Helix Energy (HLX) Q2 2026 Earnings Call Transcript

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DATE

Wednesday, July 29, 2026 at 9:00 a.m. ET

CALL PARTICIPANTS

• Executive Vice President and Chief Financial Officer - Erik Staffeldt
• Chairman of the Board - Bill Transier
• Executive Vice President and Chief Operating Officer - Scott Sparks
• Chairman, President, and Chief Executive Officer - Todd Hornbeck
• Executive Vice President and Chief Financial Officer - Jim Hart
• Senior Vice President of Finance - Potter Adam

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TAKEAWAYS

• Q2 Revenue -- $304.0 million, representing a 21% increase over the second quarter of 2025 driven by higher seasonal utilization and the reactivation of the Seawell.
• Q2 Net Income -- $22.7 million, or $0.15 per diluted share, reflecting an improvement from a net loss of $13.4 million in the first quarter of 2026.
• Q2 Adjusted EBITDA from Continuing Operations -- $74.7 million, compared to $36.6 million in the second quarter of 2025.
• Combined Pro Forma EBITDA -- 106% increase over standalone results from 2025, reflecting the integration of Hornbeck’s $288 million annual adjusted EBITDA and 40% margins.
• Combined Pro Forma Revenue -- 56% increase over standalone results from 2025, based on the combined fiscal year 2025 results of $1.3 billion for Helix and approximately $730 million for Hornbeck.
• Synergies -- $75 million or more in annual cost and revenue synergies, expected to be realized within three years following the merger through asset optimization and integrated service offerings.
• Ownership Split -- 45% for Helix shareholders and 55% for Hornbeck shareholders, structured as an all-stock transaction.
• Combined Backlog -- $2 billion, consisting of approximately $1 billion from each company and including long-term military and specialty vessel contracts.
• Combined Fleet Capacity -- 73 vessels, including 71 current assets and two new build multi-purpose support vessels expected to be delivered in 2027.
• Combined Fleet Market Value -- $2.8 billion, representing high-specification deepwater vessels and subsea robotics assets.
• Vessel Reactivations -- 23 vessels, which are currently preserved and available for reactivation as market demand increases in the defense and subsea sectors.
• Cash and Liquidity -- $652.2 million in cash and $716.5 million in total liquidity as of June 30, 2026, supported by the $104.2 million sale of the Helix Alliance business.
• Net Debt -- Negative $347.9 million as of June 30, 2026, calculated as $304.3 million in long-term debt less $652.2 million in cash and equivalents.
• Q2 Well Intervention Utilization -- 91%, compared to 72% in the second quarter of 2025, reflecting higher seasonal activity in the North Sea and production enhancement in the Gulf of Mexico.
• Q2 Robotics Revenue -- $76.4 million, representing a 23% increase over the first quarter of 2026 due to seasonally higher trenching and ROV activities.
• Q2 Production Facilities Revenue -- $29.7 million, representing a 59% sequential increase driven by higher production and prices at the Thunder Hawk field.
• Capital Requirements -- $50 million remaining for the completion of two new build vessels, representing low entry-cost capital for high-specification Jones Act assets.
• ROV Lead Time -- six months for a new build remotely operated vehicle, allowing the company to scale operations quickly in response to renewable energy demand in the Asia Pacific region.
• Nigeria Mobilization -- The Q7000 vessel is expected to begin a contract in Nigeria shortly after finishing its project with Shell in Brazil.
• Mexico Operations -- Four long-term contracts with Woodside for the Trion project, including a 10-year commitment for marine support and supply vessels.

SUMMARY

Helix Energy Solutions Group, Inc. (NYSE:HLX) reported a definitive agreement to combine with Hornbeck Offshore Services in an all-stock transaction. Management stated that the merger will create an integrated offshore services provider by combining subsea robotics and well intervention capabilities with high-specification marine logistics. The transaction is expected to close on Sept. 1, 2026, with the combined entity operating under the Hornbeck Offshore Services name and trading on the New York Stock Exchange under the ticker HOS. Following the close, the company will be led by Todd Hornbeck as president and chief executive officer, with the board of directors comprising four representatives from Hornbeck and three from Helix. Management noted that the combined company will maintain its dual headquarters in Houston, Texas, and Covington, Louisiana.

• Chairman Bill Transier stated that the combination establishes a company "poised to create value" with a "diversified and expanded high specification fleet of specialty vessels."
• Todd Hornbeck indicated that the company intends to "move the assets where they are most valuable" to maximize returns across global basins including West Africa and South America.
• Scott Sparks noted that the company plans to build a dedicated inspection, repair, and maintenance division, stating, "we are definitely going to build an IRM division, which leads to further growth as well."
• Management identified the defense market as a significant growth driver, with Todd Hornbeck stating, "our defense market is really looking good... they like the large PSVs to accommodate that business."
• The company reported that 70% of Hornbeck's current revenue is derived from specialty business rather than drilling support, highlighting a shift toward non-oil and gas sectors.
• Sparks confirmed that the robotics segment is "very busy" and expects to have no available ROVs by the end of the year, potentially requiring new capital investment for growth.
• Management noted that the Seawell vessel has returned to a two-vessel market in the North Sea, contributing to higher utilization rates for the monohull fleet.

INDUSTRY GLOSSARY

• Cabotage: The legal right to operate transport services between two points within the same country, often restricted to domestic vessels.
• IRM: Inspection, Repair, and Maintenance of subsea infrastructure and equipment.
• Jones Act: A United States federal law that requires goods shipped between U.S. ports to be transported on ships that are built, owned, and operated by United States citizens.
• MPSV: Multi-purpose support vessel used for subsea installation and construction tasks.
• P&A: Plug and abandonment, the process of permanently sealing a non-productive well.
• PSV: Platform supply vessel, designed to transport supplies and equipment to offshore oil and gas rigs.
• ROV: Remotely operated vehicle, an unoccupied subsea robot used for deepwater tasks.
• Well Intervention: Any operation carried out on an oil or gas well during or at the end of its productive life to alter its state and improve production.

Full Conference Call Transcript

Operator: Good morning, and welcome to today's conference call to discuss the combination of Helix Energy Solutions and Hornbeck Offshore. As well as Helix's first quarter 26 results. Please note this event is being recorded. At this time, all participants are in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be a question-and-answer session. To ask a question, you may press star, then 1, on a touch-tone phone. To withdraw your question, please press star, then 2. You can find today's investor presentation as well as the press release regarding the transaction at each company's Investor Relations website.

The press release regarding Helix's first quarter 26 results can be found at Helix's Investor Relations website as well as the earnings presentation. I would now like to turn the call over to Erik Staffeldt, Executive Vice President and Chief Financial Officer at Helix. Please go ahead.

Erik Staffeldt: Thank you, and good morning. As highlighted, any forward-looking statements we make during today's conference call are given in the context of today only. And are subject to important risks as discussed in the presentation. Actual results and events could differ materially from those discussed here, Please also refer to the additional information discussed on this slide as well as in our SEC filings. I will now turn to a brief overview of Helix's first quarter 26 results. Helix's team delivered another well executed quarter. Safely and efficiently providing our customers with world-class service. Our first quarter results reflect expected seasonal levels during the winter in the North Sea and Gulf of America shelf.

Impacting our well intervention robotics and shallow water abandonment segments. And they reflect the cost of the successful workover of Thunder Hawk Field. Revenues for the first quarter were $288 million with a gross profit of $9 million resulting in a net loss of $13 million Adjusted EBITDA for the quarter was $32 million with operating cash flow of $62 million resulting in free cash flow of $9 million Highlights for the quarter include strong utilization on the Q4 thousand performing well intervention work at improved rates. The successful workover and recommencement of production of our Thunder Hawk field, a return to a 2-vessel market in the North Sea with the Seawell reactivation and return to operations.

Good utilization expected in 2026. And strong cash flow generation of $59 million as I shared earlier. With that, our cash position and liquidity remain strong with $501 million of cash and $612 million of liquidity at the end of the quarter. Overall, our first quarter results were as expected, perhaps even marginally better than expected. The current macro environment remains uncertain, but we are seeing some positive developments in the markets we serve. Both supply disruptions, increased commodity prices, and increased regulatory enforcement in the North Sea are providing positive catalysts that may drive increased activity by our customers for the balance of 2025 and into 2026 and into 2027.

We also expect momentum to continue to build in the offshore market. With the results we delivered in Q1 and supported by our backlog in several key contracts, we are maintaining our guidance for 2026. Revenue of $1.2 billion to $1.4 billion in line with 2025. EBITDA of $230 million to $290 million impacted by the Thunder Hawk workover in Q1 and the upcoming Siem Helix 1 docking. CapEx of $70 million to $80 million primarily a mix of inventory maintenance on our vessel and intervention systems and fleet renewal by robotics ROVs. Free cash flow of $100 million to $160 million We expect continued meaningful free cash flow generation with variability driven by ultimate working capital movements.

Key forecast drivers for our annual guidance include second half utilization on the Q4 thousand and Q7 thousand late season North Sea Intervention Market, strong markets for our robotics fleet, and the stable shallow water abandonment segment. Our quarterly financial performance in 2026 is expected to follow the same cadence as previous years' results. With the second and third quarters being our most active quarters. And the first and fourth quarters impacted by winter weather. Our balance sheet is strong, $10 million of funded debt, $501 million of cash and a strong cash flow generation expected in 2026. You have any questions on our quarterly results, our outlook for 2026, please feel free to reach out to our team directly.

With that, we will transition to the transaction announcement portion of the call. For that, I am joined by Bill Transier, Helix's chairman of the board, Scott Sparks, Helix's executive vice president and chief operating officer. Todd Hornbeck, Hornbeck's chairman, president, and chief executive officer, Also joining us for the question and answer portion of the call will be Jim Hart, Hornbeck's Executive Vice President and Chief Financial Officer and Potter Adam Hornbeck's senior vice president of finance. Now before I turn it over to Bill, I do want to note we have supplied supporting the following information on each company's investor relations website. So please feel free to refer to those as we go through the call.

With that, Bill, over to you.

Bill Transier: Thanks, Erik. By combining Helix and Hornbeck, we are bringing together 2 market leaders and establishing a premier integrated offshore services company poised to create value for current shareholders of both Hornbeck and Helix. There are many compelling benefits to this combination. First, the strategic combination will create a recognized leader in offshore operations. With a diversified and expanded high specification fleet of specialty vessels. Supported by subsea robotics, well intervention, and technical service capabilities, including trenching subsea pipelines and cables. Also, the combined company will provide innovative and integrated subsea and marine transportation solutions to customers across Deepwater Energy, defense, and renewables. Thereby expanding service offerings moving forward.

Further, combining Helix's well intervention and robotic vessels with Hornbeck's specialty and ultra high specification offshore support vessels will allow us to offer a complimentary end to end service offering that will materially expand the combined company's ability to meet a broader share of customers' deepwater needs spanning the offshore cycle. All of this, in combination with the significant annual revenue and cost synergies the transaction is expected to generate, of $75 million or more within 3 years following the close, make for a strong combination rationale. We will dig deeper into the strategic and financial benefits shortly, and I do want to cover the terms of the transaction in more detail too.

First, I would be remiss if I did not take the opportunity to acknowledge Owen E. Kratz Helix's president and chief executive officer. For the significant role he has held in building Helix into what it is today. I announced last year his plan to retire from Helix. I am sure you saw his quote in the press release, reiterating his support for the transaction. He has agreed to support Todd through the close of the deal and will remain available thereafter as needed. He, along with the entire executive management team, are committed to getting this combination across the line. With that, I will turn to the highlights of the transaction. This is structured as an all stock transaction.

Which will allow shareholders from both sides to participate in the significant upside potential of the combined company. The terms of the agreement which are outlined in the press release we issued this morning, have been approved by the boards of directors of both companies. At closing, which we expect to occur in the second half of 26, subject to approval by Helix shareholders, the receipt of applicable regulatory approvals and the satisfaction of other customary closing conditions. Helix shareholders will own approximately 45% of the combined company and Hornbeck shareholders will have approximately 55% ownership.

I will note the parties representing a significant majority of the ownership of Hornbeck including Ares management funds, have delivered written consents approving the transaction. Through this combination, we will bring together 2 best in class teams with aligned cultures. Following the close, Todd Hornbeck will serve as president and chief executive officer of the combined company. The combined company's Board of Directors will comprise 7 directors, 3 of whom will be from Helix and 4 from Hornbeck, including Todd. I will serve as chairman of the combined company's board.

Post closing, the combined company will operate under the Hornbeck Offshore Services name and trade on the New York Stock Exchange under the ticker symbol HOS with the Helix brand to be retained for well intervention services. The combined company's headquarters will be in Houston, Texas, and Covington, Louisiana. I also want to touch on why we are stronger and more competitive together as a combined company. In 2025, Helix had revenue and EBITDA of $1.3 billion and $272 million respectively. With more than $500 million in cash at the end of the first quarter. When you include Hornbeck's 2025 annual results, the combined company will increase revenue and EBITDA by 56%, 106% respectively.

As well, we will have incremental growth drivers of 2 new build MPSVs, and 23 vessels that will be available for reactivation. In summary, we believe this unique combination a is compelling opportunity to enhance value for Helix's shareholders and deliver sustainable long term growth. Now Todd will provide you an overview of Hornbeck.

Todd Hornbeck: Thank you, Bill. Let me start by sharing some background on Hornbeck. 1 of the preeminent market leading providers of ultra high-spec marine logistics services. To a broad range of offshore energy infrastructure and defense customers. We have a leading deep water high- and ultra-high-spec fleet with geographic footprint across The US, Gulf of Mexico, Mexico, The Caribbean, Guyana, Suriname, and Brazil. Our focus at the end of the day is tailored logistics solutions that address a broad spectrum of unique customer life of field requirements. And we have proven operational capabilities and an unwavering commitment to safety and risk management as Helix does as well. We have also included key highlights of the company by the numbers.

Including approximately 71 vessels in our current fleet, with 2 MPSVs under construction and expected to be in 2027, giving us a pro forma fleet of 73 vessels a fair market value of $2.8 billion. We generated adjusted EBITDA of $288 million and an adjusted EBITDA margin of 40% for fiscal year 25. I would also like to note that if you have any additional questions about Hornbeck as a company, and our financials, you can find that information in the appendix section of this presentation. We are also confident that this transaction maximizes value provides the best long term prospects to deliver superior returns for our combined investors.

We are pleased that this is an all-stock consideration will allow Helix and Hornbeck investors to participate in the upside of this combination. With that, I will turn it over to Scott Andrew Sparks. Helix's executive vice president and chief operating officer, to walk you through the combined company's global presence and complementary business offerings.

Scott Andrew Sparks: Thank you, Todd. Another important benefit of this transaction is the geographical alignment of our 2 companies. Helix's credible presence in West Africa, Asia Pacific and the North Sea regions, as well as The United States, and with Hornbeck's home-based concentration in The Americas, including Brazil and Mexico, creates a combined global footprint spanning the key offshore basins worldwide. The combined company's footprint will include cabotage protected markets, We will have direct access to leading offshore customers. Enabling the delivery of premier deepwater services for technologically advanced assets.

This global presence translates into a diversified revenue stream with approximately half of the combined company's revenue expected to come from The United States followed by Brazil and then the North Sea region. We also want to share more information on our combined customer base, and how we expect to serve customers as a combined company. We provide essential services to many of the key organizations and companies that fuel the global economy. We see the integration of complementary services offerings increasing our combined company's relevance with customers, creating unique cross selling opportunities that will drive growth and improve margins.

Further, the combined fleet of vessels and specialty equipment enable comprehensive suites of combined services as a 1-stop shop for customers while enhancing profitability through asset optimization and enhanced scale. Both companies have high quality blue chip customers whom we have developed strong in-depth relationships. Among our customers are global market leading companies, operating at the forefront of innovation in their respective fields. We are looking forward to delivering an enhanced offering of integrated solutions to our expanded customer base. With that, I will send it back to Todd to talk about our world-class deep water fleet and its leading position in the defense industry.

Todd Hornbeck: Thank you, Scott. We mentioned a moment ago that together, Helix and Hornbeck will have a fleet of high-quality, deepwater, high-spec vessels. The combined company will focus on drill intervention, subsea, and specialty services robotics, ring transportation, and emerging technologies to support the deepwater energy, defense, and renewables markets. The combined company will have the highest specification fleet of specialty vessels designed to support deepwater life-of-field services globally. It will be the only company capable of providing riser based well intervention subsea operations, and IRM and surface vessel logistics support.

Additionally, we are combining Helix's market leading position and subsea trenching of pipeline and cable with Hornbeck's leading position in providing support to offshore energy development. it is also important to note that the combined company will have increased exposure to the defense industry through a cutting edge fleet supporting military operations and related capabilities. Together, Helix and Hornbeck will have operations that provide multiple types of defense services. This includes surface and subsea vessels, vessel management, and emerging technologies such as marine autonomy, and artificial intelligence. These capabilities along with advantages like trusted relationship with key officials, and decades of experience in the industry, will position the combined company extremely well to increase revenue and defense customers.

Now I would like to transition to a central element of this transaction is the combined company's scaled and growth platform and the significant synergy potential. We are confident that the combined company will be poised for future growth and shareholder value creation with a strong balance sheet, low leverage, and a significant cash at the closing to advance the combined company's value driven strategy. Importantly, this financial strength and projected substantial free cash flow generation will provide significant flexibility for organic growth and investments in the business, or other strategic M&A. To increase long term shareholder value creation. The combined company's scaled life-of-field business, is expected to mitigate through cycle earnings volatility.

While also enabling flexible global asset deployment where the demand is strongest. As you will see in the slide deck, another key part of why we are so confident in this combined company's strong financial profile going forward is a significant synergies opportunities this transaction presents. Specifically, we expect to realize 75 million or more in annual costs and revenue synergies just within 3 years following the transaction.

The synergies are expected to result from combined and integrated service offerings as well as expanded service offers to existing customers, driving revenue pull through, With also the scale of the combined company fleet will enable asset optimization, reducing reliance on third party vessel charters, and delivering efficiencies across maintenance, procurement, and operations. In short, we expect to operate more efficiently and benefit from growth opportunities post closing. I would now like to turn it back to Bill to close it out.

Bill Transier: I will wrap things up by reiterating that we believe this transaction represents an incredibly exciting opportunity for Helix and Hornbeck. As well as both companies' shareholders and other stakeholders. By bringing these 2 leaders together, we will create an even stronger combined company designed to innovate, execute with scale and grow. I would also like to take a moment just to thank the talented teams of both Helix and Hornbeck. This transaction reflects their continued hard work and dedication and we would not have been able to reach this milestone without their efforts. I know I speak for the leadership teams of both companies when I say we are grateful for your many contributions.

Thank you for joining us today. I will now open the floor to questions. Operator, we will take our first question now.

Operator: Thank you. At this time, I would like to remind everyone, in order to ask a question, please press * then the number 1 on your telephone keypad. We will just pause, we will pause for just a moment to compile the Q&A roster. And your first question comes from the line of Leigh Beck with Pickering Energy Partners. Your line is open.

Keith Beckman: Hey, thanks for taking my question, and congratulations, guys. Thank you. Thank you. So I just wanted to I wanted to ask first, could you bucket the $75 million of synergies a little bit better? And then maybe that is over 3 years. What do you kind of expect the initial capture to be maybe within the first 6 months to a year or so?

Todd Hornbeck: I think the capture will be revenue synergies and being able to combine these assets together to offer a full plentiful offering to the customers that should increase utilization across the board on ROVs, the supply vessels, the subsea construction vessels, and well intervention. So that combination and offering life of field services to be able to take to the full field development or full field decommissioning is a is a real added value to the to the customer base.

Scott Andrew Sparks: Yeah. The crossover services that we have pulled together as 1 company provides some very good revenue synergies, but then there is also the size of the fleet provides good cost synergies with procurement and engineering and all things as we create a much bigger fleet on a global basis.

Keith Beckman: Awesome. Thanks. And then my second question was just kind of obviously, Hornbeck has had an advantage in kind of cabotage-protected markets. On a lot of the OSVs in The Americas. Now with the merger of the 2 companies, I mean, is there any is there any plan over time to move some of the vessels outside of cabotage markets and potentially go outside of The Americas, maybe West Africa, etcetera? Just any thoughts on that at all?

Todd Hornbeck: Our plan is that we are going to be a growth company, and we plan to continue to grow every segment of the business but we are going to move the assets where they are most valuable. To the company. And returns for the company. So we do have assets that can move across the globe and some of the largest and best assets in the industry.

Scott Andrew Sparks: And we are going to move where the business is.

Keith Beckman: Awesome. Really appreciate you guys taking my questions, and, congratulations again.

Todd Hornbeck: Thank you. Thanks. Thanks.

Operator: Your next question comes from the line of Benjamin Summers with BTIG. Your line is open.

Benjamin Sommers: Hey. Good morning, and congrats on the announcement. So my first question is just on the $2 billion of backlog that you guys have in the presentation. Just kind of curious around the duration of this backlog and any color you can give on just the makeup across now the various business lines.

Erik Staffeldt: So from Helix reports their backlog, in ours close to a billion dollars. Covering a significant portion this year and into next year. So the Helix portion of it is about a billion.

Todd Hornbeck: Yep. Hornbeck's about a billion as well. And you know, that includes our long term contracts with the military. And the specialty vessels as well. As you know, we have been primarily a shorter term player because of the type of assets we have. We have been able to on shorter term contracts, get a lot better returns. But you know, this is the biggest backlog we have had, I think, in our history. it is showing you where the market's going and a lot of opportunity also in our fleet to turn and mark to market those vessels as well.

Benjamin Sommers: Awesome. Thank you. Super helpful. And then I know you guys mentioned it in the prepared remarks but just on the strong balance sheet of the combined company. I guess any color on what you are seeing in the market and then kind of just detailing a bit more on the potential growth opportunities or creation of shareholder value from that strong balance sheet?

Todd Hornbeck: Yes. I think we had a superior balance sheet. A lot of cash on the balance sheet. Like I said, we are going to grow all the divisions between the ROV Subsea group and Well Intervention and Supply Vessels. So we are looking forward to growing it to be, you know, an international player worldwide, not just our main focus is right now or has been with the company is about 50% of revenue coming out of the U.S. Gulf. Or the America U Gulf of Mexico. But we see great opportunities of growth in Brazil. The whole South America, Northern you know, flank of South America with Colombia, Guyana and Suriname and of that whole region.

Also, West Africa showing great signs of opportunity as well. So you know, with this balance sheet, we should be able to really move the company forward with a lot of opportunities, whether they are organic or acquisitions as well.

Benjamin Sommers: Great. Thank you guys, and congrats again.

Todd Hornbeck: Thanks. Thank you.

Operator: Your next question comes from the line of James Schumm with TD Cowen. Your line is open.

James Schumm: Thanks. Good morning. Okay. So the 75 million of synergies, can you did you say what the split was between revenue and cost synergies there?

Todd Hornbeck: No, we have not. We are going to have more gonna have more of that in the merger proxy. But the majority of it probably will be from revenue synergies and cost efficiencies by putting the companies together and streamlining our services. But the companies do a little overlap. That much in services. that is what makes this combination such a strong combination putting together because, where we did not have robotics and all the tooling and whatnot, we had the MPSVs, heavy iron, Helix has all that. We were not in well intervention or decommissioning, and when you are in that business as well, they need supply vessels MPSVs, and all the things that we have.

So we do not overlap a lot. So that is what is, great about this. We are gonna be able to build all of that and retool the business model to be able to grow in all of those areas.

Scott Andrew Sparks: While we have done that, we will be able to do is offer a very good bundled service, so if you take a deepwater field decommissioning program, we have the Helix assets that can do all the deep water p and a and the well work Now we have the construction assets to take away the subsea infrastructure We have the supply boats to support the subsea infrastructure to take away and the Wells P and A work can offer that to 1 client, take away their procurement costs and give them 1 contract. So that is quite compelling.

There will always be some oil procurement companies out there that will not like that, but there will be a bunch of oil companies out there that will see the cost benefits of 1 contract and 1 service.

James Schumm: Okay. Great. Thank you. And I have not covered OSVs in 12 or 13 years. Can you help me what is the capital intensity of this business now in just in terms of CapEx to sales?

Todd Hornbeck: I will tell you the on the OSV side, we are strictly deepwater, ultra deepwater. The largest PSVs in the world. So a lot of them are habitat protected in The US, We have a big presence in Brazil and Mexico and the whole South America. Right now, the market is basically at equilibrium. By the second half of this year just with the demand that is coming from the additional rigs coming online. We see that market getting very tight. And a lot of revenue growth there or day rate expansion there as well. With the subsea construction market, you know how many trees and installations that are going in deepwater over the next several years.

Those vessels also work very, very well in the subsea construction area. And also in renewables and the defense market. Our defense market is really looking good, and you know why -- just read the paper. And they like the large PSVs to accommodate that business.

Scott Andrew Sparks: And you have-- Okay. And back into the market too.

Todd Hornbeck: Yes. It will not cost you really minor capital. Minor capital. Yeah. We have got 23 vessels that we can reactivate as this market goes undersupplied. Whether it is renewables, defense, or, drilling support or subsea support. And those are vessels that have been preserved and in good shape, and in very low cost to reactivate to put in the market.

James Schumm: Thanks. And because I was just gonna ask about the 2 new MPSVs that you have. Like, what the capital requirements are left on those? Are they substantial, or can you say?

Todd Hornbeck: We really do not have any capital requirements to talk about very much left. We have about $50 million, I think, left to spend on those vessels. For delivery, but very low cost entry for those vessels. Unique natures, they will be the largest MPSVs in The US flag fleet. And we are really excited about the robotics and the subsea infrastructure and on all everything that Helix is doing in and folding that into that program. So defense markets, renewable markets, and deepwater subsea construction markets are really anxious to get their hands on those vessels.

Scott Andrew Sparks: When those vessels hit in 2027, they are going to be the highest spec Jones Act vessels, and then we will be combining Helix Robotics into those vessels as well. So it will be quite unique and ultra high spec vessels for the U.S. Gulf of Mexico fleet.

James Schumm: Great. Thanks a lot, gentlemen. Appreciate it. Congrats.

Todd Hornbeck: Alright. Thanks. Thank you.

Operator: Again, if you would like to ask a question, press star then the number 1 on your telephone keypad. And your next question comes from the line of Don Crist with John Rice. Your line is open.

Don Kreis: Morning, guys, and I will echo my sentiments for a good deal. Congrats. Since I cover Helix, and have for a while, Scott, can you walk around the world and kinda talk about demand like you normally do on an earnings call. I know there is been a lot of rig contracts led recently that soaked up a lot of white space and can you just kind of walk around the world and tell us how that is influencing activity for the Q4 thousand Well-Enhancer and Seawell going forward throughout the rest of the year?

Scott Andrew Sparks: Sure. Yeah. Good morning, Don. So firstly, North Sea. As you know, last year, we had some headwinds against us, and had to stack 1 of the vessels. I am happy to report now that we have both vessels out actively working. And we are expecting good utilization for the monoholes in the North Sea. We are seeing high demand for decommissioning in the North Sea.

Don Kreis: And starting to see a slight improvement in rates. So that dip that went with our past year is behind us, I would like to think In the in the America, we are seeing more production enhancement activity.

Scott Andrew Sparks: We have the Q5 thousand out currently working for Shell. The Q4 thousand's out working for Oxy. Oxy and others are looking to add more wells because of the obviously, increase in the price of oil is looking to further enhance activity. The Q7 thousand has recently finished up with Shell in Brazil. Sorry. We will finish up at the end of this month, and then we are very close to taking that vessel to Nigeria again. And that is looking good, very close to being contracted. And then we expect to take that vessel back to Brazil where there is levels of activity and good tendering activity for that vessel.

The 2 Seam Helix 1 and sea helix 1 and sea Seam Helix 2 are on the long term contracts in Brazil. So our well intervention segment looks very good at the moment. We have improving activity and increasing rates going forward.

Don Kreis: Robotics side is very busy.

Scott Andrew Sparks: As you know, our trenching size of the company is very, very active. High utilization, very much increased rates, increasing rates year over year. We have work booked out in, 2026, 27 on trenching, work booked out all the way to 2030, and bid activity and a very good pipeline of activity out to 2032 on the trenching side. And then with the robotics business is strengthened and bringing these 2 companies together is, good opportunities for putting ROVs with high class vessels in the Gulf of Mexico. So very confident by the end of this year, we will have no ROVs available to the market.

We might have to look at starting to place capital to increase spend on growth activity.

Don Kreis: I appreciate that. And can you just comment on day rates? I know day rates for the offshore drillers have been kind of flat on these contract renewals. But are you seeing any urgency from customers seeing white space go away and urgency and contracting given recent events in The Middle East and oil price running up?

Scott Andrew Sparks: We talk about this each quarter, Don. I would say it is relatively flat at the moment in the Gulf. We are seeing increased rig activity that will lead into the end of 2027 to increased rates. We have definitely seen an increase in rates and better activity in the North Sea and we are we are stable and locked into long term contracts in Brazil. So it is a definitely increased and better environment than where we were 2 or 3 quarters ago.

Don Kreis: Okay. I appreciate that. And, Todd, just 1 for you. Any changes in Mexico? I know you have had presence there for a while, but not really worked for the government down there. But any improvement down there that can soak up any of the boats that came back to the U.S. side of the Gulf of Mexico going back to Mexico anytime soon?

Todd Hornbeck: Well, as you know, we have got a large component of Mexican flag vessels. In Mexico, and that is a cabotage protected market. Yes, there is been upside, even though the turmoil with Pemex that unfolded, over the last few years. We were not levered to that company. So Woodside just started the Trion project, and we have 4 long term contracts with Woodside. And that has started in earnest now in February. So that will go for many years. We also have a 10-year commitment, for all the marine support, for supply vessels for the next 10 years. So for that development of that field.

What we are seeing in Mexico, though, is a little bit of change in tone with bringing IOCs back into the country. A couple of years ago under Amlo, they really wanted to get all the IOCs out and all the all the foreign companies out of Mexico. that is turned around. It looks like we are seeing green shoots starting to happen at other IOCs are interested in doing. Structures like Woodside had done there. So it looks promising. I think over the next couple of years, we are going to see some growth in Mexico. Mexico is Mexico, so we have been down there a long time and done very well in that market.

Don Kreis: We appreciate the color. Congrats again, guys.

Scott Andrew Sparks: Thank you. Thank you.

Operator: Okay. And your next question comes from the line of Josh Jayne with Daniel or Daniel Energy Partners. Your line is open.

Joshua Jayne: Good morning. Thanks for taking my question. First 1 for me, maybe you could just go into a bit more detail on the your views on OSV supply and demand Ultimately, you mentioned some vessels going back to work. Maybe you could just elaborate on your views on the market, not only in the markets that you serve, but just opportunities elsewhere. Just it would just be good to hear your views today.

Todd Hornbeck: Yeah. I think the market on the big-- look. We are just really focused on above 4 thousand deadweight class all the way to 6 thousand. So ultra deep water is where our bread and butter is, and that market, is traded very thinly now. A lot of capacity is term contracted because Petrobras soaked up a lot of tonnage as we know, and with the rigs in the second half of the year coming back online, we see that market tightening. Our rates are you know, I can say leading edge rates are in the mid forties. You know?

But they are kind of all over the board because there is been a lot of a little sloppy with the white space. But our rates seem to have held up very well. The second half of the year is where we really see the growth opportunity. The market getting really, really tight. For the supply and supply-demand imbalance. But the subsea construction market, renewables market, our defense market is doing extremely well. So we are we are servicing a lot of that market with the PSVs today. On our total revenue, about 70% of our revenue is coming from the specialty business, not from the drill bit.

So that is a testament of the type of equipment that we have.

Joshua Jayne: And then And then on the ROV side, it was alluded to a little bit in the last answer. But is this transaction I know Helix has been a bit conservative to spend capital. When we think about the tightness of the ROV business, is this the type of transaction that has the potential just given the tightness of that market to accelerate capital, spending sort of over the next few years? And then could you update us on lead times for ROVs today? that is my final question.

Analyst: Thanks.

Todd Hornbeck: I think Scott can answer the lead times, but you are correct. That market is very tight. And but I think there is opportunities there, besides you know, you can always build ROVs, and that takes it will tell you how long that takes and what the cost is. But I think there may be opportunities out there now that we put this together of, ROV opportunities and other opportunities in the company to do some acquisitive and grow our platform.

Scott Andrew Sparks: Think 1 of the good sides of the ROV business is we can scale up very quickly. So to build a new ROV right now is a 6-month lead time. And if we did a batch build every month after, we can have another ROV. So we can scale up the RV business very quickly. there is also, you know, Hornbeck at this time, they hire ROVs in and now will be an internal cost to Hornbeck. So we can scale up very quickly and you know, bring the 2 services together.

Todd Hornbeck: If we cannot find adequate equipment out there, on the ROV side and the tooling side, we can be in the market very, very quickly.

Scott Andrew Sparks: With what Scott's saying.

Todd Hornbeck: So we are open. It will happen 1 way or the other, will not it? Yeah.

Scott Andrew Sparks: And we are also seeing an increased demand for ROV activity in the renewables business in Taiwan and the APAC region as well. So there is a lot of growth potential on the ROV side, the robotics side. Also have some plans that we have as a robotic company, never been an IRM company. And as we bring these 2 companies together, we are definitely going to build an IRM division, which leads to further growth as well.

Joshua Jayne: Understood. Congrats on the transaction. Thanks for taking my questions.

Todd Hornbeck: Thank you. Thank you.

Operator: Your next question comes from the line of James Schumm with TD Cowen. Your line is open.

James Schumm: Just the Hornbeck net debt, did I calculate that right? Is that around 480 million?

Jim Hart: Yes. No. No. that is the gross debt. Go ahead, Jim.

Todd Hornbeck: it is gross. it is about James.

Jim Hart: Jim, Jim, what is it? Yep. that is gross debt. Our cash is under you know, between 75 and 100, you know, $80.90, something like that.

Todd Hornbeck: And the $4.40 is gross debt. The 4 I said $4.80.

James Schumm: So what do you have as what is your net debt? Is it a $380 or what is the net debt?

Todd Hornbeck: Actually, I forgot about the sorry. Around $3.80.

James Schumm: Okay. And then maybe just 1 for the Helix guys. I mean, how do you position this for your shareholders? Like, why is this a good deal for the Helix shareholders?

Bill Transier: This is Bill. I will take that on. First of all, if you cannot tell by the enthusiasm of these 2 guys across the table talking about their combined businesses. It represents a really kind of a unique opportunity for these companies to come together and do more than they could on a stand alone basis. And I think that is what Helix has been looking at for quite a while is it was a good company, well run. But Hornbeck has a good capital structure. But it was only so big.

And the ability to kind of build scale reduce cost of capital, and do some of the things that Scott and Todd are talking about in terms of growing the business, it just makes for a better outcome going forward.

James Schumm: A real growth company that deliver significant shareholder value going down the road. So I look at that as compelling reasons why. And we are excited about it. Okay. Thanks a lot, guys. Appreciate it.

Todd Hornbeck: Thank you. Thank you. Thank you.

Operator: I am not showing any further questions in the queue. I will now turn it back over to the company for closing remarks.

Erik Staffeldt: Thank you for joining us today. We appreciate your interest in today's call, that highlighted the exciting opportunity that the combination of Helix and Hornbeck creates for our investors and customers. Thank you.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

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