U.S.-based offshore oil and gas services firm Helix Energy Solutions Group is set to buy equity interests of Louisiana-baed Alliance group of companies for $120 million cash at closing, plus the potential for post-closing earnout consideration.
Alliance is a Louisiana-based privately held company that provides services supporting the upstream and midstream industries in the Gulf of Mexico shelf, including offshore oil field decommissioning and reclamation, project management, engineered solutions, intervention, maintenance, repair, heavy lift, and commercial diving services.
Helix said the acquisition aligned with its energy transition business model by expanding its decommissioning presence in the Gulf of Mexico shelf and advancing Helix’s ESG initiatives by responsibly supporting end-of-life requirements of oil and gas projects.
The company said the purchase bolstered its decommissioning and life-of-field maintenance service capabilities through the addition of Alliance’s comprehensive shallow water assets, including a fleet of Jones Act-compliant lift boats, offshore supply vessels, a heavy lift derrick barge and diving vessels, as well as plug and abandonment systems, coiled tubing systems and snubbing units.
$3 Billion in Decom Expenditures in N. America
"[The acquisition] positions Helix to further penetrate the North America decommissioning market, with published reports forecasting nearly $3 billion of decommissioning expenditures between 2022 and 2025, and potential to expand into the global market," Helix said.
“Based on a number of market and regulatory drivers and our current expectations, we fully believe that the offshore oil and gas decommissioning market will grow significantly in the near term,” said Owen Kratz, Helix’s President and Chief Executive Officer. “This acquisition complements Helix’s present deepwater abandonment offerings by adding shelf and facility abandonment capabilities, and significantly enhances our position as a full-field abandonment services provider, both in the Gulf of Mexico and globally. We also see possibilities to expand our opportunities within our existing late-life production business. We are thrilled at the prospect of adding Alliance to the Helix family, and we believe this acquisition is a meaningful step in Helix’s responsible participation in this age of Energy Transition.”
“This transaction represents the culmination of many years of hard work, as we have grown Alliance from the ground up,” commented Steve Williams, owner of Alliance. “Our recent successes in acquiring and developing businesses and assets to establish Alliance as an offshore shallow water energy services company has led us to Helix, who we see as the industry standard in deepwater energy services. We are excited for the potential combination of Helix and Alliance and the value proposition we can bring to our customers.”
As mentioned earlier, the purchase price is equal to $120 million of cash at closing, plus the potential for post-closing earnout consideration payable in 2024, in the event the Alliance business achieves certain financial metrics in 2022 and 2023. Helix has the option to pay any earnout consideration in cash, Helix stock, or a combination. The acquisition is expected to close mid-2022.