May 26, 2006

 

Dear Remington Oil and Gas Corporation Stockholder:

 

The board of directors of Remington Oil and Gas Corporation (“Remington”) has unanimously approved a merger agreement with Helix Energy Solutions Group, Inc. (formerly known as Cal Dive International, Inc.) (“Helix”). If Remington stockholders approve and adopt the merger agreement and the merger is subsequently completed, Remington will merge into a subsidiary of Helix and stockholders of Remington will receive (i) 0.436 of a share of Helix common stock and (ii) $27.00 in cash for each share of Remington common stock owned. The implied value of the stock consideration will fluctuate as the market price of Helix common stock fluctuates. You should obtain current stock price quotations for Remington common stock and Helix common stock. Remington common stock is quoted on the New York Stock Exchange under the symbol “REM.” Helix common stock is quoted on the Nasdaq National Market System under the symbol “HELX.” Based on the closing price of Helix’s common stock on the Nasdaq on May 24, 2006, the value of the aggregate consideration to be received by Remington stockholders would be approximately $41.42 per share. Upon completion of the merger, we estimate that Remington’s former stockholders will own approximately 14% of the common stock of Helix.

 

You will be asked to vote on the merger proposal at a special meeting of Remington stockholders to be held on June 29, 2006, at 9:00 a.m., Central Daylight Time, at the Hilton Dallas Park Cities, 5954 Luther Lane, Dallas, Texas 75225. Only holders of record of Remington common stock at the close of business on May 26, 2006, the record date for the special meeting, are entitled to vote at the special meeting.

 

After careful consideration, Remington’s board of directors has unanimously determined that the merger is advisable and in the best interests of Remington and its stockholders and unanimously recommends that Remington stockholders vote FOR approval and adoption of the merger agreement.

 

Your vote is very important.  Because approval and adoption of the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of Remington common stock entitled to vote at the special meeting, a failure to vote will have the same effect as a vote against approval and adoption of the merger agreement.

 

Whether or not you plan to attend the special meeting, please complete, sign, date and return the enclosed proxy card or voting instruction card in the enclosed envelope as soon as possible so that your shares are represented at the meeting.  This action will not limit your right to vote in person if you wish to attend the special meeting and vote in person.

 

This document is a prospectus related to the issuance of shares of Helix common stock in connection with the merger and a proxy statement for Remington to use in soliciting proxies for its special meeting of stockholders. Attached to this letter is an important document containing answers to frequently asked questions and a summary description of the merger, followed by more detailed information about Remington, Helix, the proposed merger and the merger agreement. We urge you to read this document carefully and in its entirety. In particular, you should consider the matters discussed under “Risk Factors” beginning on page 14 of this proxy statement/prospectus.

 

Remington’s board of directors very much appreciates and looks forward to your support.

 

Sincerely,

James A. Watt

Chairman of the Board and
Chief Executive Officer

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued in connection with the merger or passed upon the adequacy or accuracy of this proxy statement/prospectus. Any representation to the contrary is a criminal offense.

 

This proxy statement/prospectus is dated May 26, 2006 and is first being mailed to stockholders of Remington on or about June 1, 2006.

REFERENCES TO ADDITIONAL INFORMATION

 

As used in this proxy statement/prospectus, “Helix” refers to Helix Energy Solutions Group, Inc., formerly known as Cal Dive International, Inc., and its consolidated subsidiaries and “Remington” refers to Remington Oil and Gas Corporation and its consolidated subsidiaries, in each case, except where the context otherwise requires or as otherwise indicated. This proxy statement/prospectus incorporates important business and financial information about Remington from documents that Remington has filed with the Securities and Exchange Commission but that have not been included in or delivered with this proxy statement/prospectus. For a listing of documents incorporated by reference into this proxy statement/prospectus, please see the section entitled “Where You Can Find More Information” beginning on page 204 of this proxy statement/prospectus.

 

Remington will provide you with copies of this information relating to Remington, without charge, if you request it in writing or by telephone from:

 

REMINGTON OIL AND GAS CORPORATION
8201 Preston Road, Suite 600
Dallas, Texas 75225-6211
(214) 210-2650

 

In order for you to receive timely delivery of the documents in advance of the Remington special meeting, Remington should receive your request no later than June 15, 2006.

 

Helix has supplied all information contained in this proxy statement/prospectus relating to Helix, and Remington has supplied all information contained in or incorporated by reference in this proxy statement/prospectus relating to Remington. Helix and Remington have both contributed to information relating to the merger.

Remington Oil and Gas Corporation

 

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD JUNE 29, 2006

 

TO THE STOCKHOLDERS OF REMINGTON OIL AND GAS CORPORATION:

 

You are cordially invited to attend the special meeting of stockholders of Remington Oil and Gas Corporation, a Delaware corporation (“Remington”), to be held on June 29, 2006, at 9:00 a.m., Central Daylight Time, at the Hilton Dallas Park Cities, 5954 Luther Lane, Dallas, Texas 75225. As described in this proxy statement/prospectus, the special meeting will be held for the following purposes:

 

1. to consider and vote upon a proposal to approve and adopt the Agreement and Plan of Merger dated as of January 22, 2006, by and among Helix Energy Solutions Group, Inc. (formerly known as Cal Dive International, Inc.) and Remington Oil and Gas Corporation, as amended by Amendment No. 1 to Agreement and Plan of Merger dated January 24, 2006, by and among Helix Energy Solutions Group, Inc., Cal Dive Merger — Delaware Inc., a wholly owned subsidiary of Helix Energy Solutions Group, Inc., and Remington Oil and Gas Corporation;

 

2. to consider and vote upon a proposal to adjourn or postpone the special meeting, if necessary, to solicit additional proxies in favor of the approval and adoption of the merger agreement; and

 

3. to consider and transact any other business as may properly be brought before the special meeting or any adjournments or postponements thereof.

 

THE BOARD OF DIRECTORS OF REMINGTON HAS CAREFULLY CONSIDERED THE TERMS OF THE MERGER AGREEMENT AND THE MERGER AND BELIEVES THAT THE MERGER IS ADVISABLE AND FAIR TO, AND IN THE BEST INTERESTS OF REMINGTON AND ITS STOCKHOLDERS. THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND THE MERGER AND UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL OF THE MERGER AGREEMENT.

 

The Board of Directors of Remington has fixed the close of business on May 26, 2006 as the record date for the determination of stockholders entitled to notice of, and to vote at, the Remington special meeting or any reconvened meeting following an adjournment or postponement thereof. Only stockholders of record at the close of business on such record date are entitled to notice of and to vote at such meeting. A complete list of such stockholders will be available for examination at the Remington special meeting and at Remington’s offices at 8201 Preston Road, Suite 600, Dallas, Texas 75225-6211, during ordinary business hours, after June 15, 2006, for the examination by any such stockholder for any purpose germane to the special meeting.

 

 

 

 

It is important that your stock be represented at the special meeting regardless of the number of shares you hold. Please promptly mark, date, sign and return the enclosed proxy in the accompanying envelope, whether or not you intend to be present at the special meeting. In some cases, you may be able to instruct your bank or brokerage firm how to exercise your proxy by telephone or the Internet. See “Information About the Special Meeting and Voting” beginning on page 29. Your proxy is revocable at any time prior to its use at the special meeting.

 

Please do not send your Remington common stock certificates with the enclosed proxy. If the merger is completed, the exchange agent will send you instructions regarding the surrender of your stock certificates.

 

By order of the Board of Directors,

Frank T. Smith, Jr.

Corporate Secretary

May 26, 2006

TABLE OF CONTENTS

 

ANNEXES

 

 

No person is authorized to give any information or to make any representation with respect to the matters described in this proxy statement/prospectus other than those contained herein or in the documents incorporated by reference herein and, if given or made, such information or representation must not be relied upon as having been authorized by Helix or Remington. This proxy statement/prospectus does not constitute an offer to sell or a solicitation of an offer to buy the securities offered by this proxy statement/prospectus or a solicitation of a proxy in any jurisdiction where, or to any person whom, it is unlawful to make such an offer or solicitation. Neither the delivery hereof nor any distribution of securities made hereunder shall, under any circumstances, create an implication that there has been no change in the affairs of Helix or Remington since the date hereof or that the information contained or incorporated by reference in this proxy statement/prospectus is correct as of any time subsequent to the date hereof.

 

The following questions and answers briefly address some commonly asked questions about the special meeting and the merger. They may not include all the information that is important to you. We urge you to read carefully this entire proxy statement/prospectus, including the annexes and the other documents we refer to in this proxy statement/prospectus.

 

Frequently Used Terms

 

We have generally avoided the use of technical defined terms in this proxy statement/prospectus but a few frequently used terms may be helpful for you to have in mind at the outset. We refer to:

 

 

About the Merger

 

 

About the Special Meeting

 

 

 

 

General

 

 

SUMMARY

 

The Companies (page 69 for Helix and page 123 for Remington)

 

The Merger (page 33)

 

Material United States Federal Income Tax Consequences of the Merger to Remington Stockholders (page 52)

 

Remington Board of Directors’ Recommendation to Stockholders (page 38)

 

Opinion of Remington’s Financial Advisor (page 39)

 

Helix’s Reasons for the Merger (page 38)

 

Ownership of Helix Following the Merger

 

Board of Directors of Helix Following the Merger (page 57)

 

Market Prices and Share Information

		Closing Price per Share
		January 20, 2006				May 24, 2006
Helix common stock		$	44.33			$	33.08
Remington common stock		$	37.96			$	41.24
Remington Merger Consideration Equivalent		$	46.33			$	41.42

 

Interests of Certain Remington Officers and Directors in the Merger (page 49)

 

Conditions to Completion of the Merger (page 65)

	•	adoption of the merger agreement by the holders of at least a majority of the outstanding Remington shares entitled to vote at the Remington special meeting;
	•	receipt of consents, approvals, permits and authorizations of governmental authorities or other persons, including expiration or early termination of the waiting period under the Hart-Scott-Rodino Act, required to consummate the transactions contemplated by the merger agreement except where the failure to obtain them would not have a material adverse effect (as defined in the merger agreement) on Helix or materially adversely affect the consummation of the merger;
	•	continued effectiveness of the registration statement of which this proxy statement/prospectus is a part, the absence of a stop order by the Securities and Exchange Commission suspending the effectiveness of the registration statement and the absence of any continuing action, suit, proceeding or investigation by the SEC to suspend such effectiveness;
	•	receipt of all necessary approvals under state securities laws relating to the issuance or trading of the Helix common stock to be issued in the merger;
	•	absence of any temporary restraining order, preliminary or permanent injunction or other order issued by a court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the merger, so long as the parties have used their reasonable efforts to have any applicable decree, ruling, injunction or order vacated;
	•	approval for listing of the Helix shares to be issued in the merger on its stock exchange, upon official notice of issuance;
	•	absence of Remington stockholders exercising their appraisal and dissenters rights with respect to greater than 8% of the outstanding shares of Remington common stock immediately prior to the effective time of the merger;
	•	accuracy as of the closing of the merger of the representations and warranties made by each of Remington, Helix and Merger Sub to the extent specified in the merger agreement;
	•	Remington’s, Helix’s and Merger Sub’s performance in all material respects of their respective covenants and agreements under the merger agreement;
	•	absence of a material adverse change in either Remington’s or Helix’s condition (financial or otherwise), operations, business, properties or prospects that have or would be reasonably likely to have a material adverse effect (as defined in the merger agreement) on Remington or Helix, respectively;
	•	receipt of opinions by Helix and Remington from their respective tax counsel that the merger will constitute a reorganization within the meaning of Section 368(a) of the Internal Revenue Code; and
	•	delivery by Helix to the exchange agent of an irrevocable letter of instruction, in a form reasonably satisfactory to Remington, authorizing and directing the transfer to Remington stockholders of the merger consideration.

 

Regulatory Approvals (page 45)

 

Termination of the Merger Agreement (page 66)

	•	by mutual written consent of Helix and Remington;

	•	by either Helix or Remington, if:

	•	adoption of the merger agreement and approval of the merger by the Remington stockholders is not obtained;
	•	the parties fail to consummate the merger on or before August 31, 2006, unless the failure is the result of a breach of the merger agreement by the party seeking the termination; or
	•	any governmental authority has issued a final and nonappealable order, decree or ruling or has taken any other final and nonappealable action that restrains, enjoins or prohibits the merger, unless the party seeking the termination has not used all reasonable efforts to remove such injunction, order or decree;

	•	by Helix, if:

	•	Remington materially breaches any of its representations or warranties set forth in the merger agreement or Remington fails to materially perform any of its covenants or agreements under the merger agreement, and, in either case, Remington has not cured the breach or failure within 10 days of receiving notice from Helix of such breach or failure;
	•	Remington’s board of directors (1) fails to recommend, or withdraws or modifies in any manner adverse to Helix, the approval or recommendation of the merger agreement, (2) recommends to the Remington stockholders, enters into, or publicly announces its intention to enter into, an agreement or an agreement in principle with respect to a superior proposal, (3) refuses to affirm its approval or recommendation of the merger agreement within 10 business days of any written request from Helix, (4) exempts any person or entity other than Helix from the provisions of the DGCL related to business combinations with interested stockholders or (5) publicly announces its intention to do any of the foregoing;
	•	Remington breaches in any material respect its covenant not to solicit, initiate or knowingly encourage any inquiries, offers or proposals that constitute, or are reasonably likely to lead to, an alternate acquisition proposal or engaged in certain prohibited activities with respect thereto, or publicly announces its intention to do so; or
	•	a competing tender or exchange offer constituting an acquisition proposal has commenced and Remington has not sent Remington stockholders a statement that Remington’s board of directors recommends rejection of the acquisition proposal, or Remington publicly announces its intention not to do so;

	•	by Remington, if:

	•	prior to approval by Remington’s stockholders of the merger agreement, the Remington board of directors approves a superior proposal; provided, that:

	•	Remington complies with its obligations under the no-solicitation provisions of the merger agreement,
	•	the board of directors of Remington authorizes Remington to enter into a binding agreement with respect to the superior proposal and Remington notifies Helix of the superior proposal,
	•	within three business days of that notice, Remington offers to negotiate with Helix in order to make adjustments to the terms and conditions of the merger agreement so that Remington can proceed with the merger with Helix, and
	•	Remington’s board of directors determines in good faith after those negotiations with Helix, upon consulting with Remington’s independent financial advisor and outside counsel, that the superior proposal continues to be a superior proposal; see “The Merger Agreement — Covenants and Agreements — Acquisition Proposals” beginning on page 61; or

	•	Helix materially breaches any of its representations or warranties set forth in the merger agreement or Helix fails to materially perform any of its covenants or agreements under the merger agreement, and, in either case, Helix has not cured the breach or failure within 10 days of receiving notice from Remington of such breach or failure.

 

Fees and Expenses (page 67)

	•	if Remington terminates the merger agreement because, prior to approval by Remington’s stockholders of the merger agreement, the Remington board of directors approves a superior proposal; provided, that:

	•	Remington complies with its obligations under the no-solicitation provisions of the merger agreement,
	•	the board of directors of Remington authorizes Remington to enter into a binding agreement with respect to the superior proposal and Remington notifies Helix of the superior proposal,
	•	within three business days of that notice, Remington offers to negotiate with Helix in order to make adjustments to the terms and conditions of the merger agreement so that Remington can proceed with the merger with Helix, and
	•	Remington’s board of directors determines in good faith after those negotiations with Helix, upon consulting with Remington’s independent financial advisor and outside counsel, that the superior proposal continues to be a superior proposal; and

	•	if Helix terminates the merger agreement because:

	•	Remington’s board of directors (1) fails to recommend, or withdraws or modifies in any manner adverse to Helix, the approval or recommendation of the merger agreement, (2) recommends to the Remington stockholders, enters into, or publicly announces its intention to enter into, an agreement or an agreement in principle with respect to a superior proposal, (3) refuses to affirm its approval or recommendation of the merger agreement within 10 business days of any written request from Helix, (4) exempts any person or entity other then Helix from the provisions of the DGCL related to business combinations with interested stockholders or (5) publicly announces its intention to do any of the foregoing;
	•	Remington breaches in any material respect its covenant not to solicit, initiate or knowingly encourage any inquiries, offers or proposals that constitute, or are reasonably likely to lead to, an alternate acquisition proposal or engaged in certain prohibited activities with respect thereto, or publicly announces its intention to do so; or
	•	a competing tender or exchange offer constituting an acquisition proposal has commenced and Remington has not sent Remington stockholders a statement disclosing that Remington’s board of directors recommends rejection of the acquisition proposal, or Remington publicly announces its intention not to do so.

 

No Solicitation by Remington (page 61)

 

Accounting Treatment (page 45)

 

Certain Differences in the Rights of Stockholders (page 56)

 

In addition to the other information included and incorporated by reference into this proxy statement/prospectus, including the matters addressed under the caption “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 23, you should carefully read and consider the following risk factors in evaluating the proposals to be voted on at the special meeting of Remington stockholders and in determining whether to vote for approval and adoption of the merger agreement. Please also refer to the additional risk factors identified in the periodic reports and other documents incorporated by reference into this proxy statement/prospectus and see “Where You Can Find More Information” beginning on page 204.

 

Risks Relating to the Merger

 

The exchange ratio will not be adjusted in the event the value of Helix common stock declines before the merger is completed. As a result, the value of the shares of Helix common stock at the time that Remington stockholders receive them could be less than the value of those shares today.

 

In the merger, Remington stockholders will be entitled to receive a combination of 0.436 of a share of Helix common stock and $27.00 in cash for each share of Remington common stock owned. Helix and Remington will not adjust the exchange ratio for the portion of the merger consideration to be paid in Helix common stock as a result of any change in the market price of shares of Helix common stock between the date of this proxy statement/prospectus and the date that you receive shares of Helix common stock in exchange for your shares of Remington common stock. The market price of Helix common stock will likely be different, and may be lower, on the date you receive your shares of Helix common stock than the market price of shares of Helix common stock as of the date of this proxy statement/prospectus. During the 12-month period ended on May 24, 2006, the most recent practical date prior to the mailing of this proxy statement/prospectus, Helix common stock traded in a range from a low of $21.99 to a high of $45.61 and ended that period at $33.08. See “Comparative Historical and Pro Forma Per Share Information” beginning on page 27 for more detailed share price information. Differences in Helix’s stock price may be the result of changes in the business, operations or prospects of Helix, market reactions to the proposed merger, commodity prices, general market and economic conditions or other factors. If the market price of Helix common stock declines after you vote, you may receive less value than you expected when you voted. Neither Helix nor Remington is permitted to terminate the merger agreement or resolicit the vote of Remington stockholders because of changes in the market prices of their respective common stock.

 

The merger is subject to certain conditions to closing that, if not satisfied or waived, will result in the merger not being completed.

 

The merger is subject to customary conditions to closing, as set forth in the merger agreement. The conditions to the merger include, among others, the receipt of required approvals from Remington’s stockholders. If any of the conditions to the merger are not satisfied or, if waiver is permissible, not waived, the merger will not be completed. In addition, under circumstances specified in the merger agreement, Helix or Remington may terminate the merger agreement. As a result, we cannot assure you that we will complete the merger. See “The Merger Agreement — Conditions Precedent” beginning on page 65 for a discussion of the conditions to the completion of the merger.

 

Certain directors and executive officers of Remington have interests and arrangements that are different from, or in addition to, those of Remington’s stockholders and that may influence or have influenced their decision to support or approve the merger.

 

When considering the recommendation of Remington’s board of directors with respect to the merger, holders of Remington common stock should be aware that certain of Remington’s directors and executive officers have interests in the merger that are different from, or in addition to, their interests as Remington stockholders and the interests of Remington stockholders generally. These interests include, among other things, the following:

 

 

 

As a result, these directors and executive officers may be more likely to support and to vote to approve the merger than if they did not have these interests. Holders of Remington common stock should consider whether these interests may have influenced these directors and officers to support or recommend approval of the merger. As of the close of business on the record date for the Remington special meeting, these directors and executive officers were entitled to vote approximately 3.76% of the shares of Remington common stock outstanding on that date. These and additional interests of certain directors and executive officers of Remington are more fully described in the sections entitled “Interests of Remington Directors and Executive Officers in the Merger” beginning on page 49 of this proxy statement/prospectus.

 

We may face difficulties in achieving the expected benefits of the merger.

 

Helix and Remington currently operate as separate companies. Management has no experience running the combined business, and we may not be able to realize the operating efficiencies, synergies, cost savings or other benefits expected from the merger. In addition, the costs we incur in implementing synergies, including our ability to amend, renegotiate or terminate prior contractual commitments of Helix and Remington, may be greater than expected. We also may suffer a loss of employees, customers or suppliers, a loss of revenues, or an increase in operating or other costs or other difficulties relating to the merger.

 

Our actual financial position and results of operations may differ significantly and adversely from the pro forma amounts included in this proxy statement/prospectus.

 

The unaudited pro forma operating data contained in this proxy statement/prospectus is not necessarily indicative of the results that actually would have been achieved had the proposed merger and Helix’s other currently contemplated financing transactions related to the merger been consummated on January 1, 2005, or that may be achieved in the future. We can provide no assurances as to how the operations and assets of both companies would have been run if they had been combined, or how they will be run in the future, which, together with other factors, could have a significant effect on the results of operations and financial position of the combined company.

 

Remington will be subject to business uncertainties and contractual restrictions while the merger is pending.

 

Uncertainty about the effect of the merger on employees, suppliers, partners, regulators and customers may have an adverse effect on Remington and potentially on Helix. These uncertainties may impair Remington’s ability to attract, retain and motivate key personnel until the merger is consummated, and could cause suppliers, customers and others that deal with Remington to defer purchases or other decisions concerning Remington, or to seek to change existing business relationships with Remington. Employee retention may be particularly challenging during the pendency of the merger, as employees may experience uncertainty about their future roles with Helix. If key employees depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with Helix, Helix’s business following the merger could be harmed. In addition, the merger agreement restricts Remington from making certain acquisitions and taking other specified actions until the merger occurs. These restrictions may prevent Remington from pursuing attractive business opportunities that may arise prior to the completion of the

merger. See “The Merger Agreement — Covenants and Agreements” beginning on page 58 for a description of the restrictive covenants applicable to Remington.

 

The merger agreement limits Remington’s ability to pursue alternatives to the merger.

 

The merger agreement contains provisions that could adversely impact competing proposals to acquire Remington. These provisions include the prohibition on Remington generally from soliciting any acquisition proposal or offer for a competing transaction and the requirement that Remington pay to Helix the sum of (i) Helix’s documented out of pocket fees and expenses incurred or paid by or on behalf of Helix in connection with the merger or the consummation of any of the transactions contemplated by the merger agreement, including all HSR Act filing fees, fees and expenses of counsel, commercial banks, investment banking firms, accountants, experts, environmental consultants, and other consultants to Helix, up to a maximum amount not to exceed $2 million, and (ii) $45 million, if the merger agreement is terminated in specified circumstances in connection with an alternative transaction. In addition, even if the board of directors of Remington determines that a competing proposal to acquire Remington is superior, Remington may not exercise its right to terminate the merger agreement unless it notifies Helix of its intention to do so and gives Helix at least three business days to propose revisions to the terms of the merger agreement or to make another proposal in response to the competing proposal. See “The Merger Agreement — Covenants and Agreements” beginning on page 58 and “The Merger Agreement — Termination” beginning on page 66.

 

Helix required Remington to agree to these provisions as a condition to Helix’s willingness to enter into the merger agreement. These provisions, however, might discourage a third party that might have an interest in acquiring all or a significant part of Remington from considering or proposing that acquisition, even if that party were prepared to pay consideration with a higher value than the current proposed merger consideration. Furthermore, the termination fee may result in a potential competing acquiror proposing to pay a lower per share price to acquire Remington than it might otherwise have proposed to pay.

 

Failure to complete the merger could negatively impact the stock price and the future business and financial results of Remington.

 

Although Remington has agreed that its board of directors will, subject to fiduciary exceptions, recommend that its stockholders approve and adopt the merger agreement, there is no assurance that the merger agreement and the merger will be approved, and there is no assurance that the other conditions to the completion of the merger will be satisfied. If the merger is not completed, Remington will be subject to several risks, including the following:

 

 

 

In addition, Remington would not realize any of the expected benefits of having completed the merger. If the merger is not completed, these risks may materialize and materially adversely affect Remington’s business, financial results, financial condition and stock price.

 

The price of Helix common stock may be affected by factors different from those affecting the price of Remington common stock.

 

Holders of Remington common stock will receive Helix common stock in the merger. Helix’s business is different in many ways from that of Remington (including Helix’s significant diving and marine construction business and its greater exposure to international projects), and Helix’s results of operations, as well as the price of Helix’s common stock, may be affected by factors different from those affecting Remington’s results of operations and the price of Remington common stock. The price of Helix common stock may fluctuate significantly following the merger, including fluctuation due to factors over which Helix has no control. For a discussion of Helix’s business and certain factors to consider in connection with its business, including risk factors associated with its business, see “— Risks Relating to Helix”, “Information About Helix” and “Helix’s Historical Consolidated Financial Statements and Supplementary Data” and the notes thereto included in this proxy statement/prospectus. For a discussion of Remington’s business and certain factors to consider in connection with its business, including risk factors associated with its business, see Remington’s Annual Report on Form 10-K and Form 10-K/A for the fiscal year ended December 31, 2005, which is incorporated by reference into this proxy statement/prospectus. See also the other documents incorporated by reference into this proxy statement/prospectus under the caption “Where You Can Find More Information” beginning on page 204 of this proxy statement/prospectus.

 

Helix will have higher levels of indebtedness following the merger than either Helix or Remington had before the merger.

 

You should consider that, following the merger, Helix will have higher levels of debt and interest expense than Helix and Remington, together, had immediately prior to the merger. As of March 31, 2006, after giving effect to the merger and other currently contemplated related financings, the combined company and its subsidiaries are expected to have approximately $1.3 billion of indebtedness outstanding. See “Helix Energy Solutions Group, Inc. Unaudited Pro Forma Combined Balance Sheet” on page 184 of this proxy statement/prospectus. The significant level of combined indebtedness after the merger may have an effect on the combined company’s future operations, including:

 

 

See “Proposed Financings” on page 202 of this proxy statement/prospectus.

The opinion obtained by Remington from its financial advisor does not reflect changes in circumstances between signing the merger agreement and the completion of the merger.

 

Jefferies, Remington’s financial advisor, delivered a “fairness opinion” to the Remington board of directors. The opinion states that, as of January 22, 2006, the consideration to be received by Remington stockholders pursuant to the merger agreement was fair from a financial point of view to Remington stockholders. The opinion does not reflect changes that may occur or may have occurred after January 22, 2006, including changes to the operations and prospects of Remington or Helix, changes in general market and economic conditions or other factors. Any such changes, or other factors on which the opinion is based, may significantly alter the value of Remington or Helix or the prices of shares of Remington common stock or Helix common stock by the time the merger is completed. The opinion does not speak as of the time the merger will be completed or as of any date other than the date of such opinion. For a description of the opinion that Remington received from its financial advisor, see “The Merger — Opinion of Remington’s Financial Advisor” beginning on page 39. For a description of the other factors considered by Remington’s board of directors in determining to approve the merger, see “The Merger — Remington’s Reasons for the Merger” beginning on page 36 and “The Merger — Recommendation of the Remington Board of Directors” beginning on page 38.

 

The shares of Helix common stock to be received by Remington stockholders as a result of the merger will have different rights from the shares of Remington common stock.

 

Remington stockholders will become Helix stockholders, and their rights as stockholders will be governed by the articles of incorporation and bylaws of Helix and Minnesota corporate law. The rights associated with Remington common stock are different from the rights associated with Helix common stock. See the section of this proxy statement/prospectus titled “Comparison of Stockholders’ Rights” beginning on page 192 for a discussion of the different rights associated with Helix common stock.

 

Remington stockholders will have a reduced ownership and voting interest after the merger and will exercise less influence over management.

 

After the merger’s completion, Remington stockholders will own a significantly smaller percentage of Helix than they currently own of Remington. Following completion of the merger, Remington stockholders will own approximately 14% of the combined company. Consequently Remington stockholders will have less influence over the management and policies of Helix than they currently have over the management and policies of Remington.

 

Risks Relating to Helix

 

Helix’s Contracting Services business is adversely affected by low oil and gas prices and by the cyclicality of the oil and gas industry.

 

Helix’s Contracting Services business is substantially dependent upon 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. The level of capital expenditures generally depends on the prevailing view of future oil and gas prices, which are influenced by numerous factors affecting the supply and demand for oil and gas, including, but not limited to:

 

 

 

The level of offshore construction activity improved somewhat in 2004 and continued the trend in 2005 following higher commodity prices in 2003 through 2005 and significant damage sustained to the Gulf of Mexico infrastructure in Hurricanes Katrina and Rita. Helix cannot assure you activity levels will remain the same or increase. A sustained period of low drilling and production activity or the return of lower commodity prices would likely have a material adverse effect on Helix’s financial position, cash flows and results of operations.

 

The operation of marine vessels is risky, and Helix does not have insurance coverage for all risks.

 

Marine construction involves a high degree of operational risk. Hazards, such as vessels sinking, grounding, colliding and sustaining damage from severe weather conditions, are inherent in marine operations. These hazards can cause personal injury or loss of life, severe damage to and destruction of property and equipment, pollution or environmental damage and suspension of operations. Damage arising from such occurrences may result in lawsuits asserting large claims. Helix maintains such insurance protection as it deems prudent, including Jones Act employee coverage, which is the maritime equivalent of workers’ compensation, and hull insurance on its vessels. Helix cannot assure you that any such insurance will be sufficient or effective under all circumstances or against all hazards to which it may be subject. A successful claim for which Helix is not fully insured could have a material adverse effect on Helix. Moreover, Helix cannot assure you that it will be able to maintain adequate insurance in the future at rates that it considers reasonable. As a result of market conditions, premiums and deductibles for certain of our insurance policies have increased substantially and could escalate further. In some instances, certain insurance could become unavailable or available only for reduced amounts of coverage. For example, insurance carriers are now requiring broad exclusions for losses due to war risk and terrorist acts and limitations for wind storm damages. As construction activity expands into deeper water in the Gulf and other Deepwater basins of the world, a greater percentage of Helix’s revenues may be from Deepwater construction projects that are larger and more complex, and thus riskier, than shallow water projects. As a result, Helix’s revenues and profits are increasingly dependent on its larger vessels. The current insurance on Helix’s vessels, in some cases, is in amounts approximating book value, which could be less than replacement value. In the event of property loss due to a catastrophic marine disaster, mechanical failure or collision, insurance may not cover a substantial loss of revenues, increased costs and other liabilities, and could have a material adverse effect on Helix’s operating performance if it was to lose any of its large vessels.

 

Helix’s contracting business typically declines in winter, and bad weather in the Gulf or North Sea can adversely affect its operations.

 

Marine operations conducted in the Gulf and North Sea are seasonal and depend, in part, on weather conditions. Historically, Helix has enjoyed its highest vessel utilization rates during the summer and fall when weather conditions are favorable for offshore exploration, development and construction activities. Helix typically has experienced its lowest utilization rates in the first quarter. As is common in the industry, Helix typically bears the risk of delays caused by some, but not all, adverse weather conditions. Accordingly, Helix’s results in any one quarter are not necessarily indicative of annual results or continuing trends.

 

If Helix bids too low on a turnkey contract, it suffers consequences.

 

A significant amount of Helix’s projects are performed on a qualified turnkey basis where described work is delivered for a fixed price and extra work, which is subject to customer approval, is billed separately. The revenue, cost and gross profit realized on a turnkey contract can vary from the estimated amount because of changes in offshore job conditions, variations in labor and equipment productivity from the original estimates, and the performance of third parties such as equipment suppliers. These variations and risks inherent in the marine construction industry may result in Helix experiencing reduced profitability or losses on projects.

Exploration and production of oil and natural gas is a high-risk activity and subjects Helix to a variety of factors that it cannot control.

 

Helix’s Oil & Gas Production business is subject to all of the risks and uncertainties normally associated with the exploration for and development and production of oil and natural gas, including uncertainties as to the presence, size and recoverability of hydrocarbons. Helix may not encounter commercially productive oil and natural gas reservoirs. Helix may not recover all or any portion of its investment in new wells. The presence of unanticipated pressures or irregularities in formations, miscalculations or accidents may cause Helix’s drilling activities to be unsuccessful and result in a total loss of its investment. In addition, Helix often is uncertain as to the future cost or timing of drilling, completing and operating wells.

 

Projecting future natural gas and oil production is imprecise. Producing oil and gas reservoirs eventually have declining production rates. Projections of production rates rely on certain assumptions regarding historical production patterns in the area or formation tests for a particular producing horizon. Actual production rates could differ materially from such projections. Production rates depend on a number of additional factors, including commodity prices, market demand and the political, economic and regulatory climate.

 

Further, Helix’s drilling operations may be curtailed, delayed or canceled as a result of a variety of factors, including:

 

 

Estimates of Helix’s oil and gas reserves, future cash flows and abandonment costs may be significantly incorrect.

 

This proxy statement/prospectus contains estimates of Helix’s proved oil and gas reserves and the estimated future net cash flows therefrom based upon reports for the year ended December 31, 2004 and 2005, audited by Helix’s independent petroleum engineers. These reports rely upon various assumptions, including assumptions required by the Securities and Exchange Commission, as to oil and gas prices, drilling and operating expenses, capital expenditures, abandonment costs, taxes and availability of funds. The process of estimating oil and gas reserves is complex, requiring significant decisions and assumptions in the evaluation of available geological, geophysical, engineering and economic data for each reservoir. As a result, these estimates are inherently imprecise. Actual future production, cash flows, development expenditures, operating and abandonment expenses and quantities of recoverable oil and gas reserves may vary substantially from those estimated in these reports. Any significant variance in these assumptions could materially affect the estimated quantity and value of Helix’s proved reserves. You should not assume that the present value of future net cash flows from our proved reserves referred to in this proxy statement/prospectus is the current market value of Helix’s estimated oil and gas reserves. In accordance with Securities and Exchange Commission requirements, Helix bases the estimated discounted future net cash flows from its proved reserves on prices and costs on the date of the estimate. Actual future prices and costs may differ materially from those used in the net present value estimate. In addition, if costs of abandonment are materially greater than Helix’s estimates, they could have an adverse effect on financial position, cash flows and results of operations.

 

Helix’s actual development results are likely to differ from its estimates of its proved reserves. Helix may experience production that is less than estimated and development costs that are greater than estimated in its reserve reports. Such differences may be material.

 

As a result of the large property acquisitions made in 2005 (Murphy Shelf package and five Deepwater non-producing fields), 55% of Helix’s proven reserves as of December 31, 2005 are PUDs. Estimates of Helix’s oil and natural gas reserves and the costs associated with developing these reserves may not be

accurate. Development of Helix’s reserves may not occur as scheduled and the actual results may not be as estimated. Development activity may result in downward adjustments in reserves or higher than estimated costs.

 

Reserve replacement may not offset depletion.

 

Oil and gas properties are depleting assets. Helix replaces reserves through acquisitions, exploration and exploitation of current properties. If Helix is unable to acquire additional properties or if it is unable to find additional reserves through exploration or exploitation of its properties, Helix’s future cash flows from oil and gas operations could decrease.

 

Helix’s oil and gas operations involve significant risks, and Helix does not have insurance coverage for all risks.

 

Helix’s oil and gas operations are subject to risks incident to the operation of oil and gas wells, including, but not limited to, uncontrollable flows of oil, gas, brine or well fluids into the environment, blowouts, cratering, mechanical difficulties, fires, explosions, pollution and other risks, any of which could result in substantial losses to Helix. Helix maintains insurance against some, but not all, of the risks described above. Drilling for oil and gas involves numerous risks, including the risk that Helix will not encounter commercially productive oil or gas reservoirs. If certain exploration efforts are unsuccessful in establishing proved reserves and exploration activities cease, the amounts accumulated as unproved property costs would be charged against earnings as impairments.

 

Helix may not be able to compete successfully against current and future competitors.

 

The businesses in which Helix operates are highly competitive. Several of Helix’s competitors are substantially larger and have greater financial and other resources than Helix has. If other companies relocate or acquire vessels for operations in the Gulf or the North Sea, levels of competition may increase and Helix’s business could be adversely affected.

 

The loss of the services of one or more of Helix’s key employees, or Helix’s failure to attract and retain other highly qualified personnel in the future, could disrupt its operations and adversely affect its financial results.

 

The industry has lost a significant number of experienced professionals over the years due to, among other reasons, the volatility in commodity prices. Helix’s continued success depends on the active participation of its key employees. The loss of its key people could adversely affect Helix’s operations. Helix believes that its success and continued growth are also dependent upon its ability to attract and retain skilled personnel. Helix believes that its wage rates are competitive; however, unionization or a significant increase in the wages paid by other employers could result in a reduction in its workforce, increases in the wage rates it pays, or both. If either of these events occurs for any significant period of time, Helix’s revenues and profitability could be diminished and its growth potential could be impaired.

 

If Helix fails to effectively manage its growth, its results of operations could be harmed.

 

Helix has a history of growing through acquisitions of large assets and acquisitions of companies. Helix must plan and manage its acquisitions effectively to achieve revenue growth and maintain profitability in its evolving market. If Helix fails to effectively manage current and future acquisitions, its results of operations could be adversely affected. Helix’s growth has placed, and is expected to continue to place, significant demands on its personnel, management and other resources. Helix must continue to improve its operational, financial, management and legal/compliance information systems to keep pace with the growth of its business.

 

Helix may need to change the manner in which it conducts its business in response to changes in government regulations.

 

Helix’s subsea construction, intervention, inspection, maintenance and decommissioning operations and its oil and gas production from offshore properties, including decommissioning of such properties, are subject to and affected by various types of government regulation, including numerous federal, state and local environmental protection laws and regulations. These laws and regulations are becoming increasingly complex,

stringent and expensive to comply with, and significant fines and penalties may be imposed for noncompliance. Helix cannot assure you that continued compliance with existing or future laws or regulations will not adversely affect its operations.

 

Certain provisions of Helix’s corporate documents and Minnesota law may discourage a third party from making a takeover proposal.

 

In addition to the 55,000 shares of preferred stock issued to Fletcher International, Ltd. under the First Amended and Restated Agreement dated January 17, 2003, but effective as of December 31, 2002, by and between Helix and Fletcher International, Ltd., Helix’s board of directors has the authority, without any action by Helix’s shareholders, to fix the rights and preferences on up to 4,945,000 shares of undesignated preferred stock, including dividend, liquidation and voting rights. In addition, Helix’s bylaws divide the board of directors into three classes. Helix is also subject to certain anti-takeover provisions of the Minnesota Business Corporation Act. Helix also has employment contracts with all of its senior officers that require cash payments in the event of a “change of control.” Any or all of the provisions or factors described above may have the effect of discouraging a takeover proposal or tender offer not approved by management and the board of directors and could result in shareholders who may wish to participate in such a proposal or tender offer receiving less for their shares than otherwise might be available in the event of a takeover attempt.

 

Helix’s operations outside of the United States subject it to additional risks.

 

Helix’s operations outside of the U.S. are subject to risks inherent in foreign operations, including, without limitation:

 

 

In addition, laws and policies of the U.S. affecting foreign trade and taxation may also adversely affect Helix’s international operations.

 

Helix’s ability to market oil and natural gas discovered or produced in any future foreign operations, and the price it could obtain for such production, depends on many factors beyond its control, including:

 

 

Pipeline and processing facilities do not exist in certain areas of exploration and, therefore, any actual sales of Helix’s production could be delayed for extended periods of time until such facilities are constructed.

 

This proxy statement/prospectus, including the documents incorporated by reference, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are generally accompanied by words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “seek,” “could,” “should,” “will,” “project,” “estimate,” “look forward to” and similar expressions which convey uncertainty of future events or outcomes.

 

The expectations set forth in this proxy statement/prospectus and the documents incorporated by reference regarding, among other things, accretion, returns on invested capital, achievement of annual savings and synergies, achievement of strong cash flow, sufficiency of cash flow to fund capital expenditures and achievement of debt reduction targets are only the parties’ expectations regarding these matters. Actual results could differ materially from these expectations depending on factors such as:

 

 

 

Actual actions that the combined company may take may differ from time to time as the combined company may deem necessary or advisable in the best interest of the combined company and its shareholders to attempt to achieve the successful integration of the companies, the synergies needed to make the transaction a financial success and to react to the economy and the combined company’s market for its exploration and production.

 

Selected Helix Historical Financial Data

 

Helix derived the following historical information from its audited consolidated financial statements for the years ended December 31, 2001, 2002, 2003, 2004 and 2005, and from its unaudited condensed consolidated financial statements for the three months ended March 31, 2006 and 2005. The unaudited condensed consolidated financial statements have been prepared by Helix on a basis consistent with the audited financial statements and include, in the opinion of Helix’s management, all normal recurring adjustments necessary for a fair presentation of the information. Operating results for the three months ended March 31, 2006 are not necessarily indicative of the results that will be achieved for future periods. You should read this information in conjunction with Helix’s “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Helix’s Historical Consolidated Financial Statements and Supplementary Data” and the notes to such financial statements included in this proxy statement/prospectus.

 

 

 

Selected Remington Historical Financial Data

 

Remington derived the following historical information from its audited consolidated financial statements for the years ended December 31, 2001, 2002, 2003, 2004 and 2005, and from its unaudited condensed consolidated financial statements for the three months ended March 31, 2006 and 2005. The unaudited condensed consolidated financial statements have been prepared by Remington on a basis consistent with the audited financial statements and include, in the opinion of Remington’s management, all normal recurring adjustments necessary for a fair presentation of the information. Operating results for the three months ended March 31, 2006 are not necessarily indicative of the results that will be achieved for future periods. You should read this information in conjunction with Remington’s “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Remington’s consolidated financial statements and the notes thereto included in Remington’s Annual Report on Form 10-K and Form 10-K/A for the year ended December 31, 2005, and Quarterly Report on Form 10-Q for the quarter ended March 31, 2006, each incorporated by reference in this proxy statement/prospectus.

 

 

 

 

Selected Unaudited Condensed Combined Pro Forma Financial Data

 

We derived the following unaudited condensed combined pro forma financial data from Helix’s audited consolidated financial statements for the year ended December 31, 2005, Remington’s audited consolidated financial statements for the year ended December 31, 2005, Helix’s unaudited condensed consolidated financial statements for the three months ended March 31, 2006 and Remington’s unaudited condensed consolidated financial statements for the three months ended March 31, 2006. The financial data has been prepared as if the proposed merger and the consummation of Helix’s financing transactions related to the proposed merger had occurred on January 1, 2005, for the operating data and as of March 31, 2006, for the balance sheet data. The process of valuing Remington’s tangible and intangible assets and liabilities is still in the preliminary stages. Material revisions to our current estimates could be necessary as the valuation process is finalized. The unaudited pro forma operating data set forth below is not necessarily indicative of the results that actually would have been achieved if the proposed merger and the currently contemplated financing transactions related to the merger had been consummated on January 1, 2005, or that may be achieved in the future. The unaudited pro forma financial statements do not reflect any benefits from potential cost savings or revenue changes resulting from the proposed merger. You should read this information in conjunction with Helix’s “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Helix’s Historical Consolidated Financial Statements and Supplementary Data” and the notes thereto, Remington’s “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” Remington’s consolidated financial statements and notes thereto and the “Unaudited Condensed Combined Pro Forma Financial Data” included in this proxy statement/prospectus or included in Remington’s Annual Report on Form 10-K , Form 10-K/A and Quarterly Report on Form 10-Q incorporated by reference in this proxy statement/prospectus.

 

 

 

 

 

Set forth below are the Helix and Remington historical and pro forma amounts per share of common stock for income from continuing operations and book value. The exchange ratio for the pro forma computations is 0.436 of a share of Helix common stock for each share of Remington common stock. The merger consideration is 0.436 of a share of Helix common stock and $27.00 in cash for each share of Remington common stock outstanding immediately prior to completion of the merger.

 

The Remington pro forma (equivalent) information shows the effect of the merger from the perspective of an owner of Remington common stock. The information was computed by multiplying the Helix pro forma combined information by the exchange ratio of 0.436. This computation does not include the benefit to Remington stockholders of the cash component of the transaction.

 

You should read the information below together with the historical financial statements and related notes contained herein, in the case of Helix, and in the Remington Annual Report on Form 10-K and Form 10-K/A for the year ended December 31, 2005 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2006, in the case of Remington, and other information filed with the SEC and incorporated by reference in this proxy statement/prospectus. See “Where You Can Find More Information” beginning on page 204.

 

The unaudited pro forma combined data below is for illustrative purposes only. The pro forma adjustments for the balance sheet are based on the assumption that the transaction was consummated on each of the respective dates presented below. The pro forma adjustments for the statements of operations are based on the assumption that the transaction was consummated on January 1, 2005.

 

The financial results may have been different had the companies always been combined. You should not rely on this information as being indicative of the historical results that would have been achieved had the companies always been combined or of the future results of the combined company. See “Unaudited Condensed Combined Pro Forma Financial Data” beginning on page 181 for a discussion of the pro forma financial data used in the comparative per-share amounts in the table below.

 

 

 

 

The following table sets forth the closing price per share of Helix common stock and the closing price per share of Remington common stock on January 20, 2006 (the last business day preceding the announcement by Helix and Remington of the execution of the merger agreement) and May 24, 2006 (the most recent practicable trading date prior to the date of this proxy statement/prospectus). The table also presents the equivalent market value per share of Remington common stock on January 20, 2006 and May 24, 2006, for receipt of a combination of 0.436 of a share of Helix common stock and $27.00 in cash, without interest, for each share of Remington common stock that you own.

 

You are urged to obtain current market quotations for shares of Helix common stock and Remington common stock before making a decision with respect to the merger.

 

No assurance can be given as to the market prices of Helix common stock or Remington common stock at the closing of the merger. Because the exchange ratio will not be adjusted for changes in the market price of Helix common stock, the market value of the shares of Helix common stock that holders of Remington common stock will receive at the effective time of the merger may vary significantly from the market value of the shares of Helix common stock that holders of Remington common stock would have received if the merger were consummated on the date of the merger agreement or on the date of this proxy statement/prospectus.

 

 

This proxy statement/prospectus is being furnished to Remington stockholders by Remington’s board of directors in connection with the solicitation of proxies from the holders of Remington common stock for use at the special meeting of Remington stockholders and any adjournments or postponements of the special meeting. This proxy statement/prospectus also is being furnished to Remington stockholders as a prospectus of Helix in connection with the issuance by Helix of shares of Helix common stock to Remington stockholders in connection with the merger.

 

The special meeting of stockholders of Remington will be held on June 29, 2006 at 9:00 a.m., Central Daylight Time, at the Hilton Dallas Park Cities, 5954 Luther Lane, Dallas, Texas 75225.

 

At the special meeting, Remington stockholders will be asked:

 

 

At this time, the Remington board of directors is unaware of any matters, other than those set forth in the preceding sentence, that may properly come before the special meeting.

 

The close of business on May 26, 2006 has been fixed by Remington’s board as the record date for the determination of those holders of Remington common stock who are entitled to notice of, and to vote at, the special meeting and at any adjournments or postponements thereof.

 

At the close of business on the record date, there were 28,870,296 shares of Remington common stock outstanding and entitled to vote, held by approximately 504 holders of record. A list of the stockholders of record entitled to vote at the special meeting will be available for examination by Remington stockholders for any purpose germane to the meeting. The list will be available at the meeting and for ten days prior to the meeting during ordinary business hours by contacting Remington’s Corporate Secretary at 8201 Preston Road, Suite 600, Dallas, Texas 75225-6211.

 

Each holder of record of shares of Remington common stock as of the record date is entitled to cast one vote per share at the special meeting on each proposal. The presence, in person or by proxy, of the holders of a majority of the issued and outstanding shares of Remington common stock outstanding as of the record date constitutes a quorum for the transaction of business at the special meeting. The affirmative vote of the holders of a majority of the shares of Remington common stock entitled to vote at the special meeting is required to approve and adopt the merger agreement.

 

As of the record date for the special meeting, directors and executive officers of Remington and their affiliates beneficially owned an aggregate of 1,084,621 shares of Remington common stock entitled to vote at the special meeting. These shares represent 3.76% of the Remington common stock outstanding and entitled to vote as of the record date. Although these individuals are not party to any voting agreements with Remington or Helix and do not have any obligations to vote in favor of the approval and adoption of the merger agreement, they have indicated their intention to vote their outstanding shares of Remington common stock in favor of the approval and adoption of the merger agreement.

 

As of May 26, 2006, Helix and its directors, executive officers and their affiliates owned none of the outstanding shares of Remington common stock.

 

All shares of Remington common stock represented by properly executed proxies received before or at the special meeting, and not properly revoked, will be voted as specified in the proxies. Properly executed proxies that do not contain voting instructions will be voted FOR the approval and adoption of the merger agreement and any adjournment or postponement of the special meeting.

 

A properly executed proxy marked “Abstain” with respect to any proposal will be counted as present for purposes of determining whether there is a quorum at the special meeting. However, because the approval and adoption of the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares entitled to vote at the special meeting, an abstention will have the same effect as a vote AGAINST approval and adoption of the merger agreement.

 

If you hold shares of Remington common stock in “street name” through a bank, broker or other nominee, the bank, broker or nominee may vote your shares only in accordance with your instructions. If you do not give specific instructions to your bank, broker or nominee as to how you want your shares voted, your bank, broker or nominee will indicate that it does not have authority to vote on the proposal, which will result in what is called a “broker non-vote.” Broker non-votes will be counted for purposes of determining whether there is a quorum present at the special meeting, but because approval and adoption of the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares entitled to vote at the special meeting, broker non-votes will have the same effect as a vote AGAINST the merger agreement.

 

If any other matters are properly brought before the special meeting, the proxies named in the proxy card will have discretion to vote the shares represented by duly executed proxies in their sole discretion.

 

You may vote in person at the special meeting or by proxy. We recommend you vote by proxy even if you plan to attend the special meeting. You can always change your vote at the special meeting.

 

You may vote by proxy card, by completing and mailing the enclosed proxy card. If you properly submit your proxy card, in time to vote, one of the individuals named as your proxy will vote your shares of common stock as you have directed. You may vote for or against the proposals submitted at the special meeting or you may abstain from voting.

 

If you hold shares of Remington common stock through a broker or other custodian, please follow the voting instructions provided by that firm. If you do not return your proxy card, or if your shares are held in a stock brokerage account or held by a bank, broker or nominee, or, in other words, in “street name” and you do not instruct your bank, broker or nominee on how to vote those shares, those shares will not be voted at the special meeting.

 

A number of banks and brokerage firms participate in a program that also permits stockholders whose shares are held in “street name” to direct their vote by the Internet or telephone. This option, if available, will be reflected in the voting instructions from the bank or brokerage firm that accompany this proxy statement/prospectus. If your shares are held in an account at a bank or brokerage firm that participates in such a program, you may direct the vote of these shares by the Internet or telephone by following the voting instructions enclosed with the proxy from the bank or brokerage firm. The Internet and telephone proxy procedures are designed to authenticate stockholders’ identities, to allow stockholders to give their proxy voting instructions and to confirm that those instructions have been properly recorded. Votes directed by the Internet or telephone through such a program must be received by 11:59 p.m., New York, New York time, on June 28, 2006. Requesting a proxy prior to the deadline described above will automatically cancel any voting directions you have previously given by the Internet or by telephone with respect to your shares. Directing the voting of your shares will not affect your right to vote in person if you decide to attend the meeting; however, you must first obtain a signed and properly executed proxy from your bank, broker or nominee to vote your shares held in street name at the special meeting.

 

If you submit your proxy but do not make specific choices, your proxy will be voted FOR each of the proposals presented.

 

If you are a registered stockholder, you may revoke your proxy at any time before the shares are voted at the special meeting by:

 

 

Merely attending the special meeting will not revoke any prior votes or proxies; you must vote at the special meeting to revoke a prior proxy.

 

If you hold shares of Remington common stock through a broker or other custodian and you vote by proxy, you may later revoke your proxy instructions by informing the holder of record in accordance with that entity’s procedures.

 

Under the Remington stock incentive plan, a grantee of restricted shares of Remington common stock has all the rights of a Remington stockholder with respect to those shares, including the right to vote. Accordingly, holders of shares of Remington restricted stock will be entitled to vote at the special meeting in the same way as holders of non-restricted shares of Remington common stock. Beneficial holders of shares of Remington stock held within the Remington 401(k) plan control the voting of those shares.

 

In addition to solicitation by mail, directors, officers and employees of Remington may solicit proxies for the special meeting from Remington stockholders personally or by telephone, facsimile and other electronic means without compensation other than reimbursement for their actual expenses.

 

The expenses incurred in connection with the filing of this document will be paid for by Helix. The expenses incurred in connection with the printing and mailing this proxy statement/prospectus will be paid for by Remington. Arrangements also will be made with brokerage firms and other custodians, nominees and fiduciaries for the forwarding of solicitation material to the beneficial owners of shares of Remington stock held of record by those persons, and Remington will, if requested, reimburse the record holders for their reasonable out-of-pocket expenses in so doing.

 

The Remington board of directors has unanimously approved the merger agreement and the transactions it contemplates, including the merger. The Remington board of directors determined that the merger is advisable and in the best interests of Remington and its stockholders and unanimously recommends that you vote FOR approval and adoption of the merger agreement. See “The Merger — Remington’s Reasons for the Merger” beginning on page 36 and “The Merger — Recommendation of the Remington Board of Directors” beginning on page 38 for a more detailed discussion of the Remington board of directors’ recommendation.

 

If you wish to attend the special meeting in person, you must present either an admission ticket or appropriate proof of ownership of Remington stock, as well as a form of personal identification. If you are a registered stockholder and plan to attend the meeting in person, please mark the attendance box on your proxy card and bring the tear-off admission ticket with you to the meeting. If you are a beneficial owner of Remington common stock that is held by a bank, broker or other nominee, you will need proof of ownership to be admitted to the meeting. A recent brokerage statement or a letter from your bank or broker are examples of proof of ownership.

No cameras, recording equipment, electronic devices, large bags, briefcases or packages will be permitted in the meeting.

 

PLEASE DO NOT SEND IN ANY REMINGTON STOCK CERTIFICATES WITH YOUR PROXY CARD. After the merger is completed, you will receive written instructions from the exchange agent informing you how to surrender your stock certificates to receive the merger consideration.

 

The special meeting may be adjourned from time to time, to reconvene at the same or some other place, by approval of the holders of common stock representing a majority of the votes present in person or by proxy at the special meeting, whether or not a quorum exists, without further notice other than by an announcement made at the special meeting, so long as the new time and place for the special meeting are announced at that time. If the adjournment is for more than thirty days, or if after the adjournment a new record date is determined for the adjourned special meeting, a notice of the adjourned special meeting must be given to each stockholder of record entitled to vote at the special meeting. If a quorum is not present at the Remington special meeting, holders of Remington common stock may be asked to vote on a proposal to adjourn or postpone the Remington special meeting to solicit additional proxies. If a quorum is not present at the Remington special meeting, the holders of a majority of the shares entitled to vote who are present in person or by proxy may adjourn the meeting. If a quorum is present at the Remington special meeting but there are not sufficient votes at the time of the special meeting to approve the other proposal(s), holders of Remington common stock may also be asked to vote on a proposal to approve the adjournment or postponement of the special meeting to permit further solicitation of proxies.

 

Remington’s board of directors is using this document to solicit proxies from the holders of Remington common stock for use at the Remington special meeting, at which holders of Remington common stock will be asked to vote upon approval and adoption of the merger agreement. In addition, Helix is sending this document to Remington stockholders as a prospectus in connection with the issuance of shares of Helix common stock in exchange for shares of Remington common stock in the merger.

 

The boards of directors of Remington and Helix have unanimously approved the merger agreement providing for the merger of Remington into Merger Sub. Merger Sub, which is wholly owned by Helix, will be the surviving entity in the merger, and upon completion of the merger, the separate corporate existence of Remington will terminate. We expect to complete the merger in the second quarter of 2006.

 

The board of directors and senior management of Helix periodically discuss strategic options, including growth by acquisition. Helix has, from time to time, considered business combinations with other energy services companies or oil and gas exploration and production companies. Three service related acquisitions were completed during 2005, and a short list of potential exploration and production target companies was developed by mid-year.

 

In recent years, Remington has from time to time entered into agreements with Helix for the use of Helix’s marine contract services in Remington’s offshore oil and gas exploration activities. As a result, Mr. James A. Watt, Chairman and Chief Executive Officer of Remington, and Mr. Martin R. Ferron, President and Chief Operating Officer of Helix, as well as other officers and employees of both companies, have come to know each other. Therefore, from time to time in the past, Messrs. Watt and Ferron discussed contractual arrangements between the companies and general matters regarding their respective businesses and the oil and gas industry.

 

In October 2005, Helix engaged Simmons & Company International to prepare an overview of Remington, together with a preliminary valuation/combination analysis. That report was issued on November 14, 2005.

 

On November 17, 2005, Mr. Ferron contacted Mr. Watt by telephone to set up a meeting to discuss the possibility of a business combination between Helix and Remington.

 

On November 22, 2005, Mr. Ferron met with Mr. Watt and Mr. Robert P. Murphy, Remington’s President and Chief Operating Officer, at Remington’s offices in Dallas, Texas. During the meeting, Mr. Ferron expressed an interest in a business combination between Helix and Remington. Mr. Ferron suggested that Helix would be willing to pay a yet-to-be determined premium for the common stock of Remington, and that consideration for the transaction would consist of approximately 75% cash and 25% Helix common stock. Mr. Ferron further stated that, to formulate a proposal, Helix needed to review and evaluate certain non-public Remington operational and financial data. Accordingly, Mr. Ferron requested that Remington consider entering into a confidentiality agreement with Helix and provided Mr. Watt an initial request for information about Remington. Mr. Watt responded that he would discuss with the Remington board of directors Helix’s indication of interest and its request for access to non-public information pursuant to a confidentiality agreement.

 

On November 28, 2005, the board of directors of Remington met by telephonic conference and Mr. Watt and Mr. Murphy reported to the directors the discussions with Mr. Ferron at the November 22, 2005 meeting. Following a discussion of the matter, the board of directors authorized Remington to enter into a confidentiality agreement with Helix, and to conduct exploratory communications with Helix’s management regarding a possible business combination. Helix and Remington executed the confidentiality agreement on November 30, 2005. On December 5, 2005, Remington sent to Helix, by overnight courier, a package containing certain information requested by Helix.

 

On December 6, 2005, Mr. Watt received a letter from Mr. Ferron expressing continued interest in evaluating a potential transaction with Remington and requesting an exclusivity period until February 15,

2006, during which Remington would not seek or consider alternative business combination transactions. Mr. Ferron’s letter also expressed Helix’s interest in entering into a merger agreement with Remington by the end of January 2006. Mr. Watt responded that Remington was not in a position to grant that exclusivity to Helix and stated that Remington was not for sale.

 

On December 9, 2005, Mr. Owen Kratz, Chairman and Chief Executive Officer of Helix, and Mr. Ferron met with Mr. Watt and Mr. Murphy at Remington’s offices in Dallas, Texas. At the meeting Messrs. Kratz and Ferron requested further information about Remington’s business and operations. They also stated that, in the event of a combination of the companies, they contemplated that Remington would largely remain as a separate unit or division of Helix. During a follow-up telephone conference on December 12, 2005, Mr. Ferron indicated to Messrs. Watt and Murphy that, based on an analysis of publicly available information and the additional information provided to them by Remington, Helix was contemplating a price in the range of $44 for each share of Remington common stock. Messrs. Watt and Murphy reiterated that Remington was not for sale but that at Helix’s request they would discuss the matter with Remington’s board of directors.

 

On December 13, 2005, a regularly scheduled meeting of the Helix board of directors was held at which the Helix board of directors discussed the potential acquisition of Remington and an indicative offer.

 

Also on December 13, 2005, a regularly scheduled meeting of the board of directors of Remington was held, during which Mr. Watt updated the directors on the conversations to date with Helix. The directors discussed the Helix level of interest and concluded that the tentative indication of value at $44 per share of Remington common stock warranted continued dialogue with Helix, although the board reiterated that Remington was not for sale and noted that a formal offer had not been submitted. Upon Mr. Watt’s request, Remington’s board of directors authorized him to retain Jefferies in order to assist the board of directors in assessing Helix’s valuation of Remington. On December 14, 2005, Mr. Watt communicated to Mr. Ferron that Remington’s board of directors had reviewed Helix’s tentative proposal but had not reached a conclusion on it, and confirmed to Helix that Remington was not willing, at that stage of the process, to provide an exclusivity period to Helix.

 

On December 14, 2005, Mr. Ferron sent another letter to Mr. Watt suggesting that Helix commence its due diligence review of Remington immediately. In the letter Helix proposed, in lieu of an exclusivity period, a break-up fee payable by Remington to Helix of $10 million prior to the announcement of a merger and $50 million afterwards. On December 15, 2005, Mr. Ferron sent a third letter to Mr. Watt, indicating a potential offer could be made in the range of $43 to $46 per share of Remington common stock, based on approximately 30 million fully diluted shares outstanding, with Helix common stock constituting up to 50% of the consideration. Mr. Watt responded by e-mail that he would review Helix’s revised preliminary proposal with Remington’s board of directors and advisors.

 

On December 20, 2005, officers of Remington met with representatives of Jefferies at Remington’s offices in Dallas, Texas, to discuss and review Helix’s proposal. Remington entered into an engagement agreement with Jefferies on December 21, 2005. Mr. Watt then instructed Jefferies to review and evaluate Helix’s proposal and to help evaluate potential alternatives for Remington.

 

Between December 21 and December 22, 2005, Helix completed technical due diligence with respect to Remington.

 

On January 5, 2006, the Helix Board of Directors held a telephonic meeting to approve a definitive acquisition offer. The following day, a firm offer of $45 per Remington share was submitted in writing, with the consideration consisting of 50% cash and 50% Helix common stock. Mr. Watt reiterated to Mr. Ferron that Remington’s board of directors had not changed its determination that Remington was not for sale. Mr. Watt also indicated that Remington’s board of directors had to assess whether Helix’s proposal made sense to Remington’s stockholders, and that he would review it with the board of directors and external advisors.

 

Remington’s board of directors met on January 11, 2006 to consider Helix’s proposal. At the meeting, Jefferies made a presentation that included an overview of Helix, a preliminary valuation of Remington using different methodologies and a review of alternative strategic options available to Remington. Jefferies provided its evaluation of Helix’s proposal in comparison to alternative strategic options and similar recent transactions involving the sale of Gulf of Mexico oil and gas assets. Andrews Kurth LLP, outside legal counsel to

Remington, then discussed with the Remington board of directors the fiduciary duties of the board under the circumstances. Upon deliberation, the Remington board of directors confirmed that Remington was not for sale, and determined that Remington management should continue discussions with Helix and that Remington and its advisors should seek an increase in the consideration to be paid by Helix. Jefferies was then directed to contact a limited number of additional parties that might have an interest in a potential business combination with Remington at a premium to the market price of Remington’s common stock. On January 12, 2005, Mr. Watt informed Mr. Ferron of the discussions of Remington’s board of directors. After further negotiations with Helix, on January 13, 2006, Mr. Watt informed the Remington board of directors that Helix had increased its proposed offering price from $45 to $46 per share of Remington common stock, approximately 60% of which would be paid in cash and 40% in Helix common stock.

 

Mr. Watt and Mr. Murphy met with Mr. Ferron at Helix’s offices in Houston, Texas on January 16, 2006 to conduct due diligence on Helix and further discuss the prospect of a merger between the companies. At that meeting, Mr. Ferron delivered a letter to Mr. Watt stating an aggregate offer price of $812,885,625 in cash plus 13,577,577 shares of Helix common stock for the approximately 30.1 million of fully diluted shares of Remington common stock.

 

On January 18, 2006, the board of directors of Remington met in order to consider Helix’s revised proposal. Mr. Watt informed the Remington directors that the proposal was $46 per share of Remington common stock, based on the closing price of Helix’s common stock on January 13, 2006 of $42.10 per share. Remington stockholders would receive $27.00 in cash plus 0.4513 of a share of Helix common stock for each outstanding share of Remington common stock. The cash component would be about 58.7% of the total consideration. At the meeting, representatives of Jefferies expressed their oral opinion that they believed they would be able to conclude that the merger consideration to the holders of Remington common stock in the Helix proposal was fair to such holders from a financial point of view. Remington’s board of directors then directed Mr. Watt to continue discussions with Helix and report back to the board of directors with a comprehensive definitive offer from Helix. In addition, the board of directors requested that Jefferies prepare to render a fairness opinion with respect to the transaction at the next board meeting. Following the meeting, in a letter dated January 18, 2006, Mr. Watt informed Mr. Ferron that the board of directors of Remington intended to meet again on January 22, 2006 to consider approval of the transaction, provided a mutually acceptable merger agreement was negotiated by then, and Jefferies rendered a fairness opinion acceptable to the board of directors of Remington.

 

Later on January 18, 2006, Remington distributed a draft merger agreement prepared by Andrews Kurth LLP, Remington’s outside legal counsel, to Helix and its outside legal counsel, Fulbright & Jaworski L.L.P. Over the following few days, the managements of Remington and Helix and their respective financial advisors and outside legal counsel engaged in negotiations with respect to the merger agreement.

 

Between January 19 and January 20, 2006, Helix completed financial and administrative due diligence.

 

On January 19, 2006, Helix’s board of directors held a telephonic meeting regarding the status of the negotiations and discussed a revised offer as a result of information obtained as part of the due diligence review.

 

On January 20, 2006, Helix representatives notified Mr. Watt that through financial due diligence they had determined that the tax basis of Remington’s assets was significantly less than previously estimated. In addition, on January 21, 2006, Remington determined that the Gulf of Mexico exploratory well, South Pass 87 #6, in which Remington had a 50% non-operating working interest, was a dry hole. As a result, Mr. Ferron advised Mr. Watt that Helix was revising its offer and asked Mr. Watt to present the revised offer to the Remington board of directors. Mr. Watt agreed to submit the revised offer to the Remington board of directors and agreed to recommend to the board that the merger agreement be executed reflecting a consideration for each share of fully diluted Remington common stock of $27.00 in cash and 0.436 of a share of Helix common stock. Based on the closing price of Helix’s common stock on January 20, 2006, that final offer represented a consideration of $46.33 per share of Remington common stock.

 

Remington’s board of directors held a telephonic meeting on the evening of January 22, 2006 to review Helix’s revised offer and the proposed transaction. Remington’s financial advisors and outside legal counsel also attended the meeting. At the meeting, Remington’s board of directors discussed various aspects of the

proposed transaction, including the proposed merger consideration and the terms of the merger agreement. Jefferies reviewed its analysis of the economic terms of the transaction and its assessment of the fairness of the merger consideration to the holders of Remington common stock from a financial point of view. Jefferies representatives also informed the Remington board that, pursuant to the board’s instructions, Jefferies had contacted six other parties to see if they would have an interest in a potential combination with Remington. One of them executed a confidentiality agreement, but none of them expressed an interest in submitting an offer. Jefferies then delivered its written opinion to Remington’s board of directors, that, as of the date of the opinion and based on and subject to the matters described in the opinion, the merger consideration to be received in the merger by the holders of Remington common stock, other than Helix and its affiliates, was fair, from a financial point of view, to such holders. Then Remington’s outside legal counsel presented a summary of the terms of the merger agreement and discussed various legal issues with Remington’s directors. After further discussion on certain aspects of the proposed transaction, Remington’s board of directors unanimously approved the merger, the terms of the merger agreement and the transactions contemplated by the merger agreement, and determined to recommend adoption of the merger agreement to the stockholders of Remington.

 

The board of directors of Helix approved the merger agreement and the transactions contemplated thereby effective as of January 22, 2006.

 

Late in the evening of January 22, 2006, following the approval by the boards of directors of both companies, Helix and Remington executed the merger agreement. Early in the morning of January 23, 2006, the parties publicly announced the execution of the merger agreement.

 

The Remington board of directors, at a special meeting held on January 22, 2006, unanimously determined that the merger and the merger agreement are advisable, fair to and in the best interests of Remington and its stockholders. The Remington board of directors has approved the merger agreement and unanimously recommends Remington stockholders vote “FOR” approval and adoption of the merger agreement and the merger.

 

In reaching its decision, the Remington board of directors consulted with Remington’s management and its financial and legal advisors in this transaction. In concluding that the merger is in the best interests of Remington and its stockholders, the Remington board of directors considered a variety of factors, including the following:

 

 

 

 

 

 

 

The Remington board of directors also considered potential risks associated with the merger in connection with its evaluation of the proposed transaction, including:

 

 

 

The foregoing discussion of the information and factors discussed by the Remington board of directors is not exhaustive but does include material factors considered by the Remington board of directors. The Remington board of directors did not quantify or assign any relative or specific weight to the various factors that it considered. Rather, the Remington board of directors based its recommendation on the totality of the information presented to and considered by it. In addition, individual members of the Remington board of directors may have given different weight to different factors.

 

After careful consideration of the matters discussed above, the Remington board of directors concluded that the proposed merger is in the best interest of the stockholders of Remington.

 

FOR THE REASONS SET FORTH ABOVE, THE BOARD OF DIRECTORS OF REMINGTON HAS UNANIMOUSLY ADOPTED THE MERGER AGREEMENT AS IN THE BEST INTERESTS OF REMINGTON AND ITS STOCKHOLDERS, AND UNANIMOUSLY RECOMMENDS THAT REMINGTON’S STOCKHOLDERS VOTE FOR THE ADOPTION OF THE MERGER AGREEMENT.

 

The Helix Board of Directors has approved the merger agreement and believes that the acquisition of Remington is the next logical step in the evolution of Helix’s unique production contracting based business model.

 

Helix believes that the merger joins two well managed companies, providing strategic and financial benefits to shareholders. The benefits include:

 

 

 

 

 

 

 

Jefferies has rendered its written opinion, dated January 22, 2006, to the board of directors of Remington to the effect that, as of that date and subject to the assumptions, limitations, qualifications and other matters described in its opinion, the merger consideration to be received in connection with the merger by the holders of Remington common stock (other than Helix and its affiliates) was fair, from a financial point of view, to such holders.

 

The full text of Jefferies’ written opinion to Remington’s board of directors, which sets forth the procedures followed, the assumptions made, qualifications and limitations on the review undertaken and other matters, is attached to this proxy statement/prospectus as Annex B. The summary of Jefferies’ opinion in this proxy statement/prospectus is qualified in its entirety by reference to the full text of the opinion, which is incorporated by reference into this proxy statement/prospectus. Holders of Remington common stock are encouraged to read the opinion in its entirety.

 

The opinion of Jefferies does not constitute a recommendation as to how any stockholder should vote on the merger or any matter relevant to the merger agreement.

 

General

 

Jefferies was selected by Remington’s board of directors based on Jefferies’ qualifications, expertise and reputation. Jefferies is an internationally recognized investment banking and advisory firm. Jefferies, as part of its investment banking business, is regularly engaged in the evaluation of capital structures, valuation of businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements, financial restructurings and other financial services.

 

In the ordinary course of business, Jefferies and its affiliates may publish research reports regarding the securities of Remington and Helix and their respective affiliates and may trade or hold such securities of Remington and Helix for their own account and for the accounts of their customers and, accordingly, may at any time hold long or short positions in those securities. In the past, Jefferies and its affiliates have provided investment banking services to Remington unrelated to the merger for which they have received compensation, and Jefferies or its affiliates may, in the future, provide investment banking and financial advisory services to Helix for which they would expect to receive compensation.

 

Pursuant to an engagement letter between Remington and Jefferies dated December 21, 2005, Jefferies was retained to act as financial advisor to Remington in connection with a possible transaction involving Remington. Jefferies also assisted Remington in soliciting expressions of interest in Remington from other parties potentially interested in a transaction with Remington. In consideration for these financial advisory services, Jefferies will receive a fee based on a percentage of the transaction value, which is contingent upon the completion of a transaction such as the merger. On January 19, 2006, the engagement letter was amended to provide that Jefferies would render a written opinion to the board of directors of Remington regarding the fairness of the merger consideration to be received in connection with the merger by the holders of Remington common stock (other than Helix and its affiliates) from a financial point of view. On January 22, 2006, Jefferies rendered its oral opinion to the board of directors of Remington (and subsequently provided a written copy of its opinion) that, as of that date and subject to the assumptions, limitations, qualifications and other matters described in its opinion, the merger consideration to be received in connection with the merger by the holders of Remington common stock (other than Helix and its affiliates) was fair, from a financial point of view, to such holders. Jefferies received a separate fee of $1 million for rendering such opinion, which was not contingent upon the completion of the merger. Upon the completion of the merger, a portion of such fee will be credited towards the transaction fee payable pursuant to the initial engagement letter. In addition, Remington has agreed to indemnify Jefferies for certain liabilities arising out of the engagements described above.

The opinion of Jefferies was one of many factors taken into consideration by Remington’s board of directors in making its determination to approve the merger and should not be considered determinative of the views of Remington’s board of directors or management with respect to the merger or the merger consideration.

 

Jefferies did not establish the amount of cash or amount of shares of Helix common stock that will be received in exchange for each share of Remington common stock as consideration for the merger. These amounts were determined pursuant to negotiations between Remington and Helix and were approved by the board of directors of Remington.

 

Procedures Followed

 

In connection with rendering its opinion, Jefferies has, among other things,:

 

 

In addition, Jefferies conducted such other studies, analyses and investigations and considered such other financial, economical and market factors and criteria as they considered appropriate in arriving at their opinion. Jefferies’ analyses must be considered as a whole. Considering any portion of such analyses or factors, without considering all analyses and factors, could create a misleading or incomplete view of the process underlying the conclusions expressed in the opinion delivered by Jefferies.

 

Assumptions Made and Qualifications and Limitations on Review Undertaken

 

In rendering its opinion, Jefferies assumed and relied upon the accuracy and completeness of all of the financial information, forecasts and other information provided to or otherwise made available to Jefferies by Remington, Helix or that was publicly available to Jefferies, and did not attempt, or assume any responsibility, to independently verify any of such information. The opinion of Jefferies is expressly conditioned upon such information, whether written or oral, being complete, accurate and fair in all respects. With respect to the oil

and gas reserve reports, hydrocarbon production forecasts and financial projections provided to and examined by Jefferies or discussed with Jefferies by Remington and Helix, Jefferies noted that projecting future results of any company is inherently subject to uncertainty. Jefferies was advised by each of Remington and Helix and has assumed that the oil and gas reserve reports, hydrocarbon production forecasts and financial projections provided to and examined by Jefferies or discussed with Jefferies by Remington and Helix were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the management of Remington or Helix as to the expected future financial performance of Remington or Helix (including in the case of Helix as to the future revenues and related costs attributable to its services segment and production facilities operations), and their respective petroleum engineers, as to their respective oil and gas reserves, related future revenues and associated costs. Jefferies expressed no opinion as to Remington’s or Helix’s oil and gas reserves, related future revenue, financial projections or the assumptions upon which they are based. In addition, in rendering its opinion, Jefferies assumed that Remington will perform in accordance with such financial projections for all periods specified therein. Jefferies noted that although such projections did not form the principal basis for their opinion, but rather constituted one of many items that they employed, changes to such projections could affect the opinion rendered.

 

Jefferies’ opinion also expressly also assumed that there were no material changes in Remington’s assets, financial condition, results of operations, business or prospects since the most recent financial statements made available to them. In addition, Jefferies’ opinion noted that they:

 

 

Jefferies assumed that the merger will be consummated in a manner that complies in all respects with the applicable provisions of the Securities Act of 1933, and all other applicable federal and state statutes, rules and regulations and that the merger will qualify as a tax-free reorganization for U.S. federal income tax purposes. Jefferies further assumed, with permission of Remington, that:

 

 

Summary of Financial and Other Analyses

 

The following is a summary of the material financial and other analyses presented by Jefferies to Remington’s board of directors in connection with Jefferies’ opinion dated January 22, 2006. The financial

and other analyses summarized below include information presented in tabular format. In order to fully understand Jefferies’ analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the analyses. Considering the data in the tables below without considering the full narrative description of the financial and other analyses, including the methodologies underlying and the assumptions, qualifications and limitations affecting each analysis, could create a misleading or incomplete view of Jefferies’ analyses.

 

Overview

 

Based on the closing price per share of Helix common stock on January 20, 2006 of $44.33, Jefferies noted that the implied value of the merger consideration per share of Remington common stock was $46.33, which is referred to in this summary of Jefferies’ opinion as the “implied merger consideration.” The implied merger consideration includes 0.436 of a share of Helix common stock and $27.00 in cash for each share of Remington common stock. Jefferies also noted that based on the implied merger consideration of $46.33 per share, approximately 30.2 million fully diluted shares of Remington common stock currently outstanding (calculated using the treasury method) and Remington’s $38 million of cash and cash equivalent assets, the implied enterprise value of Remington was $1.36 billion. Jefferies also noted that the implied merger consideration represented a 22% premium to Remington’s closing stock price of $37.96 on January 20, 2006.

 

Jefferies analyzed the value of Remington in accordance with the following methodologies, each of which is described in more detail below:

 

 

These methodologies were used to determine an implied price range per share of Remington common stock, which was then compared to the implied merger consideration and to the historical price range of Remington common stock. The following table summarizes the results of the analyses and should be read together with the more detailed descriptions set forth below:

 

 

Discounted Cash Flow Analysis

 

Jefferies calculated the present value of Remington’s projected cash flows using risk-weighted oil and gas reserves, including estimates of non-proved reserves provided by Remington’s management. For the purposes of the discounted cash flow analysis, Jefferies used a price deck based on the New York Mercantile Exchange, or NYMEX, forward pricing curve on January 18, 2006 for proved developed reserves and proved behind pipe reserves and a flat price of $50.00 per barrel of oil and $7.00 per thousand cubic feet of gas for undeveloped and exploratory reserves. Jefferies assumed various discount rates and investment factors in connection with the discounted cash flow analysis. The discounted cash flow analysis resulted in an implied price range of $43.18 to $52.90 per share as compared to the implied proposed merger consideration of $46.33 per share of Remington common stock.

Discounted Equity Value Analysis

 

Jefferies calculated the present value of Remington’s hypothetical future stock price at December 31, 2008 using certain projections provided by Remington’s management related to production, lease operating expenses, general and administrative expenses, other expenses and capital expenditures and an exit multiple range from 3.0x to 4.0x earnings before interest, taxes, depreciation and amortization (referred to as EBITDA). Jefferies performed the discounted equity analysis using both the NYMEX forward pricing curve as of January 18, 2006 and flat pricing of $50.00 per barrel of oil and $7.00 per thousand cubic feet of gas. These pricing scenarios resulted in an implied price range as follows:

 

 

Comparable Company Analysis

 

Using publicly available financial and operating data for selected public companies in the oil and gas exploration and production industry, Jefferies calculated trading multiples of the selected public companies at their current stock price and applied those multiples to the following historical and projected financial data provided by Remington’s management:

 

 

For the purposes of calculating cubic feet equivalents, six thousand cubic feet of natural gas are deemed equivalent to one barrel of oil. Enterprise values in this analysis were calculated using the closing price of the common stock of Remington and the selected companies as of January 20, 2006.

 

The selected public companies used by Jefferies in the comparable company analysis were:

 

 

In determining the implied price range per share for this analysis, each of the EBITDA multiples was weighted 30%, the proved oil and gas reserves multiple was weighted 10% and the daily oil and gas production multiple was weighted 30%. Based on this analysis, Jefferies calculated Remington’s implied valuation per share to be $36.79 to $44.96, as compared to the implied proposed merger consideration of $46.33 per share of Remington common stock.

 

No company utilized for comparison in the comparable company analysis is identical to Remington. In evaluating the merger, Jefferies made numerous judgments and assumptions with regard to industry performance, general business, economic, market, and financial conditions and other matters, many of which are beyond Remington’s control. Mathematical analysis, such as determining the weighted average, is not in itself a meaningful method of using comparable company data.

Precedent Transaction Analysis

 

Using publicly available financial and operating data and other information for selected comparable precedent transaction in the oil and gas exploration and production industry, with a focus on transactions involving companies with significant operations in the Gulf of Mexico, Jefferies calculated multiples of transaction value to:

 

 

For the purposes of the precedent transaction analysis, Jefferies used the following selected comparable precedent transactions occurring in 2004 or 2005 and involving companies with significant shelf operations in the Gulf of Mexico:

 

 

For the purposes of the precedent transaction analysis, Jefferies also used the following selected comparable precedent transactions occurring in 2004 or 2005 and involving companies with significant deep water operations in the Gulf of Mexico:

 

 

Jefferies applied the transaction value ranges derived from the precedent transactions analysis to corresponding historical and projected financial and operating data for Remington as provided by Remington’s management and calculated an implied price range of $29.00 to $43.27 per share of Remington common stock, as compared to the implied proposed merger consideration of $46.33 per share.

 

No transaction utilized for comparison in the precedent transaction analysis is identical to the merger. In evaluating the merger, Jefferies made numerous judgments and assumptions with regard to industry performance, general business, economic, market, and financial conditions and other matters, many of which are beyond Remington’s control. Mathematical analysis, such as determining the average or the median, is not in itself a meaningful method of using comparable transaction data.

 

Analysis of Helix

 

Jefferies reviewed the price trading history of Helix for the 3-year period ending January 20, 2006 on a stand alone basis. Jefferies also compared the growth rate of the historical price of Helix common stock to the growth rate of an index consisting of various large exploration and production companies and an index of various comparable oil field services companies, each over the previous twelve months. Jefferies noted that the growth rate of the price of Helix common stock outperformed both indices during that period.

 

Using publicly available information and information related to Helix as provided by Helix’s management, Jefferies analyzed the trading multiples of Helix and the following comparable companies:

 

 

 

In its analysis, Jefferies derived and compared the following benchmarks for Helix and the comparable companies listed above:

 

 

This analysis indicated the following:

 

 

 

 

Conclusion

 

Jefferies determined and issued its written opinion to the board of directors of Remington to the effect that as of January 22, 2006, and subject to the assumptions, limitations, qualifications and other matters described in its opinion, the merger consideration to be received in connection with the merger by the holders of Remington common stock (other than Helix and its affiliates) was fair, from a financial point of view, to such holders.

 

The combination of the two companies will be accounted for as an acquisition of Remington by Helix using the purchase method of accounting.

 

The completion of the merger is conditioned on, among other things, the receipt of opinions from tax counsel for each of Helix and Remington that the merger will qualify as a reorganization under Section 368(a) of the Internal Revenue Code.

 

Under the Hart-Scott-Rodino Act, the merger may not be completed unless Helix and Remington file premerger notification and report forms with the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice and the waiting periods expire or terminate. The initial waiting period is 30 days after both parties have filed the applicable notifications, but this period may be extended if the reviewing agency issues a formal request for additional information and documentary material, referred to as a second request. On March 14, 2006, the Federal Trade Commission granted Helix and Remington’s request for early termination of the waiting period under the HSR Act.

 

Other than as we describe in this document, the merger does not require the approval of any other U.S. federal or state or foreign agency.

 

Under the DGCL, any Remington stockholder who does not wish to accept the merger consideration has the right to dissent from the merger and to seek an appraisal of, and to be paid the fair value (exclusive of any element of value arising from the accomplishment or expectation of the merger) for his or her shares of Remington common stock, so long as the stockholder complies with the provisions of Section 262 of the DGCL.

 

Holders of record of Remington common stock who do not vote in favor of the merger agreement and who otherwise comply with the applicable statutory procedures summarized in this proxy statement/prospectus will be entitled to appraisal rights under Section 262 of the DGCL. A person having a beneficial interest in shares of Remington common stock held of record in the name of another person, such as a broker or nominee, must act promptly to cause the record holder to follow the steps summarized below properly and in a timely manner to perfect appraisal rights.

 

THE FOLLOWING DISCUSSION IS NOT A COMPLETE STATEMENT OF THE LAW PERTAINING TO APPRAISAL RIGHTS UNDER THE DGCL AND IS QUALIFIED IN ITS ENTIRETY BY THE FULL TEXT OF SECTION 262 OF THE DGCL, WHICH IS REPRINTED IN ITS ENTIRETY AS ANNEX C. ALL REFERENCES IN SECTION 262 OF THE DGCL AND IN THIS SUMMARY TO A “STOCKHOLDER” OR “HOLDER” ARE TO THE RECORD HOLDER OF THE SHARES OF COMMON STOCK AS TO WHICH APPRAISAL RIGHTS ARE ASSERTED.

 

Under Section 262 of the DGCL, holders of shares of Remington common stock who follow the procedures set forth in Section 262 of the DGCL will be entitled to have their Remington common stock appraised by the Delaware Chancery Court and to receive payment in cash of the “fair value” of those Remington shares, exclusive of any element of value arising from the accomplishment or expectation of the merger, together with a fair rate of interest, if any, as determined by that court.

 

Under Section 262 of the DGCL, when a proposed merger is to be submitted for approval at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, must notify each of its stockholders who was a stockholder on the record date for this meeting with respect to shares for which appraisal rights are available, that appraisal rights are so available, and must include in that required notice a copy of Section 262 of the DGCL.

 

This proxy statement/prospectus constitutes the required notice to the holders of those Remington shares and the applicable statutory provisions of the DGCL are attached to this proxy statement/prospectus as Annex C. Any Remington stockholder who wishes to exercise his or her appraisal rights or who wishes to preserve his or her right to do so should review the following discussion and Annex C carefully, because failure to timely and properly comply with the procedures specified in Annex C will result in the loss of appraisal rights under the DGCL.

 

A holder of Remington shares wishing to exercise his or her appraisal rights (a) must not vote in favor of the merger agreement and (b) must deliver to Remington prior to the vote on the merger agreement at the Remington special meeting, a written demand for appraisal of his or her Remington shares. This written demand for appraisal must be in addition to and separate from any proxy or vote abstaining from or against the merger. This demand must reasonably inform Remington of the identity of the stockholder and of the stockholder’s intent thereby to demand appraisal of his or her shares. A holder of Remington common stock wishing to exercise his or her holder’s appraisal rights must be the record holder of these Remington shares on the date the written demand for appraisal is made and must continue to hold these Remington shares until the consummation of the merger. Accordingly, a holder of Remington common stock who is the record holder of Remington common stock on the date the written demand for appraisal is made, but who thereafter transfers these Remington shares prior to consummation of the merger, will lose any right to appraisal in respect of these Remington shares.

 

Only a holder of record of Remington common stock is entitled to assert appraisal rights for the Remington shares registered in that holder’s name. A demand for appraisal should be executed by or on behalf of the holder of record, fully and correctly, as the holder’s name appears on the holder’s stock certificates. If the Remington shares are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian,

execution of the demand should be made in that capacity, and if the Remington common stock is owned of record by more than one owner as in a joint tenancy or tenancy in common, the demand should be executed by or on behalf of all joint owners. An authorized agent, including one or more joint owners, may execute a demand for appraisal on behalf of a holder of record. The agent, however, must identify the record owner or owners and expressly disclose the fact that, in executing the demand, the agent is agent for the owner or owners. A record holder such as a broker who holds Remington common stock as nominee for several beneficial owners may exercise appraisal rights with respect to the Remington shares held for one or more beneficial owners while not exercising appraisal rights with respect to the Remington common stock held for other beneficial owners. In this case, the written demand should set forth the number of Remington shares as to which appraisal is sought. When no number of Remington shares is expressly mentioned, the demand will be presumed to cover all Remington common stock in brokerage accounts or other nominee forms, and those who wish to exercise appraisal rights under Section 262 of the DGCL are urged to consult with their brokers to determine the appropriate procedures for the making of a demand for appraisal by such a nominee.

 

ALL WRITTEN DEMANDS FOR APPRAISAL SHOULD BE SENT OR DELIVERED TO REMINGTON OIL AND GAS CORPORATION, 8201 PRESTON ROAD, SUITE 600, DALLAS, TEXAS 75225-6211, ATTENTION: SECRETARY.

 

Within ten days after the effective time of the merger, Helix will notify each stockholder who has properly asserted appraisal rights under Section 262 of the DGCL and has not voted in favor of the merger agreement of the date the merger became effective.

 

Within 120 days after the effective time of the merger, but not thereafter, Helix or any stockholder who has complied with the statutory requirements summarized above may file a petition in the Delaware Chancery Court demanding a determination of the fair value of the shares of Remington common stock of all those stockholders. None of Helix, Merger Sub or Remington is under any obligation to and none of them has any present intention to file a petition with respect to the appraisal of the fair value of the Remington shares. Accordingly, it is the obligation of stockholders wishing to assert appraisal rights to initiate all necessary action to perfect their appraisal rights within the time prescribed in Section 262 of the DGCL.

 

Within 120 days after the effective time of the merger, any Remington stockholder who has complied with the requirements for exercise of appraisal rights will be entitled, upon written request, to receive from Helix a statement setting forth the aggregate number of Remington shares not voted in favor of adoption of the merger agreement and with respect to which demands for appraisal have been received and the aggregate number of holders of those Remington shares. That statement must be mailed to those stockholders within ten days after a written request therefor has been received by Helix.

 

If a petition for an appraisal is filed timely, at a hearing on the petition, the Delaware Chancery Court will determine the stockholders entitled to appraisal rights. After determining those stockholders, the Delaware Chancery Court will appraise the “fair value” of their Remington shares, exclusive of any element of value arising from the accomplishment or expectation of the merger, together with a fair rate of interest, if any, to be paid upon the amount determined to be the fair value. Stockholders considering seeking appraisal should be aware that the fair value of their Remington shares as determined under Section 262 of the DGCL could be more than, the same as or less than the value of the merger consideration they would receive pursuant to the merger agreement if they did not seek appraisal of their Remington shares and that investment banking opinions as to fairness from a financial point of view are not necessarily opinions as to fair value under Section 262 of the DGCL. The Delaware Supreme Court has stated that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered in the appraisal proceedings.

 

The Delaware Chancery Court will determine the amount of interest, if any, to be paid upon the amounts to be received by stockholders whose Remington shares have been appraised. The costs of the appraisal proceeding may be determined by the Delaware Chancery Court and taxed upon the parties as the Delaware Chancery Court deems equitable. The Delaware Chancery Court may also order that all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorneys’ fees and the fees and expenses of experts used in the appraisal proceeding, be charged pro rata against the value of all of the Remington shares entitled to appraisal.