Owen E. Kratz, Helix Energy Solutions Group, Inc. - President, CEO & Director [4]

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Thanks. Good morning. I hope everyone out there and their families are doing well and staying safe. This morning, we'll review our Q1 performance, our operations in this challenging environment and provide our near-term outlook.

Moving to presentation Slides 5 through 8, which provide a high-level summary of our results, the first quarter historically has been a financially weaker quarter for us with the seasonal slowdown of activity in the North Sea. In an effort to maximize our earnings for this year, we made the decision to front-load Q1 with 5-vessel dry dock recertification projects, negatively impacting our results with a minimum of 73 days of lost availability.

In addition, we commenced operations on the Q7000 in West Africa, a new vessel operating in a new region. Revenues in Q1 were reported at $181 million with a net loss of $12 million and EBITDA of $19 million. The increase in revenues from Q4 was driven by the addition of the Q7000 to our fleet working in West Africa partially offset by reduced revenues and utilization in the Well Intervention, Gulf of Mexico and U.K. regions. The addition of the Q7000 on an integrated project increased our cost basis. Combined with lower revenues in the U.K. and Gulf of Mexico, this reduced our gross profit to $2 million. We had several discrete items that impacted our results, including a $6.7 million charge for goodwill write-off and a $14.1 million tax benefit related to the CARES Act and other tax restructuring efforts. Our results in the first quarter were better than anticipated. The start-up operations on the Q7000 were outstanding with a little downtime on the vessel and the execution of our business units was exceptional.

Robotics and production facilities continue to deliver. However, this has been a complete -- this has been completely overshadowed by recent market events. The impact of COVID-19 on the oil market is unprecedented. While the impact has been relatively minimal to our first quarter results, the impact of COVID-19 that it will have on the remainder of 2020 and beyond will be significant. The instability and unpredictability of our current market resulted in us withdrawing our guidance for 2020. While we're not yet in a position to provide guidance at this point, with this call and associated presentation, we will layout the key data points as we see them that are currently influencing our business.

On to Slide 8. Returning to our presentation. From a balance sheet perspective, our cash balance at the end of the quarter was $159 million with an additional $52 million in restricted cash associated with the short-term LC. As expected, our cash flows were negatively impacted by the heavy load of vessel recertification costs during the quarter.

Our net debt at the end of the quarter increased to $183 million.

I'll now turn the call over to Scotty for an in-depth discussion of our operating results.

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Scott Andrew Sparks, Helix Energy Solutions Group, Inc. - Executive VP & COO [5]

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Thanks, Owen. And good morning, everyone.

Moving on to Slide 10. These are certainly different and challenging times. However, we have risen to the occasion, and the first quarter was better-than-expected in the periods considering the effects of the virus globally was slow with the seasonal period, and we completed planned regulatory certification and other maintenance on 5 of our 7 of our Well Intervention vessels. The virus has caused numerous logistical challenges. However, we have managed to keep the fleet active, currently working in 6 countries on 4 continents and currently operational on 12 vessels. 5 Well Intervention vessels, 6 ROV support vessels and the HP1 with strong operational performance regarding safety and uptime.

In February, in swift response to the virus, we introduced strict measures and set protocols on all our vessels. Our offshore crews alliance partners and suppliers have been fantastic and rose to the challenge.

Offshore personnel self-isolate for 14 days, complete health documents before travel and are screened prior to joining the vessels. In the U.K., the U.S. and Brazil, we have recently been able to test personnel for the virus prior to allowing access to the vessels, although test kits can still be hard to come by.

Once onboard the vessel, life is now somewhat different than before, common areas such as gyms, lounges and cinemas are currently closed. Face covering are always worn when not in cabins. Social spacing and PPEs are adhered to. Mealtimes are restricted in number attending and should allow social distancing and no buffet services are available.

Our teams have undertaken to extend the length of shift patterns to reduce travel. And if at any time, any person shows any symptoms related to the virus, they are immediately quarantined and removed from the vessel. We also have deep cleaning crews on the vessels, continuously cleansing work and accommodation areas.

Move to Slide 11. In the first quarter, we achieved revenues of $181 million, resulting in gross profit of 1%, resulting in a profit of $2 million. Considering the effects of the virus, the seasonal winter period and our planned regulatory maintenance period, we attained good levels of utilization. The one intervention fleet achieved utilization of 72% globally and the Robotics chartered fleet achieved utilization of 89% globally.

In the Gulf of Mexico, the Q5000 completed its scheduled 5-year inspection and the Q4000 completed its scheduled annual inspection. Both vessels worked with 2 clients on numerous wells.

The North Sea business had 5 vessels complete, expected seasonal warm stack and scheduled maintenance experience and worked for customers on 4 wells.

The Q7000 had a very successful project in Nigeria, performing well with very little downtime and completing work on 5 wells for the clients, highlighting an exceptional start-up for new vessel in Subsea system. The vessel is now in transit to a warm layup period. Performance in Brazil was usually strong again. Both vessels performed very well, achieving high utilization of 99% with excellent uptime.

Robotics chartered fleet was very active working between ROV support and renewable works, completing 405 days of utilization across 8 vessels with 4 of the vessels working outside the oil and gas market. Again, we are really proud of our Helix teams and partners. Our offshore teams are following our requirements and kept the fleet performing and our onshore staff has done a great job working remotely supporting all of our businesses. We are still very active globally. However, this is a challenging time and we have commenced cost reduction programs. And as the market evolves, we will right size to it accordingly.

Slide 12 provides a detailed review of our operations for our Well Intervention business in the Gulf of Mexico. Q5000 had 51% utilization after completing its scheduled 5-year inspection program and then performed 2 further ultra-deepwater intervention works with 2 clients, working on a well enhancement project for one client and performing an abandonment work for another client.

The Helix/Schlumberger jointly owned 15K IRS system is currently mobilized to the Q5000 and we now commenced work for BP and contracted for the remainder of the year. The Q5000 now has a fully integrated Schlumberger spread on the vessel and we look to continue working closely with Schlumberger piloting initiatives to multi-skilling our staff to reduce headcount and ultimately, cost.

The Q4000 performed well with 68% utilization in ultra-deepwater, completing a multi-well program for one client and then completed its planned regulatory inspections. The vessel then went straight back to work undertaking production enhancement work on 2 wells.

Moving to Slide 13. Our North Sea Well Intervention business performed well, coming out of the seasonal warm stack and maintenance periods working in the harsher winter conditions on both vessels. The Well Enhancer achieved 63% utilization, working for one client on one well, completing scheduled maintenance during its seasonal stack period. The vessel then recommenced work in it for a major client.

The Seawell achieved 34% utilization, performing scheduled maintenance during the seasonal warm stack period, commencing a multi-well abandonment work for 2 clients.

The Q7000 mobilized with Schlumberger services equipments arrived in Nigeria in early January and after clearing customs and completing regulatory inspections and final climate testing, the vessel went on hire January 23 and completed production enhancement work on 4 wells in the quarter. The vessel completed the project totaling 5 wells in mid-April and is currently in transit to a warm layup berth.

Moving to Slide 14. In Brazil, our operations for Petrobras continued to go extremely well and again, producing another quarter of operational excellence with continued strong performance regarding safety, uptime and efficiently -- efficiency. We're currently ranked the #1 rig contractor for Petrobras.

In the first quarter, the Siem Helix 1 achieved 98% utilization working on 4 wells, one well being production enhancement works and working on free wells performing abandonment.

The Siem Helix 2 achieved 99% utilization working on 4 wells, performing production enhancement scopes on 2 wells and abandonment works on 2 wells. The vessel also completed scheduled shipyard maintenance during the quarter.

Moving on to Slide 15 for our Robotics review. Robotics continues to go on and is looking to have a solid year. We have continued to diversify our Robotics business internationally with numerous works that are not oil and gas related. In the first quarter, the vessel charter fleet utilization was 89%, including 272 days from spot vessels. 3 vessels were utilized mostly renewable energy projects in the North Sea. The Grand Canyon II and the MV Pride worked in the APAC region and the Ross Candies operated in the Gulf of Mexico. In the APAC region, the Grand Canyon II had a 100% utilization, performing works on ROV support projects, the MV Pride is currently working in Australia undertaking an interest in 70- to 80-day salvage project. The Ross Candies had 53 days utilization work in ROV support for 3 clients in the Gulf of Mexico.

In the North Sea, the Grand Canyon III had 46% utilization, working 42 days in renewable trenching. We also continued work from 2 smaller spot chartered vessels, the GloMar WAVE and the Kristiansand throughout the quarter working on the long-term windfarm site clearance and survey projects.

It's exciting to share how we're expanding our renewable service offering globally and contract another service other than just trenching. We've now also been awarded our first renewable trenching project in the U.S.A., mobilizing the T1200 trenching unit to the client provided vessel this week in the U.K. to transit to the U.S. East Coast. We've also just signed a contract adding significant trenching backlog, adding further work in 2022 and 2023 in Europe.

Over to Slide 16. I'll leave this slide detail on the vessels ROV and trenching utilization for your reference.

I'll now turn over the call to Erik for a discussion on our balance sheet and our 2020 outlook.

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Erik Staffeldt, Helix Energy Solutions Group, Inc. - Executive VP & CFO [6]

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Thanks, Scotty. Slide 18 outlines our debt instruments and their principal maturity profile. During the first quarter, we extended the maturity of our Q5000 loan until January of 2021. The extension was completed to align with debt maturity with our expected cash flow generation in the second half of 2020.

Moving to Slide 19. This slide provides an update on key balance sheet metrics, including long-term debt and net debt levels as of the first quarter. Our net debt in Q1 increased to $183 million from $143 million in Q4. The increase in net debt during Q1 was driven by the incurred recertification cost of our fleet, approximately $18 million, and capital expenditures during the quarter, approximately $12 million. We reduced our long-term debt by $13 million. Our cash position at the end of Q1 was $159 million, excluding $52 million of restricted cash. Our quarter end net-debt-to-book capitalization was 10%.

Moving to Slide 21 for our discussion on our 2020 outlook. Our industry, our market is an unprecedented territory. In late March, we withdrew our guidance for 2020 with a clear expectation of being cash flow positive in 2020. The lack of stability that led to that decision to withdraw guidance remains today, even to a greater extent. Our expectations have not changed, although we will not provide guidance today as we had hoped. Therefore, we are focusing on providing the details of our business as we know them today that serve as our foundation to our current expectations. Our contracting backlog for the balance of 2020 is approximately $400 million, although subject to change, we expect the majority, if not all of this contractor work to be completed in 2020.

Providing more color by segment and region. First with our Well Intervention segment. The U.K. North Sea, we expect this region to be a one-vessel region for the balance of 2020. The Well Enhancer has contracted work into Q3 with spot opportunities. The Seawell completed contract work in Q2 and will be stacked until work resumes, with discussions providing upside ongoing.

The Q7000 successfully completed its first campaign in West Africa. The work has been -- the add-on work has been suspended, and the vessel will be warm stacked until work resumes, whether in West Africa or another region.

In the Gulf of Mexico, the Q5000 commenced operations for BP and is expected to remain on hire for the balance of 2020. Q4000 has contracted work into Q3 with the likely challenging spot market thereafter. In Brazil, the Siem Helix 1 and Siem Helix 2 are on hire for the balance of 2020.

Moving to our Robotics segment on Slide 22. Robotics has thus far been more resilient in this market than Well Intervention. Work in the renewables windfarm sector continues mostly undeterred by current events. Project awards have continued during this time providing much-needed signs of continued work. Robotics is certainly expected to be impacted by the slowdown in oil and gas work, but the continued reductions in cost and the activity levels in the renewables market are mitigating a significant portion of the impact to date. The Grand Canyon II is on contract through April and is expected to have good utilization in the remainder of 2020. The Grand Canyon III is currently working with contracted trenching operations made through September. Ross Candies is expected to have good utilization through charter expiration in early Q3. Our windfarm survey and site clearance project using 2 VOOs is expected to continue into Q4.

Moving to production facilities, the HP1 is on contract the balance -- for the balance of 2020 with no expected change. As we have previously stated, we will aggressively move to reduce our cost commensurate with the levels of work activity by assets and overheads.

Continuing to Slide 23, we have lowered our CapEx forecast to approximately $38 million for the year, comprising primarily of the recertification cost of our vessels, the majority of which has already been spent in Q1. Reviewing our balance sheet, our funded debt is expected to decrease by $33 million in the remainder of 2020 as a result of scheduled principal payments. With the recent completion of the Q7000 campaign, we expect our restricted cash to be released in the near future. We also anticipate tax refunds in the amount of $16 million in the next 18 months as a result of the tax changes from the CARES Act.

I'll skip Slide 25 and leave it for your reference.

At this time, I'll turn the call back to Owen for closing comments.

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Owen E. Kratz, Helix Energy Solutions Group, Inc. - President, CEO & Director [7]

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Thanks, Erik. Well, first, I'd like to applaud and thank all Helix personnel that may be listening in. As the virus continued to spread globally, our initial focus was on safely maintaining operability. We established protocols and evolved to utilization of testing to keep 13 vessels in 6 countries on 4 continents operable. We've avoided infections on most of our vessels and have caught and contained outbreaks on 2 vessels without a loss of any meaningful productive time. Our operations team has done an outstanding job, our offshore personnel have demonstrated a flexibility, patience and resolve to keep operations up. Our office personnel have adopted to be very efficient working from home and our IT department has enabled us to make what seems to be a seamless transition. So my thanks to everyone involved.

We have previously -- we have purposely planned greater than historic levels of maintenance periods on our vessels during this past quarter. So from the outset, our expectations were for a slow quarter. In spite of this and everything that transpired in such a short period, our people have produced a quarter that exceeded our expectations. Having said that, I realize that there are 3 issues that investors are primarily interested in: outlook, cash flow and debt. Our fireside chat a few weeks ago, we said that we expected to be free cash flow positive in 2020 and 2021 and that we would give more detail at our earnings call. Given the changing environment, we continue to speak with our clients, continue reviewing our contract provisions and continued stress testing of our financial models, all of which have reinforced our previous assumptions. And let me just say, we are not really focused on trying to zero in exactly on what we think our guidance could be this year. Our focus has really been on running various sensitivities of worst cases to assess our needs and not what our future looks like. So that's another reason why the guidance is not out right now as we're really focused on the downside. We continue to believe that we'll be free cash flow positive for 2020 and 2021. At the beginning of this week, we thought we would be in a position to announce that guidance for 2020 based on primarily our contracted backlog with minimal additions from anything from the spot market. While we considered that max storage might be reached, that did actually start to occur and we're starting to see the results of what that like -- might look like this last Monday. So as everyone knows, landscape continues to evolve all the time and what no one knows is what will happen now. We can share some of the broader assumptions that we were and are considering in our modeling. Under outlook we were considering that max storage would be filled in the near term. We considered that the impact from the COVID-19 on shutdowns and therefore, demand could extend through the end of 2020. Reopening efforts might produce a sharp, but relatively modest uptick in demand on initiation, but would be hampered by a virus infection rate induced start-stop cycles, lagging consumer confidence and capacity to spend. This would especially be true if the deep recession occurs. Thereafter, we think demand might build at a slow rate until an effective therapeutic or vaccine is available. Shut-ins could be forced -- they will be forced on the industry. These shut-ins might not be uniform, but may disproportionately impact shale, small independent producers without a downstream refining capacity. As demand rises, shut-ins could be restored, but with a loss of capacity due to bankruptcies, access to capital, lack of capital spending, reservoir damage and decline. Structural damage to supply should not be underestimated, limiting the ability to restore supply to previous pre-crisis levels. Offsetting this, though, is that demand may also not recover the pre-crisis levels. Shut-in production will compete with stored oil, depressing oil prices until demand exceeds production and storage is reduced to a rational level. Oil prices gradually increase, but perhaps not to a level that promotes new development. This process could take place over 12 to 18 months and likely only begins with reopening in earnest.

Our best guess would be early 2022 with producers starting to spend ahead of this in anticipation. We would expect offshore, especially in regions with ready access to markets or having an oil quality and high demand would be less affected. In fact, some of our clients are giving signals that they intend to proceed with intervention work as usual, but we'll have to see how that unfolds. As far as free cash flow is concerned, using these conditions, which are not -- again, this is our sensitivity testing. Using these conditions, we've stress-tested the models. We've looked at each region as the impact will not be completely uniform. Our conclusion is that we need to be prepared for a sharp decline in work volume in the second half of 2020 that continues through most of 2021. Our work is like the fieldwork falling under the producer's OpEx budgets. Most of our work involves keeping the well flowing and remediation. While reduced commerciality may advance the timing of required P&A work, we believe that much of this might be allowed to be deferred. Some operators may seek to take advantage of low-cost or abandon. But at this point, we don't see a tremendous boom in abandonment work occurring.

We've had several projects planned for the second half of 2020 deferred into 2021, and we're receiving requests for rate discounts, but we've had very little in the way of contract terminations. Our rates never fully recovered from the downturn in 2016. So this time around, there's less margin for EBITDA destruction from discounting, but we have taken it into consideration. We've spoken with our major long-term contract holders, and so far, we believe they're secure.

We were hoping to issue revised guidance today. However, the industry entering territory that's never been seen before. And instead of running the risk of providing more precise but inaccurate guidance, we'll continue to observe the market and our clients' reactions and assess the validity of our assumptions. Applying what's been outlined here, and barring further degradation to our outlook, we still believe we should be able to manage through a 2020 EBITDA result that is free cash flow positive. We also believe that 2021 will likely be our trough year, but we should nevertheless be able to manage and be able to remain free cash flow positive through 2021.

With regard to our debt, we have $423 million of funded debt obligations. We plan to pay down $33 million during the last 3 quarters in 2020 and have another $91 million in 2021. We anticipate being able to maintain a strong cash position on the balance sheet at year-end 2020 and 2021. With an outlook of remaining free cash flow positive through this period, we should be able to meet our debt obligations out of cash on hand and cash flows. We're not completely dependent on refinancing or rolling of debt. This does not mean that we'll simply sit back and wait, though. We are and we'll be seeking possible solutions for restructuring of our debt that provides investors with confidence in our ability to meet our obligations.

Our strategy remains the same as it has been, which is to use our cash and cash flows to reduce debt. We no longer have significant CapEx obligations as we did going into the last downturn. We were anticipating the time when we would be strongly free cash flow positive and could return value to shareholders. That's still our ultimate goal, but we're going to have to be patient for a while, probably a few years out as our previous goal of getting to net debt zero is now more like debt-free. There's no way to sugarcoat what's happening, so I've tried only to be as realistic as possible. However, there is a silver lining. I expect emerging on the other side of this will be a much leaner oilfield service market with diminished capacity for supply. Services should be in high demand and rate and utilization recovery may well be faster than what we've been seeing.

Helix would be in a good position to be a significant beneficiary of this. We may, in fact, be further along in realization of our earnings potential at that time than we would have been under the circumstances over the past couple of years continuing. As we've had to deal with supply overhang in the OFS sector.

Bottom line is that we expect that we'll be able to manage this environment in a way that generates free cash flow based on our contracted work with minimal reliance on the spot market. And we have a plan to address our debt maturities in a way that doesn't rely on major market recovery or other aspirational factors. We believe we're in a position to weather this latest storm and are committed to do whatever it takes to emerge on the other side.

So with that, I'll turn it back to Erik.

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Erik Staffeldt, Helix Energy Solutions Group, Inc. - Executive VP & CFO [8]

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

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Questions and Answers

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Operator [1]

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(Operator Instructions) And our first question comes from the line of Ian MacPherson.

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Ian MacPherson, Piper Sandler & Co., Research Division - Research Analyst [2]

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I think coming into the year, Scotty, you had mentioned that we would -- you were expecting to have. I think you said 60% of your activity oriented towards intervention, might be a little bit more than that. I don't know if that's changed much.

I hear you, Owen, that you expect P&A obligations to be deferred in this environment. But my question is, is there a window of opportunity now to transact for assets in this oil price environment the way that you did with Marathon on Droshky? Or is the commodity price to unaccommodate this to continue that part of the business strategy right now?

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Owen E. Kratz, Helix Energy Solutions Group, Inc. - President, CEO & Director [3]

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I think that remains to be seen, Ian. Prior to Monday, we were actually getting calls of interest. So if you had asked me on Friday, I would have said it's becoming very interesting, the possibilities there. On Monday, of course, everything blew up and everything went on pause and we're probably in a period right now of everyone just sort of trying to see where everything settles. But yes, when commodity prices drop to a point where the expected liabilities of abandonment are high and we have a lower cost of abandonment that creates an arbitrage there for us to realize value. So I think we are entering a period where we'll be very open to taking calls and talking with producers about what's possible.

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Ian MacPherson, Piper Sandler & Co., Research Division - Research Analyst [4]

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Yes. I mean it just strikes me that the opportunity to shore up utilization is one of the biggest levers you have right now in terms of preserving an EBITDA for. And I think, my follow-up question would be, if you -- maybe you could just update us on what your flexibility on vessel cost is as you have to tap dance between ready, active vessels and warm stacks or if you go, maybe a little bit cooler than warm. What is the range of variability on variable costs as you pivot or think about longer-term states of readiness, maybe on a per vessel basis would be the easiest for us to digest.

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Scott Andrew Sparks, Helix Energy Solutions Group, Inc. - Executive VP & COO [5]

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I'll take that one in. So currently, our plan is that where we warm stacking the Q7000 lukewarm stacking the Seawell until work comes back. We're in discussions with clients for both of those vessels to have work later in the year. That -- we have to wait and see if that comes together. But the range of stack costs from warm to sort of cold is anything from the low 20s down to about 4,000 a day. Far less than our usual operating costs.

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Owen E. Kratz, Helix Energy Solutions Group, Inc. - President, CEO & Director [6]

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Ian, I'll just add, our sensitivity is sort of based on the possibility of stacking 3 vessels. Now whether or not they remain in stack or they come out for work is yet to be determined. So, for instance, to Seawall, we're starting off with a warm stack here because we are talking with producers about work further on this year, although we're not considering that work would just be considered upside to our current expectations. So we'll remain in cold stack. And if the work falls away, then it would revert to cold stack. So it's not possible for us to give you a number of days on specific vessels as to what will happen until the market unfolds a little more.

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Ian MacPherson, Piper Sandler & Co., Research Division - Research Analyst [7]

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Understood. The 3 vessels that you're looking at would be the Seawell and the 7000? And what's the third one?

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Owen E. Kratz, Helix Energy Solutions Group, Inc. - President, CEO & Director [8]

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Possibly the Q4000, but that's very uncertain at this point because the Gulf of Mexico, we sort of see the Gulf of Mexico remaining a little more active.

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Scott Andrew Sparks, Helix Energy Solutions Group, Inc. - Executive VP & COO [9]

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Just -- I'll add to that as well, we're in discussions with clients. The Q4000 and has worked into August. We're in discussions with 4 clients who work after that. In the North Sea, we're in discussions to -- for other works for the 2 vessels this morning alone, we were awarded a 30-day project for 1 of the vessels that has further add-on work to the robotics company as well. So it's not like the markets dead. We're in discussions for all these vessels. We're just taking a look at it.

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Operator [10]

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Our next question comes from the line of Mike Sabella.

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Michael James Sabella, BofA Merrill Lynch, Research Division - Research Analyst [11]

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Just kind of hoping we could talk for -- you touched a little bit on capital allocation. We can all look out there at the price of your debt today. Could you just walk us through sort of the options you have with respect to maybe thinking about bringing some of that in early? Is there any limitations that you have in your credit facility that would stop me from doing so?

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Owen E. Kratz, Helix Energy Solutions Group, Inc. - President, CEO & Director [12]

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We don't have any limitations under the credit facilities I'm aware of, Erik?

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Erik Staffeldt, Helix Energy Solutions Group, Inc. - Executive VP & CFO [13]

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Neither do I, that's right.

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Owen E. Kratz, Helix Energy Solutions Group, Inc. - President, CEO & Director [14]

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Well, let me just tell you, our CapEx for this year, we have lowered from $50 million down to

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Erik Staffeldt, Helix Energy Solutions Group, Inc. - Executive VP & CFO [15]

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$38 million-or-so.

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Owen E. Kratz, Helix Energy Solutions Group, Inc. - President, CEO & Director [16]

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$38 million. Most of that was already spent in the first quarter because of the high maintenance period. So we have a relatively small tranche left for the rest of this year. Next year, our expectations are that it's going to be somewhere between $15 million and $20 million. So you'll see another reduction in CapEx at that point. And so we are reducing -- we have reduced the CapEx expectations, and I'm not understanding the move forward. We do have some flexibility on moving dry docks around, which would affect CapEx, but we only have 1 maintenance period for next year that I'm aware of.

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Michael James Sabella, BofA Merrill Lynch, Research Division - Research Analyst [17]

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And then specifically around potentially bringing some of the debt in early?

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Erik Staffeldt, Helix Energy Solutions Group, Inc. - Executive VP & CFO [18]

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Okay. From that standpoint, like we currently have here within -- like Owen mentioned at $33 million is still scheduled to pay off this year, $91 million scheduled for next year. So we are being aggressive on paying that down. I think other than that, I do think that there are certain requirements within our credit facility as far as maintaining liquidity and things of that nature. If we were going to try to accelerate any of the debt that's out there in '22 or '23. So there -- I think there would be certain requirements we would have to meet.

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Owen E. Kratz, Helix Energy Solutions Group, Inc. - President, CEO & Director [19]

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Yes. I'm sorry. I thought you were talking about CapEx, not capital allocation. My apologies.

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Michael James Sabella, BofA Merrill Lynch, Research Division - Research Analyst [20]

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Yes. No worries. I probably asked the question poorly. And then if we just go and start thinking about the Robotics segment, I mean, are we positive -- are you confident that we can maintain positive EBITDA in the segment through the cycle? And as we kind of think about fixed cost in this business, how should we be thinking about EBITDA on the segment level?

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Scott Andrew Sparks, Helix Energy Solutions Group, Inc. - Executive VP & COO [21]

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So Robotics, like we said, we're expecting quite a solid year. I think there's a lot of moving parts with the robotics side of the business that we -- we've expanded our offerings in the renewables side. The trenching season looks pretty good in the North Sea. The GC II is on hire all year in APAC. We've picked up some other spot work, like we said, the MV Pride has gotten work in Australia. So we should expect that our EBITDA is somewhat in line with next year, but it's also down to some of the cost reductions in line with last year, sorry, down to some of the cost reductions we've had in -- up in our renewable services.

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Owen E. Kratz, Helix Energy Solutions Group, Inc. - President, CEO & Director [22]

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I think also remember in previous earnings, we mentioned that this year was expected to be an off year for trenching for us with a recovery in '21.

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Operator [23]

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(Operator Instructions) And our next question comes from the line of [Michael Massey].

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Unidentified Analyst, [24]

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My question is in regards to gross margin. I noticed for Q1, it was 1.1%, but historically, we have a 14.5% gross margin. I just want to know if you guys could speak to why the margin was reduced so much in this first quarter.

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Erik Staffeldt, Helix Energy Solutions Group, Inc. - Executive VP & CFO [25]

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Yes. I think if you look at our historical performance, if you go back 5 years, our gross margin fluctuates by quarter. Usually, the first and fourth quarter, which are the quarters that we have challenged utilization, our margins are lower. And I think that was the case here in the first quarter. We -- the vessels, the Q4000 and Q5000, which worked in the fourth quarter had, I think, about 70-plus days of idle time as they did their dry dock recertification costs. So idle asset utilization definitely hurts us in that -- in those standpoints. And that with the addition of the Q7000 to our cost basis, really drove our gross margin down in the first quarter.

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Operator [26]

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Our next question comes from the line of Sri Nadesan.

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Sri Nadesan, Lazard Asset Management LLC - Senior VP, Portfolio Manager & Analyst [27]

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Quick question, can you clarify the $52 million of cash that's in restricted cash? And when do those restrictions come off and in what conditions?

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Erik Staffeldt, Helix Energy Solutions Group, Inc. - Executive VP & CFO [28]

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So that was restricted cash that we had to put in place for an LC related to our work in West Africa on the Q7000. That work is completed and the vessel has left the region. So we expect that LC to be released here in the near term.

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Operator [29]

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And there are no further questions at this time. I'll turn the call back to you for your closing remarks.

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Erik Staffeldt, Helix Energy Solutions Group, Inc. - Executive VP & CFO [30]

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Thanks for joining us today. We very much appreciate your interest and participation and look forward to having you on our second quarter 2020 call in July. Thank you.

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Operator [31]

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That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.