Ladies and gentlemen, thank you for standing by and welcome to the First Quarter 2017 Earnings Conference Call. During the presentation all participants will be in a listen only mode. Afterwards we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded, Monday, April 24, 2017. I would now like to turn the conference over to Erik Staffeldt, Vice President of Finance and Accounting. Please go ahead, sir.

Good morning, everyone, and thanks for joining us today for our conference call on our Q1 2017 earnings release. Participating on this call for Helix today is Owen Kratz, our CEO; Tony Tripodo, our CFO; Alisa Johnson, our General Counsel; and myself. Scotty Sparks, our COO is in the UK this week attending to Helix's business. 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 Investor Relations 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. Before we begin our prepared remarks, Alisa Johnson will make a statement regarding forward-looking information.

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 facts, 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 of and variety of factors, including those set forth in our Slide 2 and in our Annual Report on Form 10-K for the year ended December 31, 2016. Also, during this call, certain non-GAAP financial disclosures may be made. In accordance with SEC rules, the final slides of our presentation materials provide a reconciliation of certain non-GAAP measures to comparable GAAP financial measures. The reconciliation, along with this presentation, the earnings press release, our Annual Report and a replay of this broadcast, are available on our website. Owen?

Well, we'll start off with Slide 5. Typically the first quarter's financial results in any given year are adversely affected by when our seasonal factors affecting the operating conditions in the North Sea. 2017 is no different. However, the first quarter of 2017 showed a substantial improvement in financial results from a year ago. Revenues increased from $91 million to $105 million and EBITDA increased from $1 million to $15 million year-over-year. All the improvement is attributable to higher utilization across our well intervention fleet which offset continuing weakness in the Robotics business. Turning to Slide 6, two important factors contributed to the better year-over-year results for well intervention. First, the Q5000 operated at higher utilization levels for BP whereas the vessel did not commence operations for BP in 2016 until the middle of the second quarter. Second, much better utilization in our North Sea well intervention fleet the Seawell and the Well Enhancer combined for 103 days of utilization in the first quarter which again is typically a quarter for low utilization compared to only 12 days of utilization in the North Sea fleet a year ago. These two factors also continued weak Robotic activity and the earlier planned entrance of the Q4000 into its scheduled drive out in March. The Siem Helix 1 arrived in Brazil in the third quarter of last year and we fully expect it to be in the position to have placed with us in service during Q4 of last year. However, the Petrobras inspection and acceptance process has proved to be more time consuming than we anticipated. As we announced last week, the vessel went on hire in mid-April. We will discuss the impact of the later startup and our assumptions for expected revenues and earnings later on in this call. So right now on to Slide 7, from a balance sheet perspective our cash levels at quarter end in March increased to $538 million from $357 million at year end 2016 with the increase attributable to the common stock offering we executed in early January which netted $220 million of cash to the company. We also paid down $18 million of principle on our debt obligations as scheduled and then used $48 million of cash for capital expenditures a majority of which is attributable to the Brazilian operations. Our net debt declined to $72 million at quarter end compared to $269 million a quarter ago while total liquidity increased to $594 million from $376 million at year end reflection of higher cash balances and increased availability under our revolving credit facility which remains undrawn. I'll now turn the call back over to Erik for an in-depth discussion about operating results.

Thanks Owen and moving on to Slide 9, revenue in the first quarter decreased to $105 million from a $128 million in the fourth quarter. Gross profit margin decreased to negative 1% resulting in a loss of $1 million down from $18 million profit in Q4 primarily driven by lower seasonal utilization and the difficult market conditions that continue to affect Robotics fleet. In the GOM combined we achieved total utilization for well intervention fleet the Q5000 was utilized all quarter with minimal downtime and the Q4000 was fully utilized until commencing the scheduled dry-dock in March. We continue to pursue and see further opportunities contracting on a shared risk mechanism with our alliance partner, OneSubsea and Schlumberger. Schlumberger's services were contracted on the Q4000 throughout the quarter. Moving over to Slide 10 it provides an overview of our well intervention business in the Gulf of Mexico. The Q5000 continues with BP completing work on four subsea interventions ahead of schedule with 97% uptime in the quarter. Q5000 has been with BP for almost a year and in Q1 it will [indiscernible] the quarter for high safety standards and overall reliability. We have agreed with BP to bring forward the 95-day of contract period to June 1, to allow us to schedule some contracted work from the Q4000 on to the Q5000 during this period. The vessel will then return to BP in early September for the remainder of the year. Q4000 had 83% utilization in the quarter working for numerous clients. The vessels performed exceptionally well with complete uptime on all work stream period prior to entering dry-dock. In late March the Q4000 commenced a scheduled dry-dock inspections in Brazil and is expected to return to service in early May and has good backlog for 2017. The IRS #1…

Yes, good morning everyone. Moving over to Slide 19, which provides an updated outlook for 2017. We are adjusting our forecast of 2017 EBITDA range to $105 million to $125 million from the previous range of $120 million to $140 million. This outlook is lower than we previously guided in February almost entirely attributable to the later startup of operations with Siem Helix 1 along with a reduced rate structure we are assuming for this vessel as mentioned in our press release last week. This adjusted outlook has some fundamental key assumptions. We have agreed with Petrobras to commence operations in offshore Brazil at reduced day rates to take into consideration certain conditions which were identify during the vessel acceptance process. We have made certain assumptions in our forecast with respect to both the timing as well as our ability to satisfy all of these conditions. Any significant variations to these assumptions could have a material impact on our outlook either plus or minus. Assumed startup of the Siem Helix 2 for Petrobras in late quarter four is another key assumption. We are making a third key assumption is that the market environment for the North Sea well intervention business is improving and we are off to a good start in this respect. Another key assumption improved utilization for the Q5000 that is fewer system issues than we saw last year and we did have a good first quarter in that respect. And we are also assuming that the Robotics business will remain weak throughout the year. Moving over to slide 20, our backlog is $1.9 billion at the close of quarter one. It is heavily weighted to the BP Q5000 contract, two Petrobras contracts and the production handling contract for the Helix Producer I. Again, as we said we…

Thanks, Tony. The market continues to be challenging, but it feels the period of prices is over. We are starting to see green shoots in the various markets, so at least the beginning of our willingness to one due some of the life of field work has been deferred, it produces stock spending on all fronts and second some of the producers perhaps are deciding to go after low-hanging fruit of production enhancement and finally, I think there are a number of producers starting to realize that during this down cycle perhaps their best opportunity to reduce their abandonment liabilities at a reduced cost. I am not saying that the market is returning to a more normal level of supply demand balance. There is just far too much over supply in the markets. The rebalancing will take years. While we are seeing some re-contracts awarded at better rates, there are still companies willing to price irrationally. It will continue to be a challenge to not only achieve utilization even with the green shoots we're seeing, but it will also be a challenge to realize rational margins. Service providers like Helix will need to demonstrate and tap into the value that our services add in new and creative ways. Apart from color on the market I am sure you are curious in about greater detail on the Brazilian contracts for the SH 1 and 2. The SH 1 is now on contract. The vessel is gone. The vessel had work done to be able to identify by Petrobras during the acceptance process. Some of it was contractual and some of it was not. The work we've completed at the beginning of March. From that time until April 14 was taken by Petrobras for acceptance testing. This was far longer than anticipated.…

Okay. At this time, operator, we will take questions.

[Operator Instructions] Our first question comes from Ian McPherson with Siemens. Please proceed with your question.

Thank you. Good morning. Owen with the Siem Helix 2, have you been able to bring forward the commencement acceptance given the elongated process and the anticipation that this will probably take longer, is your updated expected start time in late Q4 now predicated on a lengthier process and therefore an earlier start date for when you begin these tests or how should we think about the risk to the start time on number two as we go forward?

It’s a good question. We have included a lengthier acceptance process than what we first anticipated with the SH 1, but a shorter process than what the actual was for SH 1, and that’s based on the fact that we have taken all of the comments and request that Petrobras has made on the SH 1 and we’ve modified the work stoke on completion of the SH 2 to incorporate all of those. In addition, Petrobras has asked for us to review and amend the contract for the SH 2 to remove a lot of the ambiguities that resulted in some of the disputes that we had on the SH 1. That combined with the work that's already being addressed that should shorten the acceptance process tremendously for the SH 2. Plus I think our vessel is one of the first to be accepted by Petrobras and I think there was a certain, I don’t know how to phrase it, they were searching for how they were going to apply their acceptance process and contract administration across their whole fleet not just us, and I think they are starting to get a better handle on what their intentions are going forward on how to do that. So, I think, once the SH 2 arrives I think lot of the uncertainty that the SH 1 was victim to will have been addressed by then.

Okay, thanks. I wanted to ask separately if you could update us on the outlook for the Q4000 after its current backlog expires I guess next quarter, how you are thinking about the future backlog for that unit, if you're going to be looking for more term work for if the market opportunity does not provide that, would you think the utilization and pricing dynamics look like going forward as you progress? And then also, if you could update us on the commercialization of the ROAM unit and when you expect that to be contributing financially if that’s in the guidance for EBITDA this year? Thanks.

Let me take the Q4000 first. We do have some expiring contracts with the Q4000 and right now that’s reflecting negatively on our listed backlog. But our contracts are multiyear in nature and they have been renewed many times over the past. Our expectations for the Q4000 is that it’s become a mainstay in the Gulf of Mexico, a lot of clients are using it. I would expect the contracts to be renewed. At what rate? I think that’s a negotiation that probably is too early to guess the rates that they get renew that, but our expectations would be that the contracts within the Q4000 continues to experience high inflation. With respect to the ROAM, correct me if I am wrong, I have been out of the country for a while, but I believe the ROAM should be completed in June, July or August timeframe, but there is no contribution than our current forecast for it in 2017. That would be an upside if that occurred.

Yes that's correct.

Got it, okay. Thank you very much.

Our next question comes from Marshall Adkins with Raymond James. Please proceed with your question.

Good morning guys. Thank you all for the guidance. Just a little, I'm trying to get a little more clarity on the progression that sounds like the Siem 1 is going to be little slow on the up ramp in terms of your guidance. In other words we should think of margins, being lower over Q2, then gradually ramping up, is that the right way to think about it, Tony?

Yes, Marshall, that’s exactly right. I mean these are assumptions we are making. I think Owen went into some detail as to the issues during the acceptance process, and we are just assuming we are going to work off those issues and as we work off those issues the day rate will gradually increase over time. So that is the way we are looking at it and we are making certain assumptions in that regard and those assumptions are baked into our guidance.

And are the costs going to be the same the entire time, I would guess so?

Yes, that’s correct.

Okay. Second question on the guidance, Robotics was obviously weak this quarter, a lot of seasonality there. It seems like you have confidence in it recovering through the year, at least getting better than it was Q1, what gives you that confidence?

You know, I think work that is secured or work that we expect to get. But Marshall that’s pretty difficult, I mean you typically see our Robotics business peak in quarters two and three and have a very weak first quarter and somewhat weaker fourth quarter than the spring and summer months. So, a lot of that is historic trends and we don’t expect that to be any different this year.

Right, so just typical seasonality, I just wanted to make sure.

It was seasonality, right.

All right, last question for Owen, Owen you talked about the big picture, the competitive landscape, give me some flavor for how sensitive your customers are to oil price, I mean if we see a $5 to $10 bump in oil prices, do you expect a change in behavior or is it just much more long-term deliberate type stuff?

Well, that’s really hard to say Marshall, and I think it varies client to client. Each of them have their own balance sheet issues. I think right now, the balance sheets are not as, I think they have done a lot and seeing some stability in the balance sheet at the current pricing. I think what’s driving the - what the green shoots that I spoke about, what’s driving that more than an improved commodity price is just how long they have gone without doing the work on the wells and they are now been forced to get some of the work done.

Okay, it’s helpful. Thanks guys.

Our next question comes from Gregory Lewis with Credit Suisse. Please proceed with your question.

Yes, thank you, thank you and good morning. I would like to dig in a little bit into what’s going on in the North Sea, I mean clearly it looks like the market picked up a little bit earlier in the year in February than may be we’ve seen in the last couple of years. Just as we think about that progression into Q2, Q3 it was typically a little bit stronger. I mean is there any way to sort of quantify how we should be thinking about any progression in margins, or is this really just about utilization at this point?

I think you are looking at utilization being the biggest driver of some margins in the North Sea and I would say, Greg we expect the second and third quarters to be stronger than the first quarter. You know we talked about 102 days of utilization in the first quarter between the two vessels and we expect that to pick up quite a bit in quarters two and three. We are not 100% booked, but we are fairly solidly booked in quarters two and three for the North Sea business. So, you know we are happy with the improvement and activity. I think some of this is a deferred spending because last year was so bad and operators there just didn’t spend any money and now they have to and we are the beneficiary of that. So, yes, we expect quarters two and three to be even better than quarter one and much better to say that.

Okay, and then just on, I guess you announced the partnership with Harvey Gulf, just you know there has been some movement forward I guess in enforcement of the Jones Act, again I guess it seems like, I guess it started picking up about a year ago or may be last summer. As we think about vessels like the Grand Canyon II which are foreign flag but have been in the Gulf of Mexico for quite some time, should we be thinking about the outlook for that vessel changing, does that vessel, and not that vessel specifically, but sort of non-US Jones Act vessels is it reasonable to think that these vessels will be in the Jones Act trading in the Gulf of - US Gulf of Mexico in the next two to three years or is – are we are going to see sort of, I don’t know how you want to put it evolution or clean out of sort of non-U.S. flag Jones Act vessels in the GOM, curious how you guys are thinking about that?

The outcome of this particular round of the Jones Act debate, I don't - I think it's too early to predict what the outcome is going to be. The Jones this comes up almost regularly in our industry, usually every downturn there's a big push to apply the Jones Act. It never comes to fruition. Historically the time who knows. For our company we have, we rarely have more than one vessel exposed to the Gulf of Mexico market at any one time. Our vessel utilization is more predicated on the strength of the overseas trenching market and that'll be where our focus is going forward. The deal with Harvey Gulf is to have a solution available to the producers. What's going on right now is there's been no definitive resolution of the debate over Jones Act. You do have some producers that are ahead of the curve and wanting a Johns Act vessel and therefore we have the ability to provide one. Other than that right now the Grand Canyon II still is operating in the Gulf of Mexico. There's nothing in the Jones Act that were presented right now and then the focus on the future would be if the Jones Act came into the most onerous interpretation and of enforcement then of course this would be on the overseas trenching market.

Okay, all right hey gentlemen, thank you very much for the time.

Sure, Greg.

Our next question comes from Chase Mulvehill with Wolfe Research. Please proceed with your question.

Hey, good morning fellows. I guess, I wanted to talk about the Siem Helix 1 and I guess maybe could you provide a little bit additional color on exactly what the issues are around the contract specifications and I guess maybe what also, how long do you assume that you work at a reduced day rate in guidance?

The contract issues, some of the issues are contractual and some are not. Basically Petrobras put eighteen inspectors on board and started making comments as to what they'd like to see on the vessel. Some of them were contractual non-compliances, some of them were disputed interpretation of contractual clauses, some are completely out with of the contract and just being requested. But whatever the reason for them to want the changes to the vessel, compliance was everything. So, we took the vessel and put it into the shipyard and we've just been doing all of the, all of the work that they wanted everything they wanted to see. In order - because the vessel was scheduled to go to work and had some wells in the backlog some of the work was not completed, some of the items for those items the typical way that Petrobras works with all vessels is they assess a penalty for these items. Once you clear the items then the penalty goes away. Right now like I said in my color comments right now we have a number of outstanding items we expect to be able to knock most of those or majority of those out in the next couple of months and then within three or four months we should be able to have most if not all of them done.

Okay and in your guidance when do you actually have the Siem Helix 1 go back to full day rate?

I think in our guidance we've baked in a lot of assumptions and we'd rather not be too granular on that. Now we again, we've baked in a steady ramp up, but we want to leave ourselves a little bit of leeway here as to whether we ever had on full.

I can give a little more color on that, because we were so surprised by the atypical acceptance process that we went through, we were uncertain at this time as to what Petrobras’s intentions are going forward because with regards to administration of the contract now that we're on that. So we've been – we baked some of that uncertainty into our guidance and can't get granular until we see what Petrobras' behaviour is going to be.

Okay. Tony how much of that $15 million guide down was attributed to the Siem Helix 1, is everything just kind of related to the Siem Helix 1 or was there anything else that contributed to the $15 million guide down?

Almost all of that is attributable to Siem Helix 1.

Okay.

That is three of it.

Okay. And I guess just moving onto the North Sea, the North Sea sounds like it's going to be better this year. Could you actually frame kind of day rates as we think about the North Sea for 2017 versus kind of 2016?

I think they are flat to marginally improved. I think it's indicative of the fact that in the North Sea, we don’t necessarily compete against drill rates. Therefore our rates have remained strongly there than perhaps in the Gulf of Mexico where we have been under pressure from some real rigs, pricing irrationally.

Okay. Last one and then I will jump back in. Credit facility any updates there, I know it becomes current this summer, so anything to report here?

Nothing really to report other than obviously it is our focus here for the near-term to get to that.

Okay, awesome. Thanks everyone.

Our next question comes from Vebs Vaishnav with Cowen. Please proceed with your question.

Hey good morning and thank you for taking my question. Just following up on Chase's or one of the questions he asked, it sounds like the entire $15 million of EBITDA decline in guidance was driven by Siem 1. Can you frame for us how much was that due to a delayed start versus lower day rate structure that we expect going forward?

Yes I think the guide down that we did there is a portion addressed to the push back of the late start of the Siem Helix 2 from mid-Q4 to late Q4. So there is a piece there. There is also a piece associated with obviously the slip and the start up of the Siem Helix 1, we had originally scheduled it for Q1, it did not start until mid-April. So there is a month delay in to that. So those are two items. Then the third would really be the assumptions that we've built in as for day rates going forward and downtime assumptions and so on of the Siem Helix 1. So it's really those you could say three buckets that may call the guide down. Q - Vaibhav Vaishnav So let's say if we were to think about and because of delayed versus what we expect going forward in our model is it like 50:50 each contributing to that $15 million decline?

I'd say it's a little bit more related to rates versus slower start-up.

Got it. Okay, that is helpful. And as we think about the SH 2, can you help us think about how much of SH 2 is embedded into guidance in terms of maybe revenues or EBITDA or however you want to frame it?

Yes like I said we moved it off to late Q4, so it's really I would say marginal to the fourth quarter from that perspective, not regarding to specifics for that but it is really just like Q4 for both revenues and EBITDA perspective.

Got it, okay. Switching to Robotics like first quarter revenues obviously seasonally down only around $20 million and to get to 160 assuming seasonality, we have to almost assume revenues almost kind of double from here on into 2Q, 3Q and then maybe slide down a little bit because of seasonality in 4Q? Anything I'm missing in broadly thinking about the revenue trend?

Well I think it's - Robotics is going to follow its natural revenue trends during the year where again quarters two and three will be the best quarters and substantially better than quarter one. And then you'll see a little bit of decline in Q4 again. But yes, you're going to – we should and our expectations are that Robotics will have a much stronger quarter two and three.

Okay. And just if I think about the Robotics year-over-year and think about in 2016 the operating margins or operating profit was roughly call it $25 million loss, is there - how much visibility or backlog you have in that business or can we – how should we think about how that $25 million EBIT moves in 2017, is there a reason why it shouldn’t move materially different than what we saw in 2016?

In terms of operating margins, we're expecting slightly lower this year than last year.

All right, that's all from me. Thank you for taking my questions.

Our next question comes from Joe Gibney with Capital One. Please proceed with your question.

Thanks. Good morning. Just a couple of quick questions from me. On the Q5, I was curious on the nature of the work that shifted over from the Q4, is this well intervention related in the Gulf of Mexico or is it P&A and is it reasonable to assume you've got a little bit of downtime say in August before you ramp back up with BP, I'm just curious there?

Yes it was the switch from the Q4 to the Q5000, I believe it is well intervention work that shifted there and then you have the period now that were off-hire for BP go from June 1, I think we would start ramping up in early September back with BP.

Okay. And then last one from me and again sorry to beat the dead horse here, I'm just trying to get some clarification on Siem 1. So related to the lower contractual rate and how all is going to extend, I'm just trying to understand the genesis of this, is this operational issues that you guys encountered on your test well, is this or is this really just more of what you characterized as the broader inspection process of them wanting to see some things may be weren’t in the initial contract scope, some other reasons that initially created some of the incremental CapEx, is it contractual non-compliance and timing issues usually come up, I'm just trying to understand if there's a little bit of both buckets there or whether operational issues you guys encountered on the test well or just not wanting to kind of open the [indiscernible] yet until we can move forward a little bit?

No Joe, I don't think, there were very few if any operational issues. This was almost entirely their reading of the contract versus our reading of the contract and what was due to be delivered. And like I said some of the things that Petrobras wanted actually fell outside of the contract entirely. Now we had the vessel ready to work at the beginning of March, the early March and they a lot of the delay was just the extent of their slow operational process through the dummy well testing give you a little color it was supposed to be scheduled for 10 days and it ramped for over 30. There will be a time in the future where we sit down and we will have the discussion with Petrobras about everything that's happened. But right now the focus is getting on contract and getting the work done.

Okay, fair enough. I appreciate it. I'll turn it back.

Our next question comes from Igor Levi with Morgan Stanley. Please proceed with your question.

Good morning.

Good morning.

You mentioned that there are many different factors that go into your guidance, so I was hoping you could touch on the biggest factors that define the low end and the high end of the range?

Igor, I think the biggest assumption is what day rate will apply to Siem Helix 1 and at what pace do we – are we able to improve that day rate over time. I think those are the two biggest factors that are baked in to have developed our guidance and then from there the low end to high end. I mean, look the start-up of Siem Helix 1 is now behind us, so that's sort of set. And now we've, as Erik mentioned we've adjusted the start up of Siem Helix 2 until very late in Q4, so I think the biggest variable plus or minus going forward is the application of day rate we experienced during operations of Siem Helix 1.

So would it be fair to assume that at the low end of the guidance the vessel continues to work throughout the year but at the lower day rate it may be at the high end within that three-month period or so you guys are able to resolve the issue?

Yes more or less, I mean yes more or less. I mean there are a lot of factors we develop to get to the plus and minus and only time will tell.

Okay great and then shifting focus to ROVs I remember you've previously talked about a significant pickup in tendering for trenching work maybe doubling in 2017 and then doubling again potentially in 2018. So I was wondering if there's any change in that outlook and to what extent could that still help offset the weakness in the traditional oil and gas business?

The doubling remark there I think were based on the number of the bidding activity that we were able to see that was based on our visibility of the market. How much of a market share we capture is well it is determined on a year-by-year basis, but 2017 definitely we are expecting a pickup and increase in the trenching market throughout the year and we are expecting a further increase in 2018.

Great, thank you, I'll turn it back.

Our next question comes from Martin Malloy with Johnson Rice. Please proceed with your question.

Good morning.

Good morning.

I had a question about the proposed changes to the Jones Act enforcement and would there be any impact potentially on your well intervention assets and then if, you could comment broadly if this does come to fruition, what does this do for development in the Gulf of Mexico and the Deepwater?

Right now there's no implications on drill rigs with what's going on, on the Jones Act that’s not to say in principle I mean every time they expanded theoretically applied to a greater and greater asset base. Right now it does not impact the drilling please d right now it doesn't, it does not in fact the drilling fleet that would be disastrous for the Gulf of Mexico that were to occur. And I should point out that the Q4000 is Jones Act compliant. So for the clients that do prefer to use the Jones Act compliant vessel for whatever scope of work they have we do have one.

Thank you.

Our next question comes from Bill Dezellem with Tieton Capital Management. Please proceed with your question.

Thank you. I have two questions first of all relative to the Robotics business is there anything that can be done to further reduce the costs of that segment, if the revenues were to stay flat and then secondarily I'm hoping that you'll go into more detail on your relationship with Harvey?

Yes, I think over time one of the things we expect to happen as the existing charters start to expire as we expect current market rates for our charter vessels to be much lower combined with the fact that when the chart put in place, we entered into a series of hedging contracts to fix the current charter rates and those roll off to over time so, we're expecting to see a very meaningful reduction, is that the way to believe that?

Yes, that is the question I’m just trying to understand more detail about that relationship and what you expect for that going forward?

Okay Bill as we said in this could be a part of the Call it is really a no work, no paid arrangement with them to beneficial both to, to us and then from our standpoint we wanted to offer our client that desire potentially Jones Act compliant vessels that option I think we did have a little bit of work in Q1 and I think will started up with a little bit of work in Q2 but at something that we've done to, to offer our clients options.

Great, thank you, both.

We have a follow up question from Chase Mulvehill with Wolfe Research. Please proceed with your question.

Hey thanks for letting me back here and I'm going to, go at this one, one more time. Again, a lot of questions so, maybe you could just provide a little bit more color and maybe just kind of your confidence around this Siem 1 team when returning to full day rate, over the next quarter or two.

Right now we have a list of the work that Petrobras wants to see done. Our schedule shows those works half of them being done in the next 60 days and the remainder of them over the next 120, 160 days.

Okay and do you see a risk that there's a permanent, lower day rate for both to Siem 1 returning to full and Siem 2 or these things that you foresee being able to work through you highly confident you'll be able to work through these over the next two or three quarters.

I think we're highly confident they will be able to work over these penalties over the next, over the next couple of quarters. We're not highly confident that we've seen the last of the uncertain reactions from Petrobras on the administration of the contract and that's what led us to lower our guidance was to try and allow for any further uncertainties. It's really difficult with Petrobras to figure out what's going to happen.

Yes, let me add some perspective on this. I think our original thinking on these two vessel contracts as well as our guidance for these two vessels never assume we'd be at full day rates 100% in the time. So we never assume that, we'd always assume we'd be operating at less than full rates and have some downtime associated with the administration at contract. So I think it's important to state that our economic assumptions upfront when we entered into the contract as well as our guidance all along I assume that that is going to be a certain amount of hair cutting that takes place just based on the way business is conducted down there, so I think it's important to point out. Now I think based on what we experienced here last few months where we think it may be a slower uptake to that but I think it's important to point out that perspective.

A little more color, Petrobras has made the comments that are, they are being called on by a lot of the great companies that are rolling off contracts and they're being offered ridiculously low rates. So there is a certain amount of desire on Petrobras' part to try and lower their rate, but I will note that at no time during this whole process did Petrobras ever give the indications that they did not want these vessels. Certainly they'd like to work the day rate down and that's normal contractor-client process that is ongoing, it's a little more severe in these times. But again, they've never indicated that they did not want these vessels. The biggest impediment or the biggest cause of some of the issues that we've got right now are the overzealous or over-prudent or however you want to categorize it, the focus on absolute compliance with every letter of the contract and especially with new vessels, they come out of the shipyard, there is always a punch list to be done and the contract, these contracts were written at a time before all of this happened in Brazil. So there is – there is just an intense scrutiny on absolute compliance with the letter of the contract and it's just painful and it's taking time, but we're working through it.

Okay. At the rate that you're working at today are you generating cash margins?

Yes, we are.

Okay. And are you currently in discussions with Siem about a reduced charter rate?

We're in discussions with Siem about a lot of things, some of the work stokes in our [indiscernible] requesting has to do with the vessel which is the Siem issue and we're always talking with them about the cost and the rates.

Okay, that is all I had. Thanks Owen.

We have no further phone questions at this time.

Okay. Thanks for joining us today. We very much appreciate your interest and participation and look forward to having you on our second quarter 2017 call in July. Thank you.