10-Q

 UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

[X]	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended September 30, 2011
	or
[   ]	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from__________ to__________

Commission File Number 001-32936

HELIX ENERGY SOLUTIONS GROUP, INC.

(Exact name of registrant as specified in its charter)

Minnesota (State or other jurisdiction of incorporation or organization)	95–3409686 (I.R.S. Employer Identification No.)
400 North Sam Houston Parkway East Suite 400 Houston, Texas (Address of principal executive offices)	77060 (Zip Code)

(281) 618–0400

(Registrant's telephone number, including area code)

NOT APPLICABLE

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

     Yes   [ √ ]      No  [  ] 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

     Yes   [ √   ]      No  [  ] 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [ √ ]  Accelerated filer   [    ]      Non-accelerated filer  [    ] 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

     Yes   [   ]      No  [ √ ] 

As of October 21, 2011, 105,473,384 shares of common stock were outstanding.

TABLE OF CONTENTS

PART I.	FINANCIAL INFORMATION	PAGE
Item 1.	Financial Statements:
	Condensed Consolidated Balance Sheets –   September 30, 2011 (Unaudited) and December 31, 2010	1
	Condensed Consolidated Statements of Operations (Unaudited) –   Three months ended September 30, 2011 and 2010	2
	Condensed Consolidated Statements of Operations (Unaudited) –   Nine months ended September 30, 2011 and 2010	3
	Condensed Consolidated Statements of Cash Flows (Unaudited) –   Nine months ended September 30, 2011 and 2010	4
	Notes to Condensed Consolidated Financial Statements (Unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	48
Item 4.	Controls and Procedures	49
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	49
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	50
Item 6.	Exhibits	50
	Signatures	51
	Index to Exhibits	52

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PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements.

HELIX ENERGY SOLUTIONS GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 (in thousands)

	September 30,			December 31,
	2011			2010
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	375,355		$	391,085
Accounts receivable —      Trade, net of allowance for uncollectible accounts          of $4,130 and $4,527, respectively		221,162			177,293
Unbilled revenue		13,878			33,712
Costs in excess of billing		14,996			15,699
Other current assets		123,236			123,065
Total current assets		748,627			740,854
Property and equipment		4,434,796			4,486,077
Less — accumulated depreciation		(1,961,043	)		(1,958,997	)
		2,473,753			2,527,080
Other assets:
Equity investments		186,423			187,031
Goodwill		62,344			62,494
Other assets, net		80,862			74,561
Total assets	$	3,552,009		$	3,592,020
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	145,112		$	159,381
Accrued liabilities		159,676			198,237
Income taxes payable		3,856			—
Current maturities of long-term debt		7,877			10,179
Total current liabilities		316,521			367,797
Long-term debt		1,163,914			1,347,753
Deferred income taxes		441,520			413,639
Asset retirement obligations		169,429			170,410
Other long-term liabilities		4,844			5,777
Total liabilities		2,096,228			2,305,376
Convertible preferred stock		1,000			1,000
Commitments and contingencies
Shareholders’ equity:
Common stock, no par, 240,000 shares authorized,            105,965 and 105,592 shares issued, respectively		913,976			906,957
Retained earnings		505,892			392,705
Accumulated other comprehensive income (loss)		7,520			(39,058	)
Total controlling interest shareholders’ equity		1,427,388			1,260,604
Noncontrolling interests		27,393			25,040
Total equity		1,454,781			1,285,644
Total liabilities and shareholders’ equity	$	3,552,009		$	3,592,020

The accompanying notes are an integral part of these condensed consolidated financial statements.

1

HELIX ENERGY SOLUTIONS GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 (in thousands, except per share amounts)

		Three Months Ended
		September 30,
		2011			2010
Net revenues:
Contracting services	$	213,278		$	297,103
Oil and gas		159,218			95,566
		372,496			392,669
Cost of sales:
Contracting services		147,614			211,634
Oil and gas		100,230			93,586
Oil and gas property impairments		2,357			897
		250,201			306,117
Gross profit (loss)		122,295			86,552
Gain on oil and gas derivative contracts		—			161
Gain on the sale or acquisition of assets, net		—			13
Selling, general and administrative expenses		(22,082	)		(26,628	)
Income from operations		100,213			60,098
Equity in earnings of investments		4,906			6,221
Net interest expense		(24,114	)		(25,479	)
Other income (expense)		(10,714	)		4,072
Income before income taxes		70,291			44,912
Provision for income taxes		23,465			17,965
Net income, including noncontrolling interests		46,826			26,947
Less net income applicable to noncontrolling interests….		(800	)		(776	)
Net income applicable to Helix		46,026			26,171
Preferred stock dividends		(10	)		(10	)
Net income applicable to Helix common shareholders	$	46,016		$	26,161
Earnings per share of common stock:
Basic	$	0.43		$	0.25
Diluted	$	0.43		$	0.25
Weighted average common shares outstanding:
Basic		104,700			104,090
Diluted		105,154			105,307

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

HELIX ENERGY SOLUTIONS GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 (in thousands, except per share amounts)

		Nine Months Ended
		September 30,
		2011			2010
Net revenues:
Contracting services	$	501,887		$	604,634
Oil and gas		500,535			288,867
		1,002,422			893,501
Cost of sales:
Contracting services		371,042			438,008
Oil and gas		306,733			266,032
Oil and gas property impairments		25,078			171,871
		702,853			875,911
Gross profit		299,569			17,590
Gain on oil and gas derivative contracts		—			2,643
Gain (loss) on sale or acquisition of assets, net		(6	)		6,246
Selling, general and administrative expenses		(70,821	)		(91,675	)
Income (loss) from operations		228,742			(65,196	)
Equity in earnings of investments		16,443			12,932
Gain on sale of Cal Dive common stock		753			—
Net interest expense		(73,628	)		(61,637	)
Other income (expense)		(7,554	)		(3,189	)
Income (loss) before income taxes		164,756			(117,090	)
Provision (benefit) for income taxes		49,186			(41,962	)
Net income (loss), including noncontrolling interests		115,570			(75,128	)
Less net income applicable to noncontrolling interests…		(2,354	)		(2,049	)
Net income (loss) applicable to Helix		113,216			(77,177	)
Preferred stock dividends		(30	)		(104	)
Net income (loss) applicable to Helix common shareholders	$	113,186		$	(77,281	)
Earnings (loss) per share of common stock:
Basic	$	1.07		$	(0.74	)
Diluted	$	1.06		$	(0.74	)
Weighted average common shares outstanding:
Basic		104,616			103,772
Diluted		105,061			103,772

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

HELIX ENERGY SOLUTIONS GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 (in thousands)

		Nine Months Ended
		September 30,
		2011			2010
Cash flows from operating activities:
Net income (loss), including noncontrolling interests	$	115,570		$	(75,128	)
Adjustments to reconcile net income (loss), including noncontrolling interests to net cash provided by operating activities
Depreciation and amortization		239,540			222,730
Asset impairment charge and dry hole expense		32,736			171,626
Amortization of deferred financing costs		7,197			5,731
Stock compensation expense		6,835			6,889
Amortization of debt discount		6,693			6,272
Deferred income taxes		31,707			(53,335	)
Excess tax benefit from stock-based compensation		805			2,376
Gain on investment in Cal Dive common stock		(753	)		—
Loss on early extinguishment of Senior Unsecured Notes		2,354			—
(Gain) loss on sale or acquisition of assets		6			(6,246	)
Unrealized (gain) loss on derivative contracts		433			2,304
Changes in operating assets and liabilities:
Accounts receivable, net		(24,205	)		(29,256	)
Other current assets		(11,100	)		3,947
Income tax payable		9,129			4,896
Accounts payable and accrued liabilities		(28,668	)		38,662
Oil and gas asset retirement costs		(34,836	)		(52,244	)
Other noncurrent, net		(2,312	)		(7,458	)
Net cash provided by operating activities		351,131			241,766
Cash flows from investing activities:
Capital expenditures		(167,849	)		(179,018	)
Investments in equity investments		(2,699	)		(7,768	)
Distributions from equity investments, net		3,437			9,876
Proceeds from sale of Cal Dive common stock		3,588			—
Insurance recovery for capital items		—			16,106
Proceeds from sales of property		—			852
Decrease (increase) in restricted cash		703			(133	)
Net cash used in investing activities		(162,820	)		(160,085	)
Cash flows from financing activities:
Borrowing under revolving credit facility		109,400			—
Repayment of revolving credit facility		(109,400	)		—
Repayment of Helix Term Loan		(111,941	)		(3,245	)
Early extinguishment of Senior Unsecured Notes		(77,394	)		—
Repayment of MARAD borrowings		(4,645	)		(4,866	)
Loan notes repayment		(1,215	)		(1,842	)
Deferred financing costs		(9,224	)		(2,864	)
Repurchases of common stock and preferred dividends paid		(1,102	)		(11,763	)
Excess tax benefit from stock-based compensation		(805	)		(2,376	)
Exercise of stock options, net		2,018			335
Net cash used in financing activities		(204,308	)		(26,621	)
Effect of exchange rate changes on cash and cash equivalents		267			(253	)
Net (decrease) increase in cash and cash equivalents		(15,730	)		54,807
Cash and cash equivalents:
Balance, beginning of year		391,085			270,673
Balance, end of period	$	375,355		$	325,480

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

HELIX ENERGY SOLUTIONS GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1 – Basis of Presentation

The accompanying condensed consolidated financial statements include the accounts of Helix Energy Solutions Group, Inc. and its majority-owned subsidiaries (collectively, "Helix" or the "Company"). Unless the context indicates otherwise, the terms "we," "us" and "our" in this report refer collectively to Helix and its majority-owned subsidiaries.  All material intercompany accounts and transactions have been eliminated. These unaudited condensed consolidated financial statements have been prepared pursuant to instructions for the Quarterly Report on Form 10-Q required to be filed with the Securities and Exchange Commission (“SEC”), and do not include all information and footnotes normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles.

The accompanying condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles and are consistent in all material respects with those applied in our 2010 Annual Report on Form 10-K (“2010 Form 10-K”).  The preparation of these financial statements requires us to make estimates and judgments that affect the amounts reported in the financial statements and the related disclosures.  Actual results may differ from our estimates.  Management has reflected all adjustments (which were normal recurring adjustments unless otherwise disclosed herein) that it believes are necessary for a fair presentation of the condensed consolidated balance sheets, results of operations, and cash flows, as applicable. The operating results for the periods ended September 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011. Our balance sheet as of December 31, 2010 included herein has been derived from the audited balance sheet as of December 31, 2010 included in our 2010 Form 10-K. These unaudited condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and notes thereto included in our 2010 Form 10-K.

Certain reclassifications were made to previously reported amounts in the condensed consolidated financial statements and notes thereto to make them consistent with the current presentation format, including reclassifying the previously recorded results associated with our discontinued operations.  The discontinued operations results are now reflected as a component of other income (expense) in the accompanying condensed consolidated statement of operations as such amounts are immaterial for all the periods presented in this Quarterly Report on Form 10-Q.

Note 2 – Company Overview

We are an international offshore energy company that provides reservoir development solutions and other contracting services to the energy market as well as to our own oil and gas properties. Our Contracting Services segment utilizes our vessels, offshore equipment and methodologies to deliver services that may reduce finding and development costs and encompass the complete lifecycle of an offshore oil and gas field. Our Contracting Services are located primarily in the Gulf of Mexico, North Sea, Asia Pacific and West Africa regions.  Our Oil and Gas segment engages in exploration, development and production activities. Our oil and gas operations are exclusively located in the Gulf of Mexico.

Contracting Services Operations

We seek to provide services and methodologies which we believe are critical to finding and developing offshore reservoirs and maximizing production economics.  Our “life of field” services are segregated into four disciplines: subsea construction, well operations, robotics and production facilities. We have disaggregated our contracting services operations into two reportable segments: Contracting Services and Production Facilities. Our Contracting Services business primarily includes subsea construction, deepwater pipelay, well operations and robotics activities.  Our Production Facilities business includes our equity investment in Deepwater Gateway, L.L.C. (“Deepwater Gateway”) and Independence Hub, LLC (“Independence Hub”) as well as our majority ownership of the Helix Producer I   (“HP I”) vessel.   We have developed a response system that has been referenced as a designated spill response resource in Gulf of Mexico permit applications (see “Events in Gulf of Mexico” below), which is also a component of our Production Facilities segment.

5

Oil and Gas Operations

We began our oil and gas operations to provide a more efficient solution to offshore abandonment, to expand off-season utilization of our contracting services assets and to achieve incremental returns. We have evolved this business model to include not only mature oil and gas properties but also proved and unproved reserves yet to be explored and developed.  This has led to the assembly of services that allows us to create value at key points in the life of a reservoir from exploration through development, life of field management and operating through abandonment.

Events in Gulf of Mexico

In April 2010, an explosion occurred on the Deepwater Horizon drilling rig located on the site of the Macondo well at Mississippi Canyon Block 252.  The resulting events included loss of life, the complete destruction of the drilling rig and an oil spill, the magnitude of which was unprecedented in U.S. territorial waters.  In May 2010, the U.S. Department of Interior (“DOI”) announced a total moratorium on new drilling in the Gulf of Mexico.   In October 2010, the DOI lifted the drilling moratorium and instructed the Bureau of Ocean Energy Management, Regulation and Enforcement (“BOEMRE”) that it could resume issuing drilling permits conditioned on the requesting company’s compliance with all revised drilling, safety and environmental requirements.   No post moratorium deepwater drilling permits were issued by BOEMRE until late February 2011.

We developed the Helix Fast Response System (“HFRS”) as a culmination of our experience as a responder in the Gulf oil spill response and containment efforts.  The HFRS centers on two vessels, the HP I and the Q4000, both of which played a key role in the Gulf oil spill response and containment efforts and are presently operating in the Gulf of Mexico.  In 2011, we signed an agreement with Clean Gulf Associates ("CGA"), a non-profit industry group, allowing, in exchange for a retainer fee, the HFRS to be named as a response resource in permit applications to federal and state agencies and making the HFRS available for a two-year term to certain CGA participants who have executed utilization agreements with us. In addition to the agreement with CGA, we currently have signed separate utilization agreements with 24 CGA participant member companies specifying the day rates to be charged should the HFRS be deployed in connection with a well control incident.  The retainer fee for the HFRS became effective April 1, 2011 and is a component of our Production Facilities business segment.   A total of 38 permits have been granted to CGA participants for deepwater drilling operations identifying the HFRS to fulfill the BOERME requirement to have a spill response and containment resource included in the submitted permit applications.

New Accounting Pronouncement

In June 2011, the Financial Accounting Standards Board (“FASB”) issued an update to existing guidance on the presentation of comprehensive income. This update will require the presentation of the components of net income and other comprehensive income either in a single continuous statement or in two separate but consecutive statements. In addition, companies are also required to present reclassification adjustments for items that are reclassified from other comprehensive income to net income on the face of the financial statements. The update is effective for fiscal years and interim periods beginning after December 15, 2011. We will adopt the new disclosure requirements for comprehensive income beginning January 1, 2012 and are currently evaluating the provisions of this update.

6

Note 3 – Details of Certain Accounts

Other current assets consisted of the following as of September 30, 2011 and December 31, 2010:

	September 30,		December 31,
	2011		2010
	(in thousands)
Other receivables	$	2,767	$	1,247
Prepaid insurance		20,539		12,375
Other prepaids		14,032		11,623
Spare parts inventory		21,602		25,333
Current deferred tax assets		21,758		49,200
Hedging assets		33,203		5,472
Gas imbalance		4,817		6,001
Income tax receivable		—		6,099
Investment held for sale (a)		—		2,835
Other		4,518		2,880
	$	123,236	$	123,065

a.   In March 2011, we sold our remaining 500,000 shares of common stock in our former subsidiary Cal Dive International, Inc. (“Cal Dive”).  These sales transactions resulted in net proceeds of approximately $3.6 million and a pre-tax gain of $0.8 million.   In the fourth quarter of 2010, we recognized a $2.2 million other than temporary loss on our investment in Cal Dive common shares (see Notes 2 and 3 of our 2010 Form 10-K for additional information regarding our former Investment in Cal Dive common stock).

Other assets, net, consisted of the following as of September 30, 2011 and December 31, 2010:

	September 30,		December 31,
	2011		2010
	(in thousands)
Restricted cash	$	34,636	$	35,339
Deferred drydock expenses, net		6,576		11,086
Deferred financing costs, net		28,013		25,697
Intangible assets with finite lives, net		559		636
Hedging assets		9,428		—
Other		1,650		1,803
	$	80,862	$	74,561

Accrued liabilities consisted of the following as of September 30, 2011 and December 31, 2010:

	September 30,		December 31,
	2011		2010
	(in thousands)
Accrued payroll and related benefits	$	41,261	$	38,026
Royalties payable		15,140		15,008
Current asset retirement obligations		63,816		64,526
Unearned revenue		7,900		4,094
Billing in excess of cost		5,297		3,869
Accrued interest		13,795		27,308
Hedge liability		956		30,606
Other		11,511		14,800
	$	159,676	$	198,237

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Note 4 – Oil and Gas Properties

We follow the successful efforts method of accounting for our interests in oil and gas properties. Under the successful efforts method, the costs of drilling and equipping successful wells and leases containing productive reserves are capitalized. Costs incurred to drill and equip development wells, including unsuccessful development wells, are capitalized. Costs incurred relating to unsuccessful exploratory wells are charged to expense in the period in which the drilling is determined to be unsuccessful.

Depletion expense is determined on a field-by-field basis using the units-of-production method, with depletion rates for leasehold acquisition costs based on estimated total remaining proved reserves.  Depletion rates for well and related facility costs are based on estimated total remaining proved developed reserves associated with each individual field.  The depletion rates are changed whenever there is an indication of the need for a revision, but at a minimum, are evaluated annually.  Any such revisions are accounted for prospectively as a change in accounting estimate.

Impairments

During the third quarter of 2011, we recorded a total of $2.4 million of impairment charges primarily related to revisions in cost estimates for reclamation activities ongoing at two of our Gulf of Mexico oil and gas properties.   For the three-month period ended June 30, 2011,we recorded impairment charges totaling $22.7 million, including $4.1 million for our only non-domestic oil and gas property (see “United Kingdom Property” below), and for six of our Gulf of Mexico oil and gas properties.   These impairment charges primarily reflect a premature end of these fields’ production life either through actual depletion or as a result of capital allocation decisions affecting our third party operated fields.  We did not have any impairment of our oil and gas properties during the three-month period ended March 31, 2011.

Following the determination of a significant reduction in our estimates of proved reserves at June 30, 2010, we recorded oil and gas property impairment charges totaling $159.9 million which affected the carrying value of 15 of our Gulf of Mexico oil and gas properties.   In the first quarter of 2010, we recorded $7.0 million of impairment charges primarily resulting from natural gas price declines since year end 2009.   The three properties subject to these impairment charges produce natural gas almost entirely.   Separately, we also recorded a $4.1 million impairment charge for our United Kingdom oil and gas property.  

Exploration and Other

As of September 30, 2011, we capitalized approximately $4.6 million of costs associated with ongoing exploration and/or appraisal activities.  Such capitalized costs may be charged against earnings in future periods if management determines that commercial quantities of hydrocarbons have not been discovered or that future appraisal drilling or development activities are not likely to occur.

The following table details the components of exploration expense for the three- and nine-month periods ended September 30, 2011 and 2010 (in thousands):

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2011			2010			2011			2010
Delay rental and geological and geophysical costs	$	522		$	497		$	2,176		$	2,025
Impairment of unproved properties		1,028			—			7,668	a		—
Dry hole expense and other		(2	)		(55	)		(11	)		(245	)
Total exploration expense	$	1,548		$	442		$	9,833		$	1,780

a.   Includes the costs ($6.6 million) associated with a deepwater lease the term of which expired during the second quarter of 2011.

8

United Kingdom Property

Since 2006, we have maintained an ownership interest in the Camelot field, located offshore in the North Sea.   In 2007, we sold half of our 100% working interest in Camelotto a third party with whom we agreed to jointly pursue future development and production of the field.   In February 2010, we acquired this third party and thereby assumed the obligations, most notably the asset retirement obligation, related to its 50% working interest in the field.   We recorded an approximate $6.0 million gain on the acquisition of the remaining working interest in Camelot, including the acquired entity’s $10.2 million of cash (see Note 5 of 2010 Form 10-K).

In connection with this acquisition, we reassessed the fair value associated with our original 50% interest in the field. Based on these evaluations, we concluded that the Camelot field was impaired based on the unlikely probability of our expending the additional capital necessary to further develop the field.  As a result, we recorded a $4.1 million impairment charge to fully impair the property in the first quarter of 2010.  We are currently abandoning the field in accordance with applicable United Kingdom regulations. In connection with these activities, we continue to evaluate our estimated future field abandonment costs for the field.   These evaluations resulted in our recording an incremental $4.1 million impairment charge in the second quarter of 2011 to increase the field’s estimated reclamation liability.  Our current estimated asset retirement obligation for the Camelot field totals $11.6 million at September 30, 2011.  We have incurred approximately $4.8 million of costs related to our reclamation activities at the Camelot field through September 30, 2011.

Asset retirement obligations

The following table describes the changes in our asset retirement obligations (both long term and current) since December 31, 2010 (in thousands):

Asset retirement obligations at December 31, 2010	$	234,936
Liability incurred during the period		1,372
Liability settled during the period		(36,591	)
Revision in estimated cash flows		22,276
Accretion expense (included in depreciation and amortization)		11,252
Asset retirement obligations at September 30, 2011	$	233,245

Insurance

We carry comprehensive insurance for our operated and non-operated producing and non-producing properties.  We record our hurricane-related costs as incurred. Insurance reimbursements are recorded when the realization of the claim for recovery of a loss is deemed probable.  In 2011, our hurricane-related costs have been immaterial.  Hurricane-related costs, net of reimbursements totaled $0.9 million and $4.6 million for the three-month and nine-month periods ended September 30, 2010.   Our insurance reimbursements totaled $5.0 million for the nine-month period ended September 30, 2011.  On June 30, 2011, we renewed our hurricane catastrophic bond for the period from July 1, 2011 to June 30, 2012 and made a payment of $10.6 million.   We recorded a charge of approximately $8.4 million to insurance expense in the third quarter of 2011 to reduce the value of our hurricane catastrophic bond to its intrinsic value at September 30, 2011.  We will record a $2.0 million charge to insurance expense in the fourth quarter of 2011.

Note 5 – Statement of Cash Flow Information

We define cash and cash equivalents as cash and all highly liquid financial instruments with original maturities of less than three months.  We had restricted cash totaling $34.6 million at September 30, 2011 and $35.3 million at December 31, 2010,all of which was related to funds required to be escrowed to cover the future asset retirement obligations associated with our South Marsh Island Block 130 field.  We have fully satisfied the escrow requirements under the escrow agreement. We have used a small portion of these escrowed funds to pay for the initial reclamation activities at the South Marsh Island Block 130 field.  Reclamation activities at the field will occur over many years and will be funded with these escrowed amounts.  These amounts are reflected in other assets, net in the accompanying condensed consolidated balance sheets.

9

 The following table provides supplemental cash flow information for the nine-month period ended September 30, 2011 and 2010 (in thousands):

		Nine Months Ended
		September 30,
		2011		2010
Interest paid, net of capitalized interest	$	73,096	$	60,137
Income taxes paid	$	9,575	$	8,020

Non-cash investing activities for the nine-month periods ended September 30, 2011 and 2010 included $34.8 million and $17.5 million, respectively, of accruals for capital expenditures.  The accruals have been reflected in the condensed consolidated balance sheet as an increase in property and equipment and accounts payable.

Note 6 – Equity Investments

As of September 30, 2011, we have three investments that we account for using the equity method of accounting: Deepwater Gateway, Independence Hub, and Clough Helix Joint Venture Pty Ltd. (“Clough Helix JV”).  Deepwater Gateway and Independence Hub are included in our Production Facilities segment while the Clough Helix JV is a component of our Contracting Services segment.

·   Deepwater Gateway, L.L.C.  In June 2002, we, along with Enterprise Products Partners L.P. (”Enterprise”), formed Deepwater Gateway, each with a 50% interest, to design, construct, install, own and operate a tension leg platform production hub primarily for Anadarko Petroleum Corporation's Marco Polo field in the Gulf of Mexico. Our investment in Deepwater Gateway totaled $96.8 million at September 30, 2011 and $99.8 million at December 31, 2010 (including capitalized interest of $1.4 million at September 30, 2011 and $1.5 million December 31, 2010).  Our equity in earnings of Deepwater Gateway totaled $0.6 million and $2.7 million for the respective three-month and nine-month periods ended September 30, 2011 as compared to $1.3 million and $3.6 million for the three-month and nine-month periods ended September 30, 2010, respectively.   Distributions from Deepwater Gateway, net to our interest, totaled $2.2 million and $5.7 million for the respective three-month and nine-month periods ended September 30, 2011.

·   Independence Hub, LLC.  In December 2004, we acquired a 20% interest in Independence Hub, an affiliate of Enterprise.  Independence Hub owns the "Independence Hub" platform located in Mississippi Canyon Block 920 in a water depth of 8,000 feet.  First production through the facility commenced in July 2007.  Our investment in Independence Hub was $80.2 million at September 30, 2011 and $82.4 million at December 31, 2010 (including capitalized interest of $5.0 million at September 30, 2011 and $5.2 million at December 31, 2010).  Our equity in earnings of Independence Hub totaled $4.0 million and $12.3 million for the respective three-month and nine-month periods ended September 30, 2011 as compared to $4.2 million and $14.1 million for the three-month and nine-month periods ended September 30, 2010, respectively.   Distributions from Independence Hub, net to our interest, totaled $4.6 million and $14.2 million for the three-month and nine-month periods ended September 30, 2011, respectively.

·   Clough Helix JV. In February 2010, we announced the formation of the Clough Helix JV with Australian-based engineering and construction company, Clough Projects Australia Pty Ltd (“Clough”), to provide a range of subsea services to offshore operators in the Asia Pacific region. The Clough Helix JV combines our well intervention equipment with Clough’s 12-man saturation diving system, which are deployed from the 118 meter long DP2 multiservice vessel, Normand Clough.   In the first quarter of 2011, the Clough Helix JV commenced an approximate six- to nine-month day rate project located offshore China.  Our 50% share of the earnings from the Clough Helix JV totaled $0.3 million and $1.4 million for the three- and nine-month periods ended September 30, 2011, respectively as compared to $0.7 million of earnings and $5.0 million of losses in the three- and nine-month periods ended September 30, 2010, respectively.   The loss in the nine-month 2010 period primarily represented the mobilization costs of transporting the Normand Clough from the Gulf of Mexico to Singapore and other start up costs.   Our investment in the Clough Helix JV was $9.4 million at September 30, 2011 and $4.9 million at December 31, 2010.

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Note 7 – Long-Term Debt

Scheduled maturities of long-term debt outstanding as of September 30, 2011 were as follows (in thousands):

	Term Loan			Revolving Loans		Senior Unsecured Notes		Convertible Senior Notes (1)			MARAD Debt			Total
Less than one year	$	3,000		$	─	$	─	$	─		$	4,877		$	7,877
One to two years		3,000			─		─		─			5,120			8,120
Two to three years		3,000			─		─		─			5,376			8,376
Three to four years		289,500			─		─		─			5,644			295,144
Four to five years		─			─		474,960		─			5,925			480,885
Over five years		─			─		─		300,000			83,224			383,224
Total debt		298,500			─		474,960		300,000			110,166			1,183,626
Current maturities		(3,000	)		─		─		─			(4,877	)		(7,877	)
Long-term debt, less    current maturities		295,500			─		474,960		300,000			105,289			1,175,749
Unamortized debt discount (2)		─			─		─		(11,835	)		─			(11,835	)
Long-term debt	$	295,500		$	─	$	474,960	$	288,165		$	105,289		$	1,163,914

(1) Beginning in December 2012, the holders may require us to repurchase the notes or we may at our own option elect to repurchase the notes. The notes will mature in March 2025.

(2)   The notes will increase to the $300 million face amount through accretion of non-cash interest charges through 2012.

At September 30, 2011, unsecured letters of credit issued totaled approximately $42.6 million (see “Credit Agreement” below).  These letters of credit primarily guarantee various contract bidding, contractual performance, including asset retirement obligations, and insurance activities.  The following table details our interest expense and capitalized interest for the three- and nine-month periods ended September 30, 2011 and 2010:

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2011			2010			2011			2010
		(in thousands)
Interest expense	$	25,175		$	25,784		$	75,971		$	74,730
Interest income		(600	)		(263	)		(1,575	)		(660	)
Capitalized interest		(461	)		(42	)		(768	)		(12,433	)
Interest expense, net	$	24,114		$	25,479		$	73,628		$	61,637

Included below is a summary of certain components of our indebtedness. For additional information regarding our debt see Note 9 of our 2010 Form 10-K.

Senior Unsecured Notes

In December 2007, we issued $550 million of 9.5% Senior Unsecured Notes due 2016 (“Senior Unsecured Notes”).  Interest on the Senior Unsecured Notes is payable semiannually in arrears on each January 15 and July 15, commencing July 15, 2008.  The Senior Unsecured Notes are fully and unconditionally guaranteed by substantially all of our existing restricted domestic subsidiaries, except for Cal Dive I-Title XI, Inc.  In addition, any future restricted domestic subsidiaries that guarantee any of our indebtedness and/or our restricted subsidiaries’ indebtedness are required to guarantee the Senior Unsecured Notes.  Our foreign subsidiaries are not guarantors.

During the three-month period ended September 30, 2011, we purchased a portion of our Senior Unsecured Notes that resulted in the early extinguishment of an aggregate $75.0 million of those notes.   In these transactions we paid an aggregate amount of $77.4 million, including the $75.0 million in principal and $2.4 million in premium for the repurchased Senior Unsecured Notes.  The premium is reflected as a component of “other income (expense)” in the accompanying condensed consolidated statements of operations.   We also paid the accrued interest on these Senior Unsecured Notes totaling

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$0.8 million and we recorded a $0.9 million charge to interest expense to accelerate a pro rata portion of the deferred financing costs associated with the issuance of the Senior Unsecured Notes in 2007.

Credit Agreement

In July 2006, we entered into a credit agreement (the “Credit Agreement”) containing both a term loan (the “Term Loan”) and a revolving credit facility (the “Revolving Credit Facility”). The $835 million term loan was used to fund the cash portion of the acquisition of Remington Oil and Gas Corporation in July 2006.   The original borrowing capacity under the Revolving Credit Facility was $300 million.  In June 2011, we amended our Credit Agreement as further discussed below.  For additional information regarding the previous terms of our Credit Agreement see Note 9 of our 2010 Form 10-K.

The fourth amendment to our Credit Agreement, among other things:

·   increases the Revolving Credit Facility to $600.0 million (capacity was $435 million prior to the closing of the fourth amendment);

·   provided for the repayment of $109.4 million of the outstanding principal portion of the Term Loan together with accrued interest thereon and related costs;

·   extends the maturity date of the Term Loan from July 1, 2013 to a maturity date that is the earlier of (A) July 1, 2016, or (B), if our currently outstanding Senior Unsecured Notes due in 2016 are not fully re-financed or repaid by July 1, 2015, July 1, 2015;

·   extends the maturity date of the Revolving Credit Facility from November 30, 2012 to a maturity date that is the earlier of (A) January 1, 2016, or (B), if our currently outstanding Senior Unsecured Notes due in 2016 are not fully re-financed or repaid by July 1, 2015, July 1, 2015;

·   relaxes limitations on our right to dispose of certain Contracting Services assets comprising collateral to the Credit Agreement;

·   increases the amount of restricted payments in the form of stock repurchases or redemptions that we are permitted to repurchase or redeem up to $50 million;

·   permits us to repurchase or redeem all or part of our Convertible Senior Notes or Senior Unsecured Notes assuming certain conditions are met pro forma for any such  transaction, including maintaining minimum levels of liquidity (defined as cash on hand and availability under our Revolving Credit Facility) of (A) $400 million with respect to the Convertible Senior Notes, and (B) $500 million with respect to the Senior Unsecured Notes; and

·   increases the maximum amount of all investments permitted in subsidiaries that are neither loan parties nor whose equity interests are pledged from $150 million to $200 million.

With the closing of the fourth amendment, the Term Loan currently bears interest either at the one-, two-, three- or six-month LIBOR or Base Rates at our election plus a margin of between 3.25% and 3.5%  (LIBOR margin) or 2.25% to 2.5% (Base Rate margin) depending on current leverage ratios.  Our average interest rate on the Term Loan for the nine-month periods ended September 30, 2011 and 2010 was approximately 3.6% and 2.9%, respectively, including the effects of our interest rate swaps (Note 16).

As the rates for our Term Loan are subject to market influences and will vary over the term of the Credit Agreement, we may enter into various interest rate swaps to stabilize cash flows relating to a portion of our interest payments for our Term Loan (Note 16).

The full amount of the Revolving Credit Facility may be used for issuances of letters of credit.  At September 30, 2011, we had no amounts drawn on the Revolving Credit Facility and our availability under the Revolving Credit Facility totaled $557.4 million, net of $42.6 million of letters of credit issued.

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Pursuant to the fourth amendment, the borrowings outstanding under the Revolving Credit Facility will bear interest based on one-, two-, three- or six-month LIBOR rates or on Base Rates at our election plus an applicable margin. The LIBOR margin ranges from 2.5% to 3.5% and the Base Rate margin rates from 1.5% to 2.5%, depending on our consolidated leverage ratio. In connection with the closing of the fourth amendment to our Credit Agreement (as noted above), we borrowed $109.4 million under the Revolving Credit Facility and prepaid a portion of the Term Loan.   We subsequently repaid all borrowings under our Revolving Credit Facility with our available cash on hand.  There were no borrowings outstanding on the Revolving Credit Facility at any time during the third quarter of 2011.

The Credit Agreement contains various covenants regarding, among other things, collateral, capital expenditures, investments, dispositions, indebtedness and financial performance that are customary for this type of financing and for companies in our industry.

Convertible Senior Notes

In March 2005, we issued $300 million of Convertible Senior Notes at 100% of the principal amount to certain qualified institutional buyers.  The Convertible Senior Notes are convertible into cash and, if applicable, shares of our common stock based on the specified conversion rate, subject to adjustment.

The Convertible Senior Notes can be converted prior to the stated maturity (March 2025) under certain triggering events specified in the indenture governing the Convertible Senior Notes.  To the extent we do not have long-term financing secured to cover the conversion, the Convertible Senior Notes would be classified as a current liability in the accompanying condensed consolidated balance sheet.  No conversion triggers were met during either the three- or nine-month periods ended September 30, 2011 and September 30, 2010. The first dates for early redemption of the Convertible Senior Notes are in December 2012, with the holders of the Convertible Senior Notes being able to put them to us on December 15, 2012 and our being able to call the Convertible Senior Notes at any time after December 20, 2012 (see Note 9 of our 2010 Form 10-K).   Effective January 1, 2009, we adopted certain accounting standards that required us to discount the principal amount of our Convertible Senior Notes. Following adoption of these accounting standards, the effective interest rate for the Convertible Senior Notes is 6.6%.

Our average share price was below the $32.14 per share conversion price for all the periods presented in this Quarterly Report on Form 10-Q.  As a result of our share price being lower than the $32.14 per share conversion price for these periods there are no shares included in our diluted earnings per share calculation associated with the assumed conversion of our Convertible Senior Notes.  In the event our average share price exceeds the conversion price, there would be a premium, payable in shares of common stock, in addition to the principal amount, which is payable in cash, and such shares would be issued on conversion.  The Convertible Senior Notes are convertible into a maximum of 13,303,770 shares of our common stock.

MARAD Debt

This U.S. government guaranteed financing ("MARAD Debt")  pursuant to Title XI of the Merchant Marine Act of 1936, which is administered by the Maritime Administration, was used to finance the construction of the Q4000. The MARAD Debt is payable in equal semi-annual installments beginning in August 2002 and matures in February 2027. The MARAD Debt is collateralized by the Q4000 and 50% of the debt is guaranteed by us.  The MARAD Debt initially bore interest at a floating rate which approximated AAA Commercial Paper yields plus 20 basis points.  As provided for in the MARAD Debt agreements, in September 2005, we fixed the interest rate on the debt through the issuance of a 4.93% fixed-rate note with the same February 2027 maturity date.

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Other

In accordance with our Credit Agreement and our Senior Unsecured Notes, Convertible Senior Notes and MARAD Debt agreements, we are required to comply with certain covenants, including the maintenance of minimum net worth, working capital and debt-to-equity requirements, and restrictions that limit our ability to incur certain types of additional indebtedness.  As of September 30, 2011, we were in compliance with these covenants and restrictions.

Deferred financing costs of $28.0 million and $25.7 million are included in other assets, net as of September 30, 2011 and December 31, 2010, respectively, and are being amortized over the life of the applicable loan agreements.  We incurred $9.2 million of deferred financing costs related to the fourth amendment to our Credit Agreement and charged $0.8 million of deferred financing costs to interest expense associated with the repayment of $109.4 million of our Term Loan balance in June 2011 (see “Credit Agreement” above).  In the third quarter of 2011, we charged $0.9 million of deferred financing costs to interest expense associated with purchases and early extinguishment of a portion of our Senior Unsecured Notes (see “Senior Unsecured Notes” above).

Note 8 – Income Taxes

         The effective tax rates for the three-month and nine-month periods ended September 30, 2011 were 33.4% and 29.9%, respectively.  The effective tax rates for the three-month and nine-month periods ended September 30, 2010 reflected a provision of 40.0% and a benefit of 35.8%, respectively.  The variance of the comparable year-over-year periods primarily reflect the increased benefit derived from the effect of lower tax rates in certain foreign jurisdictions.   Our effective tax rate increased in the third quarter of 2011, primarily reflecting increased profitability in our U.S. operations and certain losses associated with our Australian operations that are nondeductible for income tax purposes.   

     We believe our recorded assets and liabilities are reasonable. However, because tax laws and regulations are subject to interpretation and tax litigation is inherently uncertain, our assessments can involve a series of complex judgments about future events and rely heavily on estimates and assumptions.

Note 9 – Comprehensive Income (Loss)

The components of total comprehensive income (loss) for the three and nine-month periods ended September 30, 2011 and 2010 were as follows (in thousands):

		Three Months Ended					Nine Months Ended
		September 30,					September 30,
		2011		2010			2011		2010
Net income (loss), including noncontrolling interests	$	46,826	$	26,947		$	115,570	$	(75,128	)
Other comprehensive income (loss), net of tax
Foreign currency translation gain (loss)		1,588		5,436			2,287		(8,372	)
Unrealized gain (loss) on hedges, net		33,888		(3,795	)		44,291		12,308
Unrealized loss on investment available for sale		─		(123	)		─		(679	)
Total other comprehensive income (loss)	$	82,302	$	28,465		$	162,148	$	(71,871	)

The components of accumulated other comprehensive income (loss) were as follows (in thousands):

	September 30,			December 31,
	2011			2010
Cumulative foreign currency translation adjustment	$	(19,975	)	$	(22,262	)
Unrealized gain (loss) on hedges, net		27,495			(16,796	)
Accumulated other comprehensive income (loss)	$	7,520		$	(39,058	)

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Note 10 – Earnings Per Share

We have shares of restricted stock issued and outstanding, some of which remain subject to certain vesting requirements. Holders of such shares of unvested restricted stock are entitled to the same liquidation and dividend rights as the holders of our outstanding common stock and are thus considered participating securities. Under applicable accounting guidance, the undistributed earnings for each period are allocated based on the participation rights of both the common shareholders and holders of any participating securities as if earnings for the respective periods had been distributed.   Because both the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis.  Further, we are required to compute earnings per share (“EPS”) amounts under the two class method in periods in which we have earnings from continuing operations.  For periods in which we have a net loss we do not use the two class method as holders of our restricted shares are not contractually obligated to share in such losses.

The presentation of basic EPS amounts on the face of the accompanying condensed consolidated statements of operations is computed by dividing the net income available to common shareholders by the weighted average shares of outstanding common stock. The calculation of diluted EPS is similar to basic EPS, except that the denominator includes dilutive common stock equivalents and the income included in the numerator excludes the effects of the impact of dilutive common stock equivalents, if any. The computations of the numerator (income) and denominator (shares) to derive the basic and diluted EPS amounts presented on the face of the accompanying condensed consolidated statements of operations are as follows (in thousands):

	Three Months Ended				Three Months Ended
	September 30, 2011				September 30, 2010
	Income			Shares	Income			Shares
Basic:
Net income applicable to common shareholders	$	46,016			$	26,161
Less: Undistributed net income allocable to participating securities		(549	)			(356	)
Net income applicable to common stock	$	45,467		104,700	$	25,805		104,090

	Three Months Ended			Three Months Ended
	September 30, 2011			September 30, 2010
	Income		Shares	Income		Shares
Diluted:
Net  income per common share – Basic	$	45,467	104,700	$	25,805	104,090
Effect of dilutive securities:
Stock options		─	93		─	22
Undistributed earnings reallocated to participating securities		2	─		5	─
Convertible Senior Notes		─	─		─	─
Convertible preferred stock		10	361		─	1,195
Net income per common share – Diluted	$	45,479	105,154	$	25,810	105,307

	Nine Months Ended				Nine Months Ended
	September 30, 2011				September 30, 2010
	Income			Shares	Income			Shares
Basic:
Net income (loss) applicable to common shareholders	$	113,186			$	(77,281	)
Less: Undistributed net income allocable to participating securities		(1,403	)			─
Net income (loss) applicable to common stock	$	111, 783		104,616	$	(77,281	)	103,772

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	Nine Months Ended			Nine Months Ended
	September 30, 2011			September 30, 2010
	Income		Shares	Income			Shares
Diluted:
Net  income (loss) per common share –  Basic	$	111,783	104,616	$	(77,281	)	103,772
Effect of dilutive securities:
Stock options		─	84		─		─
Undistributed earnings reallocated to participating securities		6	─		─		─
Convertible Senior Notes		─	─		─		─
Convertible preferred stock		30	361		─		─
Net income (loss) per common share –  Diluted	$	111,819	105,061	$	(77,281	)	103,772

We had a net loss from continuing operations for the nine-month period ended September 30, 2010.  Accordingly, we had no dilutive securities during this reporting period as their inclusion would have had an anti-dilutive effect on our EPS calculation, meaning it would have increased our reported EPS amount. The following table provides the effect the excluded securities would have had on our diluted shares calculation for the nine-month period ended September 30, 2010 assuming we had earnings from continuing operations (in thousands):

Diluted shares (as reported)	103,772
Stock options	51
Convertible preferred stock	1,689
Total	105,512

Note 11 – Stock-Based Compensation Plans

We have two stock-based compensation plans: the 1995 Long-Term Incentive Plan, as amended (the “1995 Incentive Plan”) and the 2005 Long-Term Incentive Plan, as amended (the “2005 Incentive Plan”).  As of September 30, 2011, there were 985,070 shares available for grant under our 2005 Incentive Plan.

There were no stock option grants in the three- and nine-month periods ended September 30, 2011 and 2010. During the nine-month period ended September 30, 2011, we made the following restricted share grants to executive officers, selected management employees and non-employee members of the board of directors under the 2005 Incentive Plan:

Date of Grant	Shares		Market Value Per Share		Vesting Period
January 4, 2011		475,804	$	12.14	20% per year over five years
January 4, 2011		4,427		12.14	100% on January 1, 2013
April 1, 2011		2,907		17.20	100% on January 1, 2013
May 11, 2011		21,608		16.14	20% per year over five years
July 1, 2011		2,095		16.56	100% on January 1, 2013

Compensation cost is recognized over the applicable vesting periods on a straight-line basis.  For the three- and nine-month periods ended September 30, 2011, $1.9 million and $6.8 million, respectively, was recognized as compensation expense related to restricted shares as compared with $2.1 million and $6.7 million during the three- and nine-month periods ended September 30, 2010, respectively.

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In January 2009, we adopted the 2009 Long-Term Incentive Cash Plan (the “2009 LTI Plan”) to provide long term cash-based compensation to eligible employees.  Under the terms of the 2009 LTI Plan, the majority of the cash awards are fixed sum amounts payable annually over a five-year vesting period.  Some of the cash awards, however, are indexed to the Company’s common stock price and the payment amount at each vesting date will fluctuate based on the common stock’s performance.  As a result, the compensation expense associated with those awards is re-measured to fair value each reporting period with corresponding changes being recorded as a charge to earnings as appropriate.

Total compensation expense under the 2009 LTI plan totaled $0.4 million and $5.0 million for the three- and nine-month periods ended September 30, 2011, respectively.  For the three- and nine-month periods ended September 30, 2010, total compensation under the 2009 LTI plan totaled $0.8 million and $3.4 million, respectively.  The liability balance under the 2009 LTI Plan was $7.0 million at September 30, 2011 and $7.9 million at December 31, 2010, including $5.8 million at September 30, 2011 and $6.2 million at December 31, 2010 associated with the variable portion of the 2009 LTI plan.

For more information regarding our stock-based compensation plans, including our 2009 LTI Plan see Note 12 of our 2010 Form 10-K.

Note 12 – Business Segment Information

Our operations are conducted through two lines of business: contracting services and oil and gas.  We have disaggregated our contracting services operations into two reportable segments.  As a result, our reportable segments consist of the following: Contracting Services, Production Facilities and Oil and Gas. Contracting Services operations include subsea construction, deepwater pipelay, well operations and robotics.  The Production Facilities segment includes our consolidated investment in the HP I and Kommandor LLC, as well as the retainer fee related to the HFRS and our equity investments in Deepwater Gateway and Independence Hub that are accounted for under the equity method of accounting.

We evaluate our performance based on income before income taxes of each segment. Segment assets are comprised of all assets attributable to the reportable segment.  All material intercompany transactions between the segments have been eliminated.

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2011			2010			2011			2010
		(in thousands)
Revenues ─
Contracting Services	$	229,967		$	238,531		$	532,857		$	595,048
Production Facilities		19,986			74,458			56,101			97,169
Oil and Gas		159,218			95,566			500,535			288,867
Intercompany elimination		(36,675	)		(15,886	)		(87,071	)		(87,583	)
Total	$	372,496		$	392,669		$	1,002,422		$	893,501
Income (loss) from operations ─
Contracting Services	$	47,363		$	31,015		$	81,194		$	102,282
Production Facilities (1)		10,983			44,520			28,859			57,460
Oil and Gas		48,622			(4,384	)		144,926			(159,991	)
Corporate (2)		(6,227	)		(10,767	)		(25,780	)		(46,242	)
Intercompany elimination		(528	)		(286	)		(457	)		(18,705	)
Total	$	100,213		$	60,098		$	228,742		$	(65,196	)
Equity in earnings of equity investments (Note 6)	$	4,906		$	6,221		$	16,443		$	12,932

(1)   In April 2009, Kommandor LLC commenced leasing the HP I to us under terms of a charter arrangement following the completion of the initial conversion of the vessel (Note 8 of our 2010 Form 10-K).  The HP I was certified as a floating oil and gas production unit in June 2010 following the completion of installation of oil and gas processing facilities on the vessel.

(2)   The nine-month period ended September 30, 2010, included $13.8 million of $17.5 million settlement of a third party claim against us in March 2010 (Note 14).

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Intercompany segment revenues during the three- and nine-month periods ended September 30, 2011 and 2010 were as follows:

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2011		2010		2011		2010
		(in thousands)
Contracting Services	$	25,410	$	15,886	$	52,574	$	84,053
Production Facilities		11,265		─		34,497		3,530
Total	$	36,675	$	15,886	$	87,071	$	87,583

Intercompany segment gross profit (losses) during the three- and nine-month periods ended September 30, 2011 and 2010 were as follows:

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2011			2010			2011			2010
		(in thousands)
Contracting Services	$	606		$	330		$	645		$	15,473
Production Facilities		(78	)		(44	)		(188	)		3,249
Total	$	528		$	286		$	457		$	18,722

Our identifiable assets as of September 30, 2011 and December 31, 2010 were as follows:

	September 30, 2011		December 31, 2010
		(in thousands)
Identifiable Assets ─
Contracting Services	$	1,871,004	$	1,856,016
Production Facilities		513,586		512,990
Oil and Gas		1,167,419		1,223,014
Total	$	3,552,009	$	3,592,020

Note 13 – Related Party Transactions

In April 2000, we acquired a 20% working interest in Gunnison, a deepwater Gulf of Mexico prospect, from a third party.  Financing for the exploratory costs of approximately $20 million was provided by an investment partnership (OKCD Investments, Ltd. or “OKCD”), the investors of which include current and former Helix senior management, in exchange for a revenue interest that is an overriding royalty interest of 25% of Helix’s 20% working interest. Production began in December 2003. Our payments to OKCD totaled $2.3 million and $7.3 million for the three-month and nine-month periods ended September 30, 2011, respectively, and $2.7 million and $8.7 million in the three-month and nine-month periods ended September 30, 2010, respectively.  Our Chief Executive Officer, Owen Kratz, through Class A limited partnership interests in OKCD, personally owns approximately 80.7% of the partnership. In 2000, OKCD also awarded Class B income participations to key Helix employees, who are required to maintain their employment status with Helix in order to retain such income participations.

Note 14 – Commitments and Contingencies

Litigation and Claims

  In the first quarter of 2010, our results included approximately $17.5 million in expenses associated with a settlement agreement related to an offshore construction contract dispute in Australia (see Note 16 of 2010 Form 10-K), including $13.8 million for the litigation settlement payment and $3.7 million to write off our remaining trade receivable from the third party.  These amounts were recorded as selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.

18

Loss Contract

In 2010 our Australian subsidiary contracted for a project to plug, abandon and salvage subsea wells in an oil and gas field located offshore China  (see Note 16 of the 2010 Form 10-K).  As previously reported, as of the year ended December 31, 2010 we had recorded an aggregate pre-tax loss of approximately $30 million related to this project which reflected the difficulty we had in plugging the wells because of certain structural issues, start-up issues with our recently repaired subsea intervention device and significant weather related delays.  In the first quarter of 2011, this project ended and we recorded an additional pre-tax loss of approximately $0.2 million.  We collected our remaining $6.7 million trade receivable related to this project in the third quarter of 2011.

Contingencies and Claims

We were subcontracted to perform development work for a large gas field offshore India.  Work commenced in the fourth quarter of 2007 and we completed our scope of work in the third quarter of 2009.  To date we have collected approximately $303 million related to this project with an amount of trade receivables and claims yet to be collected.  We have requested arbitration in India pursuant to the terms of the subcontract to pursue our claims and the prime contractor has also requested arbitration and has asserted certain counterclaims against us.  If we are not successful in resolving these matters through ongoing discussions with the prime contractor, then arbitration in India remains a potential remedy.  Based on number of factors associated with the ongoing negotiations with the prime contractor, in 2010 we established an allowance against our trade receivable balance that reduces its balance to an amount we believe is ultimately realizable (see Notes 16 and 18 of our 2010 Form 10-K).  However, at the time of this filing no final commercial resolution of this matter has been reached.

We have received value added tax (VAT) assessments from the State of Andhra Pradesh, India (the “State”) in the amount of approximately $28 million related to our subsea and diving contract entered into in December 2006 in India for the tax years 2007, 2008, 2009, and  2010. The State claims we owe unpaid taxes related to products consumed by us during the period of the contract.  We are of the opinion that the State has arbitrarily assessed this VAT tax and has no foundation for the assessment, and believe that we have complied with all rules and regulations as it relates to VAT in the State. We also believe that our position is supported by law and intend to vigorously defend our position. However, the ultimate outcome of this assessment and our potential liability from it, if any, cannot be determined at this time. If the current assessment is upheld, it may have a material negative effect on our consolidated results of operations while also impacting our financial position.

We are involved in various legal proceedings, primarily involving claims for personal injury under the General Maritime Laws of the United States and the Jones Act based on alleged negligence. In addition, from time to time we incur other claims, such as contract disputes, in the normal course of business.

Note 15 – Fair Value Measurements

Fair Value Measurements

Certain of our financial assets and liabilities are measured and reported at fair value on a recurring basis as required under applicable accounting requirements. These requirements establish a hierarchy for inputs used in measuring fair value. The fair value is to be calculated based on assumptions that market participants would use in pricing assets and liabilities and not on assumptions specific to the entity. The statement requires that each asset and liability carried at fair value be classified into one of the following categories:

• Level 1.  Observable inputs such as quoted prices in active markets;

• Level 2.  Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

• Level 3.  Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

19

Assets and liabilities measured at fair value are based on one or more of three valuation techniques as follows:

(a)   Market Approach.  Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

(b)   Cost Approach.   Amount that would be required to replace the service capacity of an asset (replacement cost).

(c)   Income Approach. Techniques to convert expected future cash flows to a single present amount based on market expectations (including present value techniques, option-pricing and excess earnings models).

The following table provides additional information related to assets and liabilities measured at fair value on a recurring basis at September 30, 2011 (in thousands):

	Level 1		Level 2 (1)		Level 3		Total		Valuation Technique
Assets:
Oil and gas swaps and collars	$	–	$	42,284	$	–	$	42,284	(c)
Foreign currency forwards		–		109		–		109	(c)
Interest rate swaps		–		238		–		238	(c)
Liabilities:
Fair value of long term debt(2)		1,063,501		124,212		–		1,187,713	(a), (b)
Foreign currency forwards		–		264		–		264	(c)
Interest rate swaps		–		692		–		692	(c)
Total net liability	$	1,063,501	$	82,537	$	–	$	1,146,038

(1) Unless otherwise indicated, the fair value of our Level 2 derivative instruments reflects our best estimate and is based upon exchange or over-the-counter quotations whenever they are available. Quoted valuations may not be available due to location differences or terms that extend beyond the period for which quotations are available. Where quotes are not available, we utilize other valuation techniques or models to estimate market values. These modeling techniques require us to make estimations of future prices, price correlation and market volatility and liquidity. Our actual results may differ from our estimates, and these differences can be positive or negative.

(2)   We have elected not to record our debt at fair value in the accompanying condensed consolidated balance sheets. See Note 7 for additional information regarding our long term debt.   The fair value of our long term debt at September 30, 2011 is as follows:

	Fair Value		Carrying Value
Term Loan (matures July 2015)	$	289,545	$	298,500
Revolving Credit Facility (matures July 2015)		─		─
Convertible Senior Notes (matures March 2025)		289,497		300,000	(a)
Senior Unsecured Notes (matures January 2016)		484,459		474,960
MARAD Debt (matures February 2027) (b)		124,212		110,166
Total	$	1,187,713	$	1,183,626

(a) Amount excludes the $11.8 million of unamortized discount remaining on the Convertible Senior Notes at September 30, 2011.

(b)    The estimated fair value of all debt, other than MARAD Debt, was determined using Level 1 inputs using the market approach.  The fair value of the MARAD debt was determined using a third party evaluation of the remaining average life and outstanding principal balance of the MARAD indebtedness as compared to other governmental obligations in the market place with similar terms.   The fair value of the MARAD debt was estimated using Level 2 fair value inputs using the cost approach.

20

We review long lived assets for impairment whenever events occur or changes in circumstances indicate that the carrying amount of assets may not be recoverable.  In such evaluation, the estimated future undiscounted cash flows to be generated by the asset are compared with the carrying value of the asset to determine if impairment may be required.  For our oil and gas properties, the estimated future undiscounted cash flows are based on estimated crude oil and natural gas proved and probable reserves and published future market commodity prices, estimated operating costs and estimates of future capital expenditures.   If the estimated undiscounted cash flows for a particular asset are not sufficient to cover the carrying value of the asset, the asset is impaired and its carrying value is reduced to the current fair value.  The fair value of these assets is determined using an income approach by calculating present value of future cash flows attributable to the asset based on market information (such as forward commodity prices), estimates of future costs and estimated proved and probable reserve quantities.  These fair value measurements fall within Level 3 of the fair value hierarchy.

In the third quarter of 2011, we recorded $2.4 million of impairment charges for two Gulf of Mexico oil and gas properties that are in the process of being abandoned.  In the second quarter of 2011, we recorded impairment charges on seven of our oil and gas properties.  These impairment charges reduced these oil and gas properties to their estimated fair value, which, for six of the properties, including our only United Kingdom oil and gas property, was zero and for the remaining property was $2.9 million at June 30, 2011.  At June 30, 2010 we impaired 15 of our Gulf of Mexico properties as a result of reductions in estimates of proved reserves.   The total amounts of these impairment charges were $159.9 million, which reduced the carrying value of these properties to their aggregate fair value of $62.5 million.   In the first quarter of 2010, we impaired three of our natural gas producing properties following a significant drop in natural gas prices during the period.  The total amounts of the impairment charges were $7.0 million, which reduced these properties to their aggregate fair value of $28.2 million. See Note 4 for additional information regarding our oil and gas property impairment charges.

Note 16 – Derivative Instruments and Hedging Activities

We are currently exposed to market risk in three major areas: commodity prices, interest rates and foreign currency exchange rates. Our risk management activities involve the use of derivative financial instruments to hedge the impact of market risk exposures primarily related to our oil and gas production, variable interest rates and foreign exchange currency fluctuations. All derivatives are reflected in the accompanying condensed consolidated balance sheets at fair value unless otherwise noted.

We engage solely in cash flow hedges. Hedges of cash flow exposure are entered into to hedge a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability. Changes in the derivative fair values that are designated as cash flow hedges are deferred to the extent that they are effective and are recorded as a component of accumulated other comprehensive income (loss), a component of shareholders’ equity, until the hedged transactions occur and are recognized in earnings. The ineffective portion of a cash flow hedge’s change in fair value is recognized immediately in earnings. In addition, any change in the fair value of a derivative that does not qualify for hedge accounting is recorded in earnings in the period in which the change occurs.

For additional information regarding our accounting for derivatives see Notes 2 and 20 of our 2010 Form 10-K.

Commodity Price Risks

We currently manage commodity price risk through various financial costless collars and swap instruments covering a portion of our anticipated oil and natural gas production through 2013.  All of our current commodity derivative contracts qualify for hedge accounting.  In June 2010, oil contracts for 480 MBbl, representing a portion of our anticipated production during the third quarter of 2010, ceased to qualify for hedge accounting as a result of our decision to contract the HP I  to assist in the Gulf oil spill response and containment efforts rather than commencing production from our Phoenix field. In September 2010, we separately concluded that oil contracts covering an additional 480 MBbls of the fourth quarter 2010 anticipated production ceased to qualify for hedge accounting because of uncertainty as to when the Phoenix field would be ready to commence initial production following extensions of the HP I contract to assist in the Gulf oil spill response and containment efforts.  The HP I returned to the Phoenix field in October and initial production from the field commenced on October 19, 2010.

21

As of September 30, 2011, we have the following volumes under derivative contracts related to our oil and gas producing activities totaling approximately 4.5 MMBbl of oil and 8.1 Bcf of natural gas:

Production Period	Instrument Type	Average Monthly Volumes	Weighted Average Price
Crude Oil:			(per barrel)
October 2011 — December 2011	Swap	163.3 MBbl	82.62
October 2011 — December 2011	Collar	35.3 MBbl	$  95.00 — $124.59
October 2011 — December 2011	Collar	50.0 MBbl	$100.00 — $122.80	a
January 2012 — December 2012	Collar	75.0 MBbl	$  96.67 — $118.57
January 2012 — December 2012	Collar	139.0 MBbl	$  99.42 — $117.59	a
January 2012 — December 2012	Swap	16.0 MBbl	$103.20	a
January 2013 — December 2013	Swap	41.7 MBbl	$  99.15	a
January 2013 — December 2013	Collar	41.7 MBbl	$  95.00 — $102.60	a
Natural Gas:			(per Mcf)
October 2011 — December 2011	Swap	703.3 Mmcf	$4.93
January 2012 — December 2012	Swap	333.3 Mmcf	$4.70
January 2012 — December 2012	Collar	166.7 Mmcf	$4.75 — $5.09

a. The prices quoted in the table above are primarily NYMEX Henry Hub for natural gas and NYMEX West Texas Intermediate for crude oil.   As footnoted above these costless collar contracts are priced as Brent crude oil.

Changes in quoted oil and gas strip market prices would, assuming all other things being equal, cause the fair value of these instruments to increase or decrease inversely to the change in the quoted market prices.

Variable Interest Rate Risks

As some of our long-term debt has variable interest rates and is subject to market influences, in January 2010 we entered into various interest rate swaps to stabilize cash flows relating to interest payments for $200 million of our Term Loan debt under our Credit Agreement (Note 7).  These monthly contracts will mature in January 2012.  In August 2011, we entered into additional interest rate swap contracts to fix the interest rate on $200 million of our Term Loan debt.   These monthly contracts begin in January 2012 and extend through January 2014.  Changes in the interest rate swap fair value are deferred to the extent the swap is effective and are recorded as a component of accumulated other comprehensive income (loss) until the anticipated interest payments occur and are recognized in interest expense.  The ineffective portion of the interest rate swap, if any, will be recognized immediately in earnings within the line titled net interest expense.  The amount of ineffectiveness associated with our interest swap contracts was immaterial for all periods presented in this Quarterly Report on Form 10-Q.

Foreign Currency Exchange Risks

Because we operate in various regions in the world, we conduct a portion of our business in currencies other than the U.S. dollar.  We entered into various foreign currency forwards to stabilize expected cash outflows relating to certain vessel charters denominated in British pounds.  The last of our existing monthly foreign currency swap contracts will settle in June 2012.

Quantitative Disclosures Related to Derivative Instruments

The following tables present the fair value and balance sheet classification of our derivative instruments as of September 30, 2011 and December 31, 2010.  The fair value amounts below are presented on a gross basis and do not reflect the netting of asset and liability positions permitted under the terms of our master netting arrangements.

22

Derivatives designated as hedging instruments are as follows:

	As of September 30, 2011			As of December 31, 2010
	Balance Sheet  Location	Fair Value		Balance Sheet Location	Fair Value
	(in thousands)
Asset Derivatives:
Oil contracts	Other current assets	$	28,020	Other current assets	$	—
Natural gas contracts	Other current assets		5,074	Other current assets		5,324
Natural gas contracts	Other assets, net		322	Other assets, net		—
Oil contracts	Other assets, net		8,868	Other assets, net		—
Interest rate swaps	Other assets, net		238	Other assets, net		—
		$	42,522		$	5,324

	As of September 30, 2011			As of December 31, 2010
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
	(in thousands)
Liability Derivatives:
Oil contracts	Accrued liabilities	$	—	Accrued liabilities	$	28,855
Interest rate swaps	Accrued liabilities		692	Accrued liabilities		1,751
Natural gas contracts	Other long-term liabilities		—	Other long-term liabilities		913
Interest rate swaps	Other long-term liabilities		—	Other long-term liabilities		115
		$	692		$	31,634

Derivatives that were not designated as hedging instruments (in thousands):

	As of September 30, 2011			As of December 31, 2010
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
	(in thousands)
Asset Derivatives:
Foreign exchange forwards	Other current assets	$	109	Other current assets	$	148
Foreign exchange forwards	Other assets, net		—	Other assets, net		42
		$	109		$	190
Liability Derivatives:
Foreign exchange forwards	Accrued liabilities		264	Accrued liabilities		—
		$	264		$	—

The following tables present the impact that derivative instruments designated as cash flow hedges had on our accumulated comprehensive loss and our condensed consolidated statements of operations for the three and nine month periods ended September 30, 2011 and 2010.

		Gain (Loss) Recognized in OCI on Derivatives (Effective Portion)
		Three Months Ended September 30,					Nine Months Ended September 30,
		2011(1)		2010(1)			2011(1)		2010(1)
		(in thousands)
Oil and natural gas commodity contracts	$	33,432	$	(3,405	)	$	43,373	$	13,799
Interest rate swaps		456		(390	)		918		(1,491	)
	$	33,888	$	(3,795	)	$	44,291	$	12,308

23

(1)   All unrealized gains (losses) related to our oil and natural gas commodity contracts are expected to be reclassified into earnings by no later than December 31, 2013.  The last of our interest swaps will mature in January 2014 and we have foreign exchange forwards that have maturities through June 2012.

	Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)		Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
			Three Months Ended September 30,						Nine Months Ended September 30,
			2011			2010			2011			2010
Oil and natural gas commodity contracts	Oil and gas revenue	$	(1,287	)	$	7,428		$	(19,473	)	$	17,892
Interest rate swaps	Net interest expense		(522	)		(468	)		(1,513	)		(1,355	)
		$	(1,809	)	$	6,960		$	(20,986	)	$	16,537

The following table presents the impact of derivative instruments that no longer qualify for hedge accounting or were not designated as hedges in our condensed consolidated statements of operations for the three and nine month periods ended September 30, 2011 and 2010:

	Location of Gain (Loss) Recognized in Income on Derivatives		Gain (Loss) Recognized in Income on Derivatives
			Three Months Ended September 30,					Nine Months Ended September 30,
			2011			2010		2011			2010
			(in thousands)
Natural gas contracts	Gain on oil and gas derivative contracts	$	—		$	161	$	—		$	2,643
Foreign exchange forwards	Other income (expense)		(381	)		1,106		(234	)		(2,398	)
		$	(381	)	$	1,267	$	(234	)	$	245

Note 17 – Condensed Consolidated Guarantor and Non-Guarantor Financial Information

The payment of our obligations under the Senior Unsecured Notes is guaranteed by all of our restricted domestic subsidiaries (“Subsidiary Guarantors”) except for Cal Dive I-Title XI, Inc.  Each of these Subsidiary Guarantors is included in our consolidated financial statements and has fully and unconditionally guaranteed the Senior Unsecured Notes on a joint and several basis.  As a result of these guaranty arrangements, we are required to present the following condensed consolidating financial information.  The accompanying guarantor financial information is presented on the equity method of accounting for all periods presented.  Under this method, investments in subsidiaries are recorded at cost and adjusted for our share in the subsidiaries’ cumulative results of operations, capital contributions and distributions and other changes in equity.  Elimination entries related primarily to the elimination of investments in subsidiaries and associated intercompany balances and transactions.

24

HELIX ENERGY SOLUTIONS GROUP, INC.

CONDENSED CONSOLIDATING BALANCE SHEETS

(in thousands)

(Unaudited)

	As of September 30, 2011
		Helix			Guarantors		Non-Guarantors			Consolidating  Entries			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	335,063		$	1,060	$	39,232		$	—		$	375,355
Accounts receivable, net		76,595			92,881		51,686			—			221,162
Unbilled revenue		13,235			18		15,621			—			28,874
Income taxes receivable		39,013			—		2,691			(41,704	)		—
Other current assets		60,957			49,739		13,832			(1,292	)		123,236
Total current assets		524,863			143,698		123,062			(42,996	)		748,627
Intercompany		(16,546	)		276,281		(210,909	)		(48,826	)		—
Property and equipment, net		219,450			1,552,025		707,165			(4,887	)		2,473,753
Other assets:
Equity investments in unconsolidated affiliates		—			—		186,423			—			186,423
Equity investments in affiliates		1,989,756			35,708		—			(2,025,464	)		—
Goodwill, net		—			45,107		17,237			—			62,344
Other assets, net		46,672			45,977		17,625			(29,412	)		80,862
Due from subsidiaries/parent		82,918			331,591		—			(414,509	)		—
	$	2,847,113		$	2,430,387	$	840,603		$	(2,566,094	)	$	3,552,009
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	42,650		$	74,003	$	28,459		$	—		$	145,112
Accrued liabilities		50,000			81,412		28,264			—			159,676
Income taxes payable		—			62,870		—			(59,014	)		3,856
Current maturities of long-term debt		3,000			—		4,877			—			7,877
Total current liabilities		95,650			218,285		61,600			(59,014	)		316,521
Long-term debt		1,058,626			—		105,288			—			1,163,914
Deferred income taxes		227,047			120,838		99,249			(5,614	)		441,520
Asset retirement obligations		—			169,429		—			—			169,429
Other long-term liabilities		1,351			2,899		594			—			4,844
Due to parent		—			—		108,403			(108,403	)		—
Total liabilities		1,382,674			511,451		375,134			(173,031	)		2,096,228
Convertible preferred stock		1,000			—		—			—			1,000
Total equity		1,463,439			1,918,936		465,469			(2,393,063	)		1,454,781
	$	2,847,113		$	2,430,387	$	840,603		$	(2,566,094	)	$	3,552,009

25

HELIX ENERGY SOLUTIONS GROUP, INC.

CONDENSED CONSOLIDATING BALANCE SHEETS

(in thousands)

	As of December 31, 2010
		Helix		Guarantors		Non-Guarantors			Consolidating Entries			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	376,434	$	3,294	$	11,357		$	—		$	391,085
Accounts receivable, net		61,846		91,659		23,788			—			177,293
Unbilled revenue		11,990		—		37,421			—			49,411
Income taxes receivable		19,334		—		7,195			(20,430	)		6,099
Other current assets		63,306		49,557		12,889			(8,786	)		116,966
Total current assets		532,910		144,510		92,650			(29,216	)		740,854
Intercompany		1,906		263,920		(171,513	)		(94,313	)		—
Property and equipment, net		217,153		1,605,906		709,082			(5,061	)		2,527,080
Equity investments in unconsolidated affiliates		—		—		187,031			—			187,031
Equity investments in affiliates		1,998,289		29,899		—			(2,028,188	)		—
Goodwill, net		—		45,107		17,387			—			62,494
Other assets, net		43,971		38,324		21,900			(29,634	)		74,561
Due from subsidiaries/parent		95,398		105,434		—			(200,832	)		—
	$	2,889,627	$	2,233,100	$	856,537		$	(2,387,244	)	$	3,592,020
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable	$	60,308	$	56,107	$	42,966		$	—		$	159,381
Accrued liabilities		58,074		107,874		32,289			—			198,237
Income taxes payable		—		36,678		—			(36,678	)		—
Current maturities of long-term debt		4,326		—		14,301			(8,448	)		10,179
Total current liabilities		122,708		200,659		89,556			(45,126	)		367,797
Long-term debt		1,237,587		—		110,166			—			1,347,753
Deferred income taxes		185,453		135,101		98,968			(5,883	)		413,639
Asset retirement obligations		—		170,410		—			—			170,410
Other long-term liabilities		1,421		3,691		665			—			5,777
Due to parent		—		—		120,884			(120,884	)		—
Total liabilities		1,547,169		509,861		420,239			(171,893	)		2,305,376
Convertible preferred stock		1,000		—		—			—			1,000
Total equity		1,341,458		1,723,239		436,298			(2,215,351	)		1,285,644
	$	2,889,627	$	2,233,100	$	856,537		$	(2,387,244	)	$	3,592,020

26

HELIX ENERGY SOLUTIONS GROUP, INC.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(in thousands)

(Unaudited)

	Three Months Ended September 30, 2011
	Helix			Guarantors			Non-Guarantors			Consolidating Entries			Consolidated
Net revenues	$	19,986		$	266,447		$	109,780		$	(23,717	)	$	372,496
Cost of sales		15,698			182,259			75,643			(23,399	)		250,201
Gross profit (loss)		4,288			84,188			34,137			(318	)		122,295
Gain on oil & gas derivative contracts		—			—			—			—			—
Gain (loss) on sale or acquisition of assets		—			—			—			—			—
Selling, general and administrative expenses		(6,752	)		(9,551	)		(6,105	)		326			(22,082	)
Income (loss) from operations		(2,464	)		74,637			28,032			8			100,213
Equity in earnings of investments		60,831			7,277			4,906			(68,108	)		4,906
Net interest expense and other		(17,612	)		(8,016	)		(9,200	)		—			(34,828	)
Income (loss) before income taxes		40,755			73,898			23,738			(68,100	)		70,291
Provision (benefit) for income taxes		(5,266	)		24,419			4,309			3			23,465
Net income (loss), including noncontrolling interests		46,021			49,479			19,429			(68,103	)		46,826
Less net income applicable to noncontrolling interests		—			—			—			(800	)		(800	)
Preferred stock dividends		(10	)		—			—			—			(10	)
Net income (loss) applicable to Helix common shareholders	$	46,011		$	49,479		$	19,429		$	(68,903	)	$	46,016

	Three Months Ended September 30, 2010
	Helix			Guarantors			Non-Guarantors			Consolidating Entries			Consolidated
Net revenues	$	82,764		$	212,105		$	111,581		$	(13,781	)	$	392,669
Cost of sales		42,397			184,369			92,765			(13,414	)		306,117
Gross profit (loss)		40,367			27,736			18,816			(367	)		86,552
Gain on oil & gas derivative contracts		—			161			—			—			161
Gain (loss) on sale or acquisition of assets		—			—			13			—			13
Selling, general and administrative expenses		(15,465	)		(7,370	)		(4,212	)		419			(26,628	)
Income (loss) from operations		24,902			20,527			14,617			52			60,098
Equity in earnings of investments		27,871			7,567			6,221			(35,438	)		6,221
Net interest expense and other		(19,452	)		(3,996	)		2,041			—			(21,407	)
Income (loss) before income taxes		33,321			24,098			22,879			(35,386	)		44,912
Provision (benefit) for income taxes		7,185			4,530			6,234			16			17,965
Net income (loss), including noncontrolling interests		26,136			19,568			16,645			(35,402	)		26,947
Less net income applicable to noncontrolling interests		—			—			—			(776	)		(776	)
Preferred stock dividends		(10	)		—			—			—			(10	)
Net income (loss) applicable to Helix common shareholders	$	26,126		$	19,568		$	16,645		$	(36,178	)	$	26,161

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HELIX ENERGY SOLUTIONS GROUP, INC.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(in thousands)

(Unaudited)

	Nine Months Ended September 30, 2011
	Helix			Guarantors			Non-Guarantors			Consolidating Entries			Consolidated
Net revenues	$	56,113		$	756,344		$	260,582		$	(70,617	)	$	1,002,422
Cost of sales		47,414			521,387			203,651			(69,599	)		702,853
Gross profit (loss)		8,699			234,957			56,931			(1,018	)		299,569
Gain on oil & gas derivative contracts		—			—			—			—			—
Gain (loss) on sale or acquisition of assets		(6	)		—			—			—			(6	)
Selling, general and administrative expenses		(27,512	)		(29,502	)		(14,917	)		1,110			(70,821	)
Income (loss) from operations		(18,819	)		205,455			42,014			92			228,742
Equity in earnings of investments		167,867			5,809			16,443			(173,676	)		16,443
Net interest expense and other		(53,139	)		(18,615	)		(8,675	)		—			(80,429	)
Income (loss) before income taxes		95,909			192,649			49,782			(173,584	)		164,756
Provision (benefit) for income taxes		(17,229	)		66,479			(95	)		31			49,186
Net income (loss), including noncontrolling interests		113,138			126,170			49,877			(173,615	)		115,570
Less net income applicable to noncontrolling interests		—			—			—			(2,354	)		(2,354	)
Preferred stock dividends		(30	)		—			—			—			(30	)
Net income (loss) applicable to Helix common shareholders	$	113,108		$	126,170		$	49,877		$	(175,969	)	$	113,186

	Nine Months Ended September 30, 2010
	Helix			Guarantors			Non-Guarantors			Consolidating Entries			Consolidated
Net revenues	$	137,456		$	568,075		$	256,639		$	(68,669	)	$	893,501
Cost of sales		73,889			641,568			215,067			(54,613	)		875,911
Gross profit (loss)		63,567			(73,493	)		41,572			(14,056	)		17,590
Gain on oil & gas derivative contracts		—			2,643			—			—			2,643
Gain (loss) on sale or acquisition of assets		—			287			5,959			—			6,246
Selling, general and administrative expenses		(52,923	)		(25,285	)		(14,788	)		1,321			(91,675	)
Income (loss) from operations		10,644			(95,848	)		32,743			(12,735	)		(65,196	)
Equity in earnings of investments		(36,865	)		10,672			12,932			26,193			12,932
Net interest expense and other		(42,160	)		(16,564	)		(6,102	)		—			(64,826	)
Income (loss) before income taxes		(68,381	)		(101,740	)		39,573			13,458			(117,090	)
Provision (benefit) for income taxes		517			(40,606	)		2,584			(4,457	)		(41,962	)
Net income (loss), including noncontrolling interests		(68,898	)		(61,134	)		36,989			17,915			(75,128	)
Less net income applicable to noncontrolling interests		—			—			—			(2,049	)		(2,049	)
Preferred stock dividends		(104	)		—			—			—			(104	)
Net income (loss) applicable to Helix common shareholders	$	(69,002	)	$	(61,134	)	$	36,989		$	15,866		$	(77,281	)

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HELIX ENERGY SOLUTIONS GROUP, INC.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

	Nine Months Ended September 30, 2011
	Helix			Guarantors			Non-Guarantors			Consolidating Entries			Consolidated
Cash flow from operating activities:
Net income (loss), including noncontrolling interests	$	113,138		$	126,170		$	49,877		$	(173,615	)	$	115,570
Adjustments to reconcile net income (loss), including noncontrolling interests to net cash provided by (used in) operating activities:
Equity in earnings of affiliates		(167,867	)		(5,809	)		—			173,676			—
Other adjustments		19,125			218,602			2,578			(4,744	)		235,561
Net cash provided by (used in) operating
activities		(35,604	)		338,963			52,455			(4,683	)		351,131
Cash flows from investing activities:
Capital expenditures		(18,240	)		(129,535	)		(20,074	)		—			(167,849	)
Investments in equity investments		—			—			(2,699	)		—			(2,699	)
Distributions from equity investments, net		—			—			3,437			—			3,437
Proceeds from sale of Cal Dive common stock		3,588			—			—			—			3,588
Decrease (increase) in restricted cash		—			703			—			—			703
Net cash used in investing activities		(14,652	)		(128,832	)		(19,336	)		—			(162,820	)
Cash flows from financing activities:
Repayments of debt		(111,941	)		—			(5,860	)		—			(117,801	)
Extinguishment of Senior Unsecured Notes		(77,394	)		—			—			—			(77,394	)
Deferred financing costs		(9,224	)		—			—			—			(9,224	)
Repurchase of common stock and preferred dividends paid		(1,102	)		—			—			—			(1,102	)
Excess tax benefit from stock-based  compensation		(805	)		—			—			—			(805	)
Exercise of stock options, net		2,018			—			—			—			2,018
Intercompany financing		207,333			(212,365	)		349			4,683			—
Net cash provided by (used in) financing activities		8,885			(212,365	)		(5,511	)		4,683			(204,308	)
Effect of exchange rate changes on cash and cash equivalents		—			—			267			—			267
Net increase (decrease) in cash and cash equivalents		(41,371	)		(2,234	)		27,875			—			(15,730	)
Cash and cash equivalents:
Balance, beginning of year		376,434			3,294			11,357			—			391,085
Balance, end of period	$	335,063		$	1,060		$	39,232		$	—		$	375,355

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HELIX ENERGY SOLUTIONS GROUP, INC.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)

	Nine Months Ended September 30, 2010
	Helix			Guarantors			Non-Guarantors			Consolidating Entries			Consolidated
Cash flow from operating activities:
Net income (loss), including noncontrolling interests	$	(68,898	)	$	(61,134	)	$	36,989		$	17,915		$	(75,128	)
Adjustments to reconcile net income (loss), including noncontrolling interests to net cash provided by (used in) operating activities:
Equity in earnings of affiliates		36,866			(10,673	)		—			(26,193	)		—
Other adjustments		70,963			229,567			33,675			(17,311	)		316,894
Net cash provided by (used in) operating
activities		38,931			157,760			70,664			(25,589	)		241,766
Cash flows from investing activities:
Capital expenditures		(54,880	)		(104,423	)		(19,715	)		—			(179,018	)
Investments in equity investments		—			—			(7,768	)		—			(7,768	)
Distributions from equity investments, net		—			—			9,876			—			9,876
Insurance recovery		7,020			9,086			—			—			16,106
Proceeds from sale of property		—			852			—			—			852
Decrease (increase) in restricted cash		—			(133	)		—			—			(133	)
Net cash used in investing activities		(47,860	)		(94,618	)		(17,607	)		—			(160,085	)
Cash flows from financing activities:
Repayments of debt		(3,245	)		—			(6,708	)		—			(9,953	)
Deferred financing costs		(2,864	)		—			—			—			(2,864	)
Repurchases of common stock		(11,763	)		—			—						(11,763	)
Excess tax benefit from stock-based  compensation		(2,376	)		—			—			—			(2,376	)
Exercise of stock options, net		335			—			—			—			335
Intercompany financing		73,887			(61,811	)		(37,665	)		25,589			—
Net cash provided by (used in) financing activities		53,974			(61,811	)		(44,373	)		25,589			(26,621	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(253	)		—			(253	)
Net increase (decrease) in cash and cash equivalents		45,045			1,331			8,431			—			54,807
Cash and cash equivalents:
Balance, beginning of year		258,742			2,522			9,409			—			270,673
Balance, end of period	$	303,787		$	3,853		$	17,840		$	—		$	325,480

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

FORWARD-LOOKING STATEMENTS AND ASSUMPTIONS

 This Quarterly Report on Form 10-Q contains various statements that contain forward-looking information regarding Helix Energy Solutions Group, Inc. and represent our expectations and beliefs concerning future events.   This forward looking information is intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995 as set forth in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements included herein or incorporated herein by reference that are predictive in nature, that depend upon or refer to future events or conditions, or that use terms and phrases such as “achieve,” “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “plan,” “project,” “propose,” “strategy,” “predict,” “envision,” “hope,” “intend,” “will,” “continue,” “may,” “potential,” “should,” “could” and similar terms and phrases, are forward-looking statements. Included in forward-looking statements are, among other things:    

• statements regarding our business strategy, including the potential sale of assets and/or other investments in our subsidiaries and facilities, or any other business plans, forecasts or objectives, any or all of which is subject to change;

• statements regarding our anticipated production volumes, results of exploration, exploitation, development, acquisition or  operations expenditures, and current or prospective reserve levels with respect to any oil and gas property or well;

• statements related to commodity prices for oil and gas or with respect to the supply of and demand for oil and gas;

• statements relating to our proposed exploration, development and/or production of oil and gas properties, prospects or other interests and any anticipated costs related thereto;

• statements related to environmental risks, exploration and development risks, or drilling and operating risks;

• statements regarding projections of revenues, gross margin, expenses, earnings or losses, working capital or other financial items;

• statements regarding any financing transactions or arrangements, or ability to enter into such transactions;

• statements regarding anticipated legislative, governmental, regulatory, administrative or other public body actions, requirements, permits or decisions;

• statements regarding the collectability of our trade receivables;

• statements regarding anticipated developments, industry trends, performance or industry ranking;

• statements regarding general economic or political conditions, whether international, national or in the regional and local market areas in which we do business; 

• statements related to our ability to retain key members of our senior management and key employees;

• statements related to the underlying assumptions related to any projection or forward-looking statement; and

• any other statements that relate to non-historical or future information.

Although we believe that the expectations reflected in these forward-looking statements are reasonable and are based on reasonable assumptions, they do involve risks, uncertainties and other factors that could cause actual results to be materially different from those in the forward-looking statements.  These factors include, among other things:

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• impact of weak economic conditions and the future impact of such conditions on the oil and gas industry and the demand for our services;

• uncertainties inherent in the development and production of oil and gas and in estimating reserves;

• the geographic concentration of our oil and gas operations;

• the effect of new regulations on the offshore Gulf of Mexico oil and gas operations;

• uncertainties regarding our ability to replace depletion;

• unexpected future capital expenditures (including the amount and nature thereof);

• impact of oil and gas price fluctuations and the cyclical nature of the oil and gas industry;

• the effects of indebtedness, which could adversely restrict our ability to operate, could make us vulnerable to general adverse economic and industry conditions, could place us at a competitive disadvantage compared to our competitors that have less debt, and could have other adverse consequences to us;

• the effectiveness of our hedging activities;

• the results of our continuing efforts to control or reduce costs, and improve performance;

• the success of our risk management activities;

• the effects of competition;

• the availability (or lack thereof) of capital (including any financing) to fund our business strategy and/or operations and the terms of any such financing;

• the impact of current and future laws and governmental regulations including tax and accounting developments;

• the effect of adverse weather conditions or other risks associated with marine operations;

• the effect of environmental liabilities that are not covered by an effective indemnity or insurance;

• the potential impact of a loss of one or more key employees; and

• the impact of general, market, industry or business conditions.

Our actual results could differ materially from those anticipated in any forward-looking statements as a result of a variety of factors, including those described in Item 1A. “Risk Factors” in our 2010 Form 10-K.  All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these risk factors. Forward-looking statements are only as of the date they are made, and other than as required under the securities laws, we assume no obligation to update or revise these forward-looking statements or provide reasons why actual results may differ.

EXECUTIVE SUMMARY

Our Business

We are an international offshore energy company that provides reservoir development solutions and other contracting services to the energy market as well as to our own oil and gas properties. Our oil and gas business is a prospect generation, exploration, development and production company. Employing our own key services and methodologies, we seek to lower finding and development costs relative to industry norms.

Our Strategy

Over the past few years, we have focused on improving our balance sheet by increasing our liquidity through disposition of non-core business assets, decreases in our planned capital spending and reductions in the amount of our debt outstanding.  In June 2011, we amended our Credit Agreement to extend its maturity to at least July 1, 2015 and to increase the amount we can potentially borrow under the Revolving Credit Facility to $600 million. For complete information regarding our fourth amendment to our Credit Agreement see Note 7 included elsewhere herein.  In the third quarter of 2011, we reduced our debt by $75.9 million, including the repurchase and extinguishment of $75.0 million of our Senior Unsecured Notes.  At September 30, 2011, our cash on hand totaled $375.4 million and our liquidity was $932.7 million.  Our capital expenditures for full year 2011 are expected to total approximately $275 million (but is exclusive of expenditures related to our asset retirement obligations).  Although we are in the preliminary stages of preparing our capital budget for 2012, we expect that a total of five of our subsea construction and well intervention vessels will be required to be sent to regulatory dry dock at some point during the year.  The scope and cost of those projects is still being evaluated. Over the coming twelve months, we believe that we have sufficient liquidity to successfully implement our business plan without incurring additional indebtedness beyond the existing capacity under the Revolving Credit Facility.

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In March 2010, we announced the engagement of advisors to assist us with evaluating potential alternatives for the disposition of our oil and gas business.  As previously disclosed, certain events in the Gulf of Mexico compromised the efforts to dispose of our entire oil and gas business.   As a result, we are no longer actively seeking to divest our oil and gas business and have shifted our strategy to develop our significant proved undeveloped reserve portfolio and drill certain of our exploration prospects with a focus on crude oil prospects given the favorable price environment for this commodity.   We may from time to time sell certain of our individual oil and gas properties that we consider to be in our best interest in terms of economic returns and/or risk mitigation.

Economic Outlook and Industry Influences

Demand for our contracting services operations is primarily influenced by the condition of the oil and gas industry, and in particular, the willingness of oil and gas companies to make capital expenditures for offshore exploration, drilling and production operations. Generally, spending for our contracting services fluctuates directly with the direction of oil and natural gas prices. However, some of our Contracting Services will often lag drilling operations by a period of 6 to 18 months, meaning that even if there were a sudden increase in deepwater permitting and subsequent drilling in the Gulf of Mexico, it probably would still be some time before we would start securing any awarded projects. The performance of our oil and gas operations is also largely dependent on the prevailing market prices for oil and natural gas, which are impacted by global economic conditions, hydrocarbon production and capacity, geopolitical issues, weather, and several other factors, including but not limited to:

• worldwide economic activity, including available access to global capital and capital markets;

• demand for oil and natural gas, especially in the United States, Europe, China and India;

• economic and political conditions in the Middle East and other oil-producing regions;

• the effect of new regulations on the offshore Gulf of Mexico oil and gas operations;

• actions taken by the Organization of Petroleum  Exporting Countries (“OPEC”) ;

• the availability and discovery rate of new oil and natural gas reserves in offshore areas;

• the cost of offshore exploration for and production and transportation of oil and gas;

• the ability of oil and natural gas companies to generate funds or otherwise obtain external capital for exploration, development and production operations;

• the sale and expiration dates of offshore leases in the United States and overseas;

• technological advances affecting energy exploration production transportation and consumption;

• weather conditions;

• environmental and other governmental regulations; and

• tax policies.

Oil prices increased significantly in 2011 (the average WTI price was $98.33 per barrel in the first half of 2011) but decreased during the latter portions of the third quarter of 2011 (the WTI price in late September 2011 approximated $80 per barrel).  Beginning in the latter part of the first quarter of 2011, the price that we received for the majority of our crude oil sales volumes increased significantly over the WTI market price (by anywhere from $11-$15 per barrel).   Historically the price we receive for most of our crude oil, as priced using a number of Gulf Coast crude oil price indexes, closely correlated with current market prices of WTI crude oil; however, because of a substantial increase in crude oil inventories at Cushing, Oklahoma the price of Gulf Coast crude is now substantially higher than WTI.  Currently the price we receive for our crude oil more closely correlates with the Brent crude oil price in the North Sea.    We do not know how long the price variance of our crude oil and WTI will continue but most analysts believe this will continue over at least the remainder of 2011 and into 2012.

Prices for natural gas have decreased significantly from the record highs in mid 2008 primarily reflecting the increased supply from non-traditional sources of natural gas such as production from shale formations and tight sands, as well as decreased demand following the economic downturn that commenced in mid-to-late 2008.  Although there have been signs that the economy may be slightly improving, most economists believe the recovery will be slow and will take time to recover to previous levels.  The oil and natural gas industry has been adversely affected by the uncertainty of the general timing and level of the economic recovery as well the more recent uncertainties concerning increased government regulation of the industry in the United States (as further discussed below).

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In April 2010, an explosion occurred on the Deepwater Horizon drilling rig located on the site of the Macondo well at Mississippi Canyon Block 252 (Note 1).  The resulting events included loss of life, the complete destruction of the drilling rig and an oil spill, the magnitude of which was unprecedented in U.S. territorial waters.  In October 2010, the DOI lifted the drilling moratorium and instructed the BOEMRE that it could resume issuing drilling permits conditioned on the requesting company’s compliance with all revised drilling, safety and environmental requirements.  The BOEMRE resumed issuing deepwater drilling permits in late February 2011.   See below for a discussion of our Helix Fast Response System, which currently represents one of two containment systems that have been included in  deepwater drilling permit applications with BOEMRE under its new guidelines.

While we did not have plans to drill any additional deepwater wells during the period covered by the drilling moratorium, our contracting services businesses rely heavily on industry investment in the Gulf of Mexico and the results of the moratorium and subsequent delay in the drilling permit process has adversely affected our results of operations and financial position. Although our contracting services activities during 2010 remained substantially unaffected, delays in restarting drilling in the deepwater of the Gulf of Mexico, due to the failure to issue permits or otherwise, have resulted in a deferral or cancellation of portions of our contracted backlog and have decreased current opportunities for contracts for work in the Gulf of Mexico and may continue to affect future opportunities for work in the Gulf of Mexico.  Furthermore, the continuing delays in the permitting process and any subsequent related developments in the Gulf of Mexico could require us to pursue relocation of our vessels located in the Gulf of Mexico to international locations, such as the North Sea, West Africa, Southeast Asia, Brazil and Mexico.

 Although we are still feeling the effects of a relatively fragile global economy and are experiencing the consequences of the additional regulatory requirements resulting from the aftermath of the oil spill in the Gulf of Mexico, we believe that the long-term industry fundamentals are positive based on the following factors: (1) long term increasing world demand for oil and natural gas requires the need for continual replenishment of oil and gas production; (2) peaking global production rates; (3) globalization of the natural gas market; (4) increasing number of mature and small reservoirs; (5) increasing global offshore activity, particularly in deepwater; and (6) increasing number of subsea developments. Our strategy of combining contracting services operations and oil and gas operations allows us to focus on trends (4) through (6) in that we pursue long-term sustainable growth by applying specialized subsea services to the broad external offshore market but with a complementary focus on marginal fields and new reservoirs in which we currently have an ownership stake.

 Over the longer-term, the fundamentals for our business remain generally favorable as the need for the continual replenishment of oil and gas production is the primary driver of demand for our services.

Helix Fast Response System

We developed the Helix Fast Response System (“HFRS”) as a culmination of our experience as a responder in the Gulf oil spill response and containment efforts.  The HFRS centers on two vessels, the HP I and the Q4000, both of which played a key role in the Gulf oil spill response and containment efforts and are presently operating in the Gulf of Mexico.  In 2011, we signed an agreement with Clean Gulf Associates ("CGA"), a non-profit industry group, allowing, in exchange for a retainer fee,  the HFRS to be named as a response resource in permit applications to federal and state agencies and making the HFRS available for a two-year term to certain CGA participants who have executed utilization agreements with us. In addition to the agreement with CGA, we currently have signed separate utilization agreements with 24 CGA participant member companies specifying the day rates to be charged should the HFRS solution be deployed in connection with a well control incident.  The retainer fee associated with HFRS was effective April 1, 2011 and is a component of our Production Facilities business segment.   A total of 38 permits have been granted to CGA participants for deepwater drilling operations identifying the HFRS to fulfill the BOERME requirement to have a spill response and containment resource included in the submitted permit applications.

34

RESULTS OF OPERATIONS

We have disaggregated our contracting services operations into two reportable segments: Contracting Services and Production Facilities.  Our third business segment, Oil and Gas, represents our operations within that industry.  All material intercompany transactions between the segments have been eliminated in our consolidated financial statements, including our consolidated results of operations.

Contracting Services Operations

We seek to provide services and methodologies that we believe are critical to finding and developing offshore reservoirs and maximizing production economics.  Our Contracting Services segment includes operations such as subsea construction, deepwater pipelay, well operations and robotics.   Our Contracting Services business operates primarily in the Gulf of Mexico, North Sea, Asia Pacific and West Africa regions, with services that cover the lifecycle of an offshore oil or gas field.  Our Production Facilities business includes our investments in Deepwater Gateway and Independence Hub as well as our majority ownership of the HP I.   Our Production Facilities segment also includes the HFRS retainer fee (see “Helix Fast Response System” above).   As of September 30, 2011, our Contracting Services operations had backlog of approximately $425.3 million, including $198.8 million for the remainder of 2011 and $207.0 million for 2012.  Backlog for the HP I totaled $57.7 million at September 30, 2011, including $8.4 million for the remainder of 2011 and $33.3 million for 2012.  At December 31, 2010, our contracting services operations backlog totaled approximately $267.3 million, including $218.8 million for 2011.  These backlog contracts are cancellable without penalty in many cases.  Backlog is not a reliable indicator of total annual revenue for our Contracting Services and Production Facilities businesses as contracts may be added, cancelled and in many cases modified while in progress.

Oil and Gas Operations

We began our oil and gas operations to provide a more efficient solution to offshore abandonment, to expand the off-season utilization of our contracting services assets and to achieve incremental returns.  We have evolved this business model to include not only mature oil and gas properties but also proved and unproved reserves yet to be explored and developed.  By owning oil and gas reservoirs and prospects, we are able to utilize the services we otherwise provide to third parties to create value at key points in the life of our own reservoirs including during the exploration and development stages, the field management stage and the abandonment stage.  It is also a feature of our business model to opportunistically monetize part of the created reservoir value through sales of working interests, in order to help fund field development and reduce gross profit deferrals from our Contracting Services operations.  Thus, the reservoir value we create is realized through oil and gas production and/or monetization of working interest stakes.

Impairments

In the third quarter of 2011, we recorded a total of $2.4 million of impairment charges primarily related to revisions in cost estimates for reclamation activities ongoing at two of our Gulf of Mexico oil and gas properties.   During the three-month period ended June 30, 2011,we recorded impairment charges totaling $22.7 million, including $4.1 million for  our only United Kingdom oil and gas property, and for six of our Gulf of Mexico oil and gas properties.  These impairment charges primarily reflect a premature end of these fields’ production life either through actual depletion or capital allocation decisions affecting our third party operated fields.  We did not have any impairment of our properties in the either the first or third quarters of 2011. Following the determination of a significant reduction in our estimates of proved reserves at June 30, 2010, we recorded oil and gas property impairment charges totaling $159.9 million which affected the carrying value of 15 of our Gulf of Mexico oil and gas properties.   See Note 4 for more information regarding our impairment charges.

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Non-GAAP Financial Measures

A non-GAAP financial measure is generally defined by the SEC as one that purports to measure historical or future performance, financial position, or cash flows, but excludes amounts that would not be so adjusted in the most comparable measures under generally accepted accounting principles (GAAP).   We measure our operating performance based on EBITDAX, a non-GAAP financial measure, that is commonly used in the oil and natural gas industry but is not a recognized accounting term under GAAP.  We use EBITDAX to monitor and facilitate the internal evaluation of the performance of our business operations, to facilitate external comparison of our business results to those of others in our industry, to analyze and evaluate financial and strategic planning decisions regarding future investments and acquisitions, to plan and evaluate operating budgets, and in certain cases, to report our results to the holders of our debt as required under our debt covenants.   We believe our measure of EBITDAX provides useful information to the public regarding our ability to service debt and fund capital expenditures and may help our investors understand our operating performance and make it easier to compare our results to other companies that have different financing, capital and tax structures.

We define EBITDAX as income (loss) from continuing operations plus income taxes, net interest expense and other, depreciation, depletion and amortization expense and exploration expenses.  We separately disclose our non cash oil and gas property impairment charges, which, if not material, would be reflected as a component of our depreciation, depletion and amortization expense. Because such impairment charges are material for most of the periods presented, we have reported them as a separate line item in the accompanying consolidated statements of operations.  Non cash impairment charges related to goodwill are also added back if applicable.

In our reconciliation of income (loss) including noncontrolling interests, we provide amounts as reflected in our accompanying condensed consolidated financial statements unless otherwise footnoted.  This means that such amounts are recorded at 100% even if we do not own 100% of all of our subsidiaries.  Accordingly, to arrive at our measure of Adjusted EBITDAX, we deduct the non-controlling interests related to the adjustment components of EBITDAX, the adjustment components of EBITDAX of any discontinued operations, the gain or loss on the sale of assets, and the portion of our asset impairment charges that are considered cash-related charges.  Asset impairment charges that are considered cash are those that affect future cash outflows most notably those related to adjustment to our asset retirement obligations.

Other companies may calculate their measures of EBITDAX and Adjusted EBITDAX differently than we do, which may limit its usefulness as a comparative measure.  Because EBITDAX is not a financial measure calculated in accordance with GAAP, it should not be considered in isolation or as a substitute for net income (loss) attributable to common shareholders, but used as a supplement to that GAAP financial measure.  A reconciliation of our net income (loss) attributable to common shareholders to EBITDAX is as follows:

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2011			2010			2011			2010
		(in thousands)
Income (loss), including noncontrolling interests	$	46,826		$	26,947		$	115,570		$	(75,128	)
Adjustments:
Income tax provision (benefit)		23,465			17,965			49,186			(41,962	)
Net interest expense and other		34,828			21,407			81,182			64,826
Depreciation, depletion and amortization expense		72,370			76,462			239,540			222,730
Asset impairment charges		2,357			897			25,078			171,871
Exploration expenses		1,548			442			9,833			1,780
EBITDAX		181,394			144,120			520,389			344,117
Adjustments:
Non-controlling interest Kommandor LLC		(1,035	)		(1,035	)		(3,076	)		(2,840	)
Discontinued operations		—			—			—			(15	)
(Gain) loss on sales of assets					(13	)		(747	)		(6,246	)
Asset retirement costs		(2,357	)		(897	)		(13,505	)		(897	)
ADJUSTED EBITDAX	$	178,002		$	142,175		$	503,061		$	334,119

36

Comparison of Three Months Ended September 30, 2011 and 2010

The following table details various financial and operational highlights for the periods presented:

		Three Months Ended
		September 30,						Increase/
		2011			2010			(Decrease)
Revenues (in thousands) –
Contracting Services	$	229,967		$	238,531		$	(8,564	)
Production Facilities		19,986			74,458			(54,472	)
Oil and Gas		159,218			95,566			63,652
Intercompany elimination		(36,675	)		(15,886	)		(20,789	)
	$	372,496		$	392,669		$	(20,173	)
Gross profit (loss) (in thousands) –
Contracting Services	$	55,799		$	42,149		$	13,650
Production Facilities		11,072			44,616			(33,544	)
Oil and Gas		56,631			1,083			55,548
Corporate		(679	)		(1,010	)		331
Intercompany elimination		(528	)		(286	)		(242	)
	$	122,295		$	86,552		$	35,743
Gross Margin –
Contracting Services		24	%		18	%		6 pts
Production Facilities		55	%		60	%		(5)pts
Oil and Gas		36	%		1	%		35pts
Total company		33	%		22	%		11pts
Number of vessels(1)/ Utilization(2) –
Contracting Services:
Construction vessels		8/86	%		8/97	%
Well operations		3/99	%		4/83	%
ROVs		46/67	%		46/68	%

(1)   Represents number of vessels as of the end of the period excluding acquired vessels prior to their in-service dates, vessels taken out of service prior to their disposition and vessels jointly owned with a third party.

(2)   Average vessel utilization rate is calculated by dividing the total number of days the vessels in this category generated revenues by the total number of calendar days in the applicable period.

Intercompany segment revenues during the three-month periods ended September 30, 2011 and 2010 were as follows (in thousands):

		Three Months Ended
		September 30,				Increase/
		2011		2010		(Decrease)
Contracting Services	$	25,410	$	15,886	$	9,524
Production Facilities		11,265		—		11,265
	$	36,675	$	15,886	$	20,789

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Intercompany segment profit during the three-month periods ended September 30, 2011 and 2010 was as follows (in thousands):

		Three Months Ended
		September 30,						Increase/
		2011			2010			(Decrease)
Contracting Services	$	606		$	330		$	276
Production Facilities		(78	)		(44	)		(34	)
	$	528		$	286		$	242

The following table details various financial and operational highlights related to our Oil and Gas segment for the periods presented:

		Three Months Ended
		September 30,					Increase/
		2011			2010		(Decrease)
Oil and Gas information–
Oil production volume (MBbls)		1,343			751		592
Oil sales revenue (in thousands)	$	135,590		$	55,314	$	80,276
Average oil sales price per Bbl (excluding hedges)	$	103.20		$	74.68	$	28.52
Average realized oil price per Bbl (including hedges)	$	100.93		$	73.63	$	27.30
Increase in oil sales revenue due to:
Change in prices (in thousands)	$	20,506
Change in production volume (in thousands)		59,770
Total increase in oil sales revenue (in thousands)	$	80,276
Gas production volume (MMcf)		3,617			5,875		(2,258	)
Gas sales revenue (in thousands)	$	22,244		$	36,039	$	(13,795	)
Average gas sales price per mcf (excluding hedges)	$	5.66		$	4.74	$	0.92
Average realized gas price per mcf (including hedges)	$	6.15		$	6.13	$	0.02
Increase (decrease) in gas sales revenue due to:
Change in prices (in thousands)	$	92
Change in production volume (in thousands)		(13,887	)
Total decrease in gas sales revenue (in thousands)	$	(13,795	)
Total production (MMcfe)		11,678			10,383		1,295
Price per Mcfe	$	13.52		$	8.80	$	4.72
Oil and Gas revenue information (in thousands)–
Oil and gas sales revenue	$	157,834		$	91,352	$	66,482
Other revenues(1)		1,384			4,214		(2,830	)
	$	159,218		$	95,566	$	63,652

(1)   Other revenues include fees earned under our process handling agreements.

   Presenting the expenses of our Oil and Gas segment on a cost per Mcfe of production basis normalizes for the impact of production gains/losses and provides a measure of expense control efficiencies.  The following table highlights certain relevant expense items in total converted to Mcfe at a ratio of one barrel of oil to six Mcf:

38

	Three Months Ended September 30,
	2011						2010
	Total			Per Mcfe			Total		Per Mcfe
	(in thousands, except per Mcfe amounts)
Oil and gas operating expenses(1):
Direct operating expenses(2)	$	38,022		$	3.26		$	27,406	$	2.64
Workover		3,737			0.32			3,701		0.36
Transportation		1,816			0.15			1,889		0.18
Repairs and maintenance		2,369			0.20			2,646		0.25
Overhead and company labor		2,709			0.23			1,992		0.19
	$	48,653		$	4.16		$	37,634	$	3.62
Depletion expense	$	46,008		$	3.94		$	50,677	$	4.88
Abandonment		671			0.06			150		0.01
Accretion expense		3,622			0.31			3,743		0.36
Net hurricane costs (reimbursements)		(272	)		(0.02	)		940		0.09
Impairment		2,357			0.20			897		0.09
		52,386			4.49			56,407		5.43
Total	$	101,039		$	8.65		$	94,041	$	9.05

(1)   Excludes exploration expense of $1.5 million and $0.4 million for the three-month periods ended September 30, 2011 and 2010, respectively.  Exploration expense is not a component of lease operating expense.

(2)   Includes production taxes.

Revenues.   Our Contracting Services revenues decreased 4% for the three-month period ended September 30, 2011 compared to the same period in 2010 reflecting decreased subsea construction activity in the Gulf of Mexico, primarily attributable to delays in permitting of projects since the Gulf oil spill in April 2010.   Overall utilization levels for subsea construction assets were negatively impacted for the third quarter of 2011 as the Caesar continued its capital upgrades at a U.S. shipyard until mid-October 2011.  The Caesar has mobilized to Mexico for an accommodations project.  Our ROV utilization rate remained substantially unchanged on the same number of units.  The decrease in our utilization rates for our pipelay and robotics support vessels primarily reflects the lower number of projects with approved permits in the Gulf of Mexico region.  Demand for our well intervention vessels remains strong in both the Gulf of Mexico and North Sea regions with near full utilization during the third quarter of 2011.  Our third quarter 2010 revenues included amounts earned by the contracting of the Q4000, the Express and the HP I to assist in the Gulf oil spill response and containment efforts.

Oil and Gas revenues increased 67% during the three-month period ended September 30, 2011 as compared to the same period in 2010.   The increase in revenues reflects increased oil production and higher oil prices.   Our production was 1.3 billion cubic feet of natural gas equivalent (Bcfe) more in the third quarter of 2011 as compared to the same period in 2010, primarily reflecting oil production from our Phoenix field at Green Canyon Blocks 236, 237, 238 and 282 which commenced production in October 2010, offset in part by lower natural gas production, most notably from our Bushwood field.  Our production was adversely affected during the third quarter of 2011 as the Phoenix field was shut in for a portion of July due to scheduled downtime of a third party pipeline servicing the Phoenix field and the fields in the vicinity.  Additionally, a substantial amount of our production was affected by Tropical Storm Lee in early September 2011.  Our net production rate through October 23, 2011 approximated 128 MMcfe/d as compared to an approximate average of 127 MMcfe/d for the three-month period ended September 30, 2011.

Our Production Facilities revenues reflect the HP I being placed in service in June 2010, following the final installation of its production processing facility upgrades and receipt of its certification by U.S. Coast Guard.  The HP I was initially used in the Gulf oil spill response and containment efforts where it remained until October 2010 at which time it moved to our Phoenix field in which we own a 70% working interest.   The HP I continues to be utilized in the Phoenix field, where it is expected to remain until at least 2013.  Our revenues also include the quarterly retainer fee associated with the HFRS.

Gross Profit.   Our Contracting Services gross profit increased by 32% in the three-month period ended September 30, 2011 as compared to the same period last year.  This increase primarily reflected improved well intervention vessel utilization, partially offset by the weak subsea construction industry conditions in the Gulf of Mexico region, which contributed significantly to our lower pipelay and robotics support vessel and ROV utilization rates.   Our gross profit margin in the third quarter of 2010 benefitted

39

from the Express and Q4000 being on hire in the Gulf oil spill response and containment efforts while it was adversely affected by $20.5 million of losses related to two projects, including the initial pipelay project performed by the Caesar.

Oil and Gas gross profit increased by $55.5 million for the three-month period ended September 30, 2011 as compared to the same period in 2010, which was primarily attributable to increased oil production and higher oil price realizations. The increase in our production is primarily related to the commencement of production from our Phoenix field in October 2010.

Our gross profit for Production Facilities decreased for the three-month period ended September 30, 2011, as compared to same period in 2010, reflecting the current deployment of the HP I in the   Phoenix field, which is owned 70% by us, as compared to the vessel’s third party utilization in the Gulf oil spill response and containment efforts in the third quarter of 2010.   Our gross profit for the three-month period ended September 30, 2011 also benefitted from the quarterly HFRS retainer fee.

Selling, General and Administrative Expenses.  Selling, general and administrative expenses of $22.1 million for the third quarter of 2011 were $4.5 million lower than the $26.6 million incurred in the same prior year period.   The decrease reflects implementation of certain cost savings initiatives and lower long term incentive costs (Note 11).

Equity in Earnings of Investments.  Equity in earnings of investments decreased by $1.3 million during the three-month period ended September 30, 2011 as compared to the same prior year period. This decrease was primarily due to lower throughput at both Deepwater Gateway and Independence Hub, reflecting lower production for the fields serviced by the respective facilities, including the disruptions caused by Tropical Storm Lee in early September 2011.  Our equity earnings also reflect lower contribution from our Clough Helix JV in Australia as work in China was slightly less profitable in third quarter of 2011 than in same period last year due to weather disruptions.

Net Interest Expense.  Our net interest expense was $24.1 million in third quarter 2011 as compared to $25.5 million in the same prior year period. Gross interest expense of $25.2 million during the three-month period ended September 30, 2011 was less than the $25.8 million incurred in the comparable 2010 period reflecting repayments on our Term Loan and the early extinguishment of $75.0 of our Senior Unsecured Notes.  Our interest expense for the three-month period ended September 30, 2011 also included $0.9 million of charges to accelerate the amortization of a pro rata portion of the deferred financing costs associated with the early extinguishment of a portion of our Senior Unsecured Notes (Note 7).   Interest income totaled $0.6 million for the three-month period ended September 30, 2011, as compared with $0.3 million in the same prior year period, reflecting our higher cash balances.

Other Income (Expense).  The $14.8 million variance in other expense for the three-month period ended September 30, 2011 compared with the same prior year period primarily reflects foreign exchange fluctuations in our non U.S. dollar functional currencies and foreign exchange currency contracts.  During the third quarter of 2011 the strengthening of the U.S. dollar against other global currencies resulted in our recording foreign exchange losses totaling $8.3 million as compared to recording foreign exchange gains of $3.1 million in third quarter of 2010.  We had $0.4 million of losses on our foreign exchange forward contracts in the third quarter of 2011 compared to gains of $1.1 million in the third quarter of 2010 (Note 16).  Separately, during the third quarter of 2011 we repurchased approximately $75 million of our Senior Unsecured Notes (Note 7).  The $2.4 million premium we paid to early extinguish those notes was charged to other expense.

Provision for Income Taxes.We recordedincome taxes expense of $23.5 million in the third quarter of 2011, as compared to $18.0 million in the same prior year period. The variance primarily reflects increased profitability in the current year period.  The effective tax rate for the third quarter of 2011 was 33.4% as compared to 40.0% for the third quarter of 2010 reflecting the increased benefit derived from the effect of lower tax rates in certain foreign jurisdictions.

40

Comparison of Nine Months Ended September 30, 2011 and 2010

The following table details various financial and operational highlights for the periods presented:

		Nine Months Ended
		September 30,						Increase/
		2011			2010			(Decrease)
Revenues (in thousands) –
Contracting Services	$	532,857		$	595,048		$	(62,191	)
Production Facilities		56,101			97,169			(41,068	)
Oil and Gas		500,535			288,867			211,668
Intercompany elimination		(87,071	)		(87,583	)		512
	$	1,002,422		$	893,501		$	108,921
Gross profit  (loss) (in thousands) –
Contracting Services	$	104,360		$	130,104		$	(25,744	)
Production Facilities		29,278			57,715			(28,437	)
Oil and Gas		168,724			(149,036	)		317,760
Corporate		(2,336	)		(2,471	)		135
Intercompany elimination		(457	)		(18,722	)		18,265
	$	299,569		$	17,590		$	281,979
Gross Margin –
Contracting Services		20	%		22	%		(2)pts
Production Facilities		52	%		59	%		(7)pts
Oil and Gas		34	%		(52	)%		86pts
Total company		30	%		2	%		28pts
Number of vessels(1)/ Utilization(2) –
Contracting Services:
Construction vessels		8/70	%		8/84	%
Well operations		3/88	%		4/81	%
ROVs		46/57	%		46/63	%

(1)    Represents number of vessels as of the end of the period excluding acquired vessels prior to their in-service dates, vessels taken out of service prior to their disposition and vessels jointly owned with a third party.

(2)    Average vessel utilization rate is calculated by dividing the total number of days the vessels in this category generated revenues by the total number of calendar days in the applicable period.

Intercompany segment revenues during the nine-month periods ended September 30, 2011 and 2010 were as follows (in thousands):

		Nine Months Ended
		September 30,				Increase/
		2011		2010		(Decrease)
Contracting Services	$	52,574	$	84,053	$	(31,479	)
Production Facilities		34,497		3,530		30,967
	$	87,071	$	87,583	$	(512	)

Intercompany segment profit during the nine-month periods ended September 30, 2011 and 2010 was as follows (in thousands):

		Nine Months Ended
		September 30,					Increase/
		2011			2010		(Decrease)
Contracting Services	$	645		$	15,473	$	(14,828	)
Production Facilities		(188	)		3,249		(3,437	)
	$	457		$	18,722	$	(18,265	)

41

The following table details various financial and operational highlights related to our Oil and Gas segment for the periods presented:

		Nine Months Ended
		September 30,					Increase/
		2011			2010		(Decrease)
Oil and Gas information–
Oil production volume (MBbls)		4,275			2,196		2,079
Oil sales revenue (in thousands)	$	416,500		$	159,688	$	256,812
Average oil sales price per Bbl (excluding hedges)	$	103.69		$	75.24	$	28.45
Average realized oil price per Bbl (including hedges)	$	97.43		$	72.71	$	24.72
Increase in oil sales revenue due to:
Change in prices (in thousands)	$	54,280
Change in production volume (in thousands)		202,532
Total increase in oil sales revenue (in thousands)	$	256,812
Gas production volume (MMcf)		13,094			20,365		(7,271	)
Gas sales revenue (in thousands)	$	78,527		$	121,814	$	(43,287	)
Average gas sales price per mcf (excluding hedges)	$	5.44		$	4.83	$	0.61
Average realized gas price per mcf (including hedges)	$	6.00		$	5.98	$	0.02
Increase (decrease) in gas sales revenue due to:
Change in prices (in thousands)	$	317
Change in production volume (in thousands)		(43,604	)
Total decrease in gas sales revenue (in thousands)	$	(43,287	)
Total production (MMcfe)		38,743			33,541		5,202
Price per Mcfe	$	12.78		$	8.39	$	4.39
Oil and Gas revenue information (in thousands)–
Oil and gas sales revenue	$	495,027		$	281,502	$	213,525
Other revenues(1)		5,508			7,365		(1,857	)
	$	500,535		$	288,867	$	211,668

(1)   Other revenues include fees earned under our process handling agreements.

Presenting the expenses of our Oil and Gas segment on a cost per Mcfe of production basis normalizes for the impact of production gains/losses and provides a measure of expense control efficiencies.  The following table highlights certain relevant expense items in total converted to Mcfe at a ratio of one barrel of oil to six Mcf:

	Nine Months Ended September 30,
	2011						2010
	Total			Per Mcfe			Total		Per Mcfe
	(in thousands, except per Mcfe amounts)
Oil and gas operating expenses(1):
Direct operating expenses(2)	$	98,072		$	2.53		$	57,728	$	1.72
Workover		8,541			0.22			18,818		0.56
Transportation		5,618			0.14			4,218		0.13
Repairs and maintenance		7,616			0.20			6,179		0.18
Overhead and company labor		9,322			0.24			5,465		0.16
	$	129,169		$	3.33		$	92,408	$	2.75
Depletion expense	$	160,247		$	4.14		$	154,283	$	4.60
Abandonment		1,056			0.03			1,316		0.04
Accretion expense		11,252			0.29			11,686		0.35
Net hurricane costs (reimbursements)		(4,824	)		(0.13	)		4,559		0.14
Impairment		25,078			0.65			171,871		5.12
		192,809			4.98			343,715		10.25
Total	$	321,978		$	8.31		$	436,123	$	13.00

(1)   Excludes exploration expense of $9.8 million and $1.8 million for the nine-months periods ended September 30, 2011 and 2010, respectively.  Exploration expense is not a component of lease operating expense.

(2)   Includes production taxes.

42

Revenues.   Our Contracting Services revenues decreased 10% for the nine-month period ended September 30, 2011 compared to the same period in 2010 reflecting the decreased subsea construction activity in the Gulf of Mexico, primarily attributable to delays in permitting of projects since the Gulf oil spill in April 2010 as well as the decreased amount of internal vessel utilization to develop our oil and gas properties in 2011.   As previously noted our Q4000, Express and HP I vessels were involved in the Gulf oil spill response and containment efforts in the second and third quarters of 2010.

Oil and Gas revenues increased 73% during the nine-month period ended September 30, 2011, as compared to the same period in 2010, reflecting increased oil production and higher oil prices.  Our production increased by 5.2 Bcfe for the nine-month period ended September 30, 2011, as compared to the same period in 2010.  Our production for the nine-month period ended September 30, 2011 benefited from oil production from our Phoenix field that commenced production in October 2010, which was partially offset by decreased natural gas production from our Bushwood field.

Our Production Facilities revenues increased for the nine-month period ended September 30, 2011 reflecting full utilization of the HP I  at the Phoenix field, which is owned 70% by us, in 2011, as compared to it being utilized by a third party in the Gulf oil spill response and containment efforts from  June 2010 to October 2010.   Our revenues also include the quarterly retainer fees related to the HFRS, which commenced April 1, 2011.

Gross Profit.   For the nine-month period ended September 30, 2011, our Contracting Services gross profit decreased by 20% as compared to the same period last year primarily reflecting the weak subsea construction industry conditions in the Gulf of Mexico, which contributed significantly to our lower pipelay and robotics support vessel and ROV utilization rates.   Our contracting services rates in 2010 benefitted from our increased scope of internal work related to our oil and gas properties as well as the Express being contracted to service the Gulf oil spill response and containment efforts.

The Oil and Gas gross profit increase of $317.8 million for the nine-month period ended September 30, 2011, as compared to the same period in 2010, was due primarily to increased oil production and higher oil price realizations. The increase in our production is primarily related to the commencement of production from our Phoenix field in October 2010.  Our oil and gas gross profit was adversely affected by impairment charges totaling $25.1 million for the nine-month period ended September 30, 2011 and $171.9 million for the nine-month period ended September 30, 2010, including $159.9 million in the second quarter of 2010.  See Note 4 for additional disclosure regarding our impairment charges covering the periods covered by this Quarterly Report on Form 10-Q.

The decrease in our Production Facilities gross profit in the nine-month period ended September 30, 2011, as compared to the same period in 2010, reflects full utilization of the HP I in 2011 at the Phoenix field, which is owned 70% by us, as opposed to four months of third party utilization at the Gulf oil spill response and containment efforts in the nine-month period ended September 30, 2010.

Gain on Sale or Purchase of Assets, Net. The gain for the nine-month period ended September 30, 2010 was primarily associated with the acquisition of the remaining 50% working interest related to the Camelot field in the United Kingdom (Note 4).

Selling, General and Administrative Expenses.  Selling, general and administrative expenses of $70.8 million for the nine-month period ended September 30, 2011 were $20.9 million lower than the $91.7 million incurred in the same prior year period.   The decrease primarily reflects the $17.5 million related to our settlement of litigation claims in Australia in 2010 (Note 14).

Equity in Earnings of Investments.  Equity in earnings of investments increased by $3.5 million during the nine-month period ended September 30, 2011, as compared to the same prior year period.  This increase was mostly due to the Clough Helix JV having equity earnings of $1.4 million in 2011 associated with project work in China while in the 2010 period the joint venture incurred $5.0 million of losses related primarily to start-up costs (Note 6).  Our equity in earnings also reflects lower throughput at Deepwater Gateway and Independence Hub reflecting lower production from the fields that are serviced by the respective facilities, including the disruptions caused by Tropical Storm Lee in earlySeptember 2011.

43

Net Interest Expense.  We reported net interest of $73.6 million for the nine-month period ended September 30, 2011, as compared to $61.6 million in the same prior year period. Gross interest expense of $76.0 million during the nine-month period ended September 30, 2011 was higher than the $74.7 million incurred in the same period in 2010 reflecting slightly higher interest rates.  Capitalized interest totaled $0.8 million for the nine-month period ended September 30, 2011, as compared with $12.4 million for the same period last year.  The decrease in our capitalized interest was primarily attributable to the completion of our major capital projects during the first half of 2010, including our Caesar and HP I vessels which were placed in service in the second quarter of 2010.  Interest income totaled $1.6 million for the nine-month period ended September 30, 2011, as compared to $0.7 million for the nine-month period ended September 30, 2010, reflecting the increase in our cash balances.

Other Income (Expense). The $4.4 million variance in other expense for the nine-month period ended September 30, 2011 compared with the same prior year period primarily reflects foreign exchange fluctuations in our non U.S. dollar functional currencies and foreign exchange currency contracts.  The strengthening of the U.S. dollar against other global currencies resulted in our recording foreign exchange losses totaling $5.2 million for the nine-month period ended September 30, 2011 as compared to losses of $0.6 million in the nine-month period ended September 30, 2010.   We had $0.2 million of losses on our foreign exchange forward contracts for the nine-month period ended September 30, 2011 as compared $2.4 million for the nine-month period ended September 30, 2010 (Note 16).  Other expense also includes the $2.4 million premium we paid to early extinguish the portion of the Senior Unsecured Notes we purchased in the third quarter of 2011 (Note 7).

Provision for Income Taxes.We hadincome tax expense of $49.2 million in the nine-month period ended September 30, 2011, as compared to income tax benefit of $42.0 million in the same prior year period. The variance primarily reflects increased profitability in the current year period. The effective tax rate for the nine-month period ending September 30, 2011 was 29.9%, as compared to a benefit rate of 35.8% for the nine-month period ending September 30, 2010 reflecting the increased benefit derived from the effect of lower tax rates in certain foreign jurisdictions.

LIQUIDITY AND CAPITAL RESOURCES

Overview

The following tables present certain information useful in the analysis of our financial condition and liquidity for the periods presented:

	September 30,  2011		December 31, 2010
	(in thousands)
Net working capital	$	432,106	$	373,057
Long-term debt(1)		1,163,914		1,347,753
Liquidity(2)		932,708		787,296

(1)   Long-term debt does not include the current maturities portion of the long-term debt as such amount is included in net working capital.   It is also net of unamortized debt discount on our Convertible Senior Notes (Note 7).

(2)   Liquidity, as defined by us, is equal to cash and cash equivalents plus available capacity under our revolving credit facility.

The carrying amount of our debt, including current maturities as of September 30, 2011 and December 31, 2010 follows:

44

	September 30,		December 31,
	2011		2010
	(in thousands)
Term Loan (matures July 2015)(1)	$	298,500	$	410,441
Revolving Credit Facility (matures July 2015) (1)		─		─
Convertible Senior Notes (matures March 2025) (2)		288,165		281,472
Senior Unsecured Notes (matures January 2016)		474,960		550,000
MARAD Debt (matures February 2027)		110,166		114,811
Loan Notes		─		1,208
Total	$	1,171,791	$	1,357,932

(1)   Represents earliest date debt would mature; see Note 7 for conditions that would provide extension of maturity date.

(2)   This amount is net of the unamortized debt discount of $11.8 million and $18.5 million, respectively.   The notes will increase to $300 million face amount through accretion of non-cash interest charges through 2012.  Notes may be redeemed by the holders beginning in December 2012 (Note 7).

The following table provides summary data from our consolidated statement of cash flows:

		Nine Months Ended
		September 30,
		2011			2010
		(in thousands)
Net cash provided by (used in):
Operating activities	$	351,131		$	241,766
Investing activities	$	(162,820	)	$	(160,085	)
Financing activities	$	(204,308	)	$	(26,621	)

Our current requirements for cash primarily reflect the need to fund capital expenditures to allow growth of our current lines of business and to service our existing debt.  We also intend to repay debt with any additional free cash flow from operations and/or cash received from any dispositions of our non-core business assets.  Historically, we have funded our capital program, including acquisitions, with cash flow from operations, borrowings under credit facilities and use of project financing along with other debt and equity alternatives.

We remain focused on maintaining a strong balance sheet and adequate liquidity.  We may reduce planned capital spending and seek further additional dispositions of our non-core business assets (see “Executive Summary” above).  We also have a reasonable basis for estimating our future cash flow supported by our remaining contracting services operations backlog and the significant hedged portion of our estimated oil and gas production through 2013.  We believe that internally generated cash flow and available borrowing capacity under our amended Revolving Credit Facility will be sufficient to fund our operations over the foreseeable future.  We have no borrowings drawn on our Revolving Credit Facility as of September 30, 2011.

In accordance with our Credit Agreement, Senior Unsecured Notes, Convertible Senior Notes and the MARAD debt, we are required to comply with certain covenants and restrictions, including certain financial ratios (such as collateral coverage, interest coverage and consolidated leverage), and the maintenance of minimum net worth, working capital and debt-to-equity requirements. The Credit Agreement and Senior Unsecured Notes also contain provisions that limit our ability to incur certain types of additional indebtedness. These provisions effectively prohibit us from incurring any additional secured indebtedness or indebtedness guaranteed by the Company. The Credit Agreement does permit us to incur certain unsecured indebtedness, and also provides for our subsidiaries to incur project financing indebtedness (such as our MARAD loans) secured by the underlying asset, provided that the indebtedness is not guaranteed by us. Upon the occurrence of certain dispositions or the issuance or incurrence of certain types of indebtedness, we may be required to prepay a portion of the Term Loan equal to the amount of proceeds received from such occurrences (or at least 60% of the proceeds in certain dispositions of assets).  

45

Such prepayments will be applied first to the Term Loan, and any excess will then be applied to the Revolving Loans.  As of September 30, 2011 and December 31, 2010, we were in compliance with all of our debt covenants and restrictions.

A prolonged period of weak economic activity may make it difficult to comply with our covenants and other restrictions in the agreements governing our debt.  Our ability to comply with these covenants and other restrictions is affected by economic conditions and other events beyond our control.  If we fail to comply with these covenants and other restrictions, such failure could lead to an event of default, the possible acceleration of our repayment of outstanding debt and the exercise of certain remedies by the lenders, including foreclosure on our pledged collateral.

Our Convertible Senior Notes can be converted prior to stated maturity under certain triggering events specified in the indenture governing the Convertible Senior Notes.  To the extent we do not have long-term financing secured to cover the conversion, the Convertible Senior Notes would be classified as a current liability in the accompanying condensed consolidated balance sheet.  No conversion triggers were met during the three-month and nine-month periods ended September 30, 2011.  The holders may redeem the Convertible Senior Notes beginning December 2012 (Note 7 as well as Note 9 of our 2010 Form 10-K).

 In June 2011, the Credit Agreement was amended to, among other things, to extend its maturity and increase the availability under our Revolving Credit Facility (Note 7).  See Note 9 of our 2010 Form 10-K for additional information related to our long-term debt, including more information regarding other amendments of our Credit Agreement and our requirements and obligations under the debt agreements.

Working Capital

Cash flow from operating activities increased by $109.4 million in the nine-month period ended September 30, 2011 as compared to the same period in 2010.  This increase primarily reflects the effect of increased oil production as well as the substantially higher oil prices.

Investing Activities

Capital expenditures have consisted principally of strategic asset acquisitions related to the purchase or construction of dynamically positioned vessels, acquisition of select businesses, improvements to existing vessels, acquisition and development of oil and gas properties and investments in our production facilities.  Significant sources (uses) of cash associated with investing activities for the nine-month period ended September 30, 2011 and 2010 were as follows:

		Nine Months Ended
		September 30,
		2011			2010
		(in thousands)
Capital expenditures:
Contracting Services	$	(62,202	)	$	(50,663	)
Production Facilities(1)		(16,963	)		(47,726	)
Oil and Gas(1)		(88,684	)		(64,523	)
Investments in equity investments		(2,699	)		(7,768	)
Distributions from equity investments, net(2)		3,437			9,876
Sales of shares of Cal Dive common stock		3,588			─
Proceeds from the sales of property		─			852
Decrease (increase) in restricted cash		703			(133	)
Cash used in investing activities	$	(162,820	)	$	(160,085	)

(1)   Amounts for the nine-month period ended September 30, 2010 are net of insurance recoveries ($7.0 million for Production Facilities and $9.1 million for Oil and Gas).   This insurance recovery is related to damages sustained to the Phoenix field in 2005 which we remediated upon our acquisition of the field in 2007.

(2)   Distributions from equity investments are net of undistributed equity earnings from our equity investments.  Gross distributions from our equity investments are detailed below.

46

Financing Activities

The use of proceeds from ourfinancing activities increased by $177.7 million for the nine-month period ended September 30, 2011 as compared to the same period in the prior year. The increase in  financing activities reflects payments made to reduce our debt outstanding during the nine-month period ended September 30, 2011, including the $109.4 million payment on our Term Loan pursuant to the fourth amendment of our Credit Agreement and $77.4 million to early extinguish a portion of our Senior Unsecured Notes.   See Note 7 herein for additional information regarding the debt repayments we made in 2011.

Restricted Cash

As of September 30, 2011 and December 31, 2010, we had $34.6 million and $35.3 million of restricted cash, all of which related to the funds contractually required to be escrowed to cover the asset retirement obligations associated with the South Marsh Island Block 130 field.  We have fully satisfied the escrow requirements under the escrow agreement.  We have used a small portion of these escrowed funds to pay for the initial reclamation activities at the South Marsh Island Block 130 field.  Reclamation activities at the field will occur over many years and will be funded with these escrowed amounts. These amounts are reflected in other assets, net in the accompanying condensed consolidated balance sheets.

Equity Investments

Our investment in the Clough Helix JV (Note 6) totaled $9.4 million at September 30, 2011 and $4.9 million at December 31, 2010.  Our investment in the Clough Helix JV is in the form of a loan, which is a fixed non-interest bearing with no stated maturity.  We received the following distributions from our equity investments during the nine-month periods ended September 30, 2011 and 2010:

		Nine Months Ended
		September 30,
		2011		2010
		(in thousands)
Deepwater Gateway	$	5,700	$	6,125
Independence Hub		14,180		16,415
Total	$	19,880	$	22,540

Outlook

We anticipate capital expenditures for 2011 will total approximately $275 million (exclusive of expenditures related to our asset retirement obligations).   Although we are in the preliminary stages of preparing our capital budget for 2012, we expect that a total of five of our subsea construction and well intervention vessels will be required to be sent to regulatory dry dock at some point during the year.  The scope and cost of those projects is still being evaluated.  We believe internally generated cash flow, cash from potential future sales of our non-core business assets, and borrowing availability under our existing credit facilities will provide the capital necessary to fund our current initiatives over the next twelve-month period.

The following table summarizes our contractual cash obligations as of September 30, 2011 and the scheduled years in which the obligations are contractually due:

	Total (1)		Less Than 1 year		1-3 Years		3-5 Years		More Than 5 Years
	(in thousands)
Convertible Senior Notes(2)	$	300,000	$	─	$	─	$	─	$	300,000
Senior Unsecured Notes		474,960		─		─		474,960		─
Term Loan (3)		298,500		3,000		6,000		289,500		─
MARAD debt		110,166		4,877		10,496		11,569		83,224
Revolving Credit Facility(4)		─		─		─		─		─
Interest related to long-term debt		436,107		77,600		152,168		98,873		107,466
Drilling and development costs		42,538		42,538		─		─		─
Property and equipment		17,369		17,369		─		─		─
Operating leases(5)		69,497		54,428		13,981		1,088		─
Total cash obligations	$	1,749,137	$	199,812	$	182,645	$	875,990	$	490,690

47

(1)   Excludes unsecured letters of credit outstanding at September 30, 2011 totaling $42.6 million. These letters of credit primarily guarantee various contract bidding, insurance activities and shipyard commitments.

(2)   Contractual maturity in 2025 (Notes can be redeemed by us or we may be required to purchase them beginning in December 2012). Notes can be converted prior to stated maturity if closing sale price of Helix’s common stock for at least 20 days in the period of 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter exceeds 120% of the closing price on that 30th trading day (i.e. $38.56 per share) and under certain triggering events as specified in the indenture governing the Convertible Senior Notes.  Upon the occurrence of a triggering event, to the extent we do not have alternative long-term financing secured to cover the conversion, the Convertible Senior Notes would be classified as a current liability in the accompanying balance sheet.  At September 30, 2011, the conversion trigger was not met.

(3)   Our Term Loan will mature no earlier than July 1, 2015 and may extend to July 1, 2016 if our Senior Unsecured Notes are either refinanced or repaid in full by July 1, 2015 (Note 7).

(4)   Our Revolving Credit Facility will mature no earlier than July 1, 2015 and may extend to January 1, 2016 if our Senior Unsecured Notes are either refinanced or repaid in full by July 1, 2015 (Note 7).

(5)   Operating leases included facility leases and vessel charter leases.  Vessel charter lease commitments at September 30, 2011 were approximately $61.4 million.

Contingencies

In March 2010, we reached an out of court settlement of a dispute associated with an offshore construction contract in Australia.  Pursuant to the terms of this settlement we paid 15 million AUD to resolve all claims between us and the third party.  Accordingly, our results for the nine-month period ended September 30, 2010 include approximately $17.5 million in expenses associated with this settlement agreement, including $13.8 million for the litigation settlement payment and $3.7 million to write off our remaining trade receivable from the third party.  These amounts were recorded as selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements. We prepare these financial statements in conformity with accounting principles generally accepted in the United States. As such, we are required to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. We base our estimates on historical experience, available information and various other assumptions we believe to be reasonable under the circumstances.  These estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as our operating environment changes.    Please read the following discussion in conjunction with our “Critical Accounting Policies and Estimates” as disclosed in our 2010 Form 10-K.

Item 3.  Quantitative and Qualitative Disclosure about Market Risk

We are currently exposed to market risk in three major areas: interest rates, commodity prices and foreign currency exchange rates.

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Commodity Price Risk.  As of September 30, 2011, we have the following volumes under derivative contracts related to our oil and gas producing activities totaling approximately 4.5 MMBbl of oil and 8.1 Bcf of natural gas:

Production Period	Instrument Type	Average Monthly Volumes	Weighted Average Price
Crude Oil:			(per barrel)
October 2011 — December 2011	Swap	163.3 MBbl	82.62
October 2011 — December 2011	Collar	35.3 MBbl	$  95.00 — $124.59
October 2011 — December 2011	Collar	50.0 MBbl	$100.00 — $122.80	a
January 2012 — December 2012	Collar	75.0 MBbl	$  96.67 — $118.57
January 2012 — December 2012	Collar	139.0 MBbl	$  99.42 — $117.59	a
January 2012 — December 2012	Swap	16.0 MBbl	$103.20	a
January 2013 — December 2013	Swap	41.7 MBbl	$  99.15	a
January 2013 — December 2013	Collar	41.7 MBbl	$  95.00 — $102.60	a
Natural Gas:			(per Mcf)
October 2011 — December 2011	Swap	703.3 Mmcf	$4.93
January 2012 — December 2012	Swap	333.3 Mmcf	$4.70
January 2012 — December 2012	Collar	166.7 Mmcf	$4.75 — $5.09

a)   The prices quoted in the table above are primarily NYMEX Henry Hub for natural gas or NYMEX West Texas Intermediate for crude oil.   As footnoted above these costless collar contracts are priced as Brent crude oil.

All of commodity derivative contracts were designated as cash flow hedges and all remain effective and qualify for hedge accounting as of September 30, 2011 (Note 16).

Item 4.  Controls and Procedures

(a)   Evaluation of disclosure controls and procedures.  Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) as of the end of the fiscal quarter ended September 30, 2011.  Based on this evaluation, the principal executive officer and the principal financial officer have concluded that our disclosure controls and procedures were effective as of the end of the fiscal quarter ended September 30, 2011 to ensure that information that is required to be disclosed by us in the reports we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, as appropriate, to allow timely decisions regarding required disclosure.

(b)   Changes in internal control over financial reporting. There have been no changes in our internal control over financial reporting, as defined in Rule 13a-15(f) of the Exchange Act, in the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 

49

Part II.  OTHER INFORMATION

Item 1.  Legal Proceedings

On July 8, 2011, a shareholder derivative lawsuit styled City of Sterling Heights Police & Fire Retirement System v. Owen Kratz, et al. was filed in the United States District Court for the Southern District of Texas, Houston Division.  In the suit, the plaintiff makes claims against our board of directors, certain of our former directors, our top current and former executives and the independent compensation consultant to the Compensation Committee of our board of directors, for breaches of the fiduciary duty of loyalty, unjust enrichment and aiding and abetting the alleged breaches of fiduciary duty relating to the long-term equity awards granted in 2010 to certain of the Company’s executive officers.  On August 17, 2011, a shareholder derivative lawsuit styled Scott Inglebritson v. Owen Kratz, et al was filed in the 61st Judicial District Court of Harris County, Texas, in which the plaintiff makes similar claims as those asserted in the action filed in federal court against the same defendants arising out of the same facts.  In both cases, the plaintiff seeks monetary damages and injunctive relief on behalf of the Company.  Both cases are in their preliminary stages. On September 28, 2011, the Company received a shareholder demand upon the Helix board of directors that the board take action with respect to certain of the Company’s directors’ and senior officers’ breaches of fiduciary duties of candor, good faith, and loyalty, unjust enrichment, and aiding and abetting from 2010 to the present in connection with the awarding of allegedly excessive and unwarranted 2010 executive compensation.   The board of directors is in the process of evaluating said demand.

See Part I, Item 1, Note 14 to the Condensed Consolidated Financial Statements, which is incorporated herein by reference.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

Period	(a) Total number of shares purchased		(b) Average price paid per share		(c) Total number of shares purchased as part of publicly announced program (2)		(d) Maximum value of shares that may yet be purchased under the program (2)
July 1 to July 31, 2011(1)		257	$	16.69		─		497,412
August 1 to August 31, 2011(1)		─		─		─		497,412
September 1 to September 30, 2011(1)		1,394		16.56		─		497,412
		1,651	$	16.58		─		497,412

(1)

Represents shares subject to restricted share awards withheld to satisfy tax obligations arising upon the vesting of restricted share.

(2)

Represents amounts of restricted shares issued to certain of our employees in 2011 (Note 11).  Under the terms of our stock repurchase program, these grants increase the amount of shares available for repurchase. In early October 2011, we repurchased all of the available 497,412 shares in open market transactions totaling $6.5 million for an average of $13.07 per share. For additional information regarding our stock repurchase program see Note 14 of the 2010 Form 10-K.

Item 6.  Exhibits

The exhibits to this report are listed in the Exhibit Index beginning on Page 52 hereof.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		HELIX ENERGY SOLUTIONS GROUP, INC. (Registrant)
Date: October 26, 2011	By:	/s/ Owen Kratz
		Owen Kratz President and Chief Executive Officer (Principal Executive Officer)
Date: October 26, 2011	By:	/s/ Anthony Tripodo
		Anthony Tripodo Executive Vice President and Chief Financial Officer (Principal Financial Officer)

51

INDEX TO EXHIBITS

OF

HELIX ENERGY SOLUTIONS GROUP, INC.

3.1	2005 Amended and Restated Articles of Incorporation, as amended, of registrant, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by registrant with the Securities and Exchange Commission on March 1, 2006.
3.2	Second Amended and Restated By-Laws of Helix, as amended, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed by the registrant with the Securities and Exchange Commission on September 28, 2006.
10.1	Amendment No. 4 to Credit Agreement, dated as of June 8, 2011, by and among Helix, as borrower, Bank of America, N.A., as administrative agent, swing line lender and L/C issuer, and the lenders named thereto.  Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by registrant with Securities and Exchange Commission on June 8, 2011.
15.1	Independent Registered Public Accounting Firm’s Acknowledgement Letter(1)
31.1	Certification Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 by Owen Kratz, Chief Executive Officer(1)
31.2	Certification Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 by Anthony Tripodo, Chief Financial Officer(1)
32.1	Certification of Helix’s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes – Oxley Act of 2002(2)
99.1	Report of Independent Registered Public Accounting Firm(1)
101.INS	XBRL Instance Document(2)
101.SCH	XBRL Schema Document(2)
101.CAL	XBRL Calculation Linkbase Document(2)
101.LAB	XBRL Label Linkbase Document(2)
101.PRE	XBRL Presentation Linkbase Document(2)
101.DEF	XBRL Definition Linkbase Document(2)
	(1) Filed herewith
	(2) Furnished herewith

52

EX-15.1

EXHIBIT 15.1

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S

ACKNOWLEDGEMENT LETTER

October 26, 2011

To the Board of Directors and Shareholders

of Helix Energy Solutions Group, Inc.

We are aware of the incorporation by reference in Registration Statement Forms S-3 (Nos. 333-157785, 333-103451 and 333-125276) and Forms S-8 (Nos. 333-126248, 333-58817, 333-50289 and 333-50205) of Helix Energy Solutions Group, Inc. of our report dated October 26, 2011 relating to the unaudited condensed consolidated interim financial statements of Helix Energy Solutions Group, Inc. and subsidiaries that is included in its Form 10-Q for the quarter ended September 30, 2011.

Very truly yours,

 /s/ ERNST & YOUNG LLP

Houston, Texas

EX-31.1

EXHIBIT 31.1

SECTION 302 CERTIFICATION

I, Owen Kratz, the President and Chief Executive Officer of Helix Energy Solutions Group, Inc., certify that:

1.           I have reviewed this quarterly report on Form 10-Q of Helix Energy Solutions Group, Inc.;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)           designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)           designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)           evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)           disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)           all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)           any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  October 25, 2011

/s/  Owen Kratz                                                      

Owen Kratz

President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

SECTION 302 CERTIFICATION

I, Anthony Tripodo, the Executive Vice President and Chief Financial Officer of Helix Energy Solutions Group, Inc., certify that:

1.           I have reviewed this quarterly report on Form 10-Q of Helix Energy Solutions Group, Inc.;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)           designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)           designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)           evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)           disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)           all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)           any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  October 25, 2011

/s/  Anthony Tripodo                                                      

Anthony Tripodo

Executive Vice President and

Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CEO AND CFO PURSUANT TO 18 U.S.C. SECTION 1350

(Adopted Pursuant to Section 906 of Sarbanes-Oxley Act of 2002)

Pursuant to section 1350 of chapter 63 of title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Owen Kratz, as President and Chief Executive Officer, and Anthony Tripodo, as Executive Vice President and Chief Financial Officer, each hereby certifies that the Quarterly Report of Helix Energy Solutions Group, Inc. (“Helix”) on Form 10-Q for the period ended September 30, 2011, as filed with the Securities and Exchange Commission on the date hereof (the “Report”):

(1)           The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(2)           The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Helix.

Date:  October 25, 2011

/s/  Owen Kratz                                                      

Owen Kratz

President and Chief Executive Officer

Date:  October 25, 2011

/s/  Anthony Tripodo                                                                

Anthony Tripodo

Executive Vice President and

Chief Financial Officer

EX-99.1

EXHIBIT 99.1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of

Helix Energy Solutions Group, Inc.

We have reviewed the condensed consolidated balance sheet of Helix Energy Solutions Group, Inc. and subsidiaries as of September 30, 2011, and the related condensed consolidated statements of operations for the three-month and nine-month periods ended September 30, 2011 and 2010 and the condensed consolidated statements of cash flows for the nine-month periods ended September 30, 2011 and 2010. These financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Helix Energy Solutions Group, Inc. and subsidiaries as of December 31, 2010, and the related consolidated statements of operations, shareholders’ equity, and cash flows for the year then ended, not presented herein, and in our report dated February 25, 2011, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2010, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ ERNST & YOUNG LLP

Houston, Texas

October 26, 2011

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Earnings Per Share (Excluded Securities On Diluted Shares Calculation) (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Diluted	105,154,000	105,307,000	105,061,000	103,772,000
Total				105,512,000
Dilutive securities				0
Stock Options [Member]
Anti-dilutive securities				51,000
Convertible Preferred Stock [Member]
Anti-dilutive securities				1,689,000

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands	Sep. 30, 2011	Dec. 31, 2010
Current assets:
Allowance for uncollectible accounts	$ 4,130	$ 4,527
Shareholders' equity:
Common stock, par value
Common stock, shares authorized	240,000	240,000
Common stock, shares issued	105,965	105,592

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Condensed Consolidated Statements Of Operations (USD $) In Thousands, except Per Share data	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Net revenues:
Contracting services	$ 213,278	$ 297,103	$ 501,887	$ 604,634
Oil and gas	159,218	95,566	500,535	288,867
Total net revenues	372,496	392,669	1,002,422	893,501
Cost of sales:
Contracting services	147,614	211,634	371,042	438,008
Oil and gas	100,230	93,586	306,733	266,032
Oil and gas property impairments	2,357	897	25,078	171,871
Total cost of sales	250,201	306,117	702,853	875,911
Gross profit (loss)	122,295	86,552	299,569	17,590
Gain on oil and gas derivative contracts		161		2,643
Gain (loss) on sale or acquisition of assets, net		13	(6)	6,246
Selling, general and administrative expenses	(22,082)	(26,628)	(70,821)	(91,675)
Income (loss) from operations	100,213	60,098	228,742	(65,196)
Equity in earnings of investments	4,906	6,221	16,443	12,932
Gain on sale of Cal Dive common stock			753
Net interest expense	(24,114)	(25,479)	(73,628)	(61,637)
Other income (expense)	(10,714)	4,072	(7,554)	(3,189)
Income (loss) before income taxes	70,291	44,912	164,756	(117,090)
Provision (benefit) for income taxes	23,465	17,965	49,186	(41,962)
Net income (loss), including noncontrolling interests	46,826	26,947	115,570	(75,128)
Less net income applicable to noncontrolling interests	(800)	(776)	(2,354)	(2,049)
Net income (loss) applicable to Helix	46,026	26,171	113,216	(77,177)
Preferred stock dividends	(10)	(10)	(30)	(104)
Net income (loss) applicable to Helix common shareholders	$ 46,016	$ 26,161	$ 113,186	$ (77,281)
Earnings (loss) per share of common stock:
Basic	$ 0.43	$ 0.25	$ 1.07	$ (0.74)
Diluted	$ 0.43	$ 0.25	$ 1.06	$ (0.74)
Weighted average common shares outstanding:
Basic	104,700	104,090	104,616	103,772
Diluted	105,154	105,307	105,061	103,772

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Condensed Consolidated Guarantor And Non-Guarantor Financial Information (Schedule Of Condensed Consolidating Statements Of Cash Flows) (Details) (USD $) In Thousands	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010
Net income (loss), including noncontrolling interests	$ 115,570	$ (75,128)
Other adjustments	(235,561)	316,894
Net cash provided by operating activities	351,131	241,766
Capital expenditures	(167,849)	(179,018)
Investments in equity investments	(2,699)	(7,768)
Distributions from equity investments, net	3,437	9,876
Proceeds from sale of Cal Dive common stock	3,588
Insurance recovery		16,106
Proceeds from sales of property		852
Decrease (increase) in restricted cash	703	(133)
Net cash used in investing activities	(162,820)	(160,085)
Repayments of debt	117,801	(9,953)
Early extinguishment of Senior Unsecured Notes	(77,394)
Deferred financing costs	(9,224)	(2,864)
Repurchases of common stock and preferred dividends paid	(1,102)	(11,763)
Repurchases of common stock		(11,763)
Excess tax benefit from stock-based compensation	(805)	(2,376)
Exercise of stock options, net	2,018	335
Net cash used in financing activities	(204,308)	(26,621)
Effect of exchange rate changes on cash and cash equivalents	267	(253)
Net (decrease) increase in cash and cash equivalents	(15,730)	54,807
Balance, beginning of year	391,085	270,673
Balance, end of period	375,355	325,480
Helix [Member]
Net income (loss), including noncontrolling interests	113,138	(68,898)
Equity in earnings of affiliates	(167,867)	36,866
Other adjustments	(19,125)	70,963
Net cash provided by operating activities	(35,604)	38,931
Capital expenditures	(18,240)	(54,880)
Proceeds from sale of Cal Dive common stock	3,588
Insurance recovery		7,020
Net cash used in investing activities	(14,652)	(47,860)
Repayments of debt	111,941	(3,245)
Early extinguishment of Senior Unsecured Notes	(77,394)
Deferred financing costs	(9,224)	(2,864)
Repurchases of common stock and preferred dividends paid	(1,102)
Repurchases of common stock		(11,763)
Excess tax benefit from stock-based compensation	(805)	(2,376)
Exercise of stock options, net	2,018	335
Intercompany financing	207,333	73,887
Net cash used in financing activities	8,885	53,974
Net (decrease) increase in cash and cash equivalents	(41,371)	45,045
Balance, beginning of year	376,434	258,742
Balance, end of period	335,063	303,787
Guarantors [Member]
Net income (loss), including noncontrolling interests	126,170	(61,134)
Equity in earnings of affiliates	(5,809)	(10,673)
Other adjustments	(218,602)	229,567
Net cash provided by operating activities	338,963	157,760
Capital expenditures	(129,535)	(104,423)
Insurance recovery		9,086
Proceeds from sales of property		852
Decrease (increase) in restricted cash	703	(133)
Net cash used in investing activities	(128,832)	(94,618)
Intercompany financing	(212,365)	(61,811)
Net cash used in financing activities	(212,365)	(61,811)
Net (decrease) increase in cash and cash equivalents	(2,234)	1,331
Balance, beginning of year	3,294	2,522
Balance, end of period	1,060	3,853
Non-Guarantors [Member]
Net income (loss), including noncontrolling interests	49,877	36,989
Other adjustments	(2,578)	33,675
Net cash provided by operating activities	52,455	70,664
Capital expenditures	(20,074)	(19,715)
Investments in equity investments	(2,699)	(7,768)
Distributions from equity investments, net	3,437	9,876
Net cash used in investing activities	(19,336)	(17,607)
Repayments of debt	5,860	(6,708)
Intercompany financing	349	(37,665)
Net cash used in financing activities	(5,511)	(44,373)
Effect of exchange rate changes on cash and cash equivalents	267	(253)
Net (decrease) increase in cash and cash equivalents	27,875	8,431
Balance, beginning of year	11,357	9,409
Balance, end of period	39,232	17,840
Consolidating Entries [Member]
Net income (loss), including noncontrolling interests	(173,615)	17,915
Equity in earnings of affiliates	173,676	(26,193)
Other adjustments	4,744	(17,311)
Net cash provided by operating activities	(4,683)	(25,589)
Intercompany financing	4,683	25,589
Net cash used in financing activities	$ 4,683	$ 25,589

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Business Segment Information (Schedule Of Segment Reporting Information By Segment) (Details) (USD $)	3 Months Ended					9 Months Ended
	Sep. 30, 2011		Sep. 30, 2010		Mar. 31, 2010	Sep. 30, 2011		Sep. 30, 2010
Revenues	$ 372,496,000		$ 392,669,000			$ 1,002,422,000		$ 893,501,000
Income (loss) from operations	100,213,000		60,098,000			228,742,000		(65,196,000)
Settlement of a third party claim					13,800,000			13,800,000
Settlement of claims					17,500,000			17,500,000
Equity in earnings of equity investments (Note 6)	4,906,000		6,221,000			16,443,000		12,932,000
Contracting Services [Member]
Revenues	229,967,000		238,531,000			532,857,000		595,048,000
Income (loss) from operations	47,363,000		31,015,000			81,194,000		102,282,000
Production Facilities [Member]
Revenues	19,986,000		74,458,000			56,101,000		97,169,000
Income (loss) from operations	10,983,000	[1]	44,520,000	[1]		28,859,000	[1]	57,460,000	[1]
Oil and Gas [Member]
Revenues	159,218,000		95,566,000			500,535,000		288,867,000
Income (loss) from operations	48,622,000		(4,384,000)			144,926,000		(159,991,000)
Corporate [Member]
Income (loss) from operations	(6,227,000)	[2]	(10,767,000)	[2]		(25,780,000)	[2]	(46,242,000)	[2]
Intercompany Elimination [Member]
Revenues	(36,675,000)		(15,886,000)			(87,071,000)		(87,583,000)
Income (loss) from operations	$ (528,000)		$ (286,000)			$ (457,000)		$ (18,705,000)

[1] In April 2009, Kommandor LLC commenced leasing the HP I to us under terms of a charter arrangement following the completion of the initial conversion of the vessel (Note 8 of our 2010 Form10-K). The HP I was certified as a floating oil and gas production unit in June 2010 following the completion of installation of oil and gas processing facilities on the vessel.

[2] The nine-month period ended September 30, 2010, included $13.8 million of $17.5 million settlement of a third party claim against us in March 2010 (Note 14).

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Details Of Certain Accounts (Tables)

9 Months Ended

Sep. 30, 2011

Details Of Certain Accounts

Other Current Assets

	September 30,		December 31,
	2011		2010
	(in thousands)
Other receivables	$	2,767	$	1,247
Prepaid insurance		20,539		12,375
Other prepaids		14,032		11,623
Spare parts inventory		21,602		25,333
Current deferred tax assets		21,758		49,200
Hedging assets		33,203		5,472
Gas imbalance		4,817		6,001
Income tax receivable		—		6,099
Investment held for sale (a)		—		2,835
Other		4,518		2,880
	$	123,236	$	123,065

a.   In March 2011, we sold our remaining 500,000 shares of common stock in our former subsidiary Cal Dive International, Inc. ("Cal Dive").  These sales transactions resulted in net proceeds of approximately $3.6 million and a pre-tax gain of $0.8 million.   In the fourth quarter of 2010, we recognized a $2.2 million other than temporary loss on our investment in Cal Dive common shares (see Notes 2 and 3 of our 2010 Form 10-K for additional information regarding our former Investment in Cal Dive common stock).  

Other Assets, Net

	September 30,		December 31,
	2011		2010
	(in thousands)
Restricted cash	$	34,636	$	35,339
Deferred drydock expenses, net		6,576		11,086
Deferred financing costs, net		28,013		25,697
Intangible assets with finite lives, net		559		636
Hedging assets		9,428		—
Other		1,650		1,803
	$	80,862	$	74,561

Accrued Liabilities

	September 30,		December 31,
	2011		2010
	(in thousands)
Accrued payroll and related benefits	$	41,261	$	38,026
Royalties payable		15,140		15,008
Current asset retirement obligations		63,816		64,526
Unearned revenue		7,900		4,094
Billing in excess of cost		5,297		3,869
Accrued interest		13,795		27,308
Hedge liability		956		30,606
Other		11,511		14,800
	$	159,676	$	198,237

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Document And Entity Information	9 Months Ended
	Sep. 30, 2011	Oct. 21, 2011
Document And Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2011
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2011
Entity Registrant Name	HELIX ENERGY SOLUTIONS GROUP INC
Entity Central Index Key	0000866829
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		105,473,384

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Comprehensive Income (Loss) (Components Of Accumulated Other Comprehensive Loss) (Details) (USD $) In Thousands	Sep. 30, 2011	Dec. 31, 2010
Comprehensive Income (Loss)
Cumulative foreign currency translation adjustment	$ (19,975)	$ (22,262)
Unrealized gain (loss) on hedges, net	27,495	(16,796)
Accumulated other comprehensive income (loss)	$ 7,520	$ (39,058)

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Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2011

Long-Term Debt

Maturities Of Long-Term Debt

	Term Loan			Revolving Loans		Senior Unsecured Notes		Convertible Senior Notes (1)			MARAD Debt			Total
Less than one year	$	3,000		$	—	$	—	$	—		$	4,877		$	7,877
One to two years		3,000			—		—		—			5,120			8,120
Two to three years		3,000			—		—		—			5,376			8,376
Three to four years		289,500			—		—		—			5,644			295,144
Four to five years		—			—		474,960		—			5,925			480,885
Over five years		—			—		—		300,000			83,224			383,224
Total debt		298,500			—		474,960		300,000			110,166			1,183,626
Current maturities		(3,000	)		—		—		—			(4,877	)		(7,877	)
Long-term debt, less    current maturities		295,500			—		474,960		300,000			105,289			1,175,749
Unamortized debt discount (2)		—			—		—		(11,835	)		—			(11,835	)
Long-term debt	$	295,500		$	—	$	474,960	$	288,165		$	105,289		$	1,163,914

(1) Beginning in December 2012, the holders may require us to repurchase the notes or we may at our own option elect to repurchase the notes. The notes will mature in March 2025.

(2)   The notes will increase to the $300 million face amount through accretion of non-cash interest charges through 2012.

Interest Expense And Capitalized Interest

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2011			2010			2011			2010
		(in thousands)
Interest expense	$	25,175		$	25,784		$	75,971		$	74,730
Interest income		(600	)		(263	)		(1,575	)		(660	)
Capitalized interest		(461	)		(42	)		(768	)		(12,433	)
Interest expense, net	$	24,114		$	25,479		$	73,628		$	61,637

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Comprehensive Income (Loss) (Components Of Total Comprehensive Income (Loss)) (Details) (USD $) In Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Comprehensive Income (Loss)
Net income (loss), including noncontrolling interests	$ 46,826	$ 26,947	$ 115,570	$ (75,128)
Foreign currency translation gain (loss)	1,588	5,436	2,287	(8,372)
Unrealized gain (loss) on hedges, net	33,888	(3,795)	44,291	12,308
Unrealized loss on investment available for sale		(123)		(679)
Total other comprehensive income (loss)	$ 82,302	$ 28,465	$ 162,148	$ (71,871)

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Long-Term Debt

9 Months Ended

Sep. 30, 2011

Long-Term Debt

Long-Term Debt

Note 7 – Long-Term Debt

Scheduled maturities of long-term debt outstanding as of September 30, 2011 were as follows (in thousands):

	Term Loan			Revolving Loans		Senior Unsecured Notes		Convertible Senior Notes (1)			MARAD Debt			Total
Less than one year	$	3,000		$	—	$	—	$	—		$	4,877		$	7,877
One to two years		3,000			—		—		—			5,120			8,120
Two to three years		3,000			—		—		—			5,376			8,376
Three to four years		289,500			—		—		—			5,644			295,144
Four to five years		—			—		474,960		—			5,925			480,885
Over five years		—			—		—		300,000			83,224			383,224
Total debt		298,500			—		474,960		300,000			110,166			1,183,626
Current maturities		(3,000	)		—		—		—			(4,877	)		(7,877	)
Long-term debt, less    current maturities		295,500			—		474,960		300,000			105,289			1,175,749
Unamortized debt discount (2)		—			—		—		(11,835	)		—			(11,835	)
Long-term debt	$	295,500		$	—	$	474,960	$	288,165		$	105,289		$	1,163,914

(1) Beginning in December 2012, the holders may require us to repurchase the notes or we may at our own option elect to repurchase the notes. The notes will mature in March 2025.

(2)   The notes will increase to the $300 million face amount through accretion of non-cash interest charges through 2012.

At September 30, 2011, unsecured letters of credit issued totaled approximately $42.6 million (see "Credit Agreement" below).  These letters of credit primarily guarantee various contract bidding, contractual performance, including asset retirement obligations, and insurance activities.  The following table details our interest expense and capitalized interest for the three- and nine-month periods ended September 30, 2011 and 2010:

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2011			2010			2011			2010
		(in thousands)
Interest expense	$	25,175		$	25,784		$	75,971		$	74,730
Interest income		(600	)		(263	)		(1,575	)		(660	)
Capitalized interest		(461	)		(42	)		(768	)		(12,433	)
Interest expense, net	$	24,114		$	25,479		$	73,628		$	61,637

Included below is a summary of certain components of our indebtedness. For additional information regarding our debt see Note 9 of our 2010 Form 10-K.

Senior Unsecured Notes

In December 2007, we issued $550 million of 9.5% Senior Unsecured Notes due 2016 ("Senior Unsecured Notes").  Interest on the Senior Unsecured Notes is payable semiannually in arrears on each January 15 and July 15, commencing July 15, 2008.  The Senior Unsecured Notes are fully and unconditionally guaranteed by substantially all of our existing restricted domestic subsidiaries, except for Cal Dive I-Title XI, Inc.  In addition, any future restricted domestic subsidiaries that guarantee any of our indebtedness and/or our restricted subsidiaries' indebtedness are required to guarantee the Senior Unsecured Notes.  Our foreign subsidiaries are not guarantors.

During the three-month period ended September 30, 2011, we purchased a portion of our Senior Unsecured Notes that resulted in the early extinguishment of an aggregate $75.0 million of those notes.   In these transactions we paid an aggregate amount of $77.4 million, including the $75.0 million in principal and $2.4 million in premium for the repurchased Senior Unsecured Notes.  The premium is reflected as a component of "other income (expense)" in the accompanying condensed consolidated statements of operations.   We also paid the accrued interest on these Senior Unsecured Notes totaling $0.8 million and we recorded a $0.9 million charge to interest expense to accelerate a pro rata portion of the deferred financing costs associated with the issuance of the Senior Unsecured Notes in 2007.

Credit Agreement

In July 2006, we entered into a credit agreement (the "Credit Agreement") containing both a term loan (the "Term Loan") and a revolving credit facility (the "Revolving Credit Facility"). The $835 million term loan was used to fund the cash portion of the acquisition of Remington Oil and Gas Corporation in July 2006.   The original borrowing capacity under the Revolving Credit Facility was $300 million.  In June 2011, we amended our Credit Agreement as further discussed below.  For additional information regarding the previous terms of our Credit Agreement see Note 9 of our 2010 Form 10-K.

The fourth amendment to our Credit Agreement, among other things:

·   increases the Revolving Credit Facility to $600.0 million (capacity was $435 million prior to the closing of the fourth amendment);

·   provided for the repayment of $109.4 million of the outstanding principal portion of the Term Loan together with accrued interest thereon and related costs;

·   extends the maturity date of the Term Loan from July 1, 2013 to a maturity date that is the earlier of (A) July 1, 2016, or (B), if our currently outstanding Senior Unsecured Notes due in 2016 are not fully re-financed or repaid by July 1, 2015, July 1, 2015;

·   extends the maturity date of the Revolving Credit Facility from November 30, 2012 to a maturity date that is the earlier of (A) January 1, 2016, or (B), if our currently outstanding Senior Unsecured Notes due in 2016 are not fully re-financed or repaid by July 1, 2015, July 1, 2015;

·   relaxes limitations on our right to dispose of certain Contracting Services assets comprising collateral to the Credit Agreement;

·   increases the amount of restricted payments in the form of stock repurchases or redemptions that we are permitted to repurchase or redeem up to $50 million;

·   permits us to repurchase or redeem all or part of our Convertible Senior Notes or Senior Unsecured Notes assuming certain conditions are met pro forma for any such  transaction, including maintaining minimum levels of liquidity (defined as cash on hand and availability under our Revolving Credit Facility) of (A) $400 million with respect to the Convertible Senior Notes, and (B) $500 million with respect to the Senior Unsecured Notes; and

·   increases the maximum amount of all investments permitted in subsidiaries that are neither loan parties nor whose equity interests are pledged from $150 million to $200 million.

With the closing of the fourth amendment, the Term Loan currently bears interest either at the one-, two-, three- or six-month LIBOR or Base Rates at our election plus a margin of between 3.25% and 3.5%  (LIBOR margin) or 2.25% to 2.5% (Base Rate margin) depending on current leverage ratios.  Our average interest rate on the Term Loan for the nine-month periods ended September 30, 2011 and 2010 was approximately 3.6% and 2.9%, respectively, including the effects of our interest rate swaps (Note 16).

As the rates for our Term Loan are subject to market influences and will vary over the term of the Credit Agreement, we may enter into various interest rate swaps to stabilize cash flows relating to a portion of our interest payments for our Term Loan (Note 16).

The full amount of the Revolving Credit Facility may be used for issuances of letters of credit.  At September 30, 2011, we had no amounts drawn on the Revolving Credit Facility and our availability under the Revolving Credit Facility totaled $557.4 million, net of $42.6 million of letters of credit issued.

Pursuant to the fourth amendment, the borrowings outstanding under the Revolving Credit Facility will bear interest based on one-, two-, three- or six-month LIBOR rates or on Base Rates at our election plus an applicable margin. The LIBOR margin ranges from 2.5% to 3.5% and the Base Rate margin rates from 1.5% to 2.5%, depending on our consolidated leverage ratio. In connection with the closing of the fourth amendment to our Credit Agreement (as noted above), we borrowed $109.4 million under the Revolving Credit Facility and prepaid a portion of the Term Loan.   We subsequently repaid all borrowings under our Revolving Credit Facility with our available cash on hand.  There were no borrowings outstanding on the Revolving Credit Facility at any time during the third quarter of 2011.

The Credit Agreement contains various covenants regarding, among other things, collateral, capital expenditures, investments, dispositions, indebtedness and financial performance that are customary for this type of financing and for companies in our industry.

Convertible Senior Notes

In March 2005, we issued $300 million of Convertible Senior Notes at 100% of the principal amount to certain qualified institutional buyers.  The Convertible Senior Notes are convertible into cash and, if applicable, shares of our common stock based on the specified conversion rate, subject to adjustment.

The Convertible Senior Notes can be converted prior to the stated maturity (March 2025) under certain triggering events specified in the indenture governing the Convertible Senior Notes.  To the extent we do not have long-term financing secured to cover the conversion, the Convertible Senior Notes would be classified as a current liability in the accompanying condensed consolidated balance sheet.  No conversion triggers were met during either the three- or nine-month periods ended September 30, 2011 and September 30, 2010. The first dates for early redemption of the Convertible Senior Notes are in December 2012, with the holders of the Convertible Senior Notes being able to put them to us on December 15, 2012 and our being able to call the Convertible Senior Notes at any time after December 20, 2012 (see Note 9 of our 2010 Form 10-K).   Effective January 1, 2009, we adopted certain accounting standards that required us to discount the principal amount of our Convertible Senior Notes. Following adoption of these accounting standards, the effective interest rate for the Convertible Senior Notes is 6.6%.

Our average share price was below the $32.14 per share conversion price for all the periods presented in this Quarterly Report on Form 10-Q.  As a result of our share price being lower than the $32.14 per share conversion price for these periods there are no shares included in our diluted earnings per share calculation associated with the assumed conversion of our Convertible Senior Notes.  In the event our average share price exceeds the conversion price, there would be a premium, payable in shares of common stock, in addition to the principal amount, which is payable in cash, and such shares would be issued on conversion.  The Convertible Senior Notes are convertible into a maximum of 13,303,770 shares of our common stock.

MARAD Debt

This U.S. government guaranteed financing ("MARAD Debt")  pursuant to Title XI of the Merchant Marine Act of 1936, which is administered by the Maritime Administration, was used to finance the construction of the Q4000. The MARAD Debt is payable in equal semi-annual installments beginning in August 2002 and matures in February 2027. The MARAD Debt is collateralized by the Q4000 and 50% of the debt is guaranteed by us.  The MARAD Debt initially bore interest at a floating rate which approximated AAA Commercial Paper yields plus 20 basis points.  As provided for in the MARAD Debt agreements, in September 2005, we fixed the interest rate on the debt through the issuance of a 4.93% fixed-rate note with the same February 2027 maturity date.

Other

In accordance with our Credit Agreement and our Senior Unsecured Notes, Convertible Senior Notes and MARAD Debt agreements, we are required to comply with certain covenants, including the maintenance of minimum net worth, working capital and debt-to-equity requirements, and restrictions that limit our ability to incur certain types of additional indebtedness.  As of September 30, 2011, we were in compliance with these covenants and restrictions.

Deferred financing costs of $28.0 million and $25.7 million are included in other assets, net as of September 30, 2011 and December 31, 2010, respectively, and are being amortized over the life of the applicable loan agreements.  We incurred $9.2 million of deferred financing costs related to the fourth amendment to our Credit Agreement and charged $0.8 million of deferred financing costs to interest expense associated with the repayment of $109.4 million of our Term Loan balance in June 2011 (see "Credit Agreement" above).  In the third quarter of 2011, we charged $0.9 million of deferred financing costs to interest expense associated with purchases and early extinguishment of a portion of our Senior Unsecured Notes (see "Senior Unsecured Notes" above).

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Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2011

Comprehensive Income (Loss)

Components Of Total Comprehensive Income (Loss)

		Three Months Ended					Nine Months Ended
		September 30,					September 30,
		2011		2010			2011		2010
Net income (loss), including noncontrolling interests	$	46,826	$	26,947		$	115,570	$	(75,128	)
Other comprehensive income (loss), net of tax
Foreign currency translation gain (loss)		1,588		5,436			2,287		(8,372	)
Unrealized gain (loss) on hedges, net		33,888		(3,795	)		44,291		12,308
Unrealized loss on investment available for sale		—		(123	)		—		(679	)
Total other comprehensive income (loss)	$	82,302	$	28,465		$	162,148	$	(71,871	)

Components Of Accumulated Other Comprehensive Loss

	September 30,			December 31,
	2011			2010
Cumulative foreign currency translation adjustment	$	(19,975	)	$	(22,262	)
Unrealized gain (loss) on hedges, net		27,495			(16,796	)
Accumulated other comprehensive income (loss)	$	7,520		$	(39,058	)

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Long-Term Debt (Narrative) (Details) (USD $)	3 Months Ended	9 Months Ended								9 Months Ended										1 Months Ended	3 Months Ended	1 Months Ended	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2011	Sep. 30, 2010	Aug. 31, 2011	Jun. 30, 2011	May 31, 2011	Mar. 31, 2011	Dec. 31, 2010	Mar. 31, 2010	Sep. 30, 2011 Maximum [Member] Helix Term Loan [Member]	Sep. 30, 2011 Maximum [Member] Helix Revolving Loans [Member]	Sep. 30, 2011 Minimum [Member] Helix Term Loan [Member]	Sep. 30, 2011 Minimum [Member] Helix Revolving Loans [Member]	Sep. 30, 2011 Helix Term Loan [Member]	Sep. 30, 2010 Helix Term Loan [Member]	Jul. 31, 2006 Helix Term Loan [Member]	Sep. 30, 2011 Revolving Credit Facility [Member]	Sep. 30, 2011 Helix Revolving Loans [Member]	Jul. 31, 2006 Helix Revolving Loans [Member]	Dec. 31, 2007 Senior Unsecured Notes [Member]	Sep. 30, 2011 Senior Unsecured Notes [Member]	Mar. 31, 2005 Convertible Senior Notes [Member]	Sep. 30, 2011 Convertible Senior Notes [Member]		Sep. 30, 2011 MARAD Debt [Member]		Sep. 30, 2011 Credit Agreement [Member]	Sep. 30, 2011 Letters Of Credit [Member]
Unsecured letters of credit	$ 42,600,000	$ 42,600,000																										$ 42,600,000
Long-term debt, noncurrent	1,163,914,000	1,163,914,000						1,347,753,000						295,500,000						550,000,000	474,960,000		288,165,000	[1]	105,289,000
Long-term debt, Carrying Value	1,183,626,000	1,183,626,000																			474,960,000	300,000,000	300,000,000	[2]	110,166,000	[3]
Long Term Debt																835,000,000
Debt instrument interest rate																				9.50%					4.93%
Stated maturity Year																				2016			March 2025		February 2027
Aggregate amount of debt payment	77,400,000	77,394,000
Payment on senior unsecured notes																					75,000,000
Accrued interest on notes	800,000	73,096,000	60,137,000
Loss on early extinguishment of Senior Unsecured Notes	2,400,000	2,354,000
Original borrowing capacity					600,000,000	435,000,000													300,000,000
Cash and cash equivalents plus available capacity under revolving credit facility																					500,000,000		400,000,000
Margin range										3.50%	3.50%	3.25%	2.50%
Revolving credit facility, outstanding																	0
Base rate range										2.50%	2.50%	2.25%	1.50%
Average interest rate														3.60%	2.90%
Revolving credit facility available	557,400,000	557,400,000
Investments in Subsidiaries Permitted by Credit Agreement, Excluding Loan Party Subsidiaries and Subsidiaries With Pledged Equity Interests					200,000,000	150,000,000
Repurchases and Redemptions Permitted Under Credit Agreement, Common Stock, Value																		50,000,000
Interest rate swap	200,000,000	200,000,000		200,000,000
Debt instrument issued percentage																						100.00%
Effective interest rate																							6.60%
Per share conversion price							$ 32.14		$ 32.14
Convertible senior notes are convertible into shares																							13,303,770
Debt instrument, frequency of periodic payment																									semi-annual
Debt collateral percentage		50.00%
Deferred financing costs, net	28,013,000	28,013,000						25,697,000																			9,200,000
Amortization of deferred financing costs	900,000	7,197,000	5,731,000																		900,000						800,000
Repayment of revolving credit facility		$ 109,400,000												$ 109,400,000

[1] Beginning in December 2012, the holders may require us to repurchase the notes or we may at our own option elect to repurchase the notes. The notes will mature in March 2025.

[2] Amount excludes the $11.8 million of unamortized discount remaining on the Convertible Senior Notes at September 30, 2011.

[3] The estimated fair value of all debt, other than MARAD Debt, was determined using Level 1 inputs using the market approach. The fair value of the MARAD debt was determined using a third party evaluation of the remaining average life and outstanding principal balance of the MARAD indebtedness as compared to other governmental obligations in the market place with similar terms. The fair value of the MARAD debt was estimated using Level 2 fair value inputs using the cost approach.

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Oil And Gas Properties (Components Of Exploration Expenses) (Details) (USD $) In Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011		Sep. 30, 2010
Delay rental and geological and geophysical costs	$ 522	$ 497	$ 2,176		$ 2,025
Impairment of unproved properties	1,028		7,668	[1]
Dry hole expense and other	(2)	(55)	(11)		(245)
Total exploration expense	1,548	442	9,833		1,780
Deepwater Lease [Member]
Impairment of unproved properties			$ 6,600

[1] Includes the costs ($6.6 million) associated with a deepwater lease the term of which expired during the second quarter of 2011.

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Statement Of Cash Flow Information (Tables)

9 Months Ended

Sep. 30, 2011

Statement Of Cash Flow Information

Supplemental Cash Flow Information

		Nine Months Ended
		September 30,
		2011		2010
Interest paid, net of capitalized interest	$	73,096	$	60,137
Income taxes paid	$	9,575	$	8,020

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Business Segment Information

9 Months Ended

Sep. 30, 2011

Business Segment Information

Business Segment Information

 Note 12 Business Segment Information

Our operations are conducted through two lines of business: contracting services and oil and gas.  We have disaggregated our contracting services operations into two reportable segments.  As a result, our reportable segments consist of the following: Contracting Services, Production Facilities and Oil and Gas. Contracting Services operations include subsea construction, deepwater pipelay, well operations and robotics.  The Production Facilities segment includes our consolidated investment in the HP I and Kommandor LLC, as well as the retainer fee related to the HFRS and our equity investments in Deepwater Gateway and Independence Hub that are accounted for under the equity method of accounting.

We evaluate our performance based on income before income taxes of each segment. Segment assets are comprised of all assets attributable to the reportable segment.  All material intercompany transactions between the segments have been eliminated.

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2011			2010			2011			2010
		(in thousands)
Revenues
Contracting Services	$	229,967		$	238,531		$	532,857		$	595,048
Production Facilities		19,986			74,458			56,101			97,169
Oil and Gas		159,218			95,566			500,535			288,867
Intercompany elimination		(36,675	)		(15,886	)		(87,071	)		(87,583	)
Total	$	372,496		$	392,669		$	1,002,422		$	893,501
Income (loss) from operations
Contracting Services	$	47,363		$	31,015		$	81,194		$	102,282
Production Facilities (1)		10,983			44,520			28,859			57,460
Oil and Gas		48,622			(4,384	)		144,926			(159,991	)
Corporate (2)		(6,227	)		(10,767	)		(25,780	)		(46,242	)
Intercompany elimination		(528	)		(286	)		(457	)		(18,705	)
Total	$	100,213		$	60,098		$	228,742		$	(65,196	)
Equity in earnings of equity investments (Note 6)	$	4,906		$	6,221		$	16,443		$	12,932

(1)   In April 2009, Kommandor LLC commenced leasing the HP I to us under terms of a charter arrangement following the completion of the initial conversion of the vessel (Note 8 of our 2010 Form10-K).  The HP I was certified as a floating oil and gas production unit in June 2010 following the completion of installation of oil and gas processing facilities on the vessel.

(2)   The nine-month period ended September 30, 2010, included $13.8 million of $17.5 million settlement of a third party claim against us in March 2010 (Note 14).

Intercompany segment revenues during the three- and nine-month periods ended September 30, 2011 and 2010 were as follows:

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2011		2010		2011		2010
		(in thousands)
Contracting Services	$	25,410	$	15,886	$	52,574	$	84,053
Production Facilities		11,265				34,497		3,530
Total	$	36,675	$	15,886	$	87,071	$	87,583

Intercompany segment gross profit (losses) during the three- and nine-month periods ended September 30, 2011 and 2010 were as follows:

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2011			2010			2011			2010
		(in thousands)
Contracting Services	$	606		$	330		$	645		$	15,473
Production Facilities		(78	)		(44	)		(188	)		3,249
Total	$	528		$	286		$	457		$	18,722

Our identifiable assets as of September 30, 2011 and December 31, 2010 were as follows:

	September 30, 2011		December 31, 2010
		(in thousands)
Identifiable Assets
Contracting Services	$	1,871,004	$	1,856,016
Production Facilities		513,586		512,990
Oil and Gas		1,167,419		1,223,014
Total	$	3,552,009	$	3,592,020

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Details Of Certain Accounts

9 Months Ended

Sep. 30, 2011

Details Of Certain Accounts

Details Of Certain Accounts

Note 3 – Details of Certain Accounts

Other current assets consisted of the following as of September 30, 2011 and December 31, 2010:

	September 30,		December 31,
	2011		2010
	(in thousands)
Other receivables	$	2,767	$	1,247
Prepaid insurance		20,539		12,375
Other prepaids		14,032		11,623
Spare parts inventory		21,602		25,333
Current deferred tax assets		21,758		49,200
Hedging assets		33,203		5,472
Gas imbalance		4,817		6,001
Income tax receivable		—		6,099
Investment held for sale (a)		—		2,835
Other		4,518		2,880
	$	123,236	$	123,065

a.   In March 2011, we sold our remaining 500,000 shares of common stock in our former subsidiary Cal Dive International, Inc. ("Cal Dive").  These sales transactions resulted in net proceeds of approximately $3.6 million and a pre-tax gain of $0.8 million.   In the fourth quarter of 2010, we recognized a $2.2 million other than temporary loss on our investment in Cal Dive common shares (see Notes 2 and 3 of our 2010 Form 10-K for additional information regarding our former Investment in Cal Dive common stock).  

Other assets, net, consisted of the following as of September 30, 2011 and December 31, 2010:

	September 30,		December 31,
	2011		2010
	(in thousands)
Restricted cash	$	34,636	$	35,339
Deferred drydock expenses, net		6,576		11,086
Deferred financing costs, net		28,013		25,697
Intangible assets with finite lives, net		559		636
Hedging assets		9,428		—
Other		1,650		1,803
	$	80,862	$	74,561

Accrued liabilities consisted of the following as of September 30, 2011 and December 31, 2010:

	September 30,		December 31,
	2011		2010
	(in thousands)
Accrued payroll and related benefits	$	41,261	$	38,026
Royalties payable		15,140		15,008
Current asset retirement obligations		63,816		64,526
Unearned revenue		7,900		4,094
Billing in excess of cost		5,297		3,869
Accrued interest		13,795		27,308
Hedge liability		956		30,606
Other		11,511		14,800
	$	159,676	$	198,237

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Details Of Certain Accounts (Other Assets, Net) (Details) (USD $) In Thousands	Sep. 30, 2011	Dec. 31, 2010
Details Of Certain Accounts
Restricted cash	$ 34,636	$ 35,339
Deferred drydock expenses, net	6,576	11,086
Deferred financing costs, net	28,013	25,697
Intangible assets with finite lives, net	559	636
Hedging assets	9,428
Other	1,650	1,803
Other assets, net	$ 80,862	$ 74,561

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Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2011

Comprehensive Income (Loss)

Comprehensive Income (Loss)

Note 9 – Comprehensive Income (Loss)

The components of total comprehensive income (loss) for the three and nine-month periods ended September 30, 2011 and 2010 were as follows (in thousands):

		Three Months Ended					Nine Months Ended
		September 30,					September 30,
		2011		2010			2011		2010
Net income (loss), including noncontrolling interests	$	46,826	$	26,947		$	115,570	$	(75,128	)
Other comprehensive income (loss), net of tax
Foreign currency translation gain (loss)		1,588		5,436			2,287		(8,372	)
Unrealized gain (loss) on hedges, net		33,888		(3,795	)		44,291		12,308
Unrealized loss on investment available for sale		—		(123	)		—		(679	)
Total other comprehensive income (loss)	$	82,302	$	28,465		$	162,148	$	(71,871	)

The components of accumulated other comprehensive income (loss) were as follows (in thousands):

	September 30,			December 31,
	2011			2010
Cumulative foreign currency translation adjustment	$	(19,975	)	$	(22,262	)
Unrealized gain (loss) on hedges, net		27,495			(16,796	)
Accumulated other comprehensive income (loss)	$	7,520		$	(39,058	)

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Commitments And Contingencies

9 Months Ended

Sep. 30, 2011

Commitments And Contingencies

Commitments And Contingencies

Note 14 – Commitments and Contingencies

Litigation and Claims

  In the first quarter of 2010, our results included approximately $17.5 million in expenses associated with a settlement agreement related to an offshore construction contract dispute in Australia (see Note 16 of 2010 Form 10-K), including $13.8 million for the litigation settlement payment and $3.7 million to write off our remaining trade receivable from the third party.  These amounts were recorded as selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.

Loss Contract

In 2010 our Australian subsidiary contracted for a project to plug, abandon and salvage subsea wells in an oil and gas field located offshore China  (see Note 16 of the 2010 Form 10-K).  As previously reported, as of the year ended December 31, 2010 we had recorded an aggregate pre-tax loss of approximately $30 million related to this project which reflected the difficulty we had in plugging the wells because of certain structural issues, start-up issues with our recently repaired subsea intervention device and significant weather related delays.  In the first quarter of 2011, this project ended and we recorded an additional pre-tax loss of approximately $0.2 million.  We collected our remaining $6.7 million trade receivable related to this project in the third quarter of 2011.

Contingencies and Claims

We were subcontracted to perform development work for a large gas field offshore India.  Work commenced in the fourth quarter of 2007 and we completed our scope of work in the third quarter of 2009.  To date we have collected approximately $303 million related to this project with an amount of trade receivables and claims yet to be collected.  We have requested arbitration in India pursuant to the terms of the subcontract to pursue our claims and the prime contractor has also requested arbitration and has asserted certain counterclaims against us.  If we are not successful in resolving these matters through ongoing discussions with the prime contractor, then arbitration in India remains a potential remedy.  Based on number of factors associated with the ongoing negotiations with the prime contractor, in 2010 we established an allowance against our trade receivable balance that reduces its balance to an amount we believe is ultimately realizable (see Notes 16 and 18 of our 2010 Form 10-K).  However, at the time of this filing no final commercial resolution of this matter has been reached.

We have received value added tax (VAT) assessments from the State of Andhra Pradesh, India (the "State") in the amount of approximately $28 million related to our subsea and diving contract entered into in December 2006 in India for the tax years 2007, 2008, 2009, and  2010. The State claims we owe unpaid taxes related to products consumed by us during the period of the contract.  We are of the opinion that the State has arbitrarily assessed this VAT tax and has no foundation for the assessment, and believe that we have complied with all rules and regulations as it relates to VAT in the State. We also believe that our position is supported by law and intend to vigorously defend our position. However, the ultimate outcome of this assessment and our potential liability from it, if any, cannot be determined at this time. If the current assessment is upheld, it may have a material negative effect on our consolidated results of operations while also impacting our financial position.

We are involved in various legal proceedings, primarily involving claims for personal injury under the General Maritime Laws of the United States and the Jones Act based on alleged negligence. In addition, from time to time we incur other claims, such as contract disputes, in the normal course of business.

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Earnings Per Share

9 Months Ended

Sep. 30, 2011

Earnings Per Share

Earnings Per Share

Note 10 – Earnings Per Share

           We have shares of restricted stock issued and outstanding, some of which remain subject to certain vesting requirements. Holders of such shares of unvested restricted stock are entitled to the same liquidation and dividend rights as the holders of our outstanding common stock and are thus considered participating securities. Under applicable accounting guidance, the undistributed earnings for each period are allocated based on the participation rights of both the common shareholders and holders of any participating securities as if earnings for the respective periods had been distributed.   Because both the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis.  Further, we are required to compute earnings per share ("EPS") amounts under the two class method in periods in which we have earnings from continuing operations.  For periods in which we have a net loss we do not use the two class method as holders of our restricted shares are not contractually obligated to share in such losses.

The presentation of basic EPS amounts on the face of the accompanying condensed consolidated statements of operations is computed by dividing the net income available to common shareholders by the weighted average shares of outstanding common stock. The calculation of diluted EPS is similar to basic EPS, except that the denominator includes dilutive common stock equivalents and the income included in the numerator excludes the effects of the impact of dilutive common stock equivalents, if any. The computations of the numerator (income) and denominator (shares) to derive the basic and diluted EPS amounts presented on the face of the accompanying condensed consolidated statements of operations are as follows (in thousands):

	Three Months Ended				Three Months Ended
	September 30, 2011				September 30, 2010
	Income			Shares	Income			Shares
Basic:
Net income applicable to common shareholders	$	46,016			$	26,161
Less: Undistributed net income allocable to participating securities		(549	)			(356	)
Net income applicable to common stock	$	45,467		104,700	$	25,805		104,090

	Three Months Ended			Three Months Ended
	September 30, 2011			September 30, 2010
	Income		Shares	Income		Shares
Diluted:
Net  income per common share – Basic	$	45,467	104,700	$	25,805	104,090
Effect of dilutive securities:
Stock options		—	93		—	22
Undistributed earnings reallocated to participating securities		2	—		5	—
Convertible Senior Notes		—	—		—	—
Convertible preferred stock		10	361		—	1,195
Net income per common share – Diluted	$	45,479	105,154	$	25,810	105,307

	Nine Months Ended				Nine Months Ended
	September 30, 2011				September 30, 2010
	Income			Shares	Income			Shares
Basic:
Net income (loss) applicable to common shareholders	$	113,186			$	(77,281	)
Less: Undistributed net income allocable to participating securities		(1,403	)			—
Net income (loss) applicable to common stock	$	111, 783		104,616	$	(77,281	)	103,772

	Nine Months Ended			Nine Months Ended
	September 30, 2011			September 30, 2010
	Income		Shares	Income			Shares
Diluted:
Net  income (loss) per common share –  Basic	$	111,783	104,616	$	(77,281	)	103,772
Effect of dilutive securities:
Stock options		—	84		—		—
Undistributed earnings reallocated to participating securities		6	—		—		—
Convertible Senior Notes		—	—		—		—
Convertible preferred stock		30	361		—		—
Net income (loss) per common share –  Diluted	$	111,819	105,061	$	(77,281	)	103,772

            We had a net loss from continuing operations for the nine-month period ended September 30, 2010.  Accordingly, we had no dilutive securities during this reporting period as their inclusion would have had an anti-dilutive effect on our EPS calculation, meaning it would have increased our reported EPS amount. The following table provides the effect the excluded securities would have had on our diluted shares calculation for the nine-month period ended September 30, 2010 assuming we had earnings from continuing operations (in thousands):

Diluted shares (as reported)	103,772
Stock options	51
Convertible preferred stock	1,689
Total	105,512

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Derivative Instruments And Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2011

Derivative Instruments And Hedging Activities

Volumes Under Derivative Contracts Related To Oil And Gas Producing Activities

Production Period	Instrument Type	Average Monthly Volumes	Weighted Average Price
Crude Oil:			(per barrel)
October 2011 — December 2011	Swap	163.3 MBbl	$	82.62
October 2011 — December 2011	Collar	35.3 MBbl	$	95.00— $124.59
October 2011 — December 2011	Collar	50.0 MBbl	$	100.00— $122.80	a
January 2012 — December 2012	Collar	75.0 MBbl	$	96.67— $118.57
January 2012 — December 2012	Collar	139.0 MBbl	$	99.42— $117.59	a
January 2012 — December 2012	Swap	16.0 MBbl	$	103.20	a
January 2013 — December 2013	Swap	41.7 MBbl	$	99.15	a
January 2013 — December 2013	Collar	41.7 MBbl	$	95.00— $102.60	a
Natural Gas:			(per Mcf)
October 2011 — December 2011	Swap	703.3 Mmcf	$	4.93
January 2012 — December 2012	Swap	333.3 Mmcf	$	4.70
January 2012 — December 2012	Collar	166.7 Mmcf	$	4.75— $5.09

a.   The prices quoted in the table above are primarily NYMEX Henry Hub for natural gas and NYMEX West Texas Intermediate for crude oil.   As footnoted above these costless collar contracts are priced as Brent crude oil.

Derivatives Designated As Hedging Instruments

	As of September 30, 2011			As of December 31, 2010
	Balance Sheet  Location	Fair Value		Balance Sheet Location	Fair Value
	(in thousands)
Asset Derivatives:
Oil contracts	Other current assets	$	28,020	Other current assets	$	—
Natural gas contracts	Other current assets		5,074	Other current assets		5,324
Natural gas contracts	Other assets, net		322	Other assets, net		—
Oil contracts	Other assets, net		8,868	Other assets, net		—
Interest rate swaps	Other assets, net		238	Other assets, net		—
		$	42,522		$	5,324

	As of September 30, 2011			As of December 31, 2010
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
	(in thousands)
Liability Derivatives:
Oil contracts	Accrued liabilities	$	—	Accrued liabilities	$	28,855
Interest rate swaps	Accrued liabilities		692	Accrued liabilities		1,751
Natural gas contracts	Other long-term liabilities		—	Other long-term liabilities		913
Interest rate swaps	Other long-term liabilities		—	Other long-term liabilities		115
		$	692		$	31,634

Derivatives Not Designated As Hedging Instruments

	As of September 30, 2011			As of December 31, 2010
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
	(in thousands)
Asset Derivatives:
Foreign exchange forwards	Other current assets	$	109	Other current assets	$	148
Foreign exchange forwards	Other assets, net		—	Other assets, net		42
		$	109		$	190
Liability Derivatives:
Foreign exchange forwards	Accrued liabilities		264	Accrued liabilities		—
		$	264		$	—

Impact Of Derivative Instruments On Accumulated Comprehensive Income (Loss)

		Gain (Loss) Recognized in OCI on Derivatives (Effective Portion)
		Three Months Ended September 30,					Nine Months Ended September 30,
		2011(1)		2010(1)			2011(1)		2010(1)
		(in thousands)
Oil and natural gas commodity contracts	$	33,432	$	(3,405	)	$	43,373	$	13,799
Interest rate swaps		456		(390	)		918		(1,491	)
	$	33,888	$	(3,795	)	$	44,291	$	12,308

(1)   All unrealized gains (losses) related to our oil and natural gas commodity contracts are expected to be reclassified into earnings by no later than December 31, 2013.  The last of our interest swaps will mature in January 2014 and we have foreign exchange forwards that have maturities through June 2012.

Gain (Loss) Reclassified From Accumulated OCI Into Income

	Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)		Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
			Three Months Ended September 30,						Nine Months Ended September 30,
			2011			2010			2011			2010
Oil and natural gas commodity contracts	Oil and gas revenue	$	(1,287	)	$	7,428		$	(19,473	)	$	17,892
Interest rate swaps	Net interest expense		(522	)		(468	)		(1,513	)		(1,355	)
		$	(1,809	)	$	6,960		$	(20,986	)	$	16,537

Impact Of Non Designated Derivative Instruments On Income Statement

	Location of Gain (Loss) Recognized in Income on Derivatives		Gain (Loss) Recognized in Income on Derivatives
			Three Months Ended September 30,					Nine Months Ended September 30,
			2011			2010		2011			2010
			(in thousands)
Natural gas contracts	Gain on oil and gas derivative contracts	$	—		$	161	$	—		$	2,643
Foreign exchange forwards	Other income (expense)		(381	)		1,106		(234	)		(2,398	)
		$	(381	)	$	1,267	$	(234	)	$	245

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Income Taxes

9 Months Ended

Sep. 30, 2011

Income Taxes

Income Taxes

Note 8 – Income Taxes

         The effective tax rates for the three-month and nine-month periods ended September 30, 2011 were 33.4% and 29.9%, respectively.  The effective tax rates for the three-month and nine-month periods ended September 30, 2010 reflected a provision of 40.0% and a benefit of 35.8%, respectively.  The variance of the comparable year-over-year periods primarily reflect the increased benefit derived from the effect of lower tax rates in certain foreign jurisdictions.   Our effective tax rate increased in the third quarter of 2011, primarily reflecting increased profitability in our U.S. operations and certain losses associated with our Australian operations that are nondeductible for income tax purposes.   

     We believe our recorded assets and liabilities are reasonable. However, because tax laws and regulations are subject to interpretation and tax litigation is inherently uncertain, our assessments can involve a series of complex judgments about future events and rely heavily on estimates and assumptions.

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Stock-Based Compensation Plans (Restricted Shares Granted) (Details) (USD $)	9 Months Ended
	Sep. 30, 2011
Grant Share Amount A [Member]
Restricted share grants, Date of Grant	January 4, 2011
Restricted share grants, Shares	475,804
Restricted share grants, Market Value Per Share	$ 12.14
Restricted share grants, vesting percentage	20.00%
Restricted share grants Vesting Period, in years	five
Grant Share Amount B [Member]
Restricted share grants, Date of Grant	January 4, 2011
Restricted share grants, Shares	4,427
Restricted share grants, Market Value Per Share	$ 12.14
Restricted share grants, vesting percentage	100.00%
Restricted stock, vesting date	January 1, 2013
Grant Share Amount C [Member]
Restricted share grants, Date of Grant	April 1, 2011
Restricted share grants, Shares	2,907
Restricted share grants, Market Value Per Share	$ 17.20
Restricted share grants, vesting percentage	100.00%
Restricted stock, vesting date	January 1, 2013
Grant Share Amount D [Member]
Restricted share grants, Date of Grant	May 11, 2011
Restricted share grants, Shares	21,608
Restricted share grants, Market Value Per Share	$ 16.14
Restricted share grants, vesting percentage	20.00%
Restricted share grants Vesting Period, in years	five
Grant Share Amount E [Member]
Restricted share grants, Date of Grant	July 1, 2011
Restricted share grants, Shares	2,095
Restricted share grants, Market Value Per Share	$ 16.56
Restricted share grants, vesting percentage	100.00%
Restricted stock, vesting date	January 1, 2013

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Basis Of Presentation

9 Months Ended

Sep. 30, 2011

Basis Of Presentation

Basis Of Presentation

Note 1 – Basis of Presentation

The accompanying condensed consolidated financial statements include the accounts of Helix Energy Solutions Group, Inc. and its majority-owned subsidiaries (collectively, "Helix" or the "Company"). Unless the context indicates otherwise, the terms "we," "us" and "our" in this report refer collectively to Helix and its majority-owned subsidiaries.   All material intercompany accounts and transactions have been eliminated. These unaudited condensed consolidated financial statements have been prepared pursuant to instructions for the Quarterly Report on Form 10-Q required to be filed with the Securities and Exchange Commission ("SEC"), and do not include all information and footnotes normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles.

The accompanying condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles and are consistent in all material respects with those applied in our 2010 Annual Report on Form 10-K ("2010 Form 10-K").  The preparation of these financial statements requires us to make estimates and judgments that affect the amounts reported in the financial statements and the related disclosures.  Actual results may differ from our estimates.  Management has reflected all adjustments (which were normal recurring adjustments unless otherwise disclosed herein) that it believes are necessary for a fair presentation of the condensed consolidated balance sheets, results of operations, and cash flows, as applicable. The operating results for the periods ended September 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011. Our balance sheet as of December 31, 2010 included herein has been derived from the audited balance sheet as of December 31, 2010 included in our 2010 Form 10-K. These unaudited condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and notes thereto included in our 2010 Form 10-K.

Certain reclassifications were made to previously reported amounts in the condensed consolidated financial statements and notes thereto to make them consistent with the current presentation format, including reclassifying the previously recorded results associated with our discontinued operations.  The discontinued operations results are now reflected as a component of other income (expense) in the accompanying condensed consolidated statement of operations as such amounts are immaterial for all the periods presented in this Quarterly Report on Form 10-Q.

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Oil And Gas Properties

9 Months Ended

Sep. 30, 2011

Oil And Gas Properties

Oil And Gas Properties

Note 4 – Oil and Gas Properties

We follow the successful efforts method of accounting for our interests in oil and gas properties. Under the successful efforts method, the costs of drilling and equipping successful wells and leases containing productive reserves are capitalized. Costs incurred to drill and equip development wells, including unsuccessful development wells, are capitalized. Costs incurred relating to unsuccessful exploratory wells are charged to expense in the period in which the drilling is determined to be unsuccessful.

Depletion expense is determined on a field-by-field basis using the units-of-production method, with depletion rates for leasehold acquisition costs based on estimated total remaining proved reserves.  Depletion rates for well and related facility costs are based on estimated total remaining proved developed reserves associated with each individual field.  The depletion rates are changed whenever there is an indication of the need for a revision, but at a minimum, are evaluated annually.  Any such revisions are accounted for prospectively as a change in accounting estimate.

Impairments

During the third quarter of 2011, we recorded a total of $2.4 million of impairment charges primarily related to revisions in cost estimates for reclamation activities ongoing at two of our Gulf of Mexico oil and gas properties.   For the three-month period ended June 30, 2011,we recorded impairment charges totaling $22.7 million, including $4.1 million for our only non-domestic oil and gas property (see "United Kingdom Property" below), and for six of our Gulf of Mexico oil and gas properties.   These impairment charges primarily reflect a premature end of these fields' production life either through actual depletion or as a result of capital allocation decisions affecting our third party operated fields.  We did not have any impairment of our oil and gas properties during the three-month period ended March 31, 2011.

Following the determination of a significant reduction in our estimates of proved reserves at June 30, 2010, we recorded oil and gas property impairment charges totaling $159.9 million which affected the carrying value of 15 of our Gulf of Mexico oil and gas properties.   In the first quarter of 2010, we recorded $7.0 million of impairment charges primarily resulting from natural gas price declines since year end 2009.   The three properties subject to these impairment charges produce natural gas almost entirely.   Separately, we also recorded a $4.1 million impairment charge for our United Kingdom oil and gas property.  

Exploration and Other

As of September 30, 2011, we capitalized approximately $4.6 million of costs associated with ongoing exploration and/or appraisal activities.  Such capitalized costs may be charged against earnings in future periods if management determines that commercial quantities of hydrocarbons have not been discovered or that future appraisal drilling or development activities are not likely to occur.

The following table details the components of exploration expense for the three- and nine-month periods ended September 30, 2011 and 2010 (in thousands):

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2011			2010			2011			2010
Delay rental and geological and geophysical costs	$	522		$	497		$	2,176		$	2,025
Impairment of unproved properties		1,028			—			7,668	a		—
Dry hole expense and other		(2	)		(55	)		(11	)		(245	)
Total exploration expense	$	1,548		$	442		$	9,833		$	1,780

a.   Includes the costs ($6.6 million) associated with a deepwater lease the term of which expired during the second quarter of 2011.

United Kingdom Property

Since 2006, we have maintained an ownership interest in the Camelot field, located offshore in the North Sea.   In 2007, we sold half of our 100% working interest in Camelotto a third party with whom we agreed to jointly pursue future development and production of the field.   In February 2010, we acquired this third party and thereby assumed the obligations, most notably the asset retirement obligation, related to its 50% working interest in the field.   We recorded an approximate $6.0 million gain on the acquisition of the remaining working interest in Camelot, including the acquired entity's $10.2 million of cash (see Note 5 of 2010 Form 10-K).

In connection with this acquisition, we reassessed the fair value associated with our original 50% interest in the field. Based on these evaluations, we concluded that the Camelot field was impaired based on the unlikely probability of our expending the additional capital necessary to further develop the field.  As a result, we recorded a $4.1 million impairment charge to fully impair the property in the first quarter of 2010.  We are currently abandoning the field in accordance with applicable United Kingdom regulations. In connection with these activities, we continue to evaluate our estimated future field abandonment costs for the field.   These evaluations resulted in our recording an incremental $4.1 million impairment charge in the second quarter of 2011 to increase the field's estimated reclamation liability.  Our current estimated asset retirement obligation for the Camelot field totals $11.6 million at September 30, 2011.  We have incurred approximately $4.8 million of costs related to our reclamation activities at the Camelot field through September 30, 2011.

Asset retirement obligations

The following table describes the changes in our asset retirement obligations (both long term and current) since December 31, 2010 (in thousands):

Asset retirement obligations at December 31, 2010	$	234,936
Liability incurred during the period		1,372
Liability settled during the period		(36,591	)
Revision in estimated cash flows		22,276
Accretion expense (included in depreciation and amortization)		11,252
Asset retirement obligations at September 30, 2011	$	233,245

Insurance

We carry comprehensive insurance for our operated and non-operated producing and non-producing properties.  We record our hurricane-related costs as incurred. Insurance reimbursements are recorded when the realization of the claim for recovery of a loss is deemed probable.  In 2011, our hurricane-related costs have been immaterial.  Hurricane-related costs, net of reimbursements totaled $0.9 million and $4.6 million for the three-month and nine-month periods ended September 30, 2010.   Our insurance reimbursements totaled $5.0 million for the nine-month period ended September 30, 2011.  On June 30, 2011, we renewed our hurricane catastrophic bond for the period from July 1, 2011 to June 30, 2012 and made a payment of $10.6 million.   We recorded a charge of approximately $8.4 million to insurance expense in the third quarter of 2011 to reduce the value of our hurricane catastrophic bond to its intrinsic value at September 30, 2011.  We will record a $2.0 million charge to insurance expense in the fourth quarter of 2011.

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Statement Of Cash Flow Information (Narrative) (Details) (USD $)	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Dec. 31, 2010
Statement Of Cash Flow Information
Restricted cash and cash equivalents, noncurrent	$ 34,636,000		$ 35,339,000
Accruals for capital expenditures	$ 34,800,000	$ 17,500,000

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2011

Fair Value Measurements

Assets And Liabilities Measured At Fair Value On A Recurring Basis

	Level 1		Level 2 (1)		Level 3		Total		Valuation Technique
Assets:
Oil and gas swaps and collars	$	–	$	42,284	$	–	$	42,284	(c)
Foreign currency forwards		–		109		–		109	(c)
Interest rate swaps		–		238		–		238	(c)
Liabilities:
Fair value of long term debt(2)		1,063,501		124,212		–		1,187,713	(a), (b)
Foreign currency forwards		–		264		–		264	(c)
Interest rate swaps		–		692		–		692	(c)
Total net liability	$	1,063,501	$	82,537	$	–	$	1,146,038

(1)   Unless otherwise indicated, the fair value of our Level 2 derivative instruments reflects our best estimate and is based upon exchange or over-the-counter quotations whenever they are available. Quoted valuations may not be available due to location differences or terms that extend beyond the period for which quotations are available. Where quotes are not available, we utilize other valuation techniques or models to estimate market values. These modeling techniques require us to make estimations of future prices, price correlation and market volatility and liquidity. Our actual results may differ from our estimates, and these differences can be positive or negative.

(2)   We have elected not to record our debt at fair value in the accompanying condensed consolidated balance sheets. See Note 7 for additional information regarding our long term debt.   The fair value of our long term debt at September 30, 2011 is as follows:

Fair Value Of Long Term Debt

	Fair Value		Carrying Value
Term Loan (matures July 2015)	$	289,545	$	298,500
Revolving Credit Facility (matures July 2015)		—		—
Convertible Senior Notes (matures March 2025)		289,497		300,000	(a)
Senior Unsecured Notes (matures January 2016)		484,459		474,960
MARAD Debt (matures February 2027) (b)		124,212		110,166
Total	$	1,187,713	$	1,183,626

(a)   Amount excludes the $11.8 million of unamortized discount remaining on the Convertible Senior Notes at September 30, 2011.

(b)   The estimated fair value of all debt, other than MARAD Debt, was determined using Level 1 inputs using the market approach.  The fair value of the MARAD debt was determined using a third party evaluation of the remaining average life and outstanding principal balance of the MARAD indebtedness as compared to other governmental obligations in the market place with similar terms.   The fair value of the MARAD debt was estimated using Level 2 fair value inputs using the cost approach.

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Commitments And Contingencies (Details) (USD $)	3 Months Ended			9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Mar. 31, 2010	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011 Helix [Member]	Sep. 30, 2010 Helix [Member]	Sep. 30, 2011 Helix [Member]	Sep. 30, 2010 Helix [Member]	Sep. 30, 2011 Australian Subsidiary [Member]	Mar. 31, 2011 Australian Subsidiary [Member]	Dec. 31, 2010 Australian Subsidiary [Member]
Settlement of claims			$ 17,500,000		$ 17,500,000
Payments for litigation settlements			13,800,000		13,800,000
Remaining trade receivable write off			3,700,000
Approximate pre-tax loss	70,291,000	44,912,000		164,756,000	(117,090,000)	40,755,000	33,321,000	95,909,000	(68,381,000)		200,000	30,000,000
Trade receivables collected				303,000,000						6,700,000
Value added tax assessment				$ 28,000,000

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Fair Value Measurements (Assets And Liabilities Measured At Fair Value On A Recurring Basis) (Details) (USD $) In Thousands	Sep. 30, 2011		Jun. 30, 2010	Mar. 31, 2010
Assets			$ 62,500	$ 28,200
Total net liability	1,146,038	[1]
Fair Value Of Long Term Debt [Member]
Liabilities	1,187,713	[2],[3],[4]
Fair Value Of Long Term Debt [Member] | Level 1 [Member]
Liabilities	1,063,501	[2],[3],[4]
Fair Value Of Long Term Debt [Member] | Level 2 [Member]
Liabilities	124,212	[2],[3],[4],[5]
Fair Value Of Long Term Debt [Member] | Level 3 [Member]
Liabilities		[2],[3],[4]
Interest Rate Swaps [Member]
Assets	238	[1]
Liabilities	692	[1]
Interest Rate Swaps [Member] | Level 1 [Member]
Assets		[1]
Liabilities		[1]
Interest Rate Swaps [Member] | Level 2 [Member]
Assets	238	[1],[5]
Liabilities	692	[1],[5]
Interest Rate Swaps [Member] | Level 3 [Member]
Assets		[1]
Liabilities		[1]
Oil And Gas Swaps And Collars [Member]
Assets	42,284	[1]
Oil And Gas Swaps And Collars [Member] | Level 1 [Member]
Assets		[1]
Oil And Gas Swaps And Collars [Member] | Level 2 [Member]
Assets	42,284	[1],[5]
Oil And Gas Swaps And Collars [Member] | Level 3 [Member]
Assets		[1]
Foreign Currency Forwards [Member]
Assets	109	[1]
Liabilities	264	[1]
Foreign Currency Forwards [Member] | Level 1 [Member]
Assets		[1]
Liabilities		[1]
Foreign Currency Forwards [Member] | Level 2 [Member]
Assets	109	[1],[5]
Liabilities	264	[1],[5]
Foreign Currency Forwards [Member] | Level 3 [Member]
Assets		[1]
Liabilities		[1]
Level 1 [Member]
Total net liability	1,063,501	[1]
Level 2 [Member]
Total net liability	82,537	[1],[5]
Level 3 [Member]
Total net liability		[1]

[1] Income Approach. Techniques to convert expected future cash flows to a single present amount based on market expectations (including present value techniques, option-pricing and excess earnings models).

[2] Cost Approach. Amount that would be required to replace the service capacity of an asset (replacement cost).

[3] Market Approach. Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

[4] We have elected not to record our debt at fair value in the accompanying condensed consolidated balance sheets. See Note 7 for additional information regarding our long term debt. The fair value of our long term debt at September 30, 2011 is as follows:

[5] Unless otherwise indicated, the fair value of our Level 2 derivative instruments reflects our best estimate and is based upon exchange or over-the-counter quotations whenever they are available. Quoted valuations may not be available due to location differences or terms that extend beyond the period for which quotations are available. Where quotes are not available, we utilize other valuation techniques or models to estimate market values. These modeling techniques require us to make estimations of future prices, price correlation and market volatility and liquidity. Our actual results may differ from our estimates, and these differences can be positive or negative.

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Stock-Based Compensation Plans (Narrative) (Details) (USD $) In Millions, except Share data	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010	Dec. 31, 2010
Stock-Based Compensation Plans
Shares available for grant	985,070		985,070
Compensation cost related to restricted shares	$ 1.9	$ 2.1	$ 6.8	$ 6.7
Compensation expense	0.4	0.8	5.0	3.4
Liability long-term incentive compensation plan	7.0		7.0		7.9
Liability long-term incentive compensation plan variable portion	$ 5.8		$ 5.8		$ 6.2

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Derivative Instruments And Hedging Activities (Derivatives Designated As Hedging Instruments) (Details) (USD $) In Thousands	Sep. 30, 2011	Dec. 31, 2010
Asset derivatives designated as hedging instruments	$ 42,522	$ 5,324
Liability derivatives designated as hedging instruments	692	31,634
Other Current Assets [Member] | Oil Contract [Member]
Asset derivatives designated as hedging instruments	28,020
Other Current Assets [Member] | Natural Gas Contracts [Member]
Asset derivatives designated as hedging instruments	5,074	5,324
Other Assets, Net [Member] | Oil Contract [Member]
Asset derivatives designated as hedging instruments	8,868
Other Assets, Net [Member] | Natural Gas Contracts [Member]
Asset derivatives designated as hedging instruments	322
Other Assets, Net [Member] | Interest Rate Swaps [Member]
Asset derivatives designated as hedging instruments	238
Other Liabilities [Member] | Natural Gas Contracts [Member]
Liability derivatives designated as hedging instruments		913
Other Liabilities [Member] | Interest Rate Swaps [Member]
Liability derivatives designated as hedging instruments		115
Accrued Liabilities [Member] | Oil Contract [Member]
Liability derivatives designated as hedging instruments		28,855
Accrued Liabilities [Member] | Interest Rate Swaps [Member]
Liability derivatives designated as hedging instruments	$ 692	$ 1,751

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Statement Of Cash Flow Information

9 Months Ended

Sep. 30, 2011

Statement Of Cash Flow Information

Statement Of Cash Flow Information

Note 5 – Statement of Cash Flow Information

We define cash and cash equivalents as cash and all highly liquid financial instruments with original maturities of less than three months.  We had restricted cash totaling $34.6 million at September 30, 2011 and $35.3 million at December 31, 2010,all of which was related to funds required to be escrowed to cover the future asset retirement obligations associated with our South Marsh Island Block 130 field.  We have fully satisfied the escrow requirements under the escrow agreement. We have used a small portion of these escrowed funds to pay for the initial reclamation activities at the South Marsh Island Block 130 field.  Reclamation activities at the field will occur over many years and will be funded with these escrowed amounts.  These amounts are reflected in other assets, net in the accompanying condensed consolidated balance sheets.

The following table provides supplemental cash flow information for the nine-month period ended September 30, 2011 and 2010 (in thousands):

		Nine Months Ended
		September 30,
		2011		2010
Interest paid, net of capitalized interest	$	73,096	$	60,137
Income taxes paid	$	9,575	$	8,020

Non-cash investing activities for the nine-month periods ended September 30, 2011 and 2010 included $34.8 million and $17.5 million, respectively, of accruals for capital expenditures.  The accruals have been reflected in the condensed consolidated balance sheet as an increase in property and equipment and accounts payable.

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Equity Investments (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010	Dec. 31, 2010
Equity investments in unconsolidated affiliates	$ 186,423,000		$ 186,423,000		$ 187,031,000
Equity in earnings of investments	4,906,000	6,221,000	16,443,000	12,932,000
Payments of distributions to affiliates			3,437,000	9,876,000
Deepwater Gateway, L.L.C. [Member]
Equity method investment, ownership percentage	50.00%		50.00%
Equity investments in unconsolidated affiliates	96,800,000		96,800,000		99,800,000
Capitalized interest	1,400,000		1,400,000		1,500,000
Equity in earnings of investments	600,000	1,300,000	2,700,000	3,600,000
Payments of distributions to affiliates	2,200,000		5,700,000
Independence Hub, LLC [Member]
Equity method investment, ownership percentage	20.00%		20.00%
Equity investments in unconsolidated affiliates	80,200,000		80,200,000		82,400,000
Capitalized interest	5,000,000		5,000,000		5,200,000
Equity in earnings of investments	4,000,000	4,200,000	12,300,000	14,100,000
Payments of distributions to affiliates	4,600,000		14,200,000
Clough Helix JV [Member]
Equity method investment, ownership percentage	50.00%		50.00%
Equity investments in unconsolidated affiliates	9,400,000		9,400,000		4,900,000
Equity in earnings of investments	$ 300,000	$ 700,000	$ 1,400,000	$ (5,000,000)

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2011

Earnings Per Share

Computations Of Basic And Diluted EPS

	Three Months Ended				Three Months Ended
	September 30, 2011				September 30, 2010
	Income			Shares	Income			Shares
Basic:
Net income applicable to common shareholders	$	46,016			$	26,161
Less: Undistributed net income allocable to participating securities		(549	)			(356	)
Net income applicable to common stock	$	45,467		104,700	$	25,805		104,090

	Three Months Ended			Three Months Ended
	September 30, 2011			September 30, 2010
	Income		Shares	Income		Shares
Diluted:
Net  income per common share – Basic	$	45,467	104,700	$	25,805	104,090
Effect of dilutive securities:
Stock options		—	93		—	22
Undistributed earnings reallocated to participating securities		2	—		5	—
Convertible Senior Notes		—	—		—	—
Convertible preferred stock		10	361		—	1,195
Net income per common share – Diluted	$	45,479	105,154	$	25,810	105,307

	Nine Months Ended				Nine Months Ended
	September 30, 2011				September 30, 2010
	Income			Shares	Income			Shares
Basic:
Net income (loss) applicable to common shareholders	$	113,186			$	(77,281	)
Less: Undistributed net income allocable to participating securities		(1,403	)			—
Net income (loss) applicable to common stock	$	111, 783		104,616	$	(77,281	)	103,772

	Nine Months Ended			Nine Months Ended
	September 30, 2011			September 30, 2010
	Income		Shares	Income			Shares
Diluted:
Net  income (loss) per common share –  Basic	$	111,783	104,616	$	(77,281	)	103,772
Effect of dilutive securities:
Stock options		—	84		—		—
Undistributed earnings reallocated to participating securities		6	—		—		—
Convertible Senior Notes		—	—		—		—
Convertible preferred stock		30	361		—		—
Net income (loss) per common share –  Diluted	$	111,819	105,061	$	(77,281	)	103,772

Excluded Securities On Diluted Shares Calculation

Diluted shares (as reported)	103,772
Stock options	51
Convertible preferred stock	1,689
Total	105,512

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Derivative Instruments And Hedging Activities (Impact Of Derivative Instruments On Accumulated Comprehensive Income (Loss)) (Details) (USD $) In Thousands	3 Months Ended				9 Months Ended
	Sep. 30, 2011		Sep. 30, 2010		Sep. 30, 2011		Sep. 30, 2010
Gain (Loss) Recognized in OCI on Derivatives (Effective Portion)	$ 33,888	[1]	$ (3,795)	[1]	$ 44,291	[1]	$ 12,308	[1]
Oil And Natural Gas Commodity Contracts [Member]
Gain (Loss) Recognized in OCI on Derivatives (Effective Portion)	33,432	[1]	(3,405)	[1]	43,373	[1]	13,799	[1]
Interest Rate Swaps [Member]
Gain (Loss) Recognized in OCI on Derivatives (Effective Portion)	$ 456	[1]	$ (390)	[1]	$ 918	[1]	$ (1,491)	[1]

[1] All unrealized gains (losses) related to our oil and natural gas commodity contracts are expected to be reclassified into earnings by no later than December 31, 2013. The last of our interest swaps will mature in January 2014 and we have foreign exchange forwards that have maturities through June 2012.

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Derivative Instruments And Hedging Activities (Narrative) (Details) (USD $) In Millions, unless otherwise specified	1 Months Ended	3 Months Ended		9 Months Ended
	Aug. 31, 2011	Sep. 30, 2010 bbl	Jun. 30, 2010 bbl	Sep. 30, 2011 cf bbl
Derivative Instruments And Hedging Activities
Contracts no longer qualified for hedge accounting oil volume		480,000	480,000
Total volume of oil units				4,500,000
Total volume of natural gas units				8,100,000,000
Term loans payable	$ 200			$ 200
Contract maturity period	January 2014			January 2012
Additional interest rate swap contracts, beginning period	January 2012

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Condensed Consolidated Guarantor And Non-Guarantor Financial Information (Tables)

9 Months Ended

Sep. 30, 2011

Condensed Consolidated Guarantor And Non-Guarantor Financial Information

Schedule Of Condensed Consolidating Balance Sheets

HELIX ENERGY SOLUTIONS GROUP, INC.

CONDENSED CONSOLIDATING BALANCE SHEETS

(in thousands)

(Unaudited)

	As of September 30, 2011
		Helix			Guarantors		Non-Guarantors			Consolidating  Entries			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	335,063		$	1,060	$	39,232		$	—		$	375,355
Accounts receivable, net		76,595			92,881		51,686			—			221,162
Unbilled revenue		13,235			18		15,621			—			28,874
Income taxes receivable		39,013			—		2,691			(41,704	)		—
Other current assets		60,957			49,739		13,832			(1,292	)		123,236
Total current assets		524,863			143,698		123,062			(42,996	)		748,627
Intercompany		(16,546	)		276,281		(210,909	)		(48,826	)		—
Property and equipment, net		219,450			1,552,025		707,165			(4,887	)		2,473,753
Other assets:
Equity investments in unconsolidated affiliates		—			—		186,423			—			186,423
Equity investments in affiliates		1,989,756			35,708		—			(2,025,464	)		—
Goodwill, net		—			45,107		17,237			—			62,344
Other assets, net		46,672			45,977		17,625			(29,412	)		80,862
Due from subsidiaries/parent		82,918			331,591		—			(414,509	)		—
	$	2,847,113		$	2,430,387	$	840,603		$	(2,566,094	)	$	3,552,009
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	42,650		$	74,003	$	28,459		$	—		$	145,112
Accrued liabilities		50,000			81,412		28,264			—			159,676
Income taxes payable		—			62,870		—			(59,014	)		3,856
Current maturities of long-term debt		3,000			—		4,877			—			7,877
Total current liabilities		95,650			218,285		61,600			(59,014	)		316,521
Long-term debt		1,058,626			—		105,288			—			1,163,914
Deferred income taxes		227,047			120,838		99,249			(5,614	)		441,520
Asset retirement obligations		—			169,429		—			—			169,429
Other long-term liabilities		1,351			2,899		594			—			4,844
Due to parent		—			—		108,403			(108,403	)		—
Total liabilities		1,382,674			511,451		375,134			(173,031	)		2,096,228
Convertible preferred stock		1,000			—		—			—			1,000
Total equity		1,463,439			1,918,936		465,469			(2,393,063	)		1,454,781
	$	2,847,113		$	2,430,387	$	840,603		$	(2,566,094	)	$	3,552,009

HELIX ENERGY SOLUTIONS GROUP, INC.

CONDENSED CONSOLIDATING BALANCE SHEETS

(in thousands)

	As of December 31, 2010
		Helix		Guarantors		Non-Guarantors			Consolidating Entries			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	376,434	$	3,294	$	11,357		$	—		$	391,085
Accounts receivable, net		61,846		91,659		23,788			—			177,293
Unbilled revenue		11,990		—		37,421			—			49,411
Income taxes receivable		19,334		—		7,195			(20,430	)		6,099
Other current assets		63,306		49,557		12,889			(8,786	)		116,966
Total current assets		532,910		144,510		92,650			(29,216	)		740,854
Intercompany		1,906		263,920		(171,513	)		(94,313	)		—
Property and equipment, net		217,153		1,605,906		709,082			(5,061	)		2,527,080
Equity investments in unconsolidated affiliates		—		—		187,031			—			187,031
Equity investments in affiliates		1,998,289		29,899		—			(2,028,188	)		—
Goodwill, net		—		45,107		17,387			—			62,494
Other assets, net		43,971		38,324		21,900			(29,634	)		74,561
Due from subsidiaries/parent		95,398		105,434		—			(200,832	)		—
	$	2,889,627	$	2,233,100	$	856,537		$	(2,387,244	)	$	3,592,020
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable	$	60,308	$	56,107	$	42,966		$	—		$	159,381
Accrued liabilities		58,074		107,874		32,289			—			198,237
Income taxes payable		—		36,678		—			(36,678	)		—
Current maturities of long-term debt		4,326		—		14,301			(8,448	)		10,179
Total current liabilities		122,708		200,659		89,556			(45,126	)		367,797
Long-term debt		1,237,587		—		110,166			—			1,347,753
Deferred income taxes		185,453		135,101		98,968			(5,883	)		413,639
Asset retirement obligations		—		170,410		—			—			170,410
Other long-term liabilities		1,421		3,691		665			—			5,777
Due to parent		—		—		120,884			(120,884	)		—
Total liabilities		1,547,169		509,861		420,239			(171,893	)		2,305,376
Convertible preferred stock		1,000		—		—			—			1,000
Total equity		1,341,458		1,723,239		436,298			(2,215,351	)		1,285,644
	$	2,889,627	$	2,233,100	$	856,537		$	(2,387,244	)	$	3,592,020

Schedule Of Condensed Consolidating Statements Of Operations

HELIX ENERGY SOLUTIONS GROUP, INC.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(in thousands)

(Unaudited)

	Three Months Ended September 30, 2011
	Helix			Guarantors			Non-Guarantors			Consolidating Entries			Consolidated
Net revenues	$	19,986		$	266,447		$	109,780		$	(23,717	)	$	372,496
Cost of sales		15,698			182,259			75,643			(23,399	)		250,201
Gross profit (loss)		4,288			84,188			34,137			(318	)		122,295
Gain on oil & gas derivative contracts		—			—			—			—			—
Gain (loss) on sale or acquisition of assets		—			—			—			—			—
Selling, general and administrative expenses		(6,752	)		(9,551	)		(6,105	)		326			(22,082	)
Income (loss) from operations		(2,464	)		74,637			28,032			8			100,213
Equity in earnings of investments		60,831			7,277			4,906			(68,108	)		4,906
Net interest expense and other		(17,612	)		(8,016	)		(9,200	)		—			(34,828	)
Income (loss) before income taxes		40,755			73,898			23,738			(68,100	)		70,291
Provision (benefit) for income taxes		(5,266	)		24,419			4,309			3			23,465
Net income (loss), including noncontrolling interests		46,021			49,479			19,429			(68,103	)		46,826
Less net income applicable to noncontrolling interests		—			—			—			(800	)		(800	)
Preferred stock dividends		(10	)		—			—			—			(10	)
Net income (loss) applicable to Helix common shareholders	$	46,011		$	49,479		$	19,429		$	(68,903	)	$	46,016

	Three Months Ended September 30, 2010
	Helix			Guarantors			Non-Guarantors			Consolidating Entries			Consolidated
Net revenues	$	82,764		$	212,105		$	111,581		$	(13,781	)	$	392,669
Cost of sales		42,397			184,369			92,765			(13,414	)		306,117
Gross profit (loss)		40,367			27,736			18,816			(367	)		86,552
Gain on oil & gas derivative contracts		—			161			—			—			161
Gain (loss) on sale or acquisition of assets		—			—			13			—			13
Selling, general and administrative expenses		(15,465	)		(7,370	)		(4,212	)		419			(26,628	)
Income (loss) from operations		24,902			20,527			14,617			52			60,098
Equity in earnings of investments		27,871			7,567			6,221			(35,438	)		6,221
Net interest expense and other		(19,452	)		(3,996	)		2,041			—			(21,407	)
Income (loss) before income taxes		33,321			24,098			22,879			(35,386	)		44,912
Provision (benefit) for income taxes		7,185			4,530			6,234			16			17,965
Net income (loss), including noncontrolling interests		26,136			19,568			16,645			(35,402	)		26,947
Less net income applicable to noncontrolling interests		—			—			—			(776	)		(776	)
Preferred stock dividends		(10	)		—			—			—			(10	)
Net income (loss) applicable to Helix common shareholders	$	26,126		$	19,568		$	16,645		$	(36,178	)	$	26,161

HELIX ENERGY SOLUTIONS GROUP, INC.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(in thousands)

(Unaudited)

	Nine Months Ended September 30, 2011
	Helix			Guarantors			Non-Guarantors			Consolidating Entries			Consolidated
Net revenues	$	56,113		$	756,344		$	260,582		$	(70,617	)	$	1,002,422
Cost of sales		47,414			521,387			203,651			(69,599	)		702,853
Gross profit (loss)		8,699			234,957			56,931			(1,018	)		299,569
Gain on oil & gas derivative contracts		—			—			—			—			—
Gain (loss) on sale or acquisition of assets		(6	)		—			—			—			(6	)
Selling, general and administrative expenses		(27,512	)		(29,502	)		(14,917	)		1,110			(70,821	)
Income (loss) from operations		(18,819	)		205,455			42,014			92			228,742
Equity in earnings of investments		167,867			5,809			16,443			(173,676	)		16,443
Net interest expense and other		(53,139	)		(18,615	)		(8,675	)		—			(80,429	)
Income (loss) before income taxes		95,909			192,649			49,782			(173,584	)		164,756
Provision (benefit) for income taxes		(17,229	)		66,479			(95	)		31			49,186
Net income (loss), including noncontrolling interests		113,138			126,170			49,877			(173,615	)		115,570
Less net income applicable to noncontrolling interests		—			—			—			(2,354	)		(2,354	)
Preferred stock dividends		(30	)		—			—			—			(30	)
Net income (loss) applicable to Helix common shareholders	$	113,108		$	126,170		$	49,877		$	(175,969	)	$	113,186

	Nine Months Ended September 30, 2010
	Helix			Guarantors			Non-Guarantors			Consolidating Entries			Consolidated
Net revenues	$	137,456		$	568,075		$	256,639		$	(68,669	)	$	893,501
Cost of sales		73,889			641,568			215,067			(54,613	)		875,911
Gross profit (loss)		63,567			(73,493	)		41,572			(14,056	)		17,590
Gain on oil & gas derivative contracts		—			2,643			—			—			2,643
Gain (loss) on sale or acquisition of assets		—			287			5,959			—			6,246
Selling, general and administrative expenses		(52,923	)		(25,285	)		(14,788	)		1,321			(91,675	)
Income (loss) from operations		10,644			(95,848	)		32,743			(12,735	)		(65,196	)
Equity in earnings of investments		(36,865	)		10,672			12,932			26,193			12,932
Net interest expense and other		(42,160	)		(16,564	)		(6,102	)		—			(64,826	)
Income (loss) before income taxes		(68,381	)		(101,740	)		39,573			13,458			(117,090	)
Provision (benefit) for income taxes		517			(40,606	)		2,584			(4,457	)		(41,962	)
Net income (loss), including noncontrolling interests		(68,898	)		(61,134	)		36,989			17,915			(75,128	)
Less net income applicable to noncontrolling interests		—			—			—			(2,049	)		(2,049	)
Preferred stock dividends		(104	)		—			—			—			(104	)
Net income (loss) applicable to Helix common shareholders	$	(69,002	)	$	(61,134	)	$	36,989		$	15,866		$	(77,281	)

Schedule Of Condensed Consolidating Statements Of Cash Flows

HELIX ENERGY SOLUTIONS GROUP, INC.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

	Nine Months Ended September 30, 2011
	Helix			Guarantors			Non-Guarantors			Consolidating Entries			Consolidated
Cash flow from operating activities:
Net income (loss), including noncontrolling interests	$	113,138		$	126,170		$	49,877		$	(173,615	)	$	115,570
Adjustments to reconcile net income (loss), including noncontrolling interests to net cash provided by (used in) operating activities:
Equity in earnings of affiliates		(167,867	)		(5,809	)		—			173,676			—
Other adjustments		19,125			218,602			2,578			(4,744	)		235,561
Net cash provided by (used in) operating
activities		(35,604	)		338,963			52,455			(4,683	)		351,131
Cash flows from investing activities:
Capital expenditures		(18,240	)		(129,535	)		(20,074	)		—			(167,849	)
Investments in equity investments		—			—			(2,699	)		—			(2,699	)
Distributions from equity investments, net		—			—			3,437			—			3,437
Proceeds from sale of Cal Dive common stock		3,588			—			—			—			3,588
Decrease (increase) in restricted cash		—			703			—			—			703
Net cash used in investing activities		(14,652	)		(128,832	)		(19,336	)		—			(162,820	)
Cash flows from financing activities:
Repayments of debt		(111,941	)		—			(5,860	)		—			(117,801	)
Extinguishment of Senior Unsecured Notes		(77,394	)		—			—			—			(77,394	)
Deferred financing costs		(9,224	)		—			—			—			(9,224	)
Repurchase of common stock and preferred dividends paid		(1,102	)		—			—			—			(1,102	)
Excess tax benefit from stock-based  compensation		(805	)		—			—			—			(805	)
Exercise of stock options, net		2,018			—			—			—			2,018
Intercompany financing		207,333			(212,365	)		349			4,683			—
Net cash provided by (used in) financing activities		8,885			(212,365	)		(5,511	)		4,683			(204,308	)
Effect of exchange rate changes on cash and cash equivalents		—			—			267			—			267
Net increase (decrease) in cash and cash equivalents		(41,371	)		(2,234	)		27,875			—			(15,730	)
Cash and cash equivalents:
Balance, beginning of year		376,434			3,294			11,357			—			391,085
Balance, end of period	$	335,063		$	1,060		$	39,232		$	—		$	375,355

HELIX ENERGY SOLUTIONS GROUP, INC.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)

	Nine Months Ended September 30, 2010
	Helix			Guarantors			Non-Guarantors			Consolidating Entries			Consolidated
Cash flow from operating activities:
Net income (loss), including noncontrolling interests	$	(68,898	)	$	(61,134	)	$	36,989		$	17,915		$	(75,128	)
Adjustments to reconcile net income (loss), including noncontrolling interests to net cash provided by (used in) operating activities:
Equity in earnings of affiliates		36,866			(10,673	)		—			(26,193	)		—
Other adjustments		70,963			229,567			33,675			(17,311	)		316,894
Net cash provided by (used in) operating
activities		38,931			157,760			70,664			(25,589	)		241,766
Cash flows from investing activities:
Capital expenditures		(54,880	)		(104,423	)		(19,715	)		—			(179,018	)
Investments in equity investments		—			—			(7,768	)		—			(7,768	)
Distributions from equity investments, net		—			—			9,876			—			9,876
Insurance recovery		7,020			9,086			—			—			16,106
Proceeds from sale of property		—			852			—			—			852
Decrease (increase) in restricted cash		—			(133	)		—			—			(133	)
Net cash used in investing activities		(47,860	)		(94,618	)		(17,607	)		—			(160,085	)
Cash flows from financing activities:
Repayments of debt		(3,245	)		—			(6,708	)		—			(9,953	)
Deferred financing costs		(2,864	)		—			—			—			(2,864	)
Repurchases of common stock		(11,763	)		—			—						(11,763	)
Excess tax benefit from stock-based  compensation		(2,376	)		—			—			—			(2,376	)
Exercise of stock options, net		335			—			—			—			335
Intercompany financing		73,887			(61,811	)		(37,665	)		25,589			—
Net cash provided by (used in) financing activities		53,974			(61,811	)		(44,373	)		25,589			(26,621	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(253	)		—			(253	)
Net increase (decrease) in cash and cash equivalents		45,045			1,331			8,431			—			54,807
Cash and cash equivalents:
Balance, beginning of year		258,742			2,522			9,409			—			270,673
Balance, end of period	$	303,787		$	3,853		$	17,840		$	—		$	325,480

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Statement Of Cash Flow Information (Supplemental Cash Flow Information) (Details) (USD $) In Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2011	Sep. 30, 2010
Statement Of Cash Flow Information
Interest paid, net of capitalized interest	$ 800	$ 73,096	$ 60,137
Income taxes paid		$ 9,575	$ 8,020

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Business Segment Information (Tables)

9 Months Ended

Sep. 30, 2011

Business Segment Information

Schedule Of Segment Reporting Information By Segment

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2011			2010			2011			2010
		(in thousands)
Revenues
Contracting Services	$	229,967		$	238,531		$	532,857		$	595,048
Production Facilities		19,986			74,458			56,101			97,169
Oil and Gas		159,218			95,566			500,535			288,867
Intercompany elimination		(36,675	)		(15,886	)		(87,071	)		(87,583	)
Total	$	372,496		$	392,669		$	1,002,422		$	893,501
Income (loss) from operations
Contracting Services	$	47,363		$	31,015		$	81,194		$	102,282
Production Facilities (1)		10,983			44,520			28,859			57,460
Oil and Gas		48,622			(4,384	)		144,926			(159,991	)
Corporate (2)		(6,227	)		(10,767	)		(25,780	)		(46,242	)
Intercompany elimination		(528	)		(286	)		(457	)		(18,705	)
Total	$	100,213		$	60,098		$	228,742		$	(65,196	)
Equity in earnings of equity investments (Note 6)	$	4,906		$	6,221		$	16,443		$	12,932

(1)   In April 2009, Kommandor LLC commenced leasing the HP I to us under terms of a charter arrangement following the completion of the initial conversion of the vessel (Note 8 of our 2010 Form10-K).  The HP I was certified as a floating oil and gas production unit in June 2010 following the completion of installation of oil and gas processing facilities on the vessel.

(2)   The nine-month period ended September 30, 2010, included $13.8 million of $17.5 million settlement of a third party claim against us in March 2010 (Note 14).

Summary Of Intercompany Segment Revenues

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2011		2010		2011		2010
		(in thousands)
Contracting Services	$	25,410	$	15,886	$	52,574	$	84,053
Production Facilities		11,265				34,497		3,530
Total	$	36,675	$	15,886	$	87,071	$	87,583

Intercompany Segment Gross Profit (Losses)

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2011			2010			2011			2010
		(in thousands)
Contracting Services	$	606		$	330		$	645		$	15,473
Production Facilities		(78	)		(44	)		(188	)		3,249
Total	$	528		$	286		$	457		$	18,722

Summary Of Identifiable Assets

	September 30, 2011		December 31, 2010
		(in thousands)
Identifiable Assets
Contracting Services	$	1,871,004	$	1,856,016
Production Facilities		513,586		512,990
Oil and Gas		1,167,419		1,223,014
Total	$	3,552,009	$	3,592,020

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Related Party Transactions

9 Months Ended

Sep. 30, 2011

Related Party Transactions

Related Party Transactions

Note 13 – Related Party Transactions

In April 2000, we acquired a 20% working interest in Gunnison, a deepwater Gulf of Mexico prospect, from a third party.  Financing for the exploratory costs of approximately $20 million was provided by an investment partnership (OKCD Investments, Ltd. or "OKCD"), the investors of which include current and former Helix senior management, in exchange for a revenue interest that is an overriding royalty interest of 25% of Helix's 20% working interest. Production began in December 2003. Our payments to OKCD totaled $2.3 million and $7.3 million for the three-month and nine-month periods ended September 30, 2011, respectively, and $2.7 million and $8.7 million in the three-month and nine-month periods ended September 30, 2010, respectively.  Our Chief Executive Officer, Owen Kratz, through Class A limited partnership interests in OKCD, personally owns approximately 80.7% of the partnership. In 2000, OKCD also awarded Class B income participations to key Helix employees, who are required to maintain their employment status with Helix in order to retain such income participations.

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Business Segment Information (Summary Of Identifiable Assets) (Details) (USD $) In Thousands	Sep. 30, 2011	Dec. 31, 2010
Total assets	$ 3,552,009	$ 3,592,020
Contracting Services [Member]
Total assets	1,871,004	1,856,016
Production Facilities [Member]
Total assets	513,586	512,990
Oil and Gas [Member]
Total assets	$ 1,167,419	$ 1,223,014

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Fair Value Measurements (Fair Value Of Long Term Debt) (Details) (USD $) In Thousands	9 Months Ended
	Sep. 30, 2011		Mar. 31, 2005
Long-term debt, Fair Value	$ 1,187,713
Long-term debt, Carrying Value	1,183,626
Debt Instrument, Unamortized Discount	11,835	[1]
Revolving Credit Facility [Member]
Long-term debt, Fair Value
Long-term debt, Carrying Value
Long-term debt, Maturity Date	July 2015
Term Loan [Member]
Long-term debt, Fair Value	289,545
Long-term debt, Carrying Value	298,500
Long-term debt, Maturity Date	July 2015
Convertible Senior Notes [Member]
Long-term debt, Fair Value	289,497
Long-term debt, Carrying Value	300,000	[2]	300,000
Long-term debt, Maturity Date	March 2025
Debt Instrument, Unamortized Discount	11,835	[1],[3]
Senior Unsecured Notes [Member]
Long-term debt, Fair Value	484,459
Long-term debt, Carrying Value	474,960
Long-term debt, Maturity Date	January 2016
Debt Instrument, Unamortized Discount		[1]
MARAD Debt [Member]
Long-term debt, Fair Value	124,212	[4]
Long-term debt, Carrying Value	110,166	[4]
Long-term debt, Maturity Date	February 2027
Debt Instrument, Unamortized Discount		[1]

[1] The notes will increase to the $300 million face amount through accretion of non-cash interest charges through 2012.

[2] Amount excludes the $11.8 million of unamortized discount remaining on the Convertible Senior Notes at September 30, 2011.

[3] Beginning in December 2012, the holders may require us to repurchase the notes or we may at our own option elect to repurchase the notes. The notes will mature in March 2025.

[4] The estimated fair value of all debt, other than MARAD Debt, was determined using Level 1 inputs using the market approach. The fair value of the MARAD debt was determined using a third party evaluation of the remaining average life and outstanding principal balance of the MARAD indebtedness as compared to other governmental obligations in the market place with similar terms. The fair value of the MARAD debt was estimated using Level 2 fair value inputs using the cost approach.

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Equity Investments

9 Months Ended

Sep. 30, 2011

Equity Investments

Equity Investments

Note 6 – Equity Investments

As of September 30, 2011, we have three investments that we account for using the equity method of accounting: Deepwater Gateway, Independence Hub, and Clough Helix Joint Venture Pty Ltd. ("Clough Helix JV").  Deepwater Gateway and Independence Hub are included in our Production Facilities segment while the Clough Helix JV is a component of our Contracting Services segment.

·   Deepwater Gateway, L.L.C.  In June 2002, we, along with Enterprise Products Partners L.P. ("Enterprise"), formed Deepwater Gateway, each with a 50% interest, to design, construct, install, own and operate a tension leg platform production hub primarily for Anadarko Petroleum Corporation's Marco Polo field in the Gulf of Mexico. Our investment in Deepwater Gateway totaled $96.8 million at September 30, 2011 and $99.8 million at December 31, 2010 (including capitalized interest of $1.4 million at September 30, 2011 and $1.5 million December 31, 2010).  Our equity in earnings of Deepwater Gateway totaled $0.6 million and $2.7 million for the respective three-month and nine-month periods ended September 30, 2011 as compared to $1.3 million and $3.6 million for the three-month and nine-month periods ended September 30, 2010, respectively.   Distributions from Deepwater Gateway, net to our interest, totaled $2.2 million and $5.7 million for the respective three-month and nine-month periods ended September 30, 2011.

·   Independence Hub, LLC.  In December 2004, we acquired a 20% interest in Independence Hub, an affiliate of Enterprise.  Independence Hub owns the "Independence Hub" platform located in Mississippi Canyon Block 920 in a water depth of 8,000 feet.  First production through the facility commenced in July 2007.  Our investment in Independence Hub was $80.2 million at September 30, 2011 and $82.4 million at December 31, 2010 (including capitalized interest of $5.0 million at September 30, 2011 and $5.2 million at December 31, 2010).  Our equity in earnings of Independence Hub totaled $4.0 million and $12.3 million for the respective three-month and nine-month periods ended September 30, 2011 as compared to $4.2 million and $14.1 million for the three-month and nine-month periods ended September 30, 2010, respectively.   Distributions from Independence Hub, net to our interest, totaled $4.6 million and $14.2 million for the three-month and nine-month periods ended September 30, 2011, respectively.

·   Clough Helix JV. In February 2010, we announced the formation of the Clough Helix JV with Australian-based engineering and construction company, Clough Projects Australia Pty Ltd ("Clough"), to provide a range of subsea services to offshore operators in the Asia Pacific region. The Clough Helix JV combines our well intervention equipment with Clough's 12-man saturation diving system, which are deployed from the 118 meter long DP2 multiservice vessel, Normand Clough.   In the first quarter of 2011, the Clough Helix JV commenced an approximate six- to nine-month day rate project located offshore China.  Our 50% share of the earnings from the Clough Helix JV totaled $0.3 million and $1.4 million for the three- and nine-month periods ended September 30, 2011, respectively as compared to $0.7 million of earnings and $5.0 million of losses in the three- and nine-month periods ended September 30, 2010, respectively.   The loss in the nine-month 2010 period primarily represented the mobilization costs of transporting the Normand Clough from the Gulf of Mexico to Singapore and other start up costs.   Our investment in the Clough Helix JV was $9.4 million at September 30, 2011 and $4.9 million at December 31, 2010.

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Derivative Instruments And Hedging Activities

9 Months Ended

Sep. 30, 2011

Derivative Instruments And Hedging Activities

Derivative Instruments And Hedging Activities

Note 16 – Derivative Instruments and Hedging Activities

We are currently exposed to market risk in three major areas: commodity prices, interest rates and foreign currency exchange rates. Our risk management activities involve the use of derivative financial instruments to hedge the impact of market risk exposures primarily related to our oil and gas production, variable interest rates and foreign exchange currency fluctuations. All derivatives are reflected in the accompanying condensed consolidated balance sheets at fair value unless otherwise noted.

We engage solely in cash flow hedges. Hedges of cash flow exposure are entered into to hedge a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability. Changes in the derivative fair values that are designated as cash flow hedges are deferred to the extent that they are effective and are recorded as a component of accumulated other comprehensive income (loss), a component of shareholders' equity, until the hedged transactions occur and are recognized in earnings. The ineffective portion of a cash flow hedge's change in fair value is recognized immediately in earnings. In addition, any change in the fair value of a derivative that does not qualify for hedge accounting is recorded in earnings in the period in which the change occurs.

For additional information regarding our accounting for derivatives see Notes 2 and 20 of our 2010 Form 10-K.

Commodity Price Risks

We currently manage commodity price risk through various financial costless collars and swap instruments covering a portion of our anticipated oil and natural gas production through 2013.  All of our current commodity derivative contracts qualify for hedge accounting.  In June 2010, oil contracts for 480 MBbl, representing a portion of our anticipated production during the third quarter of 2010, ceased to qualify for hedge accounting as a result of our decision to contract the HP I  to assist in the Gulf oil spill response and containment efforts rather than commencing production from our Phoenix field. In September 2010, we separately concluded that oil contracts covering an additional 480 MBbls of the fourth quarter 2010 anticipated production ceased to qualify for hedge accounting because of uncertainty as to when the Phoenix field would be ready to commence initial production following extensions of the HP I contract to assist in the Gulf oil spill response and containment efforts.  The HP I returned to the Phoenix field in October and initial production from the field commenced on October 19, 2010.

As of September 30, 2011, we have the following volumes under derivative contracts related to our oil and gas producing activities totaling approximately 4.5 MMBbl of oil and 8.1 Bcf of natural gas:

Production Period	Instrument Type	Average Monthly Volumes	Weighted Average Price
Crude Oil:			(per barrel)
October 2011 — December 2011	Swap	163.3 MBbl	$	82.62
October 2011 — December 2011	Collar	35.3 MBbl	$	95.00— $124.59
October 2011 — December 2011	Collar	50.0 MBbl	$	100.00— $122.80	a
January 2012 — December 2012	Collar	75.0 MBbl	$	96.67— $118.57
January 2012 — December 2012	Collar	139.0 MBbl	$	99.42— $117.59	a
January 2012 — December 2012	Swap	16.0 MBbl	$	103.20	a
January 2013 — December 2013	Swap	41.7 MBbl	$	99.15	a
January 2013 — December 2013	Collar	41.7 MBbl	$	95.00— $102.60	a
Natural Gas:			(per Mcf)
October 2011 — December 2011	Swap	703.3 Mmcf	$	4.93
January 2012 — December 2012	Swap	333.3 Mmcf	$	4.70
January 2012 — December 2012	Collar	166.7 Mmcf	$	4.75— $5.09

a.   The prices quoted in the table above are primarily NYMEX Henry Hub for natural gas and NYMEX West Texas Intermediate for crude oil.   As footnoted above these costless collar contracts are priced as Brent crude oil.

Changes in quoted oil and gas strip market prices would, assuming all other things being equal, cause the fair value of these instruments to increase or decrease inversely to the change in the quoted market prices.

Variable Interest Rate Risks

As some of our long-term debt has variable interest rates and is subject to market influences, in January 2010 we entered into various interest rate swaps to stabilize cash flows relating to interest payments for $200 million of our Term Loan debt under our Credit Agreement (Note 7).  These monthly contracts will mature in January 2012.  In August 2011, we entered into additional interest rate swap contracts to fix the interest rate on $200 million of our Term Loan debt.   These monthly contracts begin in January 2012 and extend through January 2014.  Changes in the interest rate swap fair value are deferred to the extent the swap is effective and are recorded as a component of accumulated other comprehensive income (loss) until the anticipated interest payments occur and are recognized in interest expense.  The ineffective portion of the interest rate swap, if any, will be recognized immediately in earnings within the line titled net interest expense.  The amount of ineffectiveness associated with our interest swap contracts was immaterial for all periods presented in this Quarterly Report on Form 10-Q.

Foreign Currency Exchange Risks

Because we operate in various regions in the world, we conduct a portion of our business in currencies other than the U.S. dollar.  We entered into various foreign currency forwards to stabilize expected cash outflows relating to certain vessel charters denominated in British pounds.  The last of our existing monthly foreign currency swap contracts will settle in June 2012.

Quantitative Disclosures Related to Derivative Instruments

The following tables present the fair value and balance sheet classification of our derivative instruments as of September 30, 2011 and December 31, 2010.  The fair value amounts below are presented on a gross basis and do not reflect the netting of asset and liability positions permitted under the terms of our master netting arrangements.

Derivatives designated as hedging instruments are as follows:

	As of September 30, 2011			As of December 31, 2010
	Balance Sheet  Location	Fair Value		Balance Sheet Location	Fair Value
	(in thousands)
Asset Derivatives:
Oil contracts	Other current assets	$	28,020	Other current assets	$	—
Natural gas contracts	Other current assets		5,074	Other current assets		5,324
Natural gas contracts	Other assets, net		322	Other assets, net		—
Oil contracts	Other assets, net		8,868	Other assets, net		—
Interest rate swaps	Other assets, net		238	Other assets, net		—
		$	42,522		$	5,324

	As of September 30, 2011			As of December 31, 2010
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
	(in thousands)
Liability Derivatives:
Oil contracts	Accrued liabilities	$	—	Accrued liabilities	$	28,855
Interest rate swaps	Accrued liabilities		692	Accrued liabilities		1,751
Natural gas contracts	Other long-term liabilities		—	Other long-term liabilities		913
Interest rate swaps	Other long-term liabilities		—	Other long-term liabilities		115
		$	692		$	31,634

Derivatives that were not designated as hedging instruments (in thousands):

	As of September 30, 2011			As of December 31, 2010
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
	(in thousands)
Asset Derivatives:
Foreign exchange forwards	Other current assets	$	109	Other current assets	$	148
Foreign exchange forwards	Other assets, net		—	Other assets, net		42
		$	109		$	190
Liability Derivatives:
Foreign exchange forwards	Accrued liabilities		264	Accrued liabilities		—
		$	264		$	—

The following tables present the impact that derivative instruments designated as cash flow hedges had on our accumulated comprehensive loss and our condensed consolidated statements of operations for the three and nine month periods ended September 30, 2011 and 2010.

		Gain (Loss) Recognized in OCI on Derivatives (Effective Portion)
		Three Months Ended September 30,					Nine Months Ended September 30,
		2011(1)		2010(1)			2011(1)		2010(1)
		(in thousands)
Oil and natural gas commodity contracts	$	33,432	$	(3,405	)	$	43,373	$	13,799
Interest rate swaps		456		(390	)		918		(1,491	)
	$	33,888	$	(3,795	)	$	44,291	$	12,308

(1)   All unrealized gains (losses) related to our oil and natural gas commodity contracts are expected to be reclassified into earnings by no later than December 31, 2013.  The last of our interest swaps will mature in January 2014 and we have foreign exchange forwards that have maturities through June 2012.

	Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)		Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
			Three Months Ended September 30,						Nine Months Ended September 30,
			2011			2010			2011			2010
Oil and natural gas commodity contracts	Oil and gas revenue	$	(1,287	)	$	7,428		$	(19,473	)	$	17,892
Interest rate swaps	Net interest expense		(522	)		(468	)		(1,513	)		(1,355	)
		$	(1,809	)	$	6,960		$	(20,986	)	$	16,537

The following table presents the impact of derivative instruments that no longer qualify for hedge accounting or were not designated as hedges in our condensed consolidated statements of operations for the three and nine month periods ended September 30, 2011 and 2010:

	Location of Gain (Loss) Recognized in Income on Derivatives		Gain (Loss) Recognized in Income on Derivatives
			Three Months Ended September 30,					Nine Months Ended September 30,
			2011			2010		2011			2010
			(in thousands)
Natural gas contracts	Gain on oil and gas derivative contracts	$	—		$	161	$	—		$	2,643
Foreign exchange forwards	Other income (expense)		(381	)		1,106		(234	)		(2,398	)
		$	(381	)	$	1,267	$	(234	)	$	245

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Derivative Instruments And Hedging Activities (Derivatives Not Designated As Hedging Instruments) (Details) (USD $) In Thousands	Sep. 30, 2011	Dec. 31, 2010
Asset derivatives not designated as hedging instruments	$ 109	$ 190
Liability derivatives not designated as hedging instruments	264
Other Current Assets [Member] | Foreign Exchange Forward [Member]
Asset derivatives not designated as hedging instruments	109	148
Other Assets, Net [Member] | Foreign Exchange Forward [Member]
Asset derivatives not designated as hedging instruments		42
Accrued Liabilities [Member] | Foreign Exchange Forward [Member]
Liability derivatives not designated as hedging instruments	$ 264

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Derivative Instruments And Hedging Activities (Volumes Under Derivative Contracts Related To Oil And Gas Producing Activities) (Details)	9 Months Ended
	Sep. 30, 2011 bbl
Maximum [Member] | Current Remaining Year [Member] | Crude Oil [Member] | Brent [Member] | Collar [Member]
Weighted Average Price	122.80	[1]
Maximum [Member] | Current Remaining Year [Member] | Crude Oil [Member] | Collar [Member]
Weighted Average Price	124.59
Minimum [Member] | Current Remaining Year [Member] | Crude Oil [Member] | Brent [Member] | Collar [Member]
Weighted Average Price	100.00	[1]
Minimum [Member] | Current Remaining Year [Member] | Crude Oil [Member] | Collar [Member]
Weighted Average Price	95.00
Current Remaining Year [Member] | Crude Oil [Member] | Brent [Member] | Collar [Member]
Average Monthly Volumes	50,000
Current Remaining Year [Member] | Crude Oil [Member] | Swap [Member]
Average Monthly Volumes	163,300
Weighted Average Price	82.62
Current Remaining Year [Member] | Crude Oil [Member] | Collar [Member]
Average Monthly Volumes	35,300
Current Remaining Year [Member] | Natural Gas [Member] | Swap [Member]
Average Monthly Volumes	703,300,000
Weighted Average Price	4.93
Maximum [Member] | Next Year [Member] | Crude Oil [Member] | Henry Hub [Member] | Collar 2 [Member]
Weighted Average Price	117.59	[1]
Maximum [Member] | Next Year [Member] | Crude Oil [Member] | Collar [Member]
Weighted Average Price	118.57
Minimum [Member] | Next Year [Member] | Crude Oil [Member] | Henry Hub [Member] | Collar 2 [Member]
Weighted Average Price	99.42	[1]
Minimum [Member] | Next Year [Member] | Crude Oil [Member] | Collar [Member]
Weighted Average Price	96.67
Next Year [Member] | Crude Oil [Member] | Brent [Member] | Swap [Member]
Average Monthly Volumes	16,000
Weighted Average Price	103.20	[1]
Next Year [Member] | Crude Oil [Member] | Brent [Member] | Collar 2 [Member]
Average Monthly Volumes	139,000
Next Year [Member] | Crude Oil [Member] | Collar [Member]
Average Monthly Volumes	75,000
Next Year [Member] | Natural Gas [Member] | Swap [Member]
Average Monthly Volumes	333,300,000
Weighted Average Price	4.70
Next Year [Member] | Natural Gas [Member] | Collar [Member]
Average Monthly Volumes	166,700,000
Maximum [Member] | Second Year [Member] | Crude Oil [Member] | Brent [Member] | Collar [Member]
Weighted Average Price	102.60	[1]
Minimum [Member] | Second Year [Member] | Crude Oil [Member] | Brent [Member] | Collar [Member]
Weighted Average Price	95.00	[1]
Second Year [Member] | Crude Oil [Member] | Brent [Member] | Swap [Member]
Average Monthly Volumes	41,700
Weighted Average Price	99.15	[1]
Second Year [Member] | Crude Oil [Member] | Brent [Member] | Collar [Member]
Average Monthly Volumes	41,700
Maximum [Member] | Natural Gas [Member] | Collar [Member]
Weighted Average Price	5.09
Minimum [Member] | Natural Gas [Member] | Collar [Member]
Weighted Average Price	4.75

[1] The prices quoted in the table above are primarily NYMEX Henry Hub for natural gas and NYMEX West Texas Intermediate for crude oil. As footnoted above these costless collar contracts are priced as Brent crude oil.

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Oil And Gas Properties (Changes In Asset Retirement Obligations) (Details) (USD $) In Thousands	9 Months Ended
	Sep. 30, 2011
Oil And Gas Properties
Asset retirement obligations at December 31, 2010	$ 234,936
Liability incurred during the period	1,372
Liability settled during the period	(36,591)
Revision in estimated cash flows	22,276
Accretion expense (included in depreciation and amortization)	11,252
Asset retirement obligations at September 30, 2011	$ 233,245

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Condensed Consolidated Guarantor And Non-Guarantor Financial Information (Schedule Of Condensed Consolidating Statements Of Operations) (Details) (USD $) In Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Net revenues	$ 372,496	$ 392,669	$ 1,002,422	$ 893,501
Cost of sales	250,201	306,117	702,853	875,911
Gross profit (loss)	122,295	86,552	299,569	17,590
Gain on oil & gas derivative contracts		161		2,643
Gain (loss) on sale or acquisition of assets		13	(6)	6,246
Selling, general and administrative expenses	(22,082)	(26,628)	(70,821)	(91,675)
Income (loss) from operations	100,213	60,098	228,742	(65,196)
Equity in earnings of investments	4,906	6,221	16,443	12,932
Net interest expense and other	(34,828)	(21,407)	(80,429)	(64,826)
Income (loss) before income taxes	70,291	44,912	164,756	(117,090)
Provision (benefit) for income taxes	23,465	17,965	49,186	(41,962)
Net income (loss), including noncontrolling interests	46,826	26,947	115,570	(75,128)
Less net income applicable to noncontrolling interests	(800)	(776)	(2,354)	(2,049)
Preferred stock dividends	(10)	(10)	(30)	(104)
Net income (loss) applicable to Helix common shareholders	46,016	26,161	113,186	(77,281)
Helix [Member]
Net revenues	19,986	82,764	56,113	137,456
Cost of sales	15,698	42,397	47,414	73,889
Gross profit (loss)	4,288	40,367	8,699	63,567
Gain on oil & gas derivative contracts
Gain (loss) on sale or acquisition of assets			(6)
Selling, general and administrative expenses	(6,752)	(15,465)	(27,512)	(52,923)
Income (loss) from operations	(2,464)	24,902	(18,819)	10,644
Equity in earnings of investments	60,831	27,871	167,867	(36,865)
Net interest expense and other	(17,612)	(19,452)	(53,139)	(42,160)
Income (loss) before income taxes	40,755	33,321	95,909	(68,381)
Provision (benefit) for income taxes	(5,266)	7,185	(17,229)	517
Net income (loss), including noncontrolling interests	46,021	26,136	113,138	(68,898)
Preferred stock dividends	(10)	(10)	(30)	(104)
Net income (loss) applicable to Helix common shareholders	46,011	26,126	113,108	(69,002)
Guarantors [Member]
Net revenues	266,447	212,105	756,344	568,075
Cost of sales	182,259	184,369	521,387	641,568
Gross profit (loss)	84,188	27,736	234,957	(73,493)
Gain on oil & gas derivative contracts		161		2,643
Gain (loss) on sale or acquisition of assets				287
Selling, general and administrative expenses	(9,551)	(7,370)	(29,502)	(25,285)
Income (loss) from operations	74,637	20,527	205,455	(95,848)
Equity in earnings of investments	7,277	7,567	5,809	10,672
Net interest expense and other	(8,016)	(3,996)	(18,615)	(16,564)
Income (loss) before income taxes	73,898	24,098	192,649	(101,740)
Provision (benefit) for income taxes	24,419	4,530	66,479	(40,606)
Net income (loss), including noncontrolling interests	49,479	19,568	126,170	(61,134)
Net income (loss) applicable to Helix common shareholders	49,479	19,568	126,170	(61,134)
Non-Guarantors [Member]
Net revenues	109,780	111,581	260,582	256,639
Cost of sales	75,643	92,765	203,651	215,067
Gross profit (loss)	34,137	18,816	56,931	41,572
Gain on oil & gas derivative contracts
Gain (loss) on sale or acquisition of assets		13		5,959
Selling, general and administrative expenses	(6,105)	(4,212)	(14,917)	(14,788)
Income (loss) from operations	28,032	14,617	42,014	32,743
Equity in earnings of investments	4,906	6,221	16,443	12,932
Net interest expense and other	(9,200)	2,041	(8,675)	(6,102)
Income (loss) before income taxes	23,738	22,879	49,782	39,573
Provision (benefit) for income taxes	4,309	6,234	(95)	2,584
Net income (loss), including noncontrolling interests	19,429	16,645	49,877	36,989
Net income (loss) applicable to Helix common shareholders	19,429	16,645	49,877	36,989
Consolidating Entries [Member]
Net revenues	(23,717)	(13,781)	(70,617)	(68,669)
Cost of sales	(23,399)	(13,414)	(69,599)	(54,613)
Gross profit (loss)	(318)	(367)	(1,018)	(14,056)
Gain on oil & gas derivative contracts
Selling, general and administrative expenses	326	419	1,110	1,321
Income (loss) from operations	8	52	92	(12,735)
Equity in earnings of investments	(68,108)	(35,438)	(173,676)	26,193
Income (loss) before income taxes	(68,100)	(35,386)	(173,584)	13,458
Provision (benefit) for income taxes	3	16	31	(4,457)
Net income (loss), including noncontrolling interests	(68,103)	(35,402)	(173,615)	17,915
Less net income applicable to noncontrolling interests	(800)	(776)	(2,354)	(2,049)
Net income (loss) applicable to Helix common shareholders	$ (68,903)	$ (36,178)	$ (175,969)	$ 15,866

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Stock-Based Compensation Plans (Tables)

9 Months Ended

Sep. 30, 2011

Stock-Based Compensation Plans

Restricted Shares Granted

Date of Grant	Shares		Market Value Per Share		Vesting Period
January 4, 2011		475,804	$	12.14	20% per year over five years
January 4, 2011		4,427		12.14	100% on January 1, 2013
April 1, 2011		2,907		17.20	100% on January 1, 2013
May 11, 2011		21,608		16.14	20% per year over five years
July 1, 2011		2,095		16.56	100% on January 1, 2013

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Condensed Consolidated Statements Of Cash Flows (USD $) In Thousands	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010
Cash flows from operating activities:
Net income (loss), including noncontrolling interests	$ 115,570	$ (75,128)
Adjustments to reconcile net income (loss), including noncontrolling interests to net cash provided by operating activities
Depreciation and amortization	239,540	222,730
Asset impairment charge and dry hole expense	32,736	171,626
Amortization of deferred financing costs	7,197	5,731
Stock compensation expense	6,835	6,889
Amortization of debt discount	6,693	6,272
Deferred income taxes	31,707	(53,335)
Excess tax benefit from stock-based compensation	805	2,376
Gain on investment in Cal Dive common stock	(753)
Loss on early extinguishment of Senior Unsecured Notes	2,354
(Gain) loss on sale or acquisition of assets	6	(6,246)
Unrealized (gain) loss on derivative contracts	433	2,304
Changes in operating assets and liabilities:
Accounts receivable, net	(24,205)	(29,256)
Other current assets	(11,100)	3,947
Income tax payable	9,129	4,896
Accounts payable and accrued liabilities	(28,668)	38,662
Oil and gas asset retirement costs	(34,836)	(52,244)
Other noncurrent, net	(2,312)	(7,458)
Net cash provided by operating activities	351,131	241,766
Cash flows from investing activities:
Capital expenditures	(167,849)	(179,018)
Investments in equity investments	(2,699)	(7,768)
Distributions from equity investments, net	3,437	9,876
Proceeds from sale of Cal Dive common stock	3,588
Insurance recovery for capital items		16,106
Proceeds from sales of property		852
Decrease (increase) in restricted cash	703	(133)
Net cash used in investing activities	(162,820)	(160,085)
Cash flows from financing activities:
Borrowing under revolving credit facility	109,400
Repayment of revolving credit facility	(109,400)
Repayment of Helix Term Loan	(111,941)	(3,245)
Early extinguishment of Senior Unsecured Notes	(77,394)
Repayment of MARAD borrowings	(4,645)	(4,866)
Loan notes repayment	(1,215)	(1,842)
Deferred financing costs	(9,224)	(2,864)
Repurchases of common stock and preferred dividends paid	(1,102)	(11,763)
Excess tax benefit from stock-based compensation	(805)	(2,376)
Exercise of stock options, net	2,018	335
Net cash used in financing activities	(204,308)	(26,621)
Effect of exchange rate changes on cash and cash equivalents	267	(253)
Net (decrease) increase in cash and cash equivalents	(15,730)	54,807
Cash and cash equivalents:
Balance, beginning of year	391,085	270,673
Balance, end of period	$ 375,355	$ 325,480

XML

Condensed Consolidated Guarantor And Non-Guarantor Financial Information

9 Months Ended

Sep. 30, 2011

Condensed Consolidated Guarantor And Non-Guarantor Financial Information

Condensed Consolidated Guarantor And Non-Guarantor Financial Information

Note 17 – Condensed Consolidated Guarantor and Non-Guarantor Financial Information

The payment of our obligations under the Senior Unsecured Notes is guaranteed by all of our restricted domestic subsidiaries ("Subsidiary Guarantors") except for Cal Dive I-Title XI, Inc.  Each of these Subsidiary Guarantors is included in our consolidated financial statements and has fully and unconditionally guaranteed the Senior Unsecured Notes on a joint and several basis.  As a result of these guaranty arrangements, we are required to present the following condensed consolidating financial information.  The accompanying guarantor financial information is presented on the equity method of accounting for all periods presented.  Under this method, investments in subsidiaries are recorded at cost and adjusted for our share in the subsidiaries' cumulative results of operations, capital contributions and distributions and other changes in equity.  Elimination entries related primarily to the elimination of investments in subsidiaries and associated intercompany balances and transactions.

HELIX ENERGY SOLUTIONS GROUP, INC.

CONDENSED CONSOLIDATING BALANCE SHEETS

(in thousands)

(Unaudited)

	As of September 30, 2011
		Helix			Guarantors		Non-Guarantors			Consolidating  Entries			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	335,063		$	1,060	$	39,232		$	—		$	375,355
Accounts receivable, net		76,595			92,881		51,686			—			221,162
Unbilled revenue		13,235			18		15,621			—			28,874
Income taxes receivable		39,013			—		2,691			(41,704	)		—
Other current assets		60,957			49,739		13,832			(1,292	)		123,236
Total current assets		524,863			143,698		123,062			(42,996	)		748,627
Intercompany		(16,546	)		276,281		(210,909	)		(48,826	)		—
Property and equipment, net		219,450			1,552,025		707,165			(4,887	)		2,473,753
Other assets:
Equity investments in unconsolidated affiliates		—			—		186,423			—			186,423
Equity investments in affiliates		1,989,756			35,708		—			(2,025,464	)		—
Goodwill, net		—			45,107		17,237			—			62,344
Other assets, net		46,672			45,977		17,625			(29,412	)		80,862
Due from subsidiaries/parent		82,918			331,591		—			(414,509	)		—
	$	2,847,113		$	2,430,387	$	840,603		$	(2,566,094	)	$	3,552,009
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	42,650		$	74,003	$	28,459		$	—		$	145,112
Accrued liabilities		50,000			81,412		28,264			—			159,676
Income taxes payable		—			62,870		—			(59,014	)		3,856
Current maturities of long-term debt		3,000			—		4,877			—			7,877
Total current liabilities		95,650			218,285		61,600			(59,014	)		316,521
Long-term debt		1,058,626			—		105,288			—			1,163,914
Deferred income taxes		227,047			120,838		99,249			(5,614	)		441,520
Asset retirement obligations		—			169,429		—			—			169,429
Other long-term liabilities		1,351			2,899		594			—			4,844
Due to parent		—			—		108,403			(108,403	)		—
Total liabilities		1,382,674			511,451		375,134			(173,031	)		2,096,228
Convertible preferred stock		1,000			—		—			—			1,000
Total equity		1,463,439			1,918,936		465,469			(2,393,063	)		1,454,781
	$	2,847,113		$	2,430,387	$	840,603		$	(2,566,094	)	$	3,552,009

HELIX ENERGY SOLUTIONS GROUP, INC.

CONDENSED CONSOLIDATING BALANCE SHEETS

(in thousands)

	As of December 31, 2010
		Helix		Guarantors		Non-Guarantors			Consolidating Entries			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	376,434	$	3,294	$	11,357		$	—		$	391,085
Accounts receivable, net		61,846		91,659		23,788			—			177,293
Unbilled revenue		11,990		—		37,421			—			49,411
Income taxes receivable		19,334		—		7,195			(20,430	)		6,099
Other current assets		63,306		49,557		12,889			(8,786	)		116,966
Total current assets		532,910		144,510		92,650			(29,216	)		740,854
Intercompany		1,906		263,920		(171,513	)		(94,313	)		—
Property and equipment, net		217,153		1,605,906		709,082			(5,061	)		2,527,080
Equity investments in unconsolidated affiliates		—		—		187,031			—			187,031
Equity investments in affiliates		1,998,289		29,899		—			(2,028,188	)		—
Goodwill, net		—		45,107		17,387			—			62,494
Other assets, net		43,971		38,324		21,900			(29,634	)		74,561
Due from subsidiaries/parent		95,398		105,434		—			(200,832	)		—
	$	2,889,627	$	2,233,100	$	856,537		$	(2,387,244	)	$	3,592,020
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable	$	60,308	$	56,107	$	42,966		$	—		$	159,381
Accrued liabilities		58,074		107,874		32,289			—			198,237
Income taxes payable		—		36,678		—			(36,678	)		—
Current maturities of long-term debt		4,326		—		14,301			(8,448	)		10,179
Total current liabilities		122,708		200,659		89,556			(45,126	)		367,797
Long-term debt		1,237,587		—		110,166			—			1,347,753
Deferred income taxes		185,453		135,101		98,968			(5,883	)		413,639
Asset retirement obligations		—		170,410		—			—			170,410
Other long-term liabilities		1,421		3,691		665			—			5,777
Due to parent		—		—		120,884			(120,884	)		—
Total liabilities		1,547,169		509,861		420,239			(171,893	)		2,305,376
Convertible preferred stock		1,000		—		—			—			1,000
Total equity		1,341,458		1,723,239		436,298			(2,215,351	)		1,285,644
	$	2,889,627	$	2,233,100	$	856,537		$	(2,387,244	)	$	3,592,020

HELIX ENERGY SOLUTIONS GROUP, INC.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(in thousands)

(Unaudited)

	Three Months Ended September 30, 2011
	Helix			Guarantors			Non-Guarantors			Consolidating Entries			Consolidated
Net revenues	$	19,986		$	266,447		$	109,780		$	(23,717	)	$	372,496
Cost of sales		15,698			182,259			75,643			(23,399	)		250,201
Gross profit (loss)		4,288			84,188			34,137			(318	)		122,295
Gain on oil & gas derivative contracts		—			—			—			—			—
Gain (loss) on sale or acquisition of assets		—			—			—			—			—
Selling, general and administrative expenses		(6,752	)		(9,551	)		(6,105	)		326			(22,082	)
Income (loss) from operations		(2,464	)		74,637			28,032			8			100,213
Equity in earnings of investments		60,831			7,277			4,906			(68,108	)		4,906
Net interest expense and other		(17,612	)		(8,016	)		(9,200	)		—			(34,828	)
Income (loss) before income taxes		40,755			73,898			23,738			(68,100	)		70,291
Provision (benefit) for income taxes		(5,266	)		24,419			4,309			3			23,465
Net income (loss), including noncontrolling interests		46,021			49,479			19,429			(68,103	)		46,826
Less net income applicable to noncontrolling interests		—			—			—			(800	)		(800	)
Preferred stock dividends		(10	)		—			—			—			(10	)
Net income (loss) applicable to Helix common shareholders	$	46,011		$	49,479		$	19,429		$	(68,903	)	$	46,016

	Three Months Ended September 30, 2010
	Helix			Guarantors			Non-Guarantors			Consolidating Entries			Consolidated
Net revenues	$	82,764		$	212,105		$	111,581		$	(13,781	)	$	392,669
Cost of sales		42,397			184,369			92,765			(13,414	)		306,117
Gross profit (loss)		40,367			27,736			18,816			(367	)		86,552
Gain on oil & gas derivative contracts		—			161			—			—			161
Gain (loss) on sale or acquisition of assets		—			—			13			—			13
Selling, general and administrative expenses		(15,465	)		(7,370	)		(4,212	)		419			(26,628	)
Income (loss) from operations		24,902			20,527			14,617			52			60,098
Equity in earnings of investments		27,871			7,567			6,221			(35,438	)		6,221
Net interest expense and other		(19,452	)		(3,996	)		2,041			—			(21,407	)
Income (loss) before income taxes		33,321			24,098			22,879			(35,386	)		44,912
Provision (benefit) for income taxes		7,185			4,530			6,234			16			17,965
Net income (loss), including noncontrolling interests		26,136			19,568			16,645			(35,402	)		26,947
Less net income applicable to noncontrolling interests		—			—			—			(776	)		(776	)
Preferred stock dividends		(10	)		—			—			—			(10	)
Net income (loss) applicable to Helix common shareholders	$	26,126		$	19,568		$	16,645		$	(36,178	)	$	26,161

HELIX ENERGY SOLUTIONS GROUP, INC.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(in thousands)

(Unaudited)

	Nine Months Ended September 30, 2011
	Helix			Guarantors			Non-Guarantors			Consolidating Entries			Consolidated
Net revenues	$	56,113		$	756,344		$	260,582		$	(70,617	)	$	1,002,422
Cost of sales		47,414			521,387			203,651			(69,599	)		702,853
Gross profit (loss)		8,699			234,957			56,931			(1,018	)		299,569
Gain on oil & gas derivative contracts		—			—			—			—			—
Gain (loss) on sale or acquisition of assets		(6	)		—			—			—			(6	)
Selling, general and administrative expenses		(27,512	)		(29,502	)		(14,917	)		1,110			(70,821	)
Income (loss) from operations		(18,819	)		205,455			42,014			92			228,742
Equity in earnings of investments		167,867			5,809			16,443			(173,676	)		16,443
Net interest expense and other		(53,139	)		(18,615	)		(8,675	)		—			(80,429	)
Income (loss) before income taxes		95,909			192,649			49,782			(173,584	)		164,756
Provision (benefit) for income taxes		(17,229	)		66,479			(95	)		31			49,186
Net income (loss), including noncontrolling interests		113,138			126,170			49,877			(173,615	)		115,570
Less net income applicable to noncontrolling interests		—			—			—			(2,354	)		(2,354	)
Preferred stock dividends		(30	)		—			—			—			(30	)
Net income (loss) applicable to Helix common shareholders	$	113,108		$	126,170		$	49,877		$	(175,969	)	$	113,186

	Nine Months Ended September 30, 2010
	Helix			Guarantors			Non-Guarantors			Consolidating Entries			Consolidated
Net revenues	$	137,456		$	568,075		$	256,639		$	(68,669	)	$	893,501
Cost of sales		73,889			641,568			215,067			(54,613	)		875,911
Gross profit (loss)		63,567			(73,493	)		41,572			(14,056	)		17,590
Gain on oil & gas derivative contracts		—			2,643			—			—			2,643
Gain (loss) on sale or acquisition of assets		—			287			5,959			—			6,246
Selling, general and administrative expenses		(52,923	)		(25,285	)		(14,788	)		1,321			(91,675	)
Income (loss) from operations		10,644			(95,848	)		32,743			(12,735	)		(65,196	)
Equity in earnings of investments		(36,865	)		10,672			12,932			26,193			12,932
Net interest expense and other		(42,160	)		(16,564	)		(6,102	)		—			(64,826	)
Income (loss) before income taxes		(68,381	)		(101,740	)		39,573			13,458			(117,090	)
Provision (benefit) for income taxes		517			(40,606	)		2,584			(4,457	)		(41,962	)
Net income (loss), including noncontrolling interests		(68,898	)		(61,134	)		36,989			17,915			(75,128	)
Less net income applicable to noncontrolling interests		—			—			—			(2,049	)		(2,049	)
Preferred stock dividends		(104	)		—			—			—			(104	)
Net income (loss) applicable to Helix common shareholders	$	(69,002	)	$	(61,134	)	$	36,989		$	15,866		$	(77,281	)

HELIX ENERGY SOLUTIONS GROUP, INC.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

	Nine Months Ended September 30, 2011
	Helix			Guarantors			Non-Guarantors			Consolidating Entries			Consolidated
Cash flow from operating activities:
Net income (loss), including noncontrolling interests	$	113,138		$	126,170		$	49,877		$	(173,615	)	$	115,570
Adjustments to reconcile net income (loss), including noncontrolling interests to net cash provided by (used in) operating activities:
Equity in earnings of affiliates		(167,867	)		(5,809	)		—			173,676			—
Other adjustments		19,125			218,602			2,578			(4,744	)		235,561
Net cash provided by (used in) operating
activities		(35,604	)		338,963			52,455			(4,683	)		351,131
Cash flows from investing activities:
Capital expenditures		(18,240	)		(129,535	)		(20,074	)		—			(167,849	)
Investments in equity investments		—			—			(2,699	)		—			(2,699	)
Distributions from equity investments, net		—			—			3,437			—			3,437
Proceeds from sale of Cal Dive common stock		3,588			—			—			—			3,588
Decrease (increase) in restricted cash		—			703			—			—			703
Net cash used in investing activities		(14,652	)		(128,832	)		(19,336	)		—			(162,820	)
Cash flows from financing activities:
Repayments of debt		(111,941	)		—			(5,860	)		—			(117,801	)
Extinguishment of Senior Unsecured Notes		(77,394	)		—			—			—			(77,394	)
Deferred financing costs		(9,224	)		—			—			—			(9,224	)
Repurchase of common stock and preferred dividends paid		(1,102	)		—			—			—			(1,102	)
Excess tax benefit from stock-based  compensation		(805	)		—			—			—			(805	)
Exercise of stock options, net		2,018			—			—			—			2,018
Intercompany financing		207,333			(212,365	)		349			4,683			—
Net cash provided by (used in) financing activities		8,885			(212,365	)		(5,511	)		4,683			(204,308	)
Effect of exchange rate changes on cash and cash equivalents		—			—			267			—			267
Net increase (decrease) in cash and cash equivalents		(41,371	)		(2,234	)		27,875			—			(15,730	)
Cash and cash equivalents:
Balance, beginning of year		376,434			3,294			11,357			—			391,085
Balance, end of period	$	335,063		$	1,060		$	39,232		$	—		$	375,355

HELIX ENERGY SOLUTIONS GROUP, INC.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)

	Nine Months Ended September 30, 2010
	Helix			Guarantors			Non-Guarantors			Consolidating Entries			Consolidated
Cash flow from operating activities:
Net income (loss), including noncontrolling interests	$	(68,898	)	$	(61,134	)	$	36,989		$	17,915		$	(75,128	)
Adjustments to reconcile net income (loss), including noncontrolling interests to net cash provided by (used in) operating activities:
Equity in earnings of affiliates		36,866			(10,673	)		—			(26,193	)		—
Other adjustments		70,963			229,567			33,675			(17,311	)		316,894
Net cash provided by (used in) operating
activities		38,931			157,760			70,664			(25,589	)		241,766
Cash flows from investing activities:
Capital expenditures		(54,880	)		(104,423	)		(19,715	)		—			(179,018	)
Investments in equity investments		—			—			(7,768	)		—			(7,768	)
Distributions from equity investments, net		—			—			9,876			—			9,876
Insurance recovery		7,020			9,086			—			—			16,106
Proceeds from sale of property		—			852			—			—			852
Decrease (increase) in restricted cash		—			(133	)		—			—			(133	)
Net cash used in investing activities		(47,860	)		(94,618	)		(17,607	)		—			(160,085	)
Cash flows from financing activities:
Repayments of debt		(3,245	)		—			(6,708	)		—			(9,953	)
Deferred financing costs		(2,864	)		—			—			—			(2,864	)
Repurchases of common stock		(11,763	)		—			—						(11,763	)
Excess tax benefit from stock-based  compensation		(2,376	)		—			—			—			(2,376	)
Exercise of stock options, net		335			—			—			—			335
Intercompany financing		73,887			(61,811	)		(37,665	)		25,589			—
Net cash provided by (used in) financing activities		53,974			(61,811	)		(44,373	)		25,589			(26,621	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(253	)		—			(253	)
Net increase (decrease) in cash and cash equivalents		45,045			1,331			8,431			—			54,807
Cash and cash equivalents:
Balance, beginning of year		258,742			2,522			9,409			—			270,673
Balance, end of period	$	303,787		$	3,853		$	17,840		$	—		$	325,480

XML

Long-Term Debt (Maturities Of Long-Term Debt) (Details) (USD $) In Thousands	Sep. 30, 2011		Dec. 31, 2010	Sep. 30, 2011 Helix Term Loan [Member]		Sep. 30, 2011 Helix Revolving Loans [Member]		Sep. 30, 2011 Senior Unsecured Notes [Member]		Dec. 31, 2007 Senior Unsecured Notes [Member]	Sep. 30, 2011 Convertible Senior Notes [Member]		Sep. 30, 2011 MARAD Debt [Member]
Less than one year	$ 7,877			$ 3,000								[1]	$ 4,877
One to two years	8,120			3,000									5,120
Two to three years	8,376			3,000								[1]	5,376
Three to four years	295,144			289,500								[1]	5,644
Four to five years	480,885							474,960				[1]	5,925
Over five years	383,224										300,000	[1]	83,224
Total debt	1,183,626			298,500				474,960			300,000	[1]	110,166
Current maturities	(7,877)		(10,179)	(3,000)								[1]	(4,877)
Long-term debt, less current maturities	1,175,749			295,500				474,960			300,000	[1]	105,289
Unamortized debt discount	(11,835)	[2]			[2]		[2]		[2]		(11,835)	[1],[2]		[2]
Long-term debt	$ 1,163,914		$ 1,347,753	$ 295,500				$ 474,960		$ 550,000	$ 288,165	[1]	$ 105,289

[1] Beginning in December 2012, the holders may require us to repurchase the notes or we may at our own option elect to repurchase the notes. The notes will mature in March 2025.

[2] The notes will increase to the $300 million face amount through accretion of non-cash interest charges through 2012.

XML

Oil And Gas Properties (Tables)

9 Months Ended

Sep. 30, 2011

Oil And Gas Properties

Components Of Exploration Expenses

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2011			2010			2011			2010
Delay rental and geological and geophysical costs	$	522		$	497		$	2,176		$	2,025
Impairment of unproved properties		1,028			—			7,668	a		—
Dry hole expense and other		(2	)		(55	)		(11	)		(245	)
Total exploration expense	$	1,548		$	442		$	9,833		$	1,780

a.   Includes the costs ($6.6 million) associated with a deepwater lease the term of which expired during the second quarter of 2011.

Changes In Asset Retirement Obligations

Asset retirement obligations at December 31, 2010	$	234,936
Liability incurred during the period		1,372
Liability settled during the period		(36,591	)
Revision in estimated cash flows		22,276
Accretion expense (included in depreciation and amortization)		11,252
Asset retirement obligations at September 30, 2011	$	233,245

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Derivative Instruments And Hedging Activities (Impact Of Non Designated Derivative Instruments On Income Statement) (Details) (USD $) In Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Gain (Loss) Recognized in Income on Derivatives	$ (381)	$ 1,267	$ (234)	$ 245
Natural Gas Contracts [Member] | Gain On Oil And Gas Derivative Contracts [Member]
Gain (Loss) Recognized in Income on Derivatives		161		2,643
Foreign Exchange Forward [Member] | Other Expense [Member]
Gain (Loss) Recognized in Income on Derivatives	$ (381)	$ 1,106	$ (234)	$ (2,398)

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Company Overview

9 Months Ended

Sep. 30, 2011

Company Overview

Company Overview

Note 2 – Company Overview

We are an international offshore energy company that provides reservoir development solutions and other contracting services to the energy market as well as to our own oil and gas properties. Our Contracting Services segment utilizes our vessels, offshore equipment and methodologies to deliver services that may reduce finding and development costs and encompass the complete lifecycle of an offshore oil and gas field. Our Contracting Services are located primarily in the Gulf of Mexico, North Sea, Asia Pacific and West Africa regions.  Our Oil and Gas segment engages in exploration, development and production activities. Our oil and gas operations are exclusively located in the Gulf of Mexico.

Contracting Services Operations

We seek to provide services and methodologies which we believe are critical to finding and developing offshore reservoirs and maximizing production economics.  Our "life of field" services are segregated into four disciplines: subsea construction, well operations, robotics and production facilities. We have disaggregated our contracting services operations into two reportable segments: Contracting Services and Production Facilities. Our Contracting Services business primarily includes subsea construction, deepwater pipelay, well operations and robotics activities.  Our Production Facilities business includes our equity investment in Deepwater Gateway, L.L.C. ("Deepwater Gateway") and Independence Hub, LLC ("Independence Hub") as well as our majority ownership of the Helix Producer I   ("HP I") vessel.   We have developed a response system that has been referenced as a designated spill response resource in Gulf of Mexico permit applications (see "Events in Gulf of Mexico" below), which is also a component of our Production Facilities segment.

Oil and Gas Operations

We began our oil and gas operations to provide a more efficient solution to offshore abandonment, to expand off-season utilization of our contracting services assets and to achieve incremental returns. We have evolved this business model to include not only mature oil and gas properties but also proved and unproved reserves yet to be explored and developed.  This has led to the assembly of services that allows us to create value at key points in the life of a reservoir from exploration through development, life of field management and operating through abandonment.

Events in Gulf of Mexico

In April 2010, an explosion occurred on the Deepwater Horizon drilling rig located on the site of the Macondo well at Mississippi Canyon Block 252.  The resulting events included loss of life, the complete destruction of the drilling rig and an oil spill, the magnitude of which was unprecedented in U.S. territorial waters.  In May 2010, the U.S. Department of Interior ("DOI") announced a total moratorium on new drilling in the Gulf of Mexico.   In October 2010, the DOI lifted the drilling moratorium and instructed the Bureau of Ocean Energy Management, Regulation and Enforcement ("BOEMRE") that it could resume issuing drilling permits conditioned on the requesting company's compliance with all revised drilling, safety and environmental requirements.   No post moratorium deepwater drilling permits were issued by BOEMRE until late February 2011.

We developed the Helix Fast Response System ("HFRS") as a culmination of our experience as a responder in the Gulf oil spill response and containment efforts.  The HFRS centers on two vessels, the HP I and the Q4000, both of which played a key role in the Gulf oil spill response and containment efforts and are presently operating in the Gulf of Mexico.  In 2011, we signed an agreement with Clean Gulf Associates ("CGA"), a non-profit industry group, allowing, in exchange for a retainer fee, the HFRS to be named as a response resource in permit applications to federal and state agencies and making the HFRS available for a two-year term to certain CGA participants who have executed utilization agreements with us. In addition to the agreement with CGA, we currently have signed separate utilization agreements with 24 CGA participant member companies specifying the day rates to be charged should the HFRS be deployed in connection with a well control incident.  The retainer fee for the HFRS became effective April 1, 2011 and is a component of our Production Facilities business segment.   A total of 38 permits have been granted to CGA participants for deepwater drilling operations identifying the HFRS to fulfill the BOERME requirement to have a spill response and containment resource included in the submitted permit applications.

New Accounting Pronouncement

In June 2011, the Financial Accounting Standards Board ("FASB") issued an update to existing guidance on the presentation of comprehensive income. This update will require the presentation of the components of net income and other comprehensive income either in a single continuous statement or in two separate but consecutive statements. In addition, companies are also required to present reclassification adjustments for items that are reclassified from other comprehensive income to net income on the face of the financial statements. The update is effective for fiscal years and interim periods beginning after December 15, 2011. We will adopt the new disclosure requirements for comprehensive income beginning January 1, 2012 and are currently evaluating the provisions of this update.

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Stock-Based Compensation Plans

9 Months Ended

Sep. 30, 2011

Stock-Based Compensation Plans

Stock-Based Compensation Plans

Note 11 – Stock-Based Compensation Plans

We have two stock-based compensation plans: the 1995 Long-Term Incentive Plan, as amended (the "1995 Incentive Plan") and the 2005 Long-Term Incentive Plan, as amended (the "2005 Incentive Plan").  As of September 30, 2011, there were 985,070 shares available for grant under our 2005 Incentive Plan.

There were no stock option grants in the three- and nine-month periods ended September 30, 2011 and 2010. During the nine-month period ended September 30, 2011, we made the following restricted share grants to executive officers, selected management employees and non-employee members of the board of directors under the 2005 Incentive Plan:

Date of Grant	Shares		Market Value Per Share		Vesting Period
January 4, 2011		475,804	$	12.14	20% per year over five years
January 4, 2011		4,427		12.14	100% on January 1, 2013
April 1, 2011		2,907		17.20	100% on January 1, 2013
May 11, 2011		21,608		16.14	20% per year over five years
July 1, 2011		2,095		16.56	100% on January 1, 2013

Compensation cost is recognized over the applicable vesting periods on a straight-line basis.  For the three- and nine-month periods ended September 30, 2011, $1.9 million and $6.8 million, respectively, was recognized as compensation expense related to restricted shares as compared with $2.1 million and $6.7 million during the three- and nine-month periods ended September 30, 2010, respectively.

In January 2009, we adopted the 2009 Long-Term Incentive Cash Plan (the "2009 LTI Plan") to provide long term cash-based compensation to eligible employees.  Under the terms of the 2009 LTI Plan, the majority of the cash awards are fixed sum amounts payable annually over a five-year vesting period.  Some of the cash awards, however, are indexed to the Company's common stock price and the payment amount at each vesting date will fluctuate based on the common stock's performance.  As a result, the compensation expense associated with those awards is re-measured to fair value each reporting period with corresponding changes being recorded as a charge to earnings as appropriate.

Total compensation expense under the 2009 LTI plan totaled $0.4 million and $5.0 million for the three- and nine-month periods ended September 30, 2011, respectively.  For the three- and nine-month periods ended September 30, 2010, total compensation under the 2009 LTI plan totaled $0.8 million and $3.4 million, respectively.  The liability balance under the 2009 LTI Plan was $7.0 million at September 30, 2011 and $7.9 million at December 31, 2010, including $5.8 million at September 30, 2011 and $6.2 million at December 31, 2010 associated with the variable portion of the 2009 LTI plan.

For more information regarding our stock-based compensation plans, including our 2009 LTI Plan see Note 12 of our 2010 Form 10-K.

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Business Segment Information (Intercompany Segment Gross Profit (Losses)) (Details) (USD $) In Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Gross profit (loss) with other operating segments of same entity	$ 528	$ 286	$ 457	$ 18,722
Contracting Services [Member]
Gross profit (loss) with other operating segments of same entity	606	330	645	15,473
Production Facilities [Member]
Gross profit (loss) with other operating segments of same entity	$ (78)	$ (44)	$ (188)	$ 3,249

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Fair Value Measurements (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended					9 Months Ended		3 Months Ended			6 Months Ended		3 Months Ended
	Sep. 30, 2011	Jun. 30, 2011	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Sep. 30, 2011	Sep. 30, 2010	Jun. 30, 2010 US Impairments [Member]	Mar. 31, 2010 UK Impairments [Member]	Mar. 31, 2010 Natural Gas Properties [Member]	Jun. 30, 2010 Natural Gas Properties [Member]	Jun. 30, 2011 Operating Properties [Member]	Jun. 30, 2011 End of Life Properties [Member]	Sep. 30, 2011 Gulf Of Mexico Oil And Gas Properties [Member]
Number of properties impaired		7								3	15		6	2
Oil and gas property impairments	$ 2,357	$ 22,700	$ 897	$ 159,900	$ 7,000	$ 25,078	$ 171,871	$ 159,900	$ 7,000					$ 2,400
Aggregate fair value of properties				$ 62,500	$ 28,200							$ 2,900	$ 0

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Condensed Consolidated Guarantor And Non-Guarantor Financial Information (Schedule Of Condensed Consolidating Balance Sheets) (Details) (USD $) In Thousands	Sep. 30, 2011	Dec. 31, 2010	Sep. 30, 2010	Dec. 31, 2009
Cash and cash equivalents	$ 375,355	$ 391,085	$ 325,480	$ 270,673
Accounts receivable, net	221,162	177,293
Unbilled revenue	28,874	49,411
Income taxes receivable		6,099
Other current assets	123,236	116,966
Total current assets	748,627	740,854
Property and equipment, net	2,473,753	2,527,080
Equity investments in unconsolidated affiliates	186,423	187,031
Goodwill, net	62,344	62,494
Other assets, net	80,862	74,561
Total assets	3,552,009	3,592,020
Accounts payable	145,112	159,381
Accrued liabilities	159,676	198,237
Income taxes payable	3,856
Current maturities of long-term debt	7,877	10,179
Total current liabilities	316,521	367,797
Long-term debt	1,163,914	1,347,753
Deferred income taxes	441,520	413,639
Asset retirement obligations	169,429	170,410
Other long-term liabilities	4,844	5,777
Total liabilities	2,096,228	2,305,376
Convertible preferred stock	1,000	1,000
Total equity	1,454,781	1,285,644
Total liabilities and shareholders' equity	3,552,009	3,592,020
Helix [Member]
Cash and cash equivalents	335,063	376,434	303,787	258,742
Accounts receivable, net	76,595	61,846
Unbilled revenue	13,235	11,990
Income taxes receivable	39,013	19,334
Other current assets	60,957	63,306
Total current assets	524,863	532,910
Intercompany	(16,546)	1,906
Property and equipment, net	219,450	217,153
Equity investments in affiliates	1,989,756	1,998,289
Other assets, net	46,672	43,971
Due from subsidiaries/parent	82,918	95,398
Total assets	2,847,113	2,889,627
Accounts payable	42,650	60,308
Accrued liabilities	50,000	58,074
Current maturities of long-term debt	3,000	4,326
Total current liabilities	95,650	122,708
Long-term debt	1,058,626	1,237,587
Deferred income taxes	227,047	185,453
Other long-term liabilities	1,351	1,421
Total liabilities	1,382,674	1,547,169
Convertible preferred stock	1,000	1,000
Total equity	1,463,439	1,341,458
Total liabilities and shareholders' equity	2,847,113	2,889,627
Guarantors [Member]
Cash and cash equivalents	1,060	3,294	3,853	2,522
Accounts receivable, net	92,881	91,659
Unbilled revenue	18
Other current assets	49,739	49,557
Total current assets	143,698	144,510
Intercompany	276,281	263,920
Property and equipment, net	1,552,025	1,605,906
Equity investments in affiliates	35,708	29,899
Goodwill, net	45,107	45,107
Other assets, net	45,977	38,324
Due from subsidiaries/parent	331,591	105,434
Total assets	2,430,387	2,233,100
Accounts payable	74,003	56,107
Accrued liabilities	81,412	107,874
Income taxes payable	62,870	36,678
Total current liabilities	218,285	200,659
Deferred income taxes	120,838	135,101
Asset retirement obligations	169,429	170,410
Other long-term liabilities	2,899	3,691
Total liabilities	511,451	509,861
Total equity	1,918,936	1,723,239
Total liabilities and shareholders' equity	2,430,387	2,233,100
Non-Guarantors [Member]
Cash and cash equivalents	39,232	11,357	17,840	9,409
Accounts receivable, net	51,686	23,788
Unbilled revenue	15,621	37,421
Income taxes receivable	2,691	7,195
Other current assets	13,832	12,889
Total current assets	123,062	92,650
Intercompany	(210,909)	(171,513)
Property and equipment, net	707,165	709,082
Equity investments in unconsolidated affiliates	186,423	187,031
Goodwill, net	17,237	17,387
Other assets, net	17,625	21,900
Total assets	840,603	856,537
Accounts payable	28,459	42,966
Accrued liabilities	28,264	32,289
Current maturities of long-term debt	4,877	14,301
Total current liabilities	61,600	89,556
Long-term debt	105,288	110,166
Deferred income taxes	99,249	98,968
Other long-term liabilities	594	665
Due to parent	108,403	120,884
Total liabilities	375,134	420,239
Total equity	465,469	436,298
Total liabilities and shareholders' equity	840,603	856,537
Consolidating Entries [Member]
Income taxes receivable	(41,704)	(20,430)
Other current assets	(1,292)	(8,786)
Total current assets	(42,996)	(29,216)
Intercompany	(48,826)	(94,313)
Property and equipment, net	(4,887)	(5,061)
Equity investments in affiliates	(2,025,464)	(2,028,188)
Other assets, net	(29,412)	(29,634)
Due from subsidiaries/parent	(414,509)	(200,832)
Total assets	(2,566,094)	(2,387,244)
Income taxes payable	(59,014)	(36,678)
Current maturities of long-term debt		(8,448)
Total current liabilities	(59,014)	(45,126)
Deferred income taxes	(5,614)	(5,883)
Due to parent	(108,403)	(120,884)
Total liabilities	(173,031)	(171,893)
Total equity	(2,393,063)	(2,215,351)
Total liabilities and shareholders' equity	$ (2,566,094)	$ (2,387,244)

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Details Of Certain Accounts (Other Current Assets) (Details) (USD $) In Thousands, except Share data	3 Months Ended			9 Months Ended
	Mar. 31, 2011	Dec. 31, 2010		Sep. 30, 2011
Details Of Certain Accounts
Other receivables		$ 1,247		$ 2,767
Prepaid insurance		12,375		20,539
Other prepaids		11,623		14,032
Spare parts inventory		25,333		21,602
Current deferred tax assets		49,200		21,758
Hedging assets		5,472		33,203
Gas imbalance		6,001		4,817
Income tax receivable		6,099
Investment held for sale		2,835	[1]
Other		2,880		4,518
Other current assets		123,065		123,236
Sale of subsidiary/equity method investee shares by parent company	500,000
Proceeds from sale of Cal Dive common stock				3,588
Gain on sale of Cal Dive common stock		(2,200)		753
Pre-tax gain on sale of Cal Dive common stock	$ 800			$ 753

[1] In March 2011, we sold our remaining 500,000 shares of common stock in our former subsidiary Cal Dive International, Inc. ("Cal Dive"). These sales transactions resulted in net proceeds of approximately $3.6 million and a pre-tax gain of $0.8 million. In the fourth quarter of 2010, we recognized a $2.2 million other than temporary loss on our investment in Cal Dive common shares (see Notes 2 and 3 of our 2010 Form 10-K for additional information regarding our former Investment in Cal Dive common stock).

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Fair Value Measurements

9 Months Ended

Sep. 30, 2011

Fair Value Measurements

Fair Value Measurements

Note 15 – Fair Value Measurements

Fair Value Measurements

Certain of our financial assets and liabilities are measured and reported at fair value on a recurring basis as required under applicable accounting requirements. These requirements establish a hierarchy for inputs used in measuring fair value. The fair value is to be calculated based on assumptions that market participants would use in pricing assets and liabilities and not on assumptions specific to the entity. The statement requires that each asset and liability carried at fair value be classified into one of the following categories:

• Level 1.  Observable inputs such as quoted prices in active markets;

• Level 2.  Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

• Level 3.  Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

Assets and liabilities measured at fair value are based on one or more of three valuation techniques as follows:

(a)   Market Approach.  Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

(b)   Cost Approach.   Amount that would be required to replace the service capacity of an asset (replacement cost).

(c)   Income Approach. Techniques to convert expected future cash flows to a single present amount based on market expectations (including present value techniques, option-pricing and excess earnings models).

The following table provides additional information related to assets and liabilities measured at fair value on a recurring basis at September 30, 2011 (in thousands):

	Level 1		Level 2 (1)		Level 3		Total		Valuation Technique
Assets:
Oil and gas swaps and collars	$	–	$	42,284	$	–	$	42,284	(c)
Foreign currency forwards		–		109		–		109	(c)
Interest rate swaps		–		238		–		238	(c)
Liabilities:
Fair value of long term debt(2)		1,063,501		124,212		–		1,187,713	(a), (b)
Foreign currency forwards		–		264		–		264	(c)
Interest rate swaps		–		692		–		692	(c)
Total net liability	$	1,063,501	$	82,537	$	–	$	1,146,038

(1)   Unless otherwise indicated, the fair value of our Level 2 derivative instruments reflects our best estimate and is based upon exchange or over-the-counter quotations whenever they are available. Quoted valuations may not be available due to location differences or terms that extend beyond the period for which quotations are available. Where quotes are not available, we utilize other valuation techniques or models to estimate market values. These modeling techniques require us to make estimations of future prices, price correlation and market volatility and liquidity. Our actual results may differ from our estimates, and these differences can be positive or negative.

(2)   We have elected not to record our debt at fair value in the accompanying condensed consolidated balance sheets. See Note 7 for additional information regarding our long term debt.   The fair value of our long term debt at September 30, 2011 is as follows:

	Fair Value		Carrying Value
Term Loan (matures July 2015)	$	289,545	$	298,500
Revolving Credit Facility (matures July 2015)		—		—
Convertible Senior Notes (matures March 2025)		289,497		300,000	(a)
Senior Unsecured Notes (matures January 2016)		484,459		474,960
MARAD Debt (matures February 2027) (b)		124,212		110,166
Total	$	1,187,713	$	1,183,626

(a)   Amount excludes the $11.8 million of unamortized discount remaining on the Convertible Senior Notes at September 30, 2011.

(b)   The estimated fair value of all debt, other than MARAD Debt, was determined using Level 1 inputs using the market approach.  The fair value of the MARAD debt was determined using a third party evaluation of the remaining average life and outstanding principal balance of the MARAD indebtedness as compared to other governmental obligations in the market place with similar terms.   The fair value of the MARAD debt was estimated using Level 2 fair value inputs using the cost approach.

We review long lived assets for impairment whenever events occur or changes in circumstances indicate that the carrying amount of assets may not be recoverable.  In such evaluation, the estimated future undiscounted cash flows to be generated by the asset are compared with the carrying value of the asset to determine if impairment may be required.  For our oil and gas properties, the estimated future undiscounted cash flows are based on estimated crude oil and natural gas proved and probable reserves and published future market commodity prices, estimated operating costs and estimates of future capital expenditures.   If the estimated undiscounted cash flows for a particular asset are not sufficient to cover the carrying value of the asset, the asset is impaired and its carrying value is reduced to the current fair value.  The fair value of these assets is determined using an income approach by calculating present value of future cash flows attributable to the asset based on market information (such as forward commodity prices), estimates of future costs and estimated proved and probable reserve quantities.  These fair value measurements fall within Level 3 of the fair value hierarchy.

In the third quarter of 2011, we recorded $2.4 million of impairment charges for two Gulf of Mexico oil and gas properties that are in the process of being abandoned.  In the second quarter of 2011, we recorded impairment charges on seven of our oil and gas properties.  These impairment charges reduced these oil and gas properties to their estimated fair value, which, for six of the properties, including our only United Kingdom oil and gas property, was zero and for the remaining property was $2.9 million at June 30, 2011.  At June 30, 2010 we impaired 15 of our Gulf of Mexico properties as a result of reductions in estimates of proved reserves.   The total amounts of these impairment charges were $159.9 million, which reduced the carrying value of these properties to their aggregate fair value of $62.5 million.   In the first quarter of 2010, we impaired three of our natural gas producing properties following a significant drop in natural gas prices during the period.  The total amounts of the impairment charges were $7.0 million, which reduced these properties to their aggregate fair value of $28.2 million. See Note 4 for additional information regarding our oil and gas property impairment charges.

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Condensed Consolidated Balance Sheets (USD $) In Thousands	Sep. 30, 2011	Dec. 31, 2010
Current assets:
Cash and cash equivalents	$ 375,355	$ 391,085
Accounts receivable - Trade, net of allowance for uncollectible accounts of $4,130 and $4,527, respectively	221,162	177,293
Unbilled revenue	13,878	33,712
Costs in excess of billing	14,996	15,699
Other current assets	123,236	123,065
Total current assets	748,627	740,854
Property and equipment	4,434,796	4,486,077
Less - accumulated depreciation	(1,961,043)	(1,958,997)
Property and equipment, net	2,473,753	2,527,080
Other assets:
Equity investments	186,423	187,031
Goodwill	62,344	62,494
Other assets, net	80,862	74,561
Total assets	3,552,009	3,592,020
Current liabilities:
Accounts payable	145,112	159,381
Accrued liabilities	159,676	198,237
Income taxes payable	3,856
Current maturities of long-term debt	7,877	10,179
Total current liabilities	316,521	367,797
Long-term debt	1,163,914	1,347,753
Deferred income taxes	441,520	413,639
Asset retirement obligations	169,429	170,410
Other long-term liabilities	4,844	5,777
Total liabilities	2,096,228	2,305,376
Convertible preferred stock	1,000	1,000
Commitments and contingencies
Shareholders' equity:
Common stock, no par, 240,000 shares authorized, 105,965 and 105,592 shares issued, respectively	913,976	906,957
Retained earnings	505,892	392,705
Accumulated other comprehensive income (loss)	7,520	(39,058)
Total controlling interest shareholders' equity	1,427,388	1,260,604
Noncontrolling interests	27,393	25,040
Total equity	1,454,781	1,285,644
Total liabilities and shareholders' equity	$ 3,552,009	$ 3,592,020

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Details Of Certain Accounts (Accrued Liabilities) (Details) (USD $) In Thousands	Sep. 30, 2011	Dec. 31, 2010
Details Of Certain Accounts
Accrued payroll and related benefits	$ 41,261	$ 38,026
Royalties payable	15,140	15,008
Current asset retirement obligations	63,816	64,526
Unearned revenue	7,900	4,094
Billing in excess of cost	5,297	3,869
Accrued interest	13,795	27,308
Hedge liability	956	30,606
Other	11,511	14,800
Accrued liabilities	$ 159,676	$ 198,237

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Earnings Per Share (Computations Of Basic And Diluted EPS) (Details) (USD $) In Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Earnings Per Share
Net income applicable to common shareholders	$ 46,016	$ 26,161	$ 113,186	$ (77,281)
Less: Undistributed net income allocable to participating securities	(549)	(356)	1,403
Net income per common share - Basic	45,467	25,805	111,783	(77,281)
Weighted average number of shares outstanding - basic	104,700	104,090	104,616	103,772
Stock options, Income
Stock options, Shares	93	22	84
Undistributed earnings reallocated to participating securities, value	2	5	6
Undistributed earnings reallocated to participating securities, shares
Convertible Senior Notes, Value
Convertible Senior Notes, Shares
Convertible preferred stock	10		30
Convertible preferred stock, Shares	361	1,195	361
Net income per common share - Diluted	$ 45,479	$ 25,810	$ 111,819	$ (77,281)
Weighted Average Number of Shares Outstanding, Diluted, Total	105,154	105,307	105,061	103,772

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Related Party Transactions (Details) (USD $) In Millions, unless otherwise specified	1 Months Ended	3 Months Ended		9 Months Ended
	Apr. 30, 2000	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Related Party Transactions
Percentage of working interests acquired	20.00%
Financing exploratory costs	$ 20
Royalty interest	25.00%
Related party payments		$ 2.3	$ 2.7	$ 7.3	$ 8.7
Partnership interests				80.70%

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Derivative Instruments And Hedging Activities (Gain (Loss) Reclassified From Accumulated OCI Into Income) (Details) (USD $) In Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	$ (1,809)	$ 6,960	$ (20,986)	$ 16,537
Oil And Natural Gas Commodity Contracts [Member] | Oil And Gas Revenue [Member]
Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	(1,287)	7,428	(19,473)	17,892
Interest Rate Swaps [Member] | Net Interest Expense And Other [Member]
Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	$ (522)	$ (468)	$ (1,513)	$ (1,355)

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Long-Term Debt (Interest Expense And Capitalized Interest) (Details) (USD $) In Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Long-Term Debt
Interest expense	$ 25,175	$ 25,784	$ 75,971	$ 74,730
Interest income	(600)	(263)	(1,575)	(660)
Capitalized interest	(461)	(42)	(768)	(12,433)
Interest expense, net	$ 24,114	$ 25,479	$ 73,628	$ 61,637

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Income Taxes (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Income Taxes
Effective tax rate	33.40%	40.00%	29.90%	35.80%

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Business Segment Information (Summary Of Intercompany Segment Revenues) (Details) (USD $) In Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Intercompany segment revenues	$ 36,675	$ 15,886	$ 87,071	$ 87,583
Contracting Services [Member]
Intercompany segment revenues	25,410	15,886	52,574	84,053
Production Facilities [Member]
Intercompany segment revenues	$ 11,265		$ 34,497	$ 3,530

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Oil And Gas Properties (Narrative) (Details) (USD $)	1 Months Ended	3 Months Ended						6 Months Ended	9 Months Ended		12 Months Ended
	Feb. 28, 2010	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Jun. 30, 2010	Sep. 30, 2011	Sep. 30, 2010	Dec. 31, 2007	Dec. 31, 2010
Oil and gas property impairments			$ 2,357,000	$ 22,700,000	$ 897,000	$ 159,900,000	$ 7,000,000		$ 25,078,000	$ 171,871,000
Oil and gas properties				6				15
Oil and gas properties subject to impairment charges							3
Asset retirement obligation			233,245,000						233,245,000			234,936,000
Capitalized exploration cost			4,600,000						4,600,000
Working interest in oil and gas field											100.00%
Cash acquired from acquisition	10,200,000
Acquired working interest	50.00%
Approximate gain on acquisition	6,000,000
Working interest before acquisition							50.00%
Hurricane-related repair costs					900,000					4,600,000
Insurance reimbursements									5,000,000
General insurance expense		2,000,000	8,400,000
Hurricane Catastrophic Bond [Member]
Prepaid insurance				10,600,000
Non-Domestic Oil And Gas Property [Member]
Oil and gas property impairments				4,100,000			4,100,000
Asset retirement obligation			11,600,000						11,600,000
Accrued reclamation costs, current			$ 4,800,000						$ 4,800,000