Logo of jester cap with thought bubble.

Image source: The Motley Fool.

DATE

Thursday, April 23, 2026 at 10 a.m. ET

CALL PARTICIPANTS

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

Need a quote from a Motley Fool analyst? Email [email protected]

TAKEAWAYS

  • Total Revenue -- $288 million, reflecting seasonal patterns in the North Sea and Gulf of America shelf segments.
  • Gross Profit -- $9 million, resulting in a net loss of $13 million, including the cost of the Thunder Hawk Field workover.
  • Adjusted EBITDA -- $32 million, with operating cash flow of $62 million, and free cash flow of $59 million.
  • Cash and Liquidity -- $501 million cash and $612 million total liquidity; funded debt totals $10 million.
  • Segment Utilization & Activity -- The Q4000 achieved high utilization at improved rates; Seawell was reactivated in the North Sea, returning to a two-vessel market with better outlook for 2026.
  • 2026 Guidance -- Revenue of $1.2 billion-$1.4 billion, EBITDA of $230 million-$290 million, CapEx of $70 million-$80 million, and free cash flow of $100 million-$160 million, with guidance driven by vessel utilization, market stability, and the Thunder Hawk workover impact.
  • M&A Announcement -- Helix Energy Solutions Group (HLX +0.73%) announced an all-stock merger with Hornbeck Offshore Services (NYSE: HOS), creating an integrated offshore services company with a diversified, high-specification fleet.
  • Synergies -- Annual revenue and cost synergies of $75 million or more are expected within three years of closing, backed by integrated offerings and expanded fleet efficiencies.
  • Backlog -- Combined company backlog stands at approximately $2 billion, split evenly between Helix Energy Solutions Group and Hornbeck Offshore Services, including $1 billion of long-term contracts with military and specialty vessels in Hornbeck Offshore Services' segment.
  • Ownership Structure -- At closing, Helix Energy Solutions Group shareholders will hold about 45% and Hornbeck Offshore Services shareholders approximately 55% of the combined entity.
  • New Leadership & Structure -- Todd Hornbeck will serve as President and CEO of the combined company, with Bill Transier as Chairman; the company will operate under the Hornbeck Offshore Services name and ticker HOS, with the Helix brand retained for well intervention.
  • Pro Forma Scale -- The combination will increase revenue and EBITDA by 56% and 106%, respectively, based on 2025 results, and add two new MPSVs and the reactivation potential for 23 vessels.
  • Capital Spending -- Remaining capital required for Hornbeck Offshore Services' two new MPSVs is approximately $50 million for delivery by 2027.
  • Debt Position -- Hornbeck Offshore Services reported gross debt of $440 million-$480 million and net debt of about $380 million, after accounting for $75 million-$100 million in cash.
  • Regional Revenue Mix -- The combined company expects approximately half of total revenue from the United States, followed by Brazil and the North Sea.

SUMMARY

The call outlined Helix Energy Solutions Group (HLX +0.73%)’s quarterly results alongside the announcement of its planned all-stock merger with Hornbeck Offshore Services (NYSE: HOS), emphasizing structural transformation and anticipated financial uplift. The transaction will yield a major offshore services provider under one platform, introduce a new leadership structure, and leverage the combined fleet and service integration for meaningful synergies. Guidance for the year was reiterated, with management highlighting visibility provided by a $2 billion backlog, stable liquidity, and continued cash flow generation. Analyst Q&A addressed segment profitability, ROV market tightness, deployment strategy in cabotage and non-cabotage markets, and capital requirements, providing additional details on asset reactivation costs, day-rate improvements, and geographic demand outlooks. Further discussion clarified the non-overlapping, complementary nature of the merging businesses and channels for accretive growth, including deepwater and defense market expansion.

  • Management indicated that annual financial cadence expects higher activity and earnings in the second and third quarters, with seasonal softness in the first and fourth quarters due to winter weather impact.
  • Improving well intervention and robotics utilization—especially in the North Sea, Brazil, and the Gulf of America—were tied directly to recent contract awards and growing customer demand, with long-term work secured as far as 2030-2032 for trenching services.
  • Hornbeck Offshore Services disclosed that roughly 70% of its revenues come from specialty business lines outside of drilling support, underscoring a less cyclical business model.
  • Combined leadership projected the ability to scale ROV operations rapidly, with speaker Sparks stating new ROVs could be delivered within six months, and that batch builds could proceed monthly, supporting growth in renewables and international markets.
  • Market commentary flagged tightening of the deepwater OSV market—especially for vessels above 4,000 deadweight—driven by Petrobras and rising demand, which is expected to raise utilization and day rates in the second half of the year.
  • Mexican marine transportation operations are anticipated to benefit from recent long-term contracts for the Trion project and positive shifts in government stance toward international oil companies, opening further fleet deployment opportunities in the region.
  • Management confirmed the minimal overlap between Helix Energy Solutions Group and Hornbeck Offshore Services assets, noting the transaction “putting together, because we did not have robotics and all the tooling,” creating a bundled, one-contract solution for customers requiring both subsea intervention and marine logistics.

INDUSTRY GLOSSARY

  • MPSV: Multipurpose Support Vessel — large, specialized ships capable of subsea construction, well intervention, and support functions in deepwater and ultra-deepwater projects.
  • ROV: Remotely Operated Vehicle — submersible, unmanned equipment used for underwater inspection, intervention, construction, and maintenance of offshore assets.
  • IRM: Inspection, Repair, and Maintenance — a category of subsea services focused on sustaining the operability and safety of offshore installations and subsea infrastructure.
  • Cabotage-Protected Market: Offshore region where regulations restrict service provision to domestically-flagged vessels, impacting competitive dynamics and deployment strategies.
  • P&A: Plug and Abandonment — decommissioning process involving the safe closure of wells at the end of production.

Full Conference Call Transcript

Erik Staffeldt: Thank you, and good morning. As highlighted, any forward-looking statements we make during today's conference call are given in 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 Energy Solutions Group, Inc.’s first quarter 2026 results. Helix Energy Solutions Group, Inc.’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 $59 million.

Highlights for the quarter include strong utilization on the Q4000 performing well intervention work at improved rates; the successful workover and recommencement of production of our Thunder Hawk field; a return to a two-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. Oil 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 and 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 c Helix One docking; CapEx of $70 million to $80 million primarily a mix of inventory maintenance on our vessels and intervention systems and fleet renewal by Robotics ROVs; and 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 Q4000 and Q7000, a late season North Sea intervention market, strong markets for our Robotics fleet, and a 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 with $10 million of funded debt, $501 million of cash, and strong cash flow generation expected in 2026. If you have any questions on our quarterly results or 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 Energy Solutions Group, Inc.’s Chairman of the Board; Scott Sparks, Helix Energy Solutions Group, Inc.’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 kick it over to Bill, I do want to note you have available supporting 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 Energy Solutions Group, Inc. and Hornbeck, we are bringing together two market leaders and establishing a premier integrated offshore services company poised to create value for current shareholders of both Hornbeck and Helix Energy Solutions Group, Inc. 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 Energy Solutions Group, Inc.’s well intervention and robotic vessels with Hornbeck’s specialty and ultra high-specification offshore support vessels will allow us to offer a complementary 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 three 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 Kratz, Helix Energy Solutions Group, Inc.’s President and Chief Executive Officer, for the significant role he has held in building Helix Energy Solutions Group, Inc. into what it is today. He announced last year his plan to retire from Helix Energy Solutions Group, Inc.; 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 2026, subject to approval by Helix Energy Solutions Group, Inc. shareholders, the receipt of applicable regulatory approvals, and the satisfaction of other customary closing conditions, Helix Energy Solutions Group, Inc. 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 two 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 seven directors, three of whom will be from Helix Energy Solutions Group, Inc. and four 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 Energy Solutions Group, Inc. 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% and 106%, respectively.

As well, we will have incremental growth drivers of two new build MPSVs and 23 vessels that will be available for reactivation. In summary, we believe this unique combination is a compelling opportunity to enhance value for Helix Energy Solutions Group, Inc.’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, one 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 deepwater high and ultra high-spec suite with geographic footprint across the U.S., Gulf of America, 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 Energy Solutions Group, Inc. does as well.

We have also included key highlights of the company by the numbers, including approximately 71 vessels in our current fleet, with two MPSVs under construction and expected to deliver in 2027 giving us a pro forma fleet of 73 vessels with 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 2025. 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 and provides the best long-term prospects to deliver superior returns for our combined investors. We are pleased that this all-stock consideration will allow Helix Energy Solutions Group, Inc. and Hornbeck investors to participate in the upside of this combination. With that, I will turn it over to Scott Sparks, Helix Energy Solutions Group, Inc.’s Executive Vice President and Chief Operating Officer, to walk you through the combined company's global presence and complementary business offerings.

Scott Sparks: Thank you, Todd. Another important benefit of this transaction is the geographical alignment of our two companies. Helix Energy Solutions Group, Inc.’s regional presence in West Africa, Asia Pacific, and the North Sea regions, as well as the United States and Brazil, and Hornbeck’s 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 and will have direct access to leading offshore customers, enabling the delivery of premier deepwater services through technologically advanced traffic.

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 service 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 a comprehensive suite of combined services as a one-stop shop for customers, while enhancing profitability through asset optimization and enhanced scale. Both companies have high-quality blue-chip customers, with 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. I will turn it back to Todd to talk through our world-class deepwater fleet and our leading position in the detention industry.

Todd Hornbeck: Thank you, Scott. We mentioned a moment ago that together, Helix Energy Solutions Group, Inc. 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, marine 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 Energy Solutions Group, Inc.’s market-leading position in 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 Energy Solutions Group, Inc. 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 relationships with key officials and decades of experience in the industry, will position the combined company extremely well to increase revenue with defense customers. Now I would like to transition to a central element of growth: the combined company's scale 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 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 the significant synergy opportunities this transaction presents.

Scott Sparks: Specifically—We expect to realize $75 million or more in annual cost and revenue synergies within three years following the transaction. The synergies are expected to result from combined and integrated service offerings, as well as expanded services offered to existing customers driving revenue pull-through. The scale of the combined company's 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 Energy Solutions Group, Inc. and Hornbeck, as well as both companies’ shareholders and other stakeholders. By bringing these two 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 to thank the talented teams of both Helix Energy Solutions Group, Inc. 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. We will now open the call for 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 pause for just a moment to compile the Q&A roster. And your first question comes from the line of Keith Beckman with Pickering Energy Partners. Your line is open.

Analyst: Hey, thanks for taking my question, and congratulations, guys.

Unknown Speaker: Thank you. Thank you.

Analyst: So I just wanted to ask first, could you bucket the $75 million of synergies a little bit better? And then maybe that is over three years. What do you expect the initial capture to be maybe within the first six 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 real added value to the customer base.

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

Analyst: Awesome. Thanks. And then my second question, obviously Hornbeck has had an advantage in cabotage-protected markets on a lot of the OSVs in the Americas. Now with the merger of the two companies, 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 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, and we are going to move where the business is.

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

Unknown Speaker: Thank you. Thanks. Thanks.

Operator: Your next question comes from the line of Benjamin Sommers 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 noted in the presentation. Just kind of curious around the duration of this backlog and any color you can give on the makeup across the various business lines.

Todd Hornbeck: So Helix Energy Solutions Group, Inc. reports their backlog, and ours is close to $1 billion covering a significant portion this year and into next year.

Erik Staffeldt: So the Helix Energy Solutions Group, Inc. portion of it is about $1 billion.

Todd Hornbeck: Yep.

Jim Hart: Hornbeck's about $1 billion as well, and 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 this is the biggest backlog we have had, I think, in our history. It is showing you where the market is 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. Any color on what you are seeing in the market and then 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 have 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 an international player worldwide, not just our main focus right now, or has been with the company, about 50% of revenue coming out of the U.S. Gulf, or the America Gulf of America. But we see great opportunities of growth in Brazil, the whole South America, the northern flank of South America with Colombia and Guyana and Suriname and that whole region.

Also, West Africa is showing great signs of opportunity as well. So 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.

Unknown Speaker: Thanks. Thank you.

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

James Schumm: The $75 million of synergies, did you say what the split was between revenue and cost synergies there?

Bill Transier: No, we have not. We are going to 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.

Todd Hornbeck: But the companies do not really overlap that much in services. That is what makes this combination such a strong combination, putting together, because we did not have robotics and all the tooling and whatnot. We had the MPSVs, the heavy iron. Helix Energy Solutions Group, Inc. has all that. We were not in well intervention or decommissioning. 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. That is what is great about this. We are going to be able to build all of that and retool the business model to be able to grow in all of those areas.

Scott Sparks: Whilst we start with that, what we will be able to do is offer a very good bundled service. If you take a deepwater field decommissioning program, we have the Helix Energy Solutions Group, Inc. assets that can do all the deepwater P&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 takeaway and the wells P&A work. We can offer that to one client, take away their procurement costs, and give them one contract. 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 one contract and one service.

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

Todd Hornbeck: Well, I will tell you on the OSV side, we are strictly deepwater, ultra deepwater, the largest PSVs in the world. A lot of them are cabotage-protected in the U.S. 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 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 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. You have vessels to bring back into the market too. Yes, it will cost really minor capital. Minor capital, yes. We have 23 vessels that we can reactivate as this market goes undersupplied, whether it is renewables, defense, or drilling support or subsea support. Those are vessels that have been preserved and in good shape, and very low cost to reactivate to put into the market.

James Schumm: Thanks. And I was just going to ask about the two new MPSVs that you have. What 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 in nature, they will be the largest MPSVs in the U.S.-flag fleet. We are really excited about the robotics and the subsea infrastructure and everything that Helix Energy Solutions Group, Inc. is doing 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 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 Energy Solutions Group, Inc. Robotics into those vessels as well. So they will be quite unique and ultra high-spec vessels for the Jones Act Gulf of America fleet.

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

Unknown Speaker: Thanks.

Erik Staffeldt: Thank you.

Operator: Press star, then the number 1 on your telephone keypad. And our next question comes from the line of Don Kreis with Johnson Rice. Your line is open.

Don Kreis: Morning, guys, and I will echo my sentiments for a good deal. Congrats. Since I cover Helix Energy Solutions Group, Inc., and have for a while, Scott, can you walk around the world and talk about demand like you normally do on an earnings call? I know there have been a lot of rig contracts let recently that soaked up a lot of white space, and can you just walk around the world and tell us how that is influencing activity for the Q4000 and Well Enhancer and Seawell going forward throughout the rest of the year?

Scott Sparks: Sure. Good morning, Don. Firstly, North Sea: as you know, last year we had some headwinds against us and had to stack one of the vessels, and I am happy to report now that we have both vessels out actively working. We are expecting good utilization for the monohulls in the North Sea. We are seeing high demand for decommissioning in the North Sea 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 Americas, we are seeing more production enhancement activity. We have the Q5000 out currently working for Shell. The Q4000 is out working for Oxy.

Oxy and others are looking to add more wells because of the increase in the price of oil, which is looking to further enhance activity. Q7000 has recently finished up with Shell in Brazil—sorry, 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. Then we expect to take that vessel back to Brazil where there is high activity and good tendering activity for that vessel. Siem Helix 1 and Siem Helix 2 are on the long-term contracts in Brazil. So our well intervention segment looks very good at the moment, with improving activity and increasing rates going forward.

Robotics side is very busy. As you know, our trenching side of the company is very, very active—high utilization, increased rates year over year. We have work booked out in 2026, 2027 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. Then the Robotics business is strengthened, and bringing these two companies together there are good opportunities for putting ROVs with high-class vessels in the Gulf of America. 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 comment on day rates? Day rates for the offshore drillers have been kind of flat on these contract renewals. Are you seeing any urgency from customers seeing white space go away and urgency in contracting given recent events in the Middle East and oil price running up?

Scott 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 2026–2027 to increased rates. We have definitely seen an increase in rates and better activity in the North Sea, and we are stable and locked into long-term contracts in Brazil. So it is a definitely increased and better environment than where we were two or three quarters ago.

Don Kreis: Okay. I appreciate that. And, Todd, just one 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. Any improvement that can soak up any of the boats that came back to the U.S. side of the Gulf of America going back to Mexico anytime soon?

Todd Hornbeck: As you know, we have a large component of Mexican-flag vessels in Mexico, and that is a cabotage-protected market. Yes, there has been upside. Even though the turmoil with Pemex that unfolded over the last few years, we were not levered to that company. Woodside just started the Trion project, and we have four long-term contracts with Woodside. 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 for that development of that field. What we are seeing in Mexico 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 foreign companies out of Mexico. That has turned around. It looks like we are seeing green shoots starting to happen, and other IOCs are interested in doing structures like Woodside has done there. So it looks promising. 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: I appreciate the color. Congrats again, guys.

Unknown Speaker: Thank you. Thank you. Okay.

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

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

Todd Hornbeck: I think the market on the big—look, we are really focused on above 4 thousand deadweight class all the way to 6 thousand. So ultra deepwater is where our bread and butter is. 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—I can say leading-edge rates—are in the mid-40s. They are kind of all over the board because there has 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 tight from a supply-demand imbalance. The subsea construction market, renewables market, and our defense market are doing extremely well. So we are servicing a lot of that market with the PSVs today. On our total revenue, about 70% of our revenues come from the specialty business, not from the drill bit. That is a testament to the type of equipment that we have.

Analyst: And then on the ROV side, it was alluded to a little bit in the last answer. Is this transaction—I know Helix Energy Solutions Group, Inc. has been a bit conservative to spend capital—but when we think about the tightness of the ROV business, is this the type of transaction that has the potential, given the tightness of that market, to accelerate capital spending over the next few years? And then could you update us on lead times for ROVs today? That is my final question. Thanks.

Todd Hornbeck: I think Scott can answer the lead times, but you are correct. That market is very tight. There may be opportunities there. Besides—you can always build ROVs, and Scott 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 moves and grow our platform.

Scott Sparks: One of the good sides of the ROV business is we can scale up very quickly. To build a new ROV right now is a six-month lead time, and if we did a batch build every month after, we can have another ROV. So we can scale up the ROV business very quickly. There is also Hornbeck—at this time, they hire ROVs in, and that will now be an internal cost to Hornbeck. We can scale up very quickly and bring the two services together. 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 with what I am describing.

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. We also have some plans—Helix Energy Solutions Group, Inc. Robotics has never been an IRM company—and as we bring these two companies together, we are definitely going to build an IRM division, which leads to further growth as well.

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

Unknown Speaker: Thank you. Thank you.

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

James Schumm: Hey, thanks. I just—the Hornbeck net debt, did I calculate that right? Is that around $480 million?

Unknown Speaker: No.

Scott Sparks: No, that is gross debt.

Unknown Speaker: Go ahead, Jim.

Jim Hart: That is gross. Our cash is between $75 million and $100 million—$80 million, $90 million, something like that—and the $440 million is gross.

James Schumm: I said $480 million. So what do you have as net debt? Is it $380 million or what is the net debt?

Jim Hart: Actually, I forgot about the [inaudible], so we have about $380 million.

James Schumm: Okay. And then maybe just one for the Helix Energy Solutions Group, Inc. guys. How do you position this for your shareholders? Why is this a good deal for the Helix Energy Solutions Group, Inc. shareholders?

Bill Transier: This is Bill. I will take that on. First of all, if you cannot tell the enthusiasm these two guys across the table have been talking about their combined business, it represents a really unique opportunity for these companies to come together and do more than they could on a standalone basis. And I think that is what Helix Energy Solutions Group, Inc. has been looking at for quite a while. It was a good company, well run, like Hornbeck, with a good capital structure, but it was only so big.

The ability to 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—a real growth company that can deliver significant shareholder value going down the road. So I look at that as the compelling reasons why, and we are excited about it.

Analyst: Okay. Thanks a lot, guys. Appreciate it.

Unknown Speaker: 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 Energy Solutions Group, Inc. 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.