Helix Energy Solutions Group, Inc. (HLX) announced today that its wholly owned subsidiary, Helix Q5000 Holdings S.A.R.L., has entered into a credit agreement with a syndicated bank lending group for a term loan of up to $250 million. Nordea Bank Finland Plc acted as Lead Arranger and Bookrunner of the new facility. Nordea Bank Finland Plc will serve as Administrative Agent.
The term loan will be funded at or near the time of delivery of the Q5000 vessel, which is currently estimated in early 2015. The vessel is already contracted by BP plc (BP) for a five-year term post delivery. Per the agreement, BP will get well intervention services from Helix Energy in the U.S. Gulf of Mexico. For the development, Helix Energy will utilize the well intervention semi-submersible vessel, named Q5000.
The contract will be for at least 270 days each year. It will also comprise a first right of refusal for extra days per year and will offer an option to extend the deal for two successive terms of one year each. Helix Energy views the deal as BP’s recognition of its strong well intervention services.
Houston, TX-based Helix Energy is a major supplier of deepwater oilfield services mainly in the Gulf of Mexico, the Asia Pacific, West African regions and North Sea. Helix Energy provides production services, which include repairing, inspecting and maintaining jumpers, pipelines, risers, trees and subsea tools.
The company also supplies well intervention and life of field support services. The principal customers of Helix Energy comprise oil and gas companies, independent suppliers and producers of oil and gas, and oil and gas pipeline companies.
While we expect Helix Energy to perform in line with its peers, one can consider sector stocks like Spectra Energy Partners LP (SEP) and Sunoco Logistics Partners LP (SXL) as buying opportunities for the short term.
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