Oilfield service provider Helix Energy Solutions Group reported a net loss of US$85.6 million for the second quarter of 2010 compared with net income of $100.2 million for the same period in 2009, and a net loss of $17.9 million in the first quarter of 2010. The net loss for the six months ended June 30, 2010 was $103.4 million compared with net income of $153.7 million for the six months ended June 30, 2009.
Second quarter 2010 results included non-cash impairment charges of $159.9 million reflecting a reduction in carrying values of oil and gas properties following reductions of reserve estimates primarily associated with the reassessment of certain fields’ economics. The net impact of the impairments in the second quarter, after income taxes, was $1.00 per diluted share.
In addition, the company recorded incremental depletion expense of $18.8 million in the second quarter of 2010 associated with the mid-year proved reserve reductions in its Bushwood field.
Owen Kratz, president and CEO of Helix, stated: “Aside from the impairment charges associated with our oil and gas properties, our second quarter results reflected a sharp sequential improvement in operating income reflecting improved market activity.”
Commenting on the company’s activities in response to the Gulf of Mexico oil spill, Kratz said: “Three of our vessels, the Q4000, the Express and the Helix Producer I (HP I) have been contracted by BP to participate in the coordinated response to the oil spill in the Gulf of Mexico. However, the operating results and utilisation are fairly consistent with what we expected from these assets based on existing contracts with other customers. With the HP I on hire to BP, oil and gas production from the Phoenix field was deferred from its anticipated start up in the second quarter and we now expect Phoenix production to start up late in the third quarter.”
Kratz struck a rather gloomy note by saying that the fallout from the oil spill and its associated uncertainties would have an impact on the company’s current efforts to find alternatives to exit the exploration and production business.
