Helix Energy Solutions Group, Inc. (NYSE: HLX) reported net income of
$16.8 million, or $0.16 per diluted share, for the fourth quarter of
2011 compared with a net loss of $49.8 million, or $(0.48) per diluted
share, for the same period in 2010, and net income of $46.0 million, or
$0.43 per diluted share, in the third quarter of 2011. Net income for
the year ended December 31, 2011 was $129.9 million, or $1.22 per
diluted share, compared with a net loss of $127.1 million, or $(1.22)
per diluted share, for the year ended December 31, 2010.

Fourth quarter 2011 results included the following items:

• 
  Impairment charges totaling $107.5 million ($69.9 million after-tax)
  primarily associated with a reduction in carrying values of certain
  U.S. oil and gas properties and increases in U.S. and U.K. asset
  retirement obligations
  
• 
  Tax benefit of $31.3 million related to a reorganization of our
  Australian subsidiaries, offset by impairment charges of $17.1 million
  associated with the reduction in the fair value of certain Australian
  assets ($14.2 million after-tax)
  
• 
  Gain on sale of an oil and gas property of $4.5 million ($2.9 million
  after-tax)
  

The net impact of these items in the fourth quarter, after income taxes,
was $(0.50) per diluted share.

Fourth quarter 2011 highlights included:

• 
  Cash increased by $171 million during the quarter after paying down an
  additional $18 million in debt, ending the year at $546 million
  
• 
  Net debt in the quarter decreased by $187 million for a total net debt
  decrease in 2011 of $358 million
  
• 
  Oil and gas production totaled 2.24 million barrels of oil equivalent,
  or MMboe (13.4 billion cubic feet equivalent, or Bcfe) in Q4 2011
  versus 1.95 MMboe (11.7 Bcfe) in Q3 2011
  
• 
  Year-end proved reserve estimates totaled 38.9 MMboe (233.2 Bcfe), 58%
  of estimated reserves are oil, with a SEC price case PV-10 value of
  $1.5 billion
  
• 
  Total estimated proved and probable reserves as of December 31, 2011
  were 58.8 MMBoe (352.9 Bcfe)
  
• 
  Sold 'Wideberth? gas property for $31 million (5.3 Bcfe of proved
  reserves)
  

Owen Kratz, President and Chief Executive Officer of Helix, stated,
'when filtering out the impairments, much of which were associated with
declining economics on our natural gas properties, Helix booked another
strong operational quarter and generated a relatively significant amount
of free cash flow.?

Fourth quarter 2010 results included the following items on a pre-tax
basis:

• 
  Non-cash impairment charge of $16.7 million to write off the carrying
  value of goodwill and a $7.1 million deferred tax asset valuation
  allowance attributable to our Southeast Asia well operations subsidiary
  
• 
  Impairment charges totaling $9.2 million primarily associated with a
  reduction in carrying values of certain oil and gas properties and
  $6.4 million related to expiring offshore leases
  
• 
  Loss of $21.4 million associated with the Lufeng contract offshore
  China related to weather, downhole and mechanical issues.
  

The net impact of these items in the fourth quarter of 2010, after
income taxes, was $(0.54) per diluted share.

Contracting Services

• 
  Subsea Construction and Robotics revenues decreased in the fourth
  quarter of 2011 compared to the third quarter of 2011 primarily due to
  decreased utilization of our mobile pipelay equipment and lower
  activity levels at our onshore spoolbase facility. Overall our
  utilization rate for our owned and chartered vessels increased to 91%
  in the fourth quarter of 2011 from 86% in the third quarter of 2011.
  ROV and trenching utilization increased to 69% in the fourth quarter
  of 2011 compared to 67% in the third quarter of 2011.
  
• 
  Well Intervention revenues decreased in the fourth quarter of 2011 due
  primarily to lower day rate work performed in the North Sea coupled
  with the mobilization of the Well Enhancer to West Africa.
  Vessel utilization in the North Sea decreased to 96% in the fourth
  quarter of 2011 from 98% in the third quarter of 2011. Vessel
  utilization in the Gulf of Mexico (Q4000) was 100% in the
  fourth quarter of 2011. On a combined basis, vessel utilization
  decreased slightly to 98% in the fourth quarter of 2011 compared to
  99% in the third quarter of 2011.
  

Production Facilities

• 
  The Helix Producer I continued its deployment on the Phoenix
  field throughout the fourth quarter of 2011.
  

Oil and Gas

• 
  Oil and Gas revenues increased in the fourth quarter of 2011 compared
  to the third quarter of 2011 due primarily to slightly higher oil and
  gas production and higher oil prices. Production in the fourth quarter
  of 2011 totaled 2.24 MMboe compared to 1.95 MMboe in the third quarter
  of 2011.
  
• 
  The average price realized for oil, including the effects of settled
  oil hedge contracts, totaled $110.75 per barrel in the fourth quarter
  of 2011 compared to $100.93 per barrel in the third quarter of 2011.
  For natural gas and natural gas liquids, including the effect of
  settled natural gas hedge contracts, we realized $6.16 per thousand
  cubic feet of gas (Mcf) in the fourth quarter of 2011 compared to
  $6.15 per Mcf in the third quarter of 2011.
  
• 
  Oil and gas production has averaged approximately 24 thousand barrels
  of oil equivalent per day (Mboe/d) year-to-date through February 21,
  2012, compared to an average of 24 Mboe/d in the fourth quarter of
  2011.
  
• 
  We currently have oil and gas hedge contracts in place totaling 4.6
  MMBoe (2.8 million barrels of oil and 11.0 Bcf of gas) in 2012 and 2.1
  MMBoe (1.1 million barrels of oil and 6.0 Bcf of gas) in 2013.
  

Other Expenses

• 
  Selling, general and administrative expenses were 7.3% of revenue in
  the fourth quarter of 2011, 5.9% in the third quarter of 2011 and 9.9%
  in the fourth quarter of 2010.
  
• 
  Net interest expense and other decreased to $18.8 million in the
  fourth quarter of 2011 from $34.8 million in the third quarter of
  2011, due primarily to foreign currency gains in the fourth quarter
  compared to foreign exchange losses and losses associated with
  premiums paid upon repurchases of senior unsecured notes in the third
  quarter. Net interest expense decreased to $22.2 million in the fourth
  quarter of 2011 compared with $24.1 million in the third quarter of
  2011, due primarily to our repurchase of $75.0 million of our senior
  unsecured notes during the third quarter.
  

Financial Condition and Liquidity

• 
  We repaid $18.0 million of our Term Loan from proceeds of the sale of
  an oil and gas property. Since the beginning of 2011 we have repaid
  $212 million of debt.
  
• 
  Consolidated net debt at December 31, 2011 decreased to $609 million
  from $796 million as of September 30, 2011. We had no outstanding
  borrowings under our revolver as of December 31, 2011. Our total
  liquidity at December 31, 2011 was approximately $1.1 billion,
  consisting of cash on hand of $546 million and revolver availability
  of $559 million. Net debt to book capitalization as of December, 2011
  was 30%. (Net debt to book capitalization is a non-GAAP measure. See
  reconciliation attached hereto.)
  
• 
  On February 21, 2012, we amended our senior credit agreement to allow
  for an additional $100 million of borrowings under a new term loan
  committed by a syndicate of banks. Terms and conditions of the new
  term loan (which is expected to fund in March) are the same as those
  contained in our revolving credit facility. Proceeds from the term
  loan together with $100 million of existing liquidity will be used to
  repay $200 million in principal amount of our senior unsecured notes
  in late March.
  
• 
  We incurred capital expenditures (including capitalized interest)
  totaling $46 million in the fourth quarter of 2011, compared to $65
  million in the third quarter of 2011 and $33 million in the fourth
  quarter of 2010. For the years ended December 31, 2011 and 2010,
  capital expenditures incurred totaled $229 million and $179 million,
  respectively.
  

Footnotes to 'Summary of Results?:

⁽¹⁾ Fourth quarter 2011 oil and gas impairments of $107.5
million were primarily related to a reduction in carrying value of
certain oil and gas properties and increases in asset retirement
obligations. Fourth quarter 2010 oil and gas impairments of $9.2 million
were primarily related to a reduction in carrying value of certain oil
and gas properties.

⁽²⁾ Full year 2011 impairments were comprised of the
impairments described in item ⁽¹⁾ above, $22.7 million in the
second quarter of 2011 primarily associated with six of our Gulf of
Mexico oil and gas properties and our only non-domestic (U.K.) oil and
gas property, and $2.4 million in the third quarter of 2011 primarily
related to revisions in cost estimates for reclamation activities
ongoing at two of our Gulf of Mexico oil and gas properties. Full year
2010 impairments were comprised of the impairments described in item ⁽¹⁾
above, $7.0 million in the first quarter of 2010 primarily resulting
from a decline in natural gas prices, $4.1 million in the first quarter
of 2010 for our non-domestic oil and gas property, $159.9 million in the
second quarter of 2010 resulting from a significant reduction in our
estimates of proved reserves, and $0.9 million in the third quarter of
2010 associated with a revised estimated asset reclamation obligation of
one non-producing field.

⁽³⁾ Fourth quarter 2011 included $0.7 million of exploration
costs associated with offshore lease expirations. Fourth quarter 2010
included $6.4 million of exploration costs associated with an offshore
lease expiration.

⁽⁴⁾ Twelve months ended December 31, 2010 included a payment
of $17.5 million to settle litigation related to the termination of a
2007 international construction contract.

⁽⁵⁾ Non-GAAP measure. See reconciliation attached hereto.

Footnotes to 'Segment Information, Operational and Financial Highlights?:

⁽¹⁾ Fourth quarter 2011 oil and gas impairments of $107.5
million were primarily related to a reduction in carrying value of
certain oil and gas properties and increases in asset retirement
obligations. Fourth quarter 2010 oil and gas impairments of $9.2 million
were primarily related to a reduction in carrying value of certain oil
and gas properties.

⁽²⁾ Fourth quarter 2011 included $0.7 million of exploration
costs associated with offshore lease expirations. Fourth quarter 2010
included $6.4 million of exploration costs associated with an offshore
lease expiration.

Conference Call Information

Further details are provided in the presentation for Helix′s quarterly
conference call to review its fourth quarter 2011 results (see the
'Investor Relations? page of Helix′s website, www.HelixESG.com).
The call, scheduled for 9:00 a.m. Central Standard Time on Thursday,
February 23, 2012, will be audio webcast live from the 'Investor
Relations? page of Helix′s website. Investors and other interested
parties wishing to listen to the conference via telephone may join the
call by dialing 888-633-8407 for persons in the United States and
+1-212-231-2925 for international participants. The passcode is
'Tripodo'. A replay of the conference will be available under 'Investor
Relations' by selecting the 'Audio Archives' link from the same page
beginning approximately two hours after the completion of the conference
call.

Helix Energy Solutions Group, headquartered in Houston, Texas, is an
international offshore energy company that provides development
solutions and other key life of field services to the open energy market
as well as to our own oil and gas business unit.

Reconciliation of Non-GAAP Financial Measures

Management evaluates Company performance and financial condition using
certain non-GAAP metrics, primarily Adjusted EBITDAX, net debt and net
debt to book capitalization. We calculate Adjusted EBITDAX as earnings
before net interest expense, taxes, depreciation and amortization and
exploration expense. Net debt is calculated as the sum of financial debt
less cash and equivalents on hand. Net debt to book capitalization is
calculated by dividing net debt by the sum of net debt, convertible
preferred stock and shareholders′ equity. These non-GAAP measures are
useful to investors and other internal and external users of our
financial statements in evaluating our operating performance because
they are widely used by investors in our industry to measure a company′s
operating performance without regard to items which can vary
substantially from company to company, and help investors meaningfully
compare our results from period to period. Adjusted EBITDAX should not
be considered in isolation or as a substitute for, but instead is
supplemental to, income from operations, net income or other income data
prepared in accordance with GAAP. Non-GAAP financial measures should be
viewed in addition to, and not as an alternative to our reported results
prepared in accordance with GAAP. Users of this financial information
should consider the types of events and transactions which are excluded.

Forward-Looking Statements

This press release contains forward-looking statements that involve
risks, uncertainties and assumptions that could cause our results to
differ materially from those expressed or implied by such
forward-looking statements. All statements, other than statements of
historical fact, are 'forward-looking statements' within the meaning of
the Private Securities Litigation Reform Act of 1995, including, without
limitation, any projections of financial items; future production
volumes, results of exploration, exploitation, development, acquisition
and operations expenditures, and prospective reserve levels of property
or wells; any statements of the plans, strategies and objectives of
management for future operations; any statement concerning developments;
any statements regarding future economic conditions or performance; any
statements of expectation or belief; and any statements of assumptions
underlying any of the foregoing. The forward-looking statements are
subject to a number of known and unknown risks, uncertainties and other
factors including but not limited to the performance of contracts by
suppliers, customers and partners; actions by governmental and
regulatory authorities; operating hazards and delays; employee
management issues; uncertainties inherent in the exploration for and
development of oil and gas and in estimating reserves; complexities of
global political and economic developments; geologic risks; volatility
of oil and gas prices and other risks described from time to time in our
reports filed with the Securities and Exchange Commission ('SEC'),
including the Company's most recently filed Annual Report on Form 10-K
and in the Company′s other filings with the SEC, which are available
free of charge on the SEC′s website at www.sec.gov.
We assume no obligation and do not intend to update these
forward-looking statements except as required by the securities laws.

Helix Energy Solutions Group, Inc.

Terrence Jamerson, 281-618-0400

Director,
Finance & Investor Relations