# LETTER TO SHAREHOLDERS

_Source: `DeepSeekOCR_Ardian_pruned_1k/energy-oil-gas-equipment-services/NYSE_HLX_2021/NYSE_HLX_2021.mmd` · pages 3-9_

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LETTER TO SHAREHOLDERS

Owen Kratz, President and Chief Executive Officer

## Dear Shareholders,

The world continues to navigate extraordinary times. While we're all still forging through a health pandemic, as I write this letter we're witnessing tremendous upheaval in Ukraine, impacting the lives of so many people as well as the global economy and specifically the energy sector. Over the past year we experienced many challenges, and like our stakeholders, Helix plans to stay strong and persevere.

Last year at this time we fully anticipated 2021 to be a difficult one for Helix, with demand for our services historically lagging producers' budgets and the expectation of a return to a spot market at depressed rates, all set against the backdrop of pandemic uncertainty. Our 2021 results of operations were largely in line with our expectations, and we responded to adverse conditions by continuing to operate our business safely, manage costs and avoid major operational downtime due to COVID-19. Our operational highlights in 2021 included the re-activation of vessels that had been stacked during the worst of the pandemic, the continued successful West Africa campaign by the Q7000, extension of our contract in Brazil for the Siem Helix 2, and steady performance from our U.S.-based production facilities segment. In 2021 we generated $96 million of EBITDA and $132 million of Free Cash Flow, and continued our efforts to de-lever our balance sheet. Operating with low leverage provides Helix with greatest flexibility during these unprecedented times, and in 2021 we ended the year with a negative net debt balance of $22 million. We know that financial discipline is of paramount importance in this environment, and we are pleased to be able to report the healthy results of our ongoing efforts.

In November 2021 we published our annual Corporate Sustainability Report, which highlights Helix's resilience and innovation, specifically with respect to our many Environmental, Social and Governance initiatives. We are proud of our ESG record, as our well intervention services enable our customers to safely access their offshore wells, thus avoiding drilling new wells by extending their existing wells' useful lives, and to preserve the environment by preventing uncontrolled releases of oil and gas. Likewise, our robotics segment provides services to both the oil and gas and renewable energy markets globally, assisting the delivery of affordable and reliable energy and supporting the responsible transition away from a carbon-based economy. Furthermore, Helix remains on call as a first responder in the Gulf of Mexico with our Helix Fast Response System to help mitigate and remediate the environmental risks associated with offshore production activities.

This most recent Corporate Sustainability Report emphasizes various ways in which Helix differentiates ourselves from our competition. In addition to providing details on our overall ESG efforts, the Report lays out the important efficiencies a Helix well intervention vessel may offer as compared to a conventional drilling rig, including a much shorter typical project duration and significant reductions in carbon emissions when using a Helix vessel. Further, within the Report we published meaningful Climate Change Targets, with stated goals for reductions of our Scope 1, Scope 2 and Scope 3 emissions by the year 2024. We often talk about our need to be good corporate citizens of the world, and how our strong ESG record translates to creating long-term value for our shareholders. Not only do our service offerings fundamentally embody sustainability for ourselves and our customers, but as demonstrated by our efficiencies, comparatively reduced carbon emissions and willingness to commit to meaningful near-term goals, we walk that walk as well. At Helix, our actions match our values.

Looking ahead, we believe the improvements in oil prices in 2021, as well as the outlook for higher sustained oil prices beyond 2021, should lead to higher customer spending for the industry. However we expect 2022 to be a rather unusual year for Helix, with a challenging first half of the year as many of our vessels undergo regulatory maintenance, transitioning to what we anticipate to be a robust recovery in the second half of 2022 and beyond.

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"Transition" is a word we at Helix have used often. We've transitioned our operations to continue functioning at a high level in the face of the pandemic without losing focus on safety, which remains our most important core value. We've transitioned back to a spot vessel market and continue to grow our geographic footprint with an anticipated return to the Asia Pacific decommissioning market as soon as late 2022. We've transitioned our balance sheet, reducing our leverage to the point our debt profile is in a negative net debt position, even as we made significant capital expenditures and despite a difficult market.

We continue to position ourselves in what we envision will be a global transition from relying primarily on fossil fuels to a more balanced energy landscape that includes renewable energy, such as wind farms and other alternative fuels. Our strategy moving forward focuses on strengthening this energy transition story, with three identified legs of our business:
First, we will highlight and emphasize our capabilities pertaining to mature fields. We currently offer Enhancement of existing production, and we want to continue to assist oil and gas producers improve recoveries from their existing fields, which has the benefit of mitigating the need for new drilling. We plan to continue marketing our offer for alternative solutions for end-of-life of fields by extending their commercial life while providing a cost-effective abandonment solution.

Second, we aim to explore ways to increase our Abandonment capabilities beyond subsea wells and architecture. We previously had success as a full field abandonment contractor, and we are prepared to leverage that expertise once again. We continue to anticipate increased demand for decommissioning work, and believe the energy transition as well as recent events in several regions will further encourage regulators to push for accelerated plug-and-abandonment and corresponding growth in that space.

Third, we intend to continue and even bolster our offerings to the Renewables markets. Helix currently provides site clearance and cable trenching services, and we envision the market for both to grow. We also have room to expand both geographically and by adding further service capabilities, potentially offering meaningful growth for 2023 and beyond.

These three legs are already within Helix's existing core competencies, and offer opportunity for meaningful growth within the larger global transition to a more balanced energy profile. I believe our operating leverage to this transition combined with an expected market recovery holds a very bright future for our company. Thank you as always for your trust and confidence, and we look forward to earning your continued support.

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Owen Kratz
President and Chief Executive Officer
Helix Energy Solutions Group, Inc.