Helix Energy Solutions Group, Inc. (HLX)

Helix is an oil services play with a twist. Its main business is offshore services - i.e., constructing wells, laying pipe, and providing other services related to the operation and upkeep of deepwater offshore oil rigs. We need to continue to find new sources of oil and gas while we develop cleaner and more efficient sources of energy. That means drilling more deep water wells. Demand has not gone away for good. Helix also owns stakes in some Gulf of Mexico oilfields which provide another source of revenues. Trading near 52 week low.

HLX represents a unique and compelling opportunity at todays prices, representing annualized returns of 30% over the next 3 years. HLX is an aggregation of two complementary businesses: finding/developing Oil & Gas, and contract servicing for oil and gas producers.

Its unique "double-barreled" business strategy should really begin to rev up...as the wisdom of its 2 two-prong approach becomes increasingly clear towards the latter half of '07, and even more so during '08. Potential Catalysts for the stock include...

In the fourth quarter HLX will be receiving delivery of its first marine vessel in which has been upgraded with the ability to lay pipes under water...this will allow HLX to contract this ship at significantly higher prices going forward (promulgating large and rising margins).

Hurricane Katrina set back HLX's production schedule...but also added substantially to its backlog (currently around 1.8B) of future work. Contracting work and rates going forward should be significantly more profitable than they have been over the last few years . The less profitable contracts are unwinding, and new contracts at significantly higher rates should begin to show up in the bottom line over the next few quarters...

Additionally, During the second half of '08, three of its E&P fields (Danny, Noonan, and Pheonix), should roughly double the company's run rate on production...

HLX's E & P unit is focused is on operating in areas in which have been abandoned by big oil, and are considered relics (such as the gulf of mexico). With oil currently around $90 a barrel and natural gas at $7-8 per british thermal units these marginal reserves are looking to be quite profitable, and HLX can aquire them at reasonable prices. The weak dollar has also made the gulf of mexico less attractive to european competitors, thereby improving pricing power.

Essentially HLX now has all of the "tools in the toolbox"...complicated drilling equipment that is difficult and time consuming to replicate...and during periods when rates are declining (or simply at their own leisure), HLX will be able to drill its group of conservative E&P development properties. It is worth mentioning, in an environment like today's, having an in-house service business to compliment its Oil and Gas side is a significant advantage, allowing HLX to monetize its E&P side much faster than would ordinarily be possible. Generally E&P companies face greater costs and longer waiting periods for third party contracts. HLX will not have these problems...

Nonetheless, HLX is currently being penalized for this strategy, and currently trades at a discount to its peers in both industries...starting sometime next year I believe this discount will recede, as it begins to reap investment returns noted from the above, and as investors begin to to appreciate its unique approach.

Great sector. Undervalued when it comes to P/E

way undervalued

Offshore oil services. Lots of value in the businesses and books.

P/E of 2.7
Revenue Growth of 30% (yoy)
Book Value of $22 per share
Almost 2 Billion in Assets
Almost 2 Billion in Revenue
Great Management
Somehow the market cap for this company is less than the Assets it already Owns. HLX has proven that they already own 667 Billion Cubic feet of Oil. They have ships that are expensive and difficult to Replicate. Nearly 40% of revenues come from laying pipe for other companies. They do have nearly 2 Billion Dollars in debt and although I highly doubt it, if they were to liquify the company, or be bought out, all share holders would be paid an excellent premium for their shares.

A compelling valuation combined with above average growth make this an attractive stock at this level

I'm still trying to figure out how HLX is staying this low. I guess their debt to book could scare some, or maybe the risk of the oil market. As far as risk goes, HLX seems to be less risky because of their many avenues for profit. If hurricanes hit sure they lose, but not totally because of their contracting business...which by the way is backlogged through 2008 I think.

Forbes Top Mid-Cap Stocks and also a CAP favorite.

#1 rated pick in cap,Driller energy services. Demand for this company services will increase at least for the next 20 years.I sell my THE stock friday and reinvest my earnings in this company.I decided not to wait till the adquisition deal with Hercules is close.This company potential growth is a good alternative in the energy sector.

pending ipo spinoff of cal dive will help clear balance sheet of debt assumed to make recent acquisitions. also, last financials reflected all debt from remington asset purchase but none of earnings from assets. also, company uniquely qualified to maximize return from all added reserves.

great oil field services company.

2008 will see easily $65.00.

screen

p/e < 10

rev growth > 20

earnings growth > 20

5 star

Will be 5 bagger in 5 years

Playing with dynamite (unproven fields), but seems like a good speculative energy play.

Lookling at Helix's solid history along with it's own unique position of being in the business of exploration, as well as production of oil and gas. Helix is in demand by it's own competitors, due to the expertice in maintaining, assembling, troubleshooting, salvage, and many other open ocean and deep water services covering the oil and energy business around the globe. Their financial statements put them in a very healthy position. Well managed, obviously! With the world's population growing rapidly, along with a vivacious thirst for natural gas and oil, Heix Energy is in position make their stock holders comfortable for a long time to come.

We are seeing an increase in petroleum prices. The lows we have seen over the last year are unsustainable. $4.00 / Gallon is the new $2.00 / Gallon... This company means business, management is committed and has the expertise to run their boats. They have some cost control issues on projects, and they need to focus on that heavily, but I'm confident they'll figure it out. The downturnish last year in petrol has forced these companies to FOCUS on the bottom line, and Helix should be well prepared to move forward as gas prices increase.

These guys produce their own oil and own their own rigs. As long as strong oil demand continues, I think they will show strong profitability thru the year.