Greetings, and welcome to the Helix Energy Solutions Second Quarter 2021 Earnings Conference Call. . As a reminder, this conference is being recorded, Tuesday, July 27, 2021. It is now my pleasure to turn the conference over to Erik Staffeldt, Executive Vice President and Chief Financial Officer with Helix Energy Solutions. Please go ahead, sir..

Good morning, everyone, and thanks for joining us today on our conference call for our second quarter 2021 earnings release. Participating on this call for Helix today are Owen Kratz, our CEO; Scotty Sparks, our COO; Ken Neikirk, our General Counsel; and myself.

Hopefully, you've had an opportunity to review our press release and the related slide presentation released last night. If you do not have a copy of these materials, both can be accessed through the -- for the investor page on our website at www.helixesg.com.

The press release can be accessed under the Press Releases tab, and the slide presentation can be accessed by clicking on today's webcast icon. .

During this conference call, we anticipate making certain projections and forward-looking statements based on our current expectations.

All statements in this conference call or in the associated presentation, other than statements of historical fact, are forward-looking statements and are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Our actual future results may differ materially from our projections and forward-looking statements due to a number and variety of factors, including those set forth in Slide 2 and our most recently filed annual report on Form 10-K and in our other filings with the SEC. Also during this call, certain non-GAAP financial disclosures may be made.

In accordance with SEC rules, the final slide of our presentation provides reconciliations of certain non-GAAP measures to comparable GAAP financial measures.

These reconciliations, along with this presentation, the earnings press release, our annual report and a replay of this broadcast are available under the -- for the Investor page of our website at www.helixesg.com.

Owen?.

Good morning. We hope everyone out there and the families are doing well, healthy and staying safe. This morning, we'll review our Q2 and year-to-date performance, our operations, our view of the current market dynamics and provide our outlook for the balance of 2021.

Moving to the presentation, Slides 5 through 7 provide a high-level summary of our results. Our performance for the quarter and year-to-date continues to be in line with expectations as our teams continue to execute at high levels of operability.

The Q7000 continued successful operations in West Africa, North Sea Intervention activity increased in tandem with good weather season. The Well Enhancer achieved good utilization. The Seawell was activated late Q2 for a brief project. Gulf of Mexico intervention while generally soft, exited the quarter with both vessels working.

In Brazil, both vessels worked the entire quarter. Robotics benefited from the good weather season with increased activity in trenching and site clearance work. Production facilities benefited from the new HWCG agreement for response services.

During the quarter, we completed production enhancement efforts on the Droshky field with expected benefit in the second half of the year. Our results for the second quarter of 2021 were slightly down compared to our results for the first quarter of 2021. Revenues were reported $162 million with a net loss of $14 million and EBITDA of $25 million.

Our gross profit was $3 million or 2%. .

Thanks, Owen, and good morning, everyone. Moving on to Slide 10. We continue to operate all of our business lines for a challenging year with the ongoing COVID-19 pandemic. Both onshore and offshore, our teams and partners are doing an incredible job and continuously adapt to situations as presented.

We have now reopened the office to all staff in our Houston headquarters and support base and our offices and facilities in Aberdeen, Scotland. Safety measures and protocols have been put in place that are designed to allow safe access to work in these locations.

Our offices still remain closed in Rio and Singapore and the teams in those locations effectively working remotely.

The COVID-19 pandemic still presents many logistical challenges, including travel restrictions, quarantines, testing and screening personnel over 18,000 times to date, and we continue to successfully transport personnel to our work sites globally. Testing is more easily available and the vaccine rollout has aided in the situation.

And in certain locations, some travel and quarantine restrictions are being eased or removed. In the second quarter, we continued to operate 11 vessels globally with minimal operational disruption. Despite the logistical challenges, continually operating at high standards with 98% -- 98.5% uptime efficiency.

Our personnel produced some of our best safety statistics since our records began. Concluding the quarter matching our lowest total recordable incident rates emphasizing our strong supportive safety culture and leadership. Over to Slide 11.

During the second quarter, we produced revenues of $162 million, resulting in a gross profit margin of 2%, producing a gross profit of $3 million, producing -- compared to $163 million revenue and $15 million gross profit in the first quarter, producing EBITDA for the second quarter of $25 million.

In the second quarter, the Well Intervention fleet achieved utilization of 72% globally with a 100% utilization in Brazil and 58% utilization in the Gulf of Mexico and 63% utilization in the North Sea and West Africa. The Robotics chartered vessel fleet achieved 93% globally.

In the Gulf of Mexico, we had both the Q4000 and the Q5000 working and operational with some scheduled gaps between projects. In the North Sea, the Well Enhancer was operational for most of the quarter and the Seawell was activated to undertake a brief project prior to returning to warm stack mode.

In the West Africa region, the Q7000 worked in Nigeria for 2 clients undertaking production enhancement works with strong operational uptime. Operating performance in Brazil was at their usual high standards where both vessels achieved high utilization of 100% undertaken abandonment activity.

The Robotics chartered vessel fleet achieved high utilization in the quarter working between ROV support, trenching and renewable works globally, completing 236 days with 157 days of work undertaken on renewable-related green projects. .

Thanks, Scotty, and good morning. Moving to Slide 18. It outlines our debt instruments and the maturity profile at June 30. Our total funded debt is $346 million at the end of Q2. We have $32 million of scheduled principal payments in the second half of the year. Moving on to Slide 19.

This provides an update on key balance sheet metrics, including long-term debt and net debt levels at year-end at June 30. With $350 million of cash and restricted cash as of June 30, our net debt approximated $21 million at the end of the quarter.

Our long-term debt balance and net debt balance at June 30 reflects the early adoption of the ASU 2020-06, which simplified the accounting treatment of our convertible notes. .

Thanks, Erik. First, let me start with some comments on the market in general, then I'll touch on some early observations about 2022 and finish with the Helix outlook for the second half of 2021, some comments. We were expecting 2021 to be another challenging year, and it has not proven us wrong.

I'd characterize it as a market in the early stages of an economic recovery. For whatever the reasons from virtual fatigue from producers working at home as a result of COVID response to reallocation of capital to renewables or the threat of OPEC and production increases, the volume of work in 2021 has only increased marginally over 2020.

Almost every asset class continues to be in meaningful oversupply and consolidations while beginning if not had a meaningful impact. Helix vessel services have always been compared with rig day rates and that continues to be the case. In the current environment, more than ever, we need to demonstrate our value proposition.

The rig market is getting tighter, and this is starting to drive work our way. However, rig contracts now are typically short 1- or 2-well spot contracts, leaving short gaps in the rig schedules. As opposed to larger gaps between longer contracts, this leaves the rigs in operating mode.

Some rig operators are taking on intervention work to fill these short gaps at a lose less kind of rate versus laying up. We missed this phenomena of identifying it earlier in the year and price to a tighter market. This cost us several significant awards. As always, we look for lessons learned and we have made adjustments since then.

At present, our -- at present, about 60% of our world work is intervention for production enhancement and 40% P&A. For decades, P&A expectations have exceeded reality, as there's always seems to be a way for producers to defer the 0 revenue work.

It's in -- it is early, but we're seeing the regulators in the Gulf of Mexico become less willing to grant deferment. In the North Sea, we're seeing a public push for abandonment of fields to occur even if there's a little push from regulators. This is especially true of the new operators.

In Australia, the fields are becoming very mature after a significant bankruptcy that resulted in an abandonment liability going to the government. There's mounting pressure to increase abandonment activity.

These are observations highlighting the regulatory environmental and social trends that are prevalent in our market and are clear indicators of significant opportunities. Our services and capabilities are well positioned for when the work is no longer deferred.

We did expect to see a marked increase in production effort -- or production enhancement efforts this year. While there's been a slight tick and plenty of talk for whatever reason, a meaningful increase is yet to occur. In the Gulf of Mexico, we had little visibility for work at the start of the year.

Fairly recently, there are last minute works being requested and planned. We're seeing a meaningful increase of work being planned or at least discussed for 2022. We're anticipating a stronger 2-vessel market in the Gulf of Mexico for 2022. The North Sea historically has been the first region to decline in a downturn and the first to recover.

This cycle has been an exception. Actual work and visibility on future work for production enhancement has been lacking. We believe there's meaningful buildup of needed work, but so far, a little is actually being engineered. However, we do anticipate a stronger year in '22 and '23 in the U.K.

We previously announced our first contract in Australia with plans to build a campaign based on additional contracts. That work was recently deferred and is now under consideration for 2023. We do believe there is a market in Australia based on P&A that can support the full-time presence of a riser-based intervention vessel.

We're tendering for work there in 2022, but our expectations for 2022 are uncertain at this time. West Africa has been a positive market for us in 2021 for our Q7000 vessel after a COVID interruption in 2020.

Our initial expectations for this market was for a partial year campaign every other year, with just the initial customers we targeted, the Q7000 began its 2021 campaign in January and is expected to remain utilized in West Africa into November. There are ongoing discussions for additional campaign possibly starting as early as January.

With a successful initial year, there's additional producers now indicating interest. We may have underestimated the demand potential of this market. This is creating options as we consider our fleet deployment going forward, which brings us to our greatest challenge, which is Brazil.

Helix has worked closely with Petrobras over the past 7 years in a number of ways from stepping up when they found themselves needing additional intervention vessels to providing various commercial accommodations along the way.

From the beginning, Helix has approached our relationship as a long-term collaboration, and I'm confident we've delivered operational excellence as evidenced by being their #1 and #2 vessels in the Petrobras fleet for most of the past years.

We've previously acknowledged and communicated that this environmental long-term contracting would be a challenge for operators, and that has borne itself out. However, recently, Petrobras has gone largely quiet on their future plans.

They've been a solid customer for us and not -- I wouldn't rule out continuing to work for Petrobras, but our plan going forward will be to pursue other alternatives given the options for fleet deployment that I've mentioned. This may result in 2022 being a challenging year, but ultimately may be the preferred direction to move toward.

Looking a little more near term, we've kept our 2021 guidance at $75 million to $100 million. This may be a bit of a wide range, but it's warranted. We are fairly confident about our results expected for Q3, but Q4 has a number of variabilities. The utilization for Q4 for the Well Ops U.K.

vessels will depend on the potential award of a significant contract yet to be awarded. The SH1 is scheduled to complete its charter extension with Petrobras in August. Any change to that or other work filling in after that could have a meaningful impact in Q4. The Q7 currently is planned to work into November.

What it does and where it goes from there will impact Q4. As you're aware, we continue to pursue additional Droshky type mature property opportunities, the timing of which could also impact results for 2021. Until these variables are resolved, the range in the guidance is warranted.

With our guidance, we try to appropriately identify in caveat the pros and cons we currently see. And in this environment, it's fair to say we still have some variables for the second half of the year. I'd be remiss if I didn't add some color comments on our Robotics business.

Our team is very adept at capturing what commercial opportunities this market has. We continue to be the global leader in jet trenching. While competitors have come into the market, the market has grown with the activity from renewables. We have contracted trenching work into 2022 and even more beyond.

It's possible that we'll need another vessel to cover the potential demand that we're seeing in trenching for 2022. We're seeing an uptick in construction support, and this is bringing greater demand for our ROV services. We're also seeing rates creep up.

This will likely be offset somewhat as we currently do not have plans for a large Jones Act vessel in the Gulf of Mexico. We were awarded and mobilized for a significant project providing decommissioning support in Asia Pacific, and we'll continue to pursue additional work in that region.

Our new offering of UXO and boulder clearance for the wind farm market began in 2020, continues but with less work so far for 2021. However, we've recently been awarded 2 additional contracts for this type of work, but the margins are from almost all wind farm-related work are under pressure from competition.

Our credibility has now been validated by these recent awards, and we'll continue to explore possibilities for expanding our renewables efforts where it's commercial to do so. We'll -- we may not be expecting exponential recovery in the robotics market, but I think at least we expect steady as she goes with some potential upside.

The disposition of the 2 SH vessels, no doubt looms large for us. We're exploring the options, but at least we have options to explore. And with that, I'll turn it back to Erik to start the Q&A..

Thanks, Owen. Operator, at this time, we'll take any questions..

. And our first question is from Ian MacPherson with Piper Sandler..

It's hard to remember a time when the fundamentals and the utilization of your fleet have been as disconnected from the customer economics for Well Intervention given the oil prices. So it does -- from the cheap seats over here, I feel like a win, not a question as to the demand recovery probably more in '22 than '21.

But you've covered a lot of the fundamentals exhaustively already.

But just wanted to get your sense on or Scotty, on how customers are talking about pent-up demand either in the Gulf of Mexico or elsewhere that should make more sense to us vis-a-vis where oil prices are now and the high returns associated with intervention projects?.

Thanks, Ian. I'll start that one off. We are seeing a lot more talk. There's a lot more discussions with the clients, especially in the Gulf of Mexico. The Gulf of Mexico, as we came into this year, looks very bleak.

What I can say is since the last earnings call we had, in Well Intervention, we've been awarded 15 projects and over 400 days of utilization between the Gulf of Mexico and the North Sea.

The North Sea has taken longer to come back, but we feel that, that leaves more work coming in '22 and '23 because the wells are older over there, and you can't just leave them set. In the robotics side, since the last earnings call, we've been awarded 7 major trenching scopes and over 380 days of trenching.

So between the last earnings call, there's over 800 days of utilization been awarded to the fleet. There is talk going on this project is happening, but it's not as visible as it used to be. We're going quarter-by-quarter, where are in discussion with the clients, but it's more of a quarterly discussion.

Will I also point out that we are in discussions with 4 clients for multiyear contracts not full utilization, but good utilization. And obviously, we want to be careful that we don't walk into too many of those because those guys are good clients, but they're obviously looking for longer rates for longer -- lower rates for longer, sorry..

That's great color. Thanks, Scotty. Owen, before we hit this setback with COVID, we had a pretty clear line of sight towards deleveraging the balance sheet and moving towards returning cash to shareholders. And you've done a heroic job of grinding down the net debt despite the recession in the market.

And I know that the free cash flow for 2022 at this point is probably more uncertain than you thought it would be, but it's probably still a pretty high certainty that it's a positive number.

So I just want to refresh the question on how you're thinking about the balance sheet and capital allocation heading into next year? And what sort of signals or maybe EBITDA thresholds you would contemplate for revisiting that discussion on cash back?.

I'm not sure about the EBITDA part of the question, but our overall strategy is still the same. We believe we've got the most modern fleet. It is a matter of the market recovering even without the market recovering, we're on a good trajectory for becoming net debt 0 sometime next year.

I think there's -- we're holding cash right now because we want to cash settle our converts. We don't want to get into an equity settlement there of any kind. So there will be a certain amount of cash held back there.

But we could deploy the cash if the market recovery started to show greater signs of recovery, and we felt more certain about an EBITDA recovery.

I'm not sure at what level that occurs, but the biggest swing factor in that is really getting beyond the end of this year with identifying what's going to happen with the 2 SH vessels down in Brazil primarily. The North Sea, I feel pretty confident that the North Sea will be a much stronger 2-vessel market next year.

I think the Gulf of Mexico is going to be stronger next year, supporting 2 vessels, the Q7000 has opportunities. And then I've mentioned a number of places where we have options of redeploying the SH vessels.

So -- but I think it would -- we need to get some clarity as to what's going to happen with those vessels and what the financial impact is going to be. Once we get that cleared and we see a path towards a stronger market then we'll return to the plan of returning value to the shareholders..

Our next question is from the line of Mike Sabella with Bank of America..

Yes. I know there's still a lot of uncertainty in the second half this year. You all in the past have said '21 is likely a cyclical bottom, and you kind of touched around many of the moving pieces here.

I was wondering if you could just kind of give us an update as to whether you're still thinking this year is generally the bottom from an EBITDA perspective, just -- as we're moving forward and thinking about all these moving pieces, is next year higher?.

Again, I think the biggest uncertainty are the 2 SH vessels where we wind up deploying those and what rates we achieve. I think another variable is what happens in the rig market. Right now, looking out in 2022, I don't see utilization as being the bigger challenge.

I think the bigger challenge is achieving better rates, and that's totally dependent on what happens with the rig market. Whether or not consolidation keeps occurring, whether or not retirements keep occurring, the market needs to tighten up.

So I don't know if -- I don't know if '21 is the bottom year or '22, I'd say '21/'22 is the bottom, and we're expecting a tremendous recovery by '23..

Understood. That's helpful. And then as we kind of think about just from a capital perspective, you've got the $20 million to $35 million budget this year.

Is that -- is there anything coming on the horizon that we should be preparing for? Or can we kind of think that you all are expecting to stay sort of in that range for the foreseeable future?.

I do expect us to stay in that range. We'll try and manage it. The next year 2022 is a little heavier year for us on dry docks.

And there are some potential capital expenditures that will be required depending on the fleet disposition as to where they go and that has to do with systems COCs and getting the ancillary equipment that we need in order to enter into different contracts. Yes.

To be more clear, right now, the 2 vessels down in Brazil, we do not have our intervention systems on board. We use intervention systems provided by Petrobras. So to the extent that we go a different direction, then we'll have to make sure that we have our systems on board..

But we're not talking major amounts. It's addition to this year, but it's not huge per system..

No, I think we'll be able to manage more or less at the same levels here going forward. We have no anticipation on any major capital expenditures..

Our next question is from the line of Taylor Zurcher with Tudor, Pickering & Holt..

I just wanted to a follow-up on some of the potential range of outcomes for the 2 Brazil vessels. It sounds like you're definitely starting to bid those vessels into other markets outside of Brazil.

And I was hoping you could just remind us what sort of markets are those vessels ideally 2 to 4? And to the extent they find some work outside of Brazil, where should we expect them to go back to work?.

It's early days yet, and we're not giving up on Petrobras. It's just up until 2019 collaboration was the word we heard often. Right now, they're not talking to us at all and certainly not using the word collaboration.

So we're starting to plan on life without Petrobras if it came to that, but I wouldn't rule out Petrobras stepping up and taking the vessels. I think the they perform well. They've done exceedingly well with them and they have a need going forward.

But beyond that, I've touched on some of it in my color comments, and Scotty mentioned the amount of trenching work that's increasing and we could always do an alternative market. Number one, there's an awful lot of intervention work in West Africa more than we thought.

We have the Australian market that we believe is market capable of supporting a vessel full time. The North Sea, we're awaiting outcome of a significant award that could also absorb a vessel. Beyond that, you get into fallback positions, which maybe 1 of the vessels is used as the additional trenching assets that we're going to be needing.

So instead of picking up 1 in the open market, we use it. And then the ultimate fallback would be accommodation work. So I think there's a number of places where we can find the utilization. It just depends on the rates that will determine the outcome financially..

Okay. That's very helpful. And my follow-up, in Ian's first question, it sounded like you are in discussions around some potential multiyear contracts. I assume that's on the well intervention side. And if I heard that correctly, just curious if you could give us a bit more color.

Is that -- is that going to be around the GOM vessels or Brazil vessels or kind of a mix of anything? Just any more color there would be helpful..

Yes. I'll take that. It's for the Gulf of Mexico and for good clients that we've had over the years. And yes it is multiyear, not full utilization, but good utilization..

Our next question is from the line of James Schumm with Cowen..

I was wondering if you could help me understand the relative earnings contribution within production facilities in 2Q between the HP1, HFRS and Droshky? And then how do you expect this to change in the third quarter with the new Droshky well?.

So Jim, in the second quarter, production facilities, obviously, is driven by HPI and what it's capable of doing on that contract. We had a little bit of benefit from the new HWCG contract that we have in place.

And I think it was next to no benefit and it might have actually been negative as we -- as -- from the production as we did the recompletion in April, and then there was facility maintenance in the months of May and June before the Droshky came back online in July. So obviously, the driver still the HP1.

There was a little bit of a benefit from the HWCG. And, like I said, next to nothing from production..

Thanks Erik.

And then is there any way you could help give us a sense of what Q3 might look like with the production coming online from the new Droshky well and maybe it sounds like you get a little bit more benefit from HWCG?.

I would expect right now that the benefit that we saw in the second quarter on HWCG would go forward into the third quarter. I don't expect it to be a minimal -- an uptick, I guess, in that area, I expect it to be in the same range.

I would expect to see a benefit in production once again, depending on uptime of that facility with the recompletion that we had. And once again, I would expect the benefit from production to be greater than what it was in the first quarter..

Okay. And then maybe just sticking on this. Can you -- the HP1 is contracted through at least June 2023, I believe.

And will that contract be extended? What are the options for that vessel in 2 years' time?.

So yes, you are correct. The vessels under contract through June 1, 2023, that is a vessel that we put into service in I think 2010 associated with the Phoenix field. And then as part of the divestment of the oil and gas, it continues to operate for the owner there processing from the Phoenix field.

I think our expectation is that, that field has a life that's longer than '23. So our current expectation is that, that vessel will be producing from that field for several years to come..

Great. And sorry, if I could just sneak one more. Like what do you think the useful life of the vessel is.

Like how many more years can you get from the HP1?.

It's like my old hammer. I've got 3 new heads, 4 new handles, but it's the same old hammer..

Our next question is from Igor Levi with BTIG..

I know we've talked quite a bit already about Brazil, but I was hoping you could clarify how competitive are the Siem vessels outside of Brazil? I remember they were initially built with the Petrobras contracts in mind.

So in other words, if you stack one of those vessels in the tender against the Q vessels in the Gulf of Mexico or West Africa, how would they perform in a tender?.

I'll handle that one. I think they're equal. They're very similar capable vessels as relatively similar cost base. When we come out of Brazil, our costs will come down, so they'll be somewhat in line.

So if you put the Siem Helix 1 side-by-side to the Q5000, when it's out of Brazil it's going to have a similar cost base, similar capability, be quite an equal position..

Great. That's very helpful. And you mentioned site clearance work through the end of the year. It still seems like some of the larger projects that we've had last year are not repeating. But do you have any kind of outlook, any kind of scope for any projects that you're already in discussions with for next year that are larger.

Basically, is there a point where you see some of those projects coming back? And what's the competitive market and site clearance like compared to a year ago when you were able to win some of those bigger projects?.

First and foremost, it's a very competitive market. It's an increasing market. Next year, we actually believe there will be a lot of them. Because it's all dependent on the timing of the wind farms in the European market. So next year, we'll see a bit of a. This year, we've won our second project, which gives us credibility.

We're in discussions for a third project that would aid for this year. Next year, it would be along, but then we see a huge increase in activity in 2023, but it's a very competitive market. But now we have some credibility behind us.

And we've secured a large project that started last year and has gone into this year, and we've got our second one, got our second UXO project now. So it's a service that we'll keep providing, but it's not huge margins. It's just a different service..

. Our next question is from Samantha Hoh with Evercore ISI..

You mentioned that you're in discussions with multiple clients for multiyear contracts. And that these customers are looking to lock in lower rates for longer. And I was just wondering what the discussion around maybe potentially seeing higher costs during that period.

Are those rates going to be indexed? And then just an update on what you're seeing on the cost side?.

So most of our contracts do carry some sort of cost increase, whether it's index linked or just percentage driven. So we'll obviously -- in those discussions, we'll be trying to enter that.

Over the 3- to 5-year period, the cost will increase and our personnel costs will go up, our R&M costs will go up as the market recovers, and those indexes and potential drivers that we try and keep there should counter against those. Again, like we said earlier, we don't want to lock into too many of these.

We're talking about our favorable clients, clients that we've had a good track record and a good history with, but we're not going to offer this to everybody. It's going to be -- we'll keep it to 3 or 4 clients sites, some good utilization to allow us to deal with the rest of the market as the recovery comes..

Okay. And then just on the trenching, the new trenching piece that you guys might add.

Can you speak to the sort of what the economics are for deciding to add a trencher? Is there like one third-party equipment provider that everyone -- so I mean I was just kind of wondering if there's like a long bill cycle to wait for something like this? And what it entails in terms of -- what sort of return profile you guys are acquiring to actually go ahead and make the decisions out of trenching?.

So I'll go ahead and try to frame it up and then Scotty, if you could fill in. But I think, Samantha, when you look at it, we currently have 4 trenchers. This season, we have a 1 trencher spread working in the North Sea. And I think Owen alluded to that perhaps we might have a second spread working next year.

And so it would just be a matter of deploying one of our existing assets, one of our existing trenchers onto a second vessel and working that spread next year. So I think it's definitely within our, say, existing assets, existing capabilities as far as the opportunities are going forward..

But we would need to pick up a vessel of opportunity to support it..

Yes..

We use one of the SH vessels to support it..

True..

There is some competition in the trenching market, but we do consider ourselves the market leaders. And we have held rates both in jet trenching and hard ground trenching throughout this COVID period.

And like I said earlier, we've had significant and sizable awards for trenching in the renewables and oil and gas market in '22, '23 and have some significant tenders out there where we believe we're the preferred supplier for '24 and onwards..

Okay. Great. Just a couple more, if I can.

Can you quantify how much working capital contributed to your 2Q cash from operations?.

So we did have a significant benefit from working capital here in the second quarter. It was quite -- it was a significant contributor here in the second quarter. I think overall, we talked about -- our expectation for the year are that working capital would be flat for the year, which would imply a potential draw in the second half.

But that's all dependent on, as we said, the workload and expectation for 2022..

Okay.

And if I can squeeze one more, the Fast Response System in the Gulf, is that now going to be sort of like a steady contributor to the segment? Or is that more of a call-out type I guess ?.

So there's two components to the HWCG. There's a retainer-based fee that it covers, I think, a 2-year period where we would expect steady contributions till we expect that there is a call out that would be on top of it..

And did you have the call out last quarter?.

Sorry?.

Was there a call out component that contributed to the 2Q results?.

No..

And Mr. Staffeldt it appears we have no further questions at the time. I'll return the call back to you at this time, sir..

Okay. Thank you. Thanks for joining us today. We very much appreciate your interest and participation and look forward to having you on our third quarter 2021 call in October. Thank you..

And that does conclude the conference call for today. We thank you all for your participation and currently ask that you please disconnect your lines. Have a great day, everyone..