UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.  )

Filed by the Registrant þ
Filed by a Party other than the Registrant o

Check the appropriate box:

o		Preliminary Proxy Statement
o		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ		Definitive Proxy Statement
o		Definitive Additional Materials
o		Soliciting Material Pursuant to §240.14a-12

 

Helix Energy Solutions Group, Inc.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

þ		No fee required.
o		Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

	(1)		Title of each class of securities to which transaction applies:
	(2)		Aggregate number of securities to which transaction applies:
	(3)		Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
	(4)		Proposed maximum aggregate value of transaction:
	(5)		Total fee paid:

o		Fee paid previously with preliminary materials.
o		Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

	(1)		Amount Previously Paid:
	(2)		Form, Schedule or Registration Statement No.:
	(3)		Filing Party:
	(4)		Date Filed:

April 1, 2009

Dear Shareholder:

     You are cordially invited to join us for our 2009 Annual Meeting of shareholders to be held on Wednesday, May 13, 2009 at 10:00 a.m. at the Crowne Plaza Houston North Greenspoint Hotel, 425 North Sam Houston Parkway East, Houston, Texas 77060. Beginning at 9:30 a.m., employees and officers will be available to provide information about 2008 developments.

     The materials following this letter include the formal Notice of Annual Meeting of Shareholders and the proxy statement. The proxy statement describes the business to be conducted at the meeting, including the election of three directors. At the meeting, we will also report on industry matters of current interest to our shareholders and you will have an opportunity to meet with some of our directors and officers.

     This year, we have elected to furnish proxy materials to shareholders on the Internet pursuant to rules adopted by the Securities and Exchange Commission. We believe these rules enable us to provide you with the information you need, while making delivery more efficient, more cost effective and more environmentally friendly. In accordance with these rules, we have sent a Notice of Availability of Proxy Materials to each of our shareholders.

     Your Vote is Important. Whether you own a few or many shares of stock, it is important that your shares be represented. Regardless of whether you plan to attend the meeting in person, please take a moment now to vote your proxy over the Internet, by telephone, or, if this statement was mailed to you, by completing and signing the enclosed proxy card and promptly return it in the envelope provided. The Notice of Annual Meeting of Shareholders on the inside cover of this proxy statement includes instructions on how to vote your shares.

     The officers and directors of Helix appreciate and encourage shareholder participation. We look forward to seeing you at the annual meeting.

Sincerely,

Owen Kratz
President and Chief Executive Officer

DATE:		Wednesday, May 13, 2009
TIME:		10:00 a.m. Central Daylight Time (Houston Time)
PLACE:		Crowne Plaza Houston North Greenspoint Hotel 425 North Sam Houston Parkway East Houston, Texas 77060
ITEMS OF BUSINESS:		1.   To elect three Class II directors each to serve a three-year term expiring on the later of the annual meeting of shareholders in 2012 and a successor being elected and qualified.
		2.   To consider any other business that may properly be considered at the annual meeting or any adjournment thereof.
RECORD DATE:		You may vote at the annual meeting if you were a holder of our common stock of record at the close of business on March 19, 2009.
VOTING BY PROXY:		In order to avoid additional soliciting expense to us, please vote your proxy as soon as possible, even if you plan to attend the meeting. Shareholders of record can vote by one of the following methods:

		1.  Call 1-800-560-1965 to vote by telephone anytime up to 12:00 noon Central Daylight Time on May 12, 2009; OR
		2.   GO TO THE WEBSITE: www.eproxy.com/hlx to vote over the Internet anytime up to 12:00 p.m. Central Daylight Time on May 12, 2009; OR
		3.   IF PRINTED PROXY MATERIALS WERE MAILED TO YOU, MARK, SIGN, DATE AND RETURN your proxy card in the enclosed postage-paid envelope. If you are voting by telephone or the Internet, please do not mail your proxy card.

INTERNET AVAILABILITY OF PROXY MATERIALS		The proxy statement and 2008 Annual Report to Shareholders are also available at www.HelixESG.com/annualmeeting.

By Order of the Board of Directors,

Alisa B. Johnson
Corporate Secretary

April 1, 2009

     The Company’s proxy statement and 2008 Annual Report to Shareholders (including our Annual Report on Form 10-K) for the fiscal year ended December 31, 2008 are also available at www.HelixESG.com/annualmeeting.

          The Board of Directors of Helix Energy Solutions Group, Inc., a Minnesota corporation that is referred to herein as “Helix,” the “Company,” “we,” “us,” or “our,” is soliciting your proxy to vote at the 2009 Annual Meeting of Shareholders on May 13, 2009. This proxy statement contains information about the items being voted on at the annual meeting and information about Helix. The proxy materials are being sent to our shareholders on or about April 1, 2009.

          We are providing these proxy materials to you in connection with our annual meeting of shareholders, to be held on Wednesday, May 13, 2009 at 10:00 a.m. at the Crowne Plaza Houston North Greenspoint Hotel, 425 North Sam Houston Parkway East, Houston, Texas 77060, and all reconvened meetings after adjournments thereof. As a shareholder of the Company, you are invited to attend the annual meeting and are entitled and requested to vote on the proposal described in this proxy statement.

          The board has set March 19, 2009 as the record date for the annual meeting. If you were the owner of Helix common stock at the close of business on March 19, 2009, you may vote at the annual meeting. You are entitled to one vote for each share of common stock you held on the record date. You may cast one vote for each share of common stock held by you on the record date on each of the matters presented at the meeting.

          The only matter currently scheduled to be voted on at the annual meeting is the election of three Class II directors to the Board of Directors of Helix, each to serve a three-year term expiring at the annual meeting of shareholders in 2012 or, if at a later date, the date on which a successor is elected and qualified.

          We also will consider other business that properly comes before the meeting in accordance with Minnesota law and our By-laws. The Chairman of the annual meeting may refuse to allow the presentation of a proposal or a nomination for the board from the floor of the annual meeting if the proposal or nomination was not properly submitted.

          Our board unanimously recommends that you vote your shares “FOR” each of the director nominees described in this proxy statement.

How do I vote my shares?

          We request that you vote your shares as promptly as possible. You may either vote your shares in person at the annual meeting or designate another person to vote the shares you own. That other person is called a proxy and you may vote your shares by means of a proxy using one of the following methods of voting if you are a shareholder of record:

	•		Electronically using the Internet,
	•		By telephone, or
	•		If this proxy statement was mailed to you, by signing and dating the enclosed proxy card and returning it in the prepaid envelope.

          The instructions for these three methods are set forth on the Notice of Annual Meeting which immediately follows the cover page of this proxy statement and also on the proxy card. If you return your signed proxy card but do not mark the boxes showing how you wish to vote, your shares will be voted as recommended by the board. The giving of such proxy does not affect your right to vote in person if you attend the meeting.

Am I shareholder of record?

          If your shares are registered directly in your name with our transfer agent, Wells Fargo Shareowner Services (Wells Fargo), you are considered a shareholder of record with respect to those shares and the Notice of Availability of Proxy Materials is being sent directly to you by Wells Fargo.

          If, like most shareholders of the Company, you hold your shares in street name through a stockbroker, bank or other nominee rather than directly in your own name, you are considered the beneficial owner of those shares, and the Notice of Availability of Proxy Materials is being forwarded to you. If you are a beneficial owner, you may appoint proxies and vote as provided by that bank, broker or nominee. The availability of telephone or internet voting will depend upon the voting process of the broker, bank or other nominee. You should follow the voting directions provided by your broker, bank or nominee. If you provide specific voting instructions in accordance with the directions provided by your broker, bank or nominee, your shares will be voted by such party as you have directed.

May I change my vote?

          Yes, if you are a shareholder of record, you may change your vote and revoke your proxy by:

	•		sending a written statement to that effect to the Corporate Secretary of Helix,
	•		submitting a properly signed proxy card with a later date, or
	•		voting in person at the annual meeting.

          If you hold shares in street name, you must follow the procedures to change your vote required by the holder of record, either your broker, bank or other nominee, to revoke or change a proxy. You should contact the shareholder of record directly for more information on these procedures.

How do I vote my shares in person at the meeting?

          If you are a shareholder of record, to vote your shares at the meeting you should bring proof of identification. You may vote shares held in street name at the meeting only if you obtain a signed “legal proxy” from the record holder (broker, bank or other nominee) giving you the right to vote the shares and provide an account statement or letter from such nominee showing that you were the beneficial owner of the shares on the record date. If your shares are not registered in your name and you plan to attend the annual meeting and vote your shares in person, you should contact your broker, bank or other nominee in whose name your shares are registered to obtain a proxy executed in your favor and bring it to the annual meeting.

          Even if you plan to attend the meeting, we encourage you to vote by proxy so your vote will be counted if you later decide not to attend the annual meeting.

What is a quorum?

          A majority of Helix’s outstanding common shares as of the record date must be present at the annual meeting in order to hold the meeting and conduct business. This is called a quorum. Shares are counted as present at the annual meeting if a shareholder:

	•		is present in person at the annual meeting; or
	•		has properly submitted a proxy (either by written proxy card or by voting on the Internet or by telephone).

          Proxies received but marked as abstentions or withholding authority, if any, and broker non-votes, will be included in the calculation of the number of shares considered to be present at the meeting for quorum purposes.

How many shares can vote?

          On the record date, there were 98,385,061 shares of Helix common stock outstanding and entitled to vote at the meeting held by approximately 30,537 beneficial owners. These are the only securities entitled to vote. Each holder of a share of common stock is entitled to one vote for each share held.

What happens if additional matters are presented at the annual meeting?

          Other than the election of three Class II directors, we are not aware of any other business to be acted upon at the annual meeting. If you grant a proxy, the persons named as proxy holders will have the discretion to vote your shares on any additional matters properly presented for a vote at the meeting in accordance with Minnesota law and our By-laws.

How many votes are required to approve each proposal?

          The election of each director nominee requires the affirmative “FOR” vote of a plurality of the shares present in person or by proxy at the annual meeting and entitled to vote on the election of directors. Assuming that a quorum is present at the annual meeting, the three directors receiving the greatest number of votes cast by the holders of common stock entitled to vote on the matter will be elected as directors. As a result, if you “WITHHOLD AUTHORITY” to vote for a nominee, your vote will not be counted in determining the outcome of the election of directors.

          Any other proposal being voted on requires the affirmative “FOR” vote of a majority of the shares present in person or by proxy at the meeting and entitled to vote on that proposal.

How are votes counted?

          You may either vote “FOR” or “WITHHOLD AUTHORITY” to vote on each nominee for the Board of Directors. Only “FOR” votes are counted in determining whether a plurality has been cast in favor of a director. If you sign and submit your proxy card without voting instructions, your shares will be voted “FOR” each director nominee and as recommended by the Board of Directors on any other proposal.

          If you hold your shares in street name and do not provide voting instructions to your broker, your shares will not be voted on any proposal on which your broker does not have discretionary authority to vote, but will be counted in determining whether there is a quorum present. In this situation, a “broker non-vote” occurs. Shares that constitute broker non-votes are not considered as entitled to vote on the proposal in question, thus effectively reducing the number of shares needed to approve any proposal introduced at the annual meeting.

          Under the rules of the New York Stock Exchange, or “NYSE,” in effect at the time this proxy statement was printed, if you hold your shares though a broker, your broker has discretionary authority and thus is permitted to vote your shares on “routine” matters, which includes the election of directors, even if the broker does not receive voting instructions from you.

Is my vote confidential?

          Proxy cards, proxies delivered by internet or telephone, ballots and voting tabulations that identify individual shareholders are mailed or returned directly to an independent inspector of election and handled in a manner that protects your voting privacy. The independent inspector of election will count the votes.

How do I get to the annual meeting of shareholders?

          A map is provided on the back of this proxy statement for your convenience or at www.HelixESG.com under Investor Relations tab and by clicking Annual Meeting.

May shareholders ask questions at the annual meeting?

          Yes. During the annual meeting shareholders may ask questions or make remarks directly related to the matters being voted on. In order to ensure an orderly meeting, we ask that shareholders direct questions and comments to the Chairman. In order to provide this opportunity to every shareholder who wishes to speak, the Chairman may limit each shareholder’s remarks to two minutes. In addition, beginning at 9:30 a.m., our employees and officers will be available to provide information about 2008 developments and to answer questions of more general interest.

What does it mean if I receive more than one proxy card?

          It means you hold shares registered in more than one account. To ensure that all your shares are voted, please follow the instructions and vote the shares represented by each such card.

Who will count the votes?

          We have hired a third party, Wells Fargo, to judge the voting, be responsible for determining whether or not a quorum is present, and tabulate votes cast by proxy or in person at the annual meeting.

Who will bear the cost for soliciting votes for the meeting?

          We will bear all expenses in conjunction with the solicitation of proxies, including the charges of brokerage houses and other custodians, nominees or fiduciaries for forwarding documents to beneficial owners; provided, however that we will not bear any costs related to an individual shareholder’s use of the Internet or telephone to cast their vote. Proxies may be solicited by mail, in person, or by telephone or by facsimile by certain of our officers, directors and regular employees, without extra compensation.

How do I find out the results of the annual meeting?

          Preliminary voting results will be announced at the annual meeting. The final voting results will be published in our second quarter 2009 quarterly report on Form 10-Q and will be available on www.HelixESG.com or in an earlier filed Form 8-K.

Whom should I call with other questions?

          If you have additional questions about this proxy statement or the meeting, or would like additional copies of this document or our 2008 Annual Report to Shareholders (including our Annual Report on Form 10-K), please contact: Helix Energy Solutions Group, Inc., 400 North Sam Houston Parkway East, Suite 400, Houston Texas, 77060, Attention: Corporate Secretary, telephone: (281) 618-0400.

How may I communicate with the Company’s Board of Directors?

          Shareholders may send communications in care of the Corporate Secretary, Helix Energy Solutions Group, Inc., 400 North Sam Houston Parkway East, Suite 400, Houston, Texas 77060. Please indicate whether your message is for the Board of Directors as a whole, or a particular group or committee of directors, or an individual director.

When are the shareholder proposals for the 2010 Annual Meeting of Shareholders due?

          All shareholder proposals must be submitted in writing to General Counsel and Secretary, Helix Energy Solutions Group, Inc., 400 North Sam Houston Parkway East, Suite 400, Houston. Texas 77060. Any shareholder who intends to present a proposal at the 2010 Annual Meeting of Shareholders must deliver the proposal to us so that it is received no later than December 2, 2009, to have the proposal included in our proxy materials for that meeting. Shareholder proposals must also meet other requirements of the Securities Exchange Act of 1934 to be eligible for inclusion. In addition, our By-laws permit shareholders to propose business to be considered and to nominate directors for election by the shareholders. To propose business or to nominate a director, the shareholder must deliver a notice to the Corporate Secretary prior to February 12, 2010 setting forth the name of the nominee and all information

required to be disclosed in solicitations of proxies or otherwise required pursuant to Regulation 14A under the Exchange Act together with such person’s written consent to serve as a director if elected.

          In accordance with our By-laws, the Board of Directors currently consists of eight members and is divided into three classes of similar size. The members of each class are elected to serve a three-year term with the term of office of each class ending in successive years. The Class I, II and III directors are currently serving until the later of the annual meeting in 2010, 2009 and 2011, respectively, and their respective successor being elected and qualified. There are currently three directors in Class I and Class II and two directors in Class III.

          Three directors are to be elected at the 2009 annual meeting. T. William Porter, William L. Transier and James A. Watt are the Class II directors whose terms expire at this annual meeting and who have been nominated for re-election to the board to serve until the 2012 annual meeting or, if at a later date, until their successors are elected and qualified. Each of the nominees listed below is currently serving as a director.

          Unless otherwise instructed, the persons named as proxies will vote all proxies received FOR the election of the persons named as nominees below as Class II directors for a term of three years, until the annual meeting of shareholders to be held in 2012 or, if at a later date, until their respective successors are elected and qualified. There is no cumulative voting in the election of directors and the Class II directors will be elected by a plurality of the votes cast at the annual meeting.

          All of the nominees have agreed to be named in this proxy statement and have indicated a willingness to continue to serve if elected. The Corporate Governance and Nominating Committee of the board nominated each of the candidates for election. If any nominee becomes unable to serve before the election, the shares represented by proxies may be voted for a substitute designated by the board, unless a contrary instruction is indicated on the proxy card. The board has no reason to believe that any of the nominees will become unavailable. The board has affirmatively determined that the nominees qualify as “independent” as that term is defined under NYSE Rule 303A and applicable rules promulgated by the Securities and Exchange Commission (SEC).

          In the section below, we provide the names and biographical information about the three Class II nominees and each other member of the board. Age and other information in the director’s biographical information are as of March 19, 2009. Information about the number of shares of Common Stock beneficially owned by each director as of March 27, 2009 appears below under the heading “Share Ownership Information — Management Shareholdings” on pages 20-22.

          There are no family relationships among any of our directors, nominees for director or executive officers.

          The board recommends that you vote “FOR” each of the nominees to the Board of Directors set forth in this Proposal 1.

          Election of each director requires the affirmative vote of a plurality of the shares of common stock present or represented and entitled to vote at the annual meeting. This means the three directors receiving the greatest number of votes cast by the holders of common stock entitled to vote on the matter will be elected as directors.

BOARD OF DIRECTORS

Board of Directors Independence

          The board consists of eight directors. The board has affirmatively determined that the following members of the board qualify as “independent” as that term is defined under NYSE Rule 303A and applicable rules under the Securities Exchange Act of 1934: Messrs. Ahalt, Duroc-Danner, Lovoi, Porter, Transier and Watt and Ms. Quinn. In making this determination, the board has concluded that none of these members has a relationship which, in the opinion of the board, is material and would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The non-independent management director is Mr. Kratz, our President and Chief Executive Officer. Accordingly, a majority of the members of the Board of Directors are independent, as required by NYSE Rule 303A. This independence determination is analyzed annually to promote arms-length oversight. In making the determination regarding independence the board reviewed the NYSE criteria for independence in advance of the first meeting of the board in 2009. The board then gathered information with respect to each board member individually regarding potential transactions and relationships between Helix and its directors, including the existence of certain ongoing transactions entered into between the Company and certain entities of which existing directors serve as officers or directors, including transactions with Weatherford International Ltd. and Endeavour International Corporation. None of these transactions were deemed to affect the independence of the applicable director and they did not exceed the thresholds established by NYSE rules.

Attendance at the Annual Meeting of Shareholders

          The Company’s Board of Directors holds a regular meeting immediately preceding or immediately after each year’s annual meeting of shareholders. Therefore, members of the Company’s Board of Directors generally attend the Company’s annual meetings of shareholders. The board encourages its members to attend the annual meeting, but does not have a written policy regarding attendance at such meeting. Messrs. Kratz, Transier, Watt and Ahalt attended the 2008 annual meeting along with former director and current Chief Financial Officer, Anthony Tripodo.

Shareholder Communications with the Board

          Pursuant to the terms of our Corporate Governance Guidelines adopted by the board, any shareholder or other interested party wishing to send written communications to any one or more of the Company’s directors may do so by sending them in care of the Corporate Secretary at the Company’s principal executive offices. All such communications will be forwarded to the intended recipient(s). All such communications should indicate whether it contains a message for the Board of Directors as a whole, or a particular group or committee of directors, or an individual director.

Sources for New Nominees

          Messrs. Porter, Transier and Watt are directors standing for re-election. The Company did not utilize any third party search firms to assist in identifying potential director candidates during 2008 or to date in 2009. Neither the Corporate Secretary nor the Corporate Governance and Nominating Committee received any recommendations for director candidates from any shareholder or group of shareholders during 2008 or to date in 2009.

Code of Business Conduct and Ethics

          In 2003, we adopted a written code of business conduct and ethics that applies to all our directors, officers and employees, including our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer. At that time we also established a code of ethics for Chief Executive Officer and Senior Financial Officers which is applicable to the Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and Controller, Vice President — Finance and Treasurer, and Vice President — Internal Audit. We have also adopted a set of Corporate Governance Guidelines that applies to the Board of Directors. We have posted a current copy of both codes and the guidelines on our website, which is located at www.HelixESG.com, under Investor Relations, then by clicking Governance. In addition, we intend to post on our website all disclosures that are required by law or NYSE listing standards concerning any amendments to, or waivers from, any provision of the code. All of the Code of Business Conduct and Ethics, the Code of Ethics for the Chief Executive and the Senior Financial Officers and the Corporate Governance Guidelines are available free of charge in print upon request sent to the Corporate Secretary at Helix Energy Solutions Group, Inc., 400 North Sam Houston Parkway East, Suite 400, Houston, Texas 77060.

          The board currently has, and appoints members to, three standing committees: the Audit Committee, the Compensation Committee and the Corporate Governance and Nominating Committee. The following table summarizes the membership of the board and each of its committees as well as the number of times each met during the year ended December 31, 2008. Members were elected to these committees in February 2008 by a vote of the Board of Directors. Each member of each of these committees is independent as defined by the applicable NYSE and SEC rules. Each committee has a written charter approved by the board.

Corporate

Governance

Name(1)

Board

Audit

Compensation

and Nominating

Mr. Kratz

Chair

—

—

—

Mr. Ahalt

Member

—

Member

Member

Mr. Duroc-Danner

Member

—

—

—

Mr. Lovoi

Member

Member (1)

Chair (1)

—

Mr. Porter

Member

Member

—

Chair

Ms. Quinn (2)

Member

Member

—

Member

Mr. Transier

Member

Chair (1)

Member

—

Mr. Watt

Member

—

Member

Member

Number of Meetings in 2007

Regular

4

6

5

3

Special

4

1

6

1

          During the year ended December 31, 2008, the board held a total of eight meetings. Each director attended 75% or more of the total meetings of the board other than Mr. Duroc-Danner who attended three meetings and each director attended 75% or more of the total meetings of the committees on which such director served.

          Non-management directors meet in regularly scheduled executive sessions following each board and committee meeting without any members of management being present and at which only those directors who meet the independence standards of the NYSE are present, provided however, that committees did meet with individual members of management during executive session by invitation. Mr. Porter presided as the Chair of each executive session of the board unless the particular topic of the applicable executive session dictated that another independent director serve as the Chair of the meeting, typically the Chair of the committee responsible for the particular topic. In the case of an executive session of the independent directors held in connection with a meeting of a committee of the board, the chairman of the particular committee will preside as Chair.

          The Audit Committee consists of four non-employee, independent directors, Messrs. Lovoi, Porter and Transier and Ms. Quinn, each of whom meets the independence and financial literacy requirements as defined in the applicable NYSE and SEC rules. The Audit Committee is appointed by the Board of Directors to assist the board in fulfilling its oversight responsibility to the shareholders, potential shareholders, the investment community and others relating to: (1) the integrity of our financial statements, (2) the compliance by the Company with applicable legal and regulatory requirements, (3) the performance of the Company’s internal audit function and independent registered public accounting firm, and (4) the independent registered public accounting firm’s qualifications and independence. The Audit Committee acts under the terms of a written charter, which was most recently amended and restated in December 2008, a copy of which is available at our website, www.HelixESG.com, under Investor Relations, then by clicking Governance. A copy of the Audit Committee charter is available free of charge upon request to the Corporate Secretary at

Helix Energy Solutions Group, Inc., 400 North Sam Houston Parkway East, Suite 400, Houston, Texas 77060. Among the duties of the Audit Committee, all of which are more specifically described in the Audit Committee charter, the Audit Committee:

	•		Oversees and appoints our independent registered public accounting firm.
	•		Reviews the adequacy of our accounting and audit principles and practices, and the adequacy of compliance assurance procedures and internal controls.
	•		Reviews and pre-approves all non-audit services to be performed by the independent registered public accounting firm in order to maintain such accounting firm’s independence.
	•		Reviews the scope of the annual audit.
	•		Reviews with management and the independent registered public accounting firm our annual and quarterly financial statements, including disclosures made in management’s discussion and analysis and our earnings press releases.
	•		Meets independently with management and the independent registered public accounting firm.
	•		Reviews corporate compliance and disclosure systems.
	•		Reviews and approves all related-party transactions.
	•		Makes regular reports to the Board of Directors.
	•		Reviews and reassesses the adequacy of its charter annually and recommends any proposed changes to the Board of Directors for approval.
	•		Performs an annual self-evaluation of its own performance.
	•		Produces an annual report for inclusion in our proxy statement.

Audit Committee Independence

          The board has affirmatively determined that all members of the Audit Committee: (i) are considered “independent” as defined under NYSE Rule 303A, and (ii) meet the criteria for independence set forth in Exchange Act Rule 10A-3(b)(1).

Designation of Audit Committee Financial Expert

          The board has determined that each of the members of the Audit Committee is financially literate and that Mr. Transier and Ms. Quinn are “audit committee financial experts,” as that term is defined in the rules promulgated by the SEC pursuant to the Sarbanes-Oxley Act of 2002.

          For more information regarding the Audit Committee, please refer to the “Report of the Audit Committee” beginning on page 17.

Compensation Committee

          The Compensation Committee is composed of four non-employee, independent directors. The Compensation Committee is appointed by the board to discharge the board’s responsibilities relating to compensation of our executive officers. The Compensation Committee acts under the terms of, and the Board of Directors has adopted, a written charter for the Compensation Committee, a copy of which is available at our website, www.HelixESG.com, under Investor Relations, then by clicking Governance. The Compensation Committee charter is also available free of charge upon request to the Corporate Secretary at Helix Energy Solutions Group, Inc., 400 North Sam Houston Parkway East, Suite 400, Houston, Texas 77060. The Compensation Committee has the responsibilities described in the Compensation Committee charter including the overall responsibility for reviewing, evaluating and approving the Company’s executive officer compensation agreements (to the extent such agreements are considered necessary or appropriate by the Compensation Committee), plans, policies and programs. The Compensation Committee is also responsible for reviewing and recommending to the board whether the “Compensation Discussion and Analysis” should be included in our proxy statement, and for performing such other functions as the board may assign to the Compensation Committee from time to time, including the responsibility to:

	•		Review compensation philosophy and major compensation and benefits programs for employees.
	•		Oversee the 2005 Long Term Incentive Plan, the Employee Retirement Savings Plan and the Employee Stock Purchase Plan.
	•		Commission independent consultants and review compensation surveys with respect to executive officer compensation as compared to our industry and our peer group, as discussed in our “Compensation Discussion and Analysis” below.
	•		Review and approve executive officer compensation, including bonuses and equity incentive compensation.
	•		Review and reassess the adequacy of its charter annually and recommend any proposed changes to the board for adoption.
	•		Perform an annual self-evaluation of its performance.

Corporate Governance and Nominating Committee

          The goal of the Corporate Governance and Nominating Committee is to take a leadership role in shaping the corporate governance and business standards of our Board of Directors and the Company. The Corporate Governance and Nominating Committee consists of no fewer than three members, all of whom meet the independence requirements of the NYSE. The members of the Corporate Governance and Nominating Committee are appointed by the Board of Directors. The Board of Directors has adopted a written charter for the Corporate Governance and Nominating Committee, a copy of which is available at the Company’s website, www.HelixESG.com, under Investor Relations, then by clicking Governance. The Corporate Governance and Nominating Committee charter is also available free of charge upon request to the Corporate Secretary at Helix Energy Solutions Group, Inc., 400 North Sam Houston Parkway East, Suite 400, Houston, Texas 77060.

          The Corporate Governance and Nominating Committee identifies individuals qualified to become board members, consistent with criteria approved by the board, oversees the organization of the board to discharge the board’s duties and responsibilities properly and efficiently, and identifies best practices and recommends corporate governance principles, including giving proper attention and effective responses to shareholder concerns regarding corporate governance. The Corporate Governance and Nominating Committee has the responsibilities specifically described in the Corporate Governance and Nominating Committee charter, including the responsibility to:

	•		Identify and evaluate potential qualified director nominees and select or recommend director nominees to the board.
	•		Monitor, and recommend members for, each of the committees of the board.
	•		Periodically review and revise our corporate governance principles.
	•		Review and reassess the adequacy of its charter annually and recommend any proposed changes to the board for approval.
	•		Perform an annual self-evaluation of its performance and the performance of the board.
	•		Perform such other duties as may be assigned by the board from time to time.

Process for Director Nominations — Shareholder Nominees

          The policy of the Corporate Governance and Nominating Committee is to consider properly submitted shareholder nominations for candidates for membership on the board as described below under “Identifying and Evaluating Nominees for Directors.” In evaluating such nominations, the Corporate Governance and Nominating Committee seeks to achieve a balance of knowledge, experience and capability on the board and to address the membership criteria set forth below under “Director Qualifications.” Any shareholder nominations proposed for consideration by the Corporate Governance and Nominating Committee should include the nominee’s name and qualifications for board membership and should be addressed to the Corporate Secretary, Helix Energy Solutions Group, Inc., 400 North Sam Houston Parkway East, Suite 400, Houston, Texas 77060. In addition, our By-laws permit shareholders to nominate directors for consideration at an annual shareholder meeting. However, in order to be considered at this year’s annual meeting such nominations were required to be received by us prior to the date of this proxy statement. Shareholders may nominate persons for election to the Board of Directors to be considered at next year’s annual meeting in accordance with the procedure beginning on page 46 of this proxy statement.

Director Qualifications

          The Corporate Governance and Nominating Committee has established certain criteria that apply to Committee-recommended nominees for a position on our board. Under these criteria, members of the board should have the highest professional and personal ethics and values, consistent with our longstanding values and standards. They should have broad experience at the policy-making level in business and possess a familiarity with one or more of our industry segments. They should be committed to enhancing shareholder value and should have sufficient time to carry out their duties and to provide insight and practical wisdom based on experience. Their service on other boards of public companies should be limited to a number that permits them, given their individual circumstances, to perform responsibly all director duties. Each director must represent the interests of all shareholders.

Identifying and Evaluating Nominees for Directors

          The Corporate Governance and Nominating Committee utilizes a variety of methods for identifying and evaluating nominees for director. The Corporate Governance and Nominating Committee regularly assesses the appropriate size of the board, and whether any vacancies on the board are expected, due to retirement or otherwise. In the event that vacancies are anticipated, or otherwise arise, the Corporate Governance and Nominating Committee considers various potential candidates for director. Candidates may come to the attention of the Corporate Governance and Nominating Committee through current board members, professional search firms, shareholders or other persons. These candidates are evaluated at regular or special meetings of the Corporate Governance and

Nominating Committee, and may be considered at any point during the year. As described above, the Corporate Governance and Nominating Committee considers properly submitted shareholder nominations for candidates for the board. Following verification of the shareholder status of persons proposing candidates, recommendations are aggregated and considered by the Corporate Governance and Nominating Committee at a regularly scheduled meeting, which is generally the first or second meeting prior to the issuance of the proxy statement for our annual meeting of shareholders. If any materials are provided by a shareholder in connection with the nomination of a director candidate, such materials are forwarded to the Corporate Governance and Nominating Committee. The Corporate Governance and Nominating Committee may also review materials provided by professional search firms or other parties in connection with a nominee who is not proposed by a shareholder. In evaluating such nominations, the Corporate Governance and Nominating Committee seeks to achieve a balance of knowledge, experience and capability on the board.

          The Corporate Governance and Nominating Committee recommended that the board elect Nancy K. Quinn to the board in February 2009 to fill the vacant position previously held by Mr. Tripodo. Ms. Quinn came to the attention of the committee through recommendations of current board members.

          The Corporate Governance and Nominating Committee encourages all members of the board to attend director education programs appropriate to their individual backgrounds in order to stay abreast of developments in corporate governance and “best practices” relevant to their contribution to the board and their specific committee assignments.

          During 2008, Mr. Transier attended a full-day, in-house training on corporate governance for the Board members of Reliant Energy, Inc. conducted by a professor from the University of Delaware. Mr. Porter attended the West Coast Board Committee Peer Exchange in San Francisco, California.

          The following table provides compensation information for the one year period ended December 31, 2008 for each member of our Board of Directors.

		Fees Earned or
		Paid in Cash				Stock Awards				Option Awards				Total
Name (1)		($)(2)				($)(3)(4)				($)(3)(5)				($)
Gordon F. Ahalt		$	86,000			$	122,806			$	-0-			$	208,806
Bernard J. Duroc-Danner		$	-0-			$	18,508			$	148,644			$	167,152
John V. Lovoi		$	-0-			$	110,641			$	13,445			$	124,086
T. William Porter (8)		$	82,000			$	-0-			$	172,075			$	254,075
Nancy K. Quinn (6)		$	-0-			$	-0-			$	-0-			$	-0-
William L. Transier		$	-0-			$	169,652			$	-0-			$	169,652
Anthony Tripodo (7)		$	-0-			$	93,124			$	13,445			$	106,569
James A. Watt		$	79,500			$	143,308			$	-0-			$	222,808

		Share of Restricted
Director (b)		Stock Outstanding (a)
Mr. Duroc-Danner			3,614
Mr. Ahalt			38,810
Mr. Lovoi			44,124
Mr. Transier			42,690
Mr. Watt			40,858
Mr. Porter			0

					Number of				Grant Date
Name		Date of Grant			Shares				Fair Value
Mr. Duroc-Danner		April 1, 2008				417			$	13,125
		July 1, 2008				255			$	10,625
		October 1, 2008				489			$	11,875
		January 2, 2009	(c)			1,985			$	14,375
Mr. Ahalt		December 11, 2008	(a)			29,586			$	200,000
Mr. Tripodo		January 2, 2008	(b)			723			$	30,000
		February 28, 2008	(d)			5,537			$	183,340
		April 1, 2008				833			$	26,250
		July 1, 2008				600			$	25,000
Mr. Lovoi		January 2, 2008	(b)			384			$	15,938
		February 28, 2008				5,537			$	183,340
		April 1, 2008				784			$	24,688
		July 1, 2008				593			$	24,688
		October 1, 2008				1,133			$	27,500
		December 11, 2008	(a)			29,586			$	200,000
		January 2, 2009	(c)			4,316			$	31,250
Mr. Transier		April 1, 2008				1,032			$	32,500
		July 1, 2008				871			$	36,250
		October 1, 2008				1,133			$	27,500
		December 11, 2008	(a)			29,586			$	200,000
		January 2, 2009	(c)			4,316			$	31,250
Mr. Watt		December 11, 2008	(a)			29,586			$	200,000

Summary of Director Compensation and Procedures

          Our non-employee director compensation structure has three components: director fees, expenses and equity-based compensation currently in the form of restricted stock awards. We re-evaluate director compensation on an annual basis based on the compensation of directors by companies in our peer group. In 2008, the directors (other than Mr. Kratz, who is employed by the Company, and Mr. Ferron, who was employed by the Company prior to February 4, 2008) received an annual director’s fee of $30,000, and $1,000 per board meeting for attending each of four regularly scheduled quarterly meetings and any special board meetings. Furthermore, each of the outside directors receives an annual committee retainer fee of $5,000 for each committee on which such director serves and a fee of $2,000 ($3,000 for the Chair) for each committee meeting attended. We also pay the reasonable out-of-pocket expenses incurred by each director in connection with attending the meetings of the Board of Directors and any committee thereof. In December 2008, the Compensation Committee voted to increase the annual retainer fee paid to our Board of Directors to $45,000 and to increase board meeting fees to $2,000 per board meeting attended.

          Since January 1, 2005, non-employee directors have had the option of taking board and committee fees (but not expenses) in the form of restricted stock, pursuant to the terms of the 2005 Long Term Incentive Plan, as amended (the “2005 Plan”) for grants after May 10, 2005, or the 1995 Long Term Incentive Plan, as amended (the “1995 Plan”) for grants on or before May 10, 2005. An election to take fees in the form of cash or stock is made by a director prior to the beginning of the subject fiscal year. Directors taking fees in the form of restricted stock receive an award for a quarter on the first business day of the next quarter in an amount equal to 125% of the cash equivalent on the last trading day of the fiscal quarter for which the fees are being determined. The award fully vests two years after the first day of the subject fiscal year. For fiscal year 2008, Messrs. Duroc-Danner, Lovoi, Transier and Tripodo elected to take board and committee fees in the form of restricted stock. During the year ended December 31, 2008, director (other than our employee directors) compensation was $1,366,703, which was composed of $329,500 in cash compensation, $689,594 in restricted stock expense (as described above) and $347,609 in stock option expense.

          Prior to 2005, each non-employee director received at approximately the time he joined the board, and on each fifth anniversary of service thereafter, options to purchase 44,000 shares of our common stock at an exercise price equal to the fair market value of the common stock on the date of grant. As with our other options, these options vest equally over five years and expire on their tenth anniversary. On December 8, 2005, there was a two-for-one stock split that had the effect of doubling the number of options outstanding while halving the strike price. As of March 27, 2009, options for 88,000 shares were outstanding to each of Messrs. Duroc-Danner and Lovoi; options for 30,000 shares were outstanding to Mr. Ahalt; options for 52,800 shares were outstanding to Mr. Porter; and options for 51,000 shares were outstanding for Mr. Tripodo. Neither Mr. Watt nor Mr. Transier had any outstanding options as of March 27, 2008. No options were issued in 2008.

          In 2005, the Board of Directors, on the recommendation of the Compensation Committee, voted to change the equity compensation of directors. Currently, on joining the board and initially on the date of the board meeting closest to the anniversary date of such joining (and thereafter on the date of each December board meeting) a director would receive a grant of restricted stock; provided, however, that such grants of restricted stock would not occur until such time as any prior grant of options had fully vested. Accordingly, on February 28, 2008, Messrs. Tripodo and Lovoi each received a grant of 5,537 shares of restricted stock and on December 11, 2008, Messrs. Ahalt, Lovoi, Transier and Watt each received a grant of 29,586 shares of restricted stock. All such grants of restricted stock are made pursuant to the terms of the 2005 Plan and vest ratably over five years, subject to immediate vesting on the occurrence of a Change of Control (as defined in the 2005 Plan).

          Directors who are also our employees do not receive cash or equity compensation for service on the board in addition to compensation payable for their service as employees of Helix.

CERTAIN RELATIONSHIPS

          In accordance with our Audit Committee charter, our Audit Committee is responsible for reviewing and approving the terms and conditions of all related party transactions. The Audit Committee has adopted a written statement of policy with respect to related party transactions. It is our written policy to approve and enter into transactions only when the board, acting through the Audit Committee, determines that a transaction with a related party is in, or not inconsistent with, the best interests of Helix or our shareholders. The Audit Committee will consider all relevant facts and circumstances available to the Audit Committee to determine whether such related party transaction is in our best interests, including, the benefits to us, the impact on a director’s independence, the availability of other sources for the product or services, the terms of the transaction and the terms available from unrelated third parties. The policy covers any transaction, arrangement or relationship in which we are a participant and in which a related party has a direct or indirect interest, other than transactions available to all employees generally or transactions involving less than $5,000. A “related party” includes any person that served as a senior officer or director in the last fiscal year; and a person that beneficially owns more than 5% of our outstanding voting securities; and a person that is the immediate family member of either of the foregoing or an entity that is controlled by any of the foregoing. Other than the ongoing ordinary course transactions with Weatherford International Ltd. (Weatherford) and Tesco Corporation (Tesco) described below, we did not enter into any financial transactions with any related party during fiscal 2008. If we were to do so in the future, any such material financial transaction would need to be approved by our Audit Committee prior to our Company entering into such transaction.

Cal Dive International, Inc.

          In the past, we have provided Cal Dive certain management and administrative services including: (i) accounting, treasury, payroll and other financial services; (ii) legal, insurance and claims services; (iii) information systems, network and communication services; (iv) employee benefit services (including direct third-party group insurance costs and 401(k) contribution matching costs discussed below); and (v) corporate facilities management services. Total allocated costs to Cal Dive for such services were approximately $4 million, $3.6 million and $16.5 million for the years ended December 31, 2008, 2007 and 2006, respectively. Included in these costs are costs related to the participation by CDI’s employees in our employee benefit plans through December 31, 2007, including employee medical insurance and a defined contribution 401(k) retirement plan.

          In contemplation of the initial public offering (IPO) of Cal Dive, we entered into intercompany agreements with Cal Dive that address the rights and obligations of each respective company, including a Master Agreement, a Corporate Services Agreement, an Employee Matters Agreement and a Tax Matters Agreement. The Master Agreement describes and provides a framework for the separation of our business from Cal Dive’s business, allocates liabilities (including potential liabilities related to litigation) between the parties, allocates responsibilities and provides standards for each of the parties’ conduct going forward (e.g., coordination regarding financial reporting), and sets forth the indemnification obligations of each party to the other. In addition, the Master Agreement provides us with a preferential right to use a specified number of Cal Dive’s vessels in accordance with the terms of such agreement.

          Pursuant to the Corporate Services Agreement, each party agrees to provide specified services to the other party, including administrative and support services for the time period specified therein. Generally after we cease to own more than 50% of the total voting power of Cal Dive’s common stock, all services may be terminated by either party upon 60 days notice, but a longer notice period is applicable for selected services. Each of the services shall be provided in exchange for a monthly charge as calculated for each service (based on relative revenues, number of users for a particular service, or other specified measure). In general, under the Corporate Services Agreement as originally entered into by the parties we provided Cal Dive with services related to the tax, treasury, audit, insurance (including claims) and information technology functions; Cal Dive provided us with services related to the human resources, training and orientation functions, and certain supply chain and environmental, health and safety services. However, the Corporate Services Agreement was amended effective January 1, 2008 and again effective January 1, 2009 to reflect that Cal Dive no longer provides us with these functions, and to reflect that we only provide Cal Dive with certain information technology and insurance services.

          Pursuant to the Employee Matters Agreement, except as otherwise provided, Cal Dive generally accepts and assumes all employment related obligations with respect to all individuals who are employees of Cal Dive as of the IPO closing date, including expenses related to existing options and restricted stock. Those employees are entitled to retain their Helix stock options and restricted stock grants under their original terms except as mandated by applicable law. The Employee Matters Agreement also permitted Cal Dive employees to participate in our Employee Stock Purchase Plan for the offering period that ended June 30, 2007, and Cal Dive paid us $1.6 million in July 2007, which was the fair market value of the shares of our stock purchased by such employees.

          Pursuant to the Tax Matters Agreement, we are generally responsible for all federal, state, local and foreign income taxes that are attributable to Cal Dive for all tax periods ending on the IPO; Cal Dive is generally responsible for all such taxes beginning after the IPO. In addition, the agreement provides that for a period of up to ten years, Cal Dive is required to make annual payments to us equal to 90% of tax benefits derived by Cal Dive from tax basis adjustments resulting from the “Boot” gain recognized by us as a result of the distributions made to us as part of the IPO transaction.

Other

          In April 2000, we acquired a 20% working interest in Gunnison, a Deepwater Gulf of Mexico prospect of Kerr-McGee. Financing for the exploratory costs of approximately $20 million was provided by an investment partnership (OKCD Investments, Ltd. or “OKCD”), the investors of which include current and former Helix senior management, in exchange for a revenue interest that is an overriding royalty interest of 25% of Helix’s 20% working interest. Production from the Gunnison field commenced in December 2003. We have made payments to OKCD totaling $21.6 million, $22.1 million and $34.6 million in the years ended December 31, 2008, 2007 and 2006 respectively. Mr. Kratz personally owns approximately 75% of the partnership. Mr. Ferron, our former President and Chief Executive Officer, owns approximately 1.1% of the partnership and Mr. Pursell, our former Executive Vice President and Chief Financial Officer, owns approximately .43% of the partnership. In 2000, OKCD also awarded Class B limited partnership interests to key Helix employees.

          During 2008, 2007 and 2006, we paid $3.4 million, $12.3 million and $6.1 million, respectively, to Weatherford, an oil and gas industry company, for services provided to us. Mr. Duroc-Danner, a member of our board of directors, is part of the executive management team of Weatherford. During 2008, we paid $0.2 million to Tesco for services provided to us. Mr. Tripodo, a former board member and current member of our executive management team, is a former member of Tesco’s executive management team.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

          Ernst & Young LLP has served as the Company’s independent registered public accounting firm providing auditing and financial services since their engagement in fiscal year 2002, and will continue to provide such services during fiscal year 2009. We expect that representatives of Ernst & Young LLP will be present at the annual meeting and will have the opportunity to make a statement if they desire to do so. They will also be available to respond to appropriate questions.

Independent Registered Public Accounting Firm Fee Information

          Fees for professional services (in thousands) provided by our independent registered public accounting firm in each of the last two fiscal years in each of the following categories were:

		2007				2008
Audit Fees(1)		$	3,474	(2)		$	3,859	(3)
Audit-Related Fees(4)			16				3
Tax Fees(5)			106				36
All Other Fees (6)			1,763				104
Total		$	5,359			$	4,002

          The Audit Committee considers whether the provision of the foregoing services is compatible with maintaining the auditor’s independence and has concluded that the foregoing non-audit services and non-audit-related services did not adversely affect the independence of Ernst & Young LLP.

Audit Committee Pre-Approval Policies and Procedures

          The Audit Committee has adopted procedures for pre-approving certain audit and permissible non-audit services provided by the independent registered public accounting firm. These procedures include reviewing a budget for audit and permissible non-audit services. The budget includes a description of, and a budgeted amount for, particular categories of audit and permissible non-audit services that are recurring in nature and therefore anticipated at the time the budget is submitted. During the year, circumstances may arise such that it becomes necessary to engage the independent registered public accounting firm for services in excess of those contemplated by the budget or for additional services. Audit Committee approval is required to exceed the budget amount for a particular category of audit or permissible non-audit services and to engage the independent registered public accounting firm for any audit or permissible non-audit services not included in the budget. For both types of pre-approval, the Audit Committee considers whether such services are consistent with the SEC rules on auditor independence. The Audit Committee charter includes specific pre-approval procedures with respect to tax related services. The Audit Committee charter delegates pre-approval authority in certain circumstances to the Chairman of the Audit Committee. The Audit Committee periodically monitors the services rendered and actual fees paid to the independent registered public accounting firms to ensure that such services are within the parameters approved by the Audit Committee. None of the fees were for services approved by the Audit Committee pursuant to the de minimis exception in paragraph (c)(7)(i)(c) of Rule 2-01 of Regulation S-X.

     All fiscal year 2008 professional services by Ernst & Young LLP were pre-approved.

REPORT OF THE AUDIT COMMITTEE

     From January until June 2008, the Audit Committee consisted of Anthony Tripodo, T. William Porter and William L. Transier. As previously disclosed by the Company in a Current Report on Form 8-K filed with the Securities and Exchange Commission on June 30, 2008, Mr. Tripodo resigned from the Board of Directors and the Audit Committee and was appointed as the Executive Vice President and Chief Financial Officer of the Company. For the remainder of fiscal 2008, the Audit Committee consisted of T. William Porter, William L. Transier, and John V. Lovoi. In February 2009, Nancy K. Quinn was appointed to the Audit Committee. All of the individuals that have served, or currently serve, on the Audit Committee during fiscal 2008 have been determined to be independent by the board of directors (as independence is defined in the listing standards of the NYSE and the rules of the SEC). Each member of the Audit Committee satisfies the NYSE requirements for experience and expertise, and the board also has determined that Mr. Transier and Ms. Quinn each are, and prior to his resignation from the Audit Committee Mr. Tripodo was, an “audit committee financial expert” as defined by the SEC. During the fiscal year ended December 31, 2008, the Audit Committee conducted seven meetings.

     The primary purpose of the Audit Committee is to assess the information provided by management and our independent registered public accounting firm and to assist the board of directors in fulfilling its oversight responsibility to the shareholders, potential shareholders, the investment community, and others relating to: (1) the integrity of the financial statements of the Company; (2) the compliance by the Company with legal and regulatory requirements; (3) the performance of the Company’s internal audit function and independent registered public accounting firm; and (4) the independent registered public accounting firm’s qualifications and independence. The Audit Committee charter, a written charter adopted by the board of directors, describes in greater detail the full responsibilities of the Audit Committee. A copy of the Audit Committee charter is on our website at http://www.HelixESG.com or to any shareholder requesting a copy.

     Management is responsible for the preparation, presentation and integrity of our financial statements and for the appropriateness of our accounting and financial reporting principles and policies. Management is also responsible for establishing and maintaining the Company’s internal controls and procedures, establishing financial reporting processes and controls, evaluating the effectiveness of such controls and procedures and ensuring compliance with laws, regulations and ethical business standards. Our independent registered

public accounting firm, Ernst & Young LLP, is responsible for performing an independent audit of the Company’s financial statements in accordance with standards of the Public Company Accounting Oversight Board (U.S.) and issuing a report thereon as well as expressing an opinion on the effectiveness of our internal controls over financial reporting. The Audit Committee’s responsibility is to monitor and oversee these processes.

     The Audit Committee reviewed and discussed the audited financial statements of Helix for the year ended December 31, 2008, with management, and management represented that the financial statements of Helix were prepared in accordance with accounting principles generally accepted in the United States. Management has also represented that they have assessed the effectiveness of the Company’s internal controls over financial reporting as of December 31, 2008, and determined that as of that date, the Company has maintained effective internal control over financial reporting.

     In connection with the December 31, 2008 financial statements, the Audit Committee: (1) reviewed and discussed the audited financial statements with management and the independent registered public accounting firm; (2) reviewed with the independent registered accounting firm the scope and plan of the audit; (3) discussed with the independent registered public accounting firm the matters required to be discussed by Statement on Auditing Standards No. 61, “Communication with Audit Committees”, as amended by SAS No. 91 and as otherwise may be modified or supplemented; (4) discussed with Ernst & Young LLP that firm’s independence from management and the Company and received written disclosures and the letter required by PCAOB Ethics and Independence Rule 3526, Communication with Audit Committee Concerning Independence; and (5) discussed with the independent registered public accounting firm (in executive session outside of the presence of management) the audited financial statements and the evaluation of our system of internal controls.

     Based upon these reviews and discussions, the Audit Committee recommended to the Board of Directors, and the Board of Directors approved, that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 for filing with the SEC.

     Submitted by the members of the Audit Committee.

          The following table sets forth information as to all persons or entities known by us to have beneficial ownership, as of March 27, 2009, of more than 5% of the outstanding shares of our common stock, other than Mr. Kratz’s beneficial ownership which is set forth in “Management Shareholdings” below. As of March 19, 2009, we had 98,385,061 shares outstanding. The information set forth below has been determined in accordance with Rule 13d-3 under the Exchange Act on the basis of the most recent information filed with the SEC and furnished to us by the person listed. To our knowledge, except as otherwise indicated below, all shares shown as beneficially owned are held with sole voting power and sole dispositive power.

		Shares Beneficially				Percent of
Name and Address		Owned				Common Shares
(1) David Einhorn (Greenlight Capital, L.L.C.)			5,732,818	(1)			5.8	%
140 East 45th Street, 24th Floor New York, New York 10017
(2) Fletcher Asset Management, Inc.			9,035,056	(2)			8.4	%
48 Wall Street, 5th Floor New York, New York 10005
(3) EARNEST Partners, LLC			5,003,117	(3)			5.1	%
1180 Peachtree Street NE, Suite 2300 Atlanta, Georgia 30309
(4) Robeco Investment Management, Inc.			4,865,736	(4)			5.0	%
909 Third Avenue New York, New York 10022
(5) BNP Paribas Arbitrage SNC			6,334,451	(5)			6.4	%
787 Seventh Avenue New York, New York 10019

          The following table shows the number of shares of our common stock beneficially owned as of March 27, 2009 by our directors and nominees for director and the executive officers identified in the Summary Compensation Table below (“named executive officers”), other than Messrs. Ferron and Pursell, who each resigned as an officer in 2008 and are no longer subject to our reporting obligations, and all directors and such executive officers as a group. Mr. Ferron resigned effective February 4, 2008 and Mr. Pursell resigned on June 25, 2008.

          The number of shares beneficially owned by each director or executive officer is determined by the rules of the SEC, and the information does not necessarily indicate beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares over which the person or entity has sole or shared voting power or investment power regardless of economic interest, and also any shares that the person or entity can acquire within 60 days of March 27, 2008 through the exercise of stock options or other right. The inclusion in the table below of any shares deemed beneficially owned does not constitute an admission of beneficial ownership of those shares. As of March 19, 2009 there were 98,385,061 shares of common stock outstanding. The address of all executive officers and directors is care of Helix Energy Solutions Group, Inc., 400 North Sam Houston Parkway East, Suite 400, Houston, Texas 77060.

						Of Shares Beneficially
						Owned, Amount that may
		Amount and Nature of				be Acquired Within 60 Days				Percentage of Common
Name of Beneficial Owner(1)		Beneficial Ownership(2)				by Option Exercise				Stock Outstanding
Owen Kratz (3)			5,243,990				13,400				5.3	%
Bart H. Heijermans (4)			169,919				-0-				*
Robert Murphy (5)			214,498				-0-				*
Anthony Tripodo (6)			162,808				51,000				*
Alisa B. Johnson (7)			77,314				-0-				*
Gordon F. Ahalt (8)			100,525				30,000				*
Bernard Duroc-Danner (9)			164,344				88,000				*
John V. Lovoi (10)			139,801				88,000				*
T. William Porter			35,200				35,200				*
Nancy K. Quinn (11)			76,074				-0-				*
William L. Transier (12)			66,822				-0-				*
James A. Watt (13)			54,209				-0-				*
All named executive officers and directors as a group (12 persons)			6,505,504				305,600				6.6	%

          Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers and persons who own more than ten percent of a registered class of our equity securities, or “reporting person,” to file with the Securities and Exchange Commission initial reports of ownership and report changes in ownership of the Company’s common stock. Reporting persons are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file. Based solely on a review of the copies of these reports furnished to the Company, we believe that all reports required to be filed by reporting persons pursuant to Section 16(a) of the Exchange Act were filed for the year ended December 31, 2008 on a timely basis except as follows: Mr. Watt, our director, failed to file a timely Form 4 with respect to the sale of 5,930 shares of stock on May 8, 2008 in connection with the termination of and distribution from a 401(K) plan. This transaction was reported by Mr. Watt on a Form 4 filed on May 30, 2008.

     The table below provides information relating to the Company’s equity compensation plans as of December 31, 2008:

Number of Securities

to Be Issued upon

Weighted-Average

Number of Securities

Exercise of Outstanding

Exercise Price of

Remaining Available

Options, Warrants

Outstanding Options,

for Future Issuance under

Plan Category

and Rights (3)

Warrants and Rights

Compensation Plans (4)

Equity compensation plans approved by security holders (1)

-0-

-0-

3,770,624

(4)(5)

Equity compensation plans not approved by security holders (2)

521,654

$10.66

631,115

Total

521,654

$10.66

4,401,739

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

          No member of the Compensation Committee of our Board of Directors was, during fiscal year 2008, an officer or employee of the Company or any of its subsidiaries, or was formerly an officer of the Company or any of its subsidiaries, or had any relationships requiring disclosure by the Company under Item 404 of Regulation S-K under the Exchange Act.

          During 2008, no executive officer of the Company served as (i) a member of the compensation committee (or other board committee performing equivalent functions) of another entity, one or more of whose executive officers served on the Compensation Committee of the Board of Directors, (ii) a director of another entity, one or more of whose executive officers served on the Compensation Committee, or (iii) a member of the compensation committee (or other board committee performing equivalent functions) of another entity, one or more of whose executive officers served as a director of the Company.

COMPENSATION DISCUSSION AND ANALYSIS

          This Compensation Discussion and Analysis is intended to provide our stockholders with a description of the material elements of our compensation program for our executive officers for the year 2008 and the policies and objectives that support that program.

Oversight of Executive Compensation Program

          Each member of our Compensation Committee is independent. Each year we review any and all relationships that each director serving on the Compensation Committee may have with us, and the Board of Directors reviews our findings. The Board of Directors has determined that none of the Compensation Committee members has any material business relationship with us. No Compensation Committee member participates in any of our compensation programs, except for receiving grants of equity-based awards normally awarded to our directors under our 2005 Plan.

          The Compensation Committee assists the board in fulfilling its responsibilities for determining the total compensation packages offered to our executive officers and administers our compensation program. Specifically, the Compensation Committee is responsible for establishing the compensation policies and administering the compensation programs for our executive officers, and for administering the grant of equity-based incentive awards under our 2005 Plan. The Compensation Committee’s charter (i) empowers the Compensation Committee to review, evaluate and approve our executive officer compensation agreements, plans, policies and programs, (ii) delegates to the Compensation Committee all authority of the board required or appropriate to fulfill such purpose, and (iii) grants to the Compensation Committee the sole authority to retain and terminate any independent compensation consultant.

Compensation Philosophy and Objectives

          Our business model, which includes both a contracting services segment and an exploration and development segment, is very complex and requires highly qualified and technically proficient executive officers. In addition, we rely on our executive officers to develop and execute our business strategy in a way that maximizes value for our shareholders through the market and business fluctuations of a cyclical industry. Our compensation philosophy reflects the realities of the competitive market in which we operate and the characteristics of our business environment. The primary objectives of our compensation program for our executive officers including our named executive officers listed in the summary compensation table below, or “named executive officers,” are to attract and retain the qualified and technically proficient employees required to execute our business model, to motivate them to achieve superior performance in their respective areas of responsibility and to support and implement our business strategies, and to reward those employees for effective performance in a manner commensurate with those rewards given to their peers in the industry. Our compensation program is designed to create a positive environment in which the employees, including the named executive officers, are enthusiastic about our business, strategic objectives, core values and culture, and are working toward our long-term success.

          Currently, we have six executive officers. These executive officers have the broadest set of responsibilities, duties and policy-making authority in the Company. We hold them responsible for our performance, for implementing our strategic objectives and for maintaining a culture of strong core values and ethics. Details of compensation for our Chief Executive Officer, Chief Financial Officer, and three other highest paid executive officers, along with our former Chief Executive Officer and former Chief Financial Officer, can be found in the tables beginning on page 34.

          Executive Compensation Policy

          In 2008, our executive compensation program consisted of a base salary, a cash bonus and a long-term incentive equity award. All elements of the compensation program are designed upon the following principles:

	•		We pay competitively in terms of type and amount of compensation as compared to other companies in our industry (as discussed below);
	•		We compensate based upon the responsibilities, complexity and difficulty of the position;
	•		We compensate to reflect performance of both the individual, the group for which he or she is responsible, and our business;
	•		A substantial portion of each executive’s total compensation should be in the form of incentive compensation based on the individual executive’s performance during the year;
	•		Because of the cyclical nature of our industry and other factors related to an executive officer’s overall performance, the incentive bonus compensation should not be based on formulas or pre-set thresholds but should be based on the discretion of the Compensation Committee;
	•		The compensation program should incentivize executive officers to remain with us over the long-term;
	•		The compensation program should incentivize executive officers to execute our business plan and our financial objectives consistent with our long-term strategy; and
	•		We reward annual performance that reflects the execution of our stated strategy.

          Determining Executive Compensation for 2008

          The Compensation Committee applies the principles listed above to determine the compensation of each executive officer. The Compensation Committee considered the following information in evaluating the compensation program for 2008 and the compensation of each individual executive officer:

	•		Marketplace compensation levels for each position provided by the independent compensation consultant retained by the Compensation Committee to assist it in determining the compensation for our executive officers, based on both public and proprietary surveys of oilfield industry compensation, as well as compensation data derived from the proxy statements of oilfield industry peers (our “peer group”);
	•		A description of the current roles and responsibilities of the current executive officers as provided by the President and Chief Executive Officer;
	•		Current and historic financial information related to the performance of the Company and each of its segments;
	•		Information relevant to the internal equity analysis of our executive compensation program; and
	•		Recommendations of our President and Chief Executive Officer, with respect to the base salary, cash bonus target and equity grant of each executive officer, including each named executive officer.

          Market and Peer Group Review

          Each year, including 2008, the Compensation Committee compares our total compensation for each position occupied by our executive officers to the compensation paid by companies in our peer group and compensation data from available surveys of the oilfield services or oil and gas industry, as applicable, for similar positions. The Compensation Committee’s independent consultant proposes companies to be included in the peer group and management annually reviews such proposal to ensure that the most appropriate companies are included therein. The Compensation Committee then reviews and approves the members of the peer group as it deems appropriate. The report of the compensation consultant with respect to 2008 compensation included proxy information on executive officer compensation programs of ten energy services companies of similar size which we consider our peer group companies. For fiscal 2008, the peer group for executive officer compensation consisted of the following companies:

Rowan Companies Inc.		Oceaneering International Inc.
McDermott International Inc.		Global Industries Ltd.
Cameron International Corp.		Complete Production Services, Inc.
Pride International, Inc.		Tidewater Inc.
Grant Prideco Inc.		Oil States International, Inc.

          We believe these companies were appropriate for the purpose of our targeted compensation comparison for 2008 because such companies were our direct competitors or were companies that are a likely source of executive talent, their executive officers often have similar positions to or responsibilities of the positions held by our executive officers, each of the companies was of a comparable size to us and each such company is within our same general industry.

          The Compensation Committee was also provided with data from several databases containing survey information (survey data). The survey data is for executive officers with similar positions with roles and responsibilities similar to our executive officers. The report provided by the compensation consultant included data from the Towers Perrin 2007 Oilfield Services Industry Compensation Survey (Oil Field Services Survey) and the William M. Mercer 2007 Energy Industry Compensation Survey (Energy Industry Survey); these were the two principal surveys used by the consultant in generating survey data for our various executive officer positions. The Oilfield Services Survey included information from 15 companies having average revenues for fiscal 2006 equal to approximately $2 billion. The data from the Energy Industry Survey was tailored for each position to include only companies that were most closely aligned with us in terms of revenues and executive officer position. As a result, the number of companies and the average revenue of participants in the Energy Industry Survey varied depending on the position but for each position included information from at least 21 companies having in each case average revenues for fiscal 2006 equal to approximately $1.9 billion. The Oilfield Services Survey was used for each executive officer other than Mr. Kratz, as Executive Chairman, and Mr. Murphy, as Executive Vice President - Oil and Gas. The Energy Industry Survey was used for each executive officer other than Mr. Kratz. The positions held by Messrs. Kratz and Murphy provided difficulties in terms of survey data position matching for 2008 compensation purposes, so in order to obtain information for the positions of Executive Chairman and Executive Vice President — Oil and Gas, the consultant also provided information from the Towers Perrin 2007 Executive Compensation Database Survey and the Towers Perrin 2007 Oil and Gas Compensation Survey (Oil and Gas Survey), respectively. The Towers Perrin 2007 Executive Compensation Database Survey was used to obtain information solely with respect to Executive Chairman and included all the companies in such survey with a similar position. Mr. Murphy’s survey reference data was provided based on both the Energy Industry Survey and the Oil and Gas Survey. The Oil and Gas Survey data was based on companies with oil and gas revenues for fiscal 2006 between $1 billion and $3 billion. In each case where more than one survey was utilized, the Compensation Committee was given an average as determined by the consultant of the amounts shown in the applicable surveys.

          The data derived from the surveys and the proxy peer group is the data used for compensation reference point purposes. With this information, the Compensation Committee reviews and analyzes compensation for each executive officer and makes adjustments as it deems appropriate in its discretion. As a general rule, annual base salary was compared to the 50^th percentile (mid-point) of the range of annual cash base compensation paid by our industry peers or applicable survey data. The annual cash bonus award target and the equity-based incentive award for each executive officer were compared, depending on the position, at between the 50^th and the 75^th (top 25%) percentile of the range of total compensation paid by our industry peers or survey participants to provide an incentive to our executive officers, including the named executive officers, to achieve a level of performance comparable to the top performing companies within the our industry and also to attract and retain highly talented individuals.

          Pursuant to the authority granted to the Compensation Committee pursuant to its charter, the Compensation Committee engages independent compensation consultants to assist the committee in this process. In 2007, the Compensation Committee retained the services of Towers Perrin, an independent consultant that specializes in executive compensation matters. Towers Perrin reported to, and acted at the direction of, the Compensation Committee. Helix management worked closely with Towers Perrin, however, the Compensation Committee retained ultimate control and authority over Towers Perrin. For 2008, Towers Perrin provided survey and proxy peer data on total compensation with respect to the 25^th percentile, market median (50^th percentile), and 75^th percentile of the market. This data was presented to management and the Compensation Committee for its review and analysis in advance of the December 2007 meeting. The survey results and proxy data were taken into consideration by the Chief Executive Officer in determining his recommendations regarding base salary, cash bonus target and equity incentive compensation for each of the executive officers and by the Compensation Committee. The Chief Executive Officer examined the survey and proxy peer data provided by the compensation consultant and made suggestions to the Compensation Committee for each of the executive officers with respect to 2008 base salary, bonus target, and equity grants, as he deemed appropriate considering each of the executive officer’s area of responsibility and performance. The Compensation Committee then determined an appropriate base salary, bonus target and equity award for each executive officer, generally following the target guidelines described above, but considering any other factors the Compensation Committee deemed appropriate in its discretion.

          From time to time the compensation consultant provides additional services and advice to the Compensation Committee including reviewing and advising regarding the terms of employment agreements, advising on the structure and award levels of non-equity based incentive compensation for executive officers, advising with respect to structuring the fees paid to our independent directors as well as equity compensation awarded to our independent directors and providing such other information or advice regarding such other issues as may be requested by the committee.

          CEO Recommendations

          As discussed above, during December 2007, our President and Chief Executive Officer provided recommendations to the Compensation Committee with respect to the 2008 compensation, base salary, equity award and cash bonus target, for each executive officer. These recommendations were based on the survey and proxy peer group data reviewed by the Compensation Committee and a subjective review by the Chief Executive Officer of the complexity and responsibility of each executive officer’s position and each officer’s overall performance and contribution to the Company during the prior year. While the Compensation Committee considered the recommendations of the Chief Executive Officer with respect to these elements of compensation, the Committee independently evaluated the recommendations and made all final compensation decisions. The Compensation Committee in executive session decided the base salary, bonus targets and long-term incentive award of Mr. Kratz, then Executive Chairman, and Mr. Ferron, our former President and Chief Executive Officer.

Elements of our 2008 Compensation

          Overview

          During fiscal 2008, the primary elements of compensation earned by each of our executive officers, including our named executive officers, consisted of:

	•		base salary;
	•		a short term incentive cash bonus; and
	•		long-term incentive compensation, in the form of equity-based awards.

          Typically, and as was the case for fiscal 2008, the Compensation Committee reviews and approves each element of compensation separately, and, if necessary, makes adjustments to individual elements of compensation to achieve total targeted compensation that is competitive with our peer group at the desired levels of approximately the 50^th or 75^th percentile of the market. See “Market and Peer Group Review” above for a discussion of the comparison of our fiscal 2008 compensation to the survey data and the peer group.

          We use each element of compensation to satisfy one or more of our stated compensation objectives. For purposes of this discussion, total compensation includes the total cash compensation (base salary plus cash bonus) plus long-term equity incentive awards. To ensure appropriate linkage between our objectives and compensation levels, we periodically review the goals and the levels of each element of compensation.

          Base Salary Determination

          In establishing base salaries for executive officers, including the named executive officers, the Compensation Committee considers a number of factors including the executive’s job responsibilities, individual achievements and contributions, level of experience and personal compensation history. Base salary is set for our named executive officers at the regularly scheduled December meeting of our Compensation Committee, to be effective beginning on the first day of the next calendar year. It is not our policy to pay executive officers at the highest level relative to their peers, but rather to set their base salaries at a level comparable to the 50^th percentile of the market. We believe that this, together with the other elements of our compensation program, provides appropriate compensation to each of our executive officers depending on his or her position and gives us the opportunity to attract and retain talented managerial employees both at the executive level and below.

          After reviewing the peer group and the survey data, the Compensation Committee exercised its discretion and determined a base salary for each executive officer. The target bonus for each of the named executive officers was then established by the Compensation Committee at levels it deemed appropriate after reference to the survey data or our peer group, as applicable. Set forth below are the actual base salary of the named executive officer, and the target bonus for and the actual bonus of the named executive officer.

          Cash Bonus Program

          The annual incentive compensation plan includes a cash bonus designed to reward our employees, including our executive officers, for the achievement of certain goals in a given year. The bonus target for each executive officer is established in either the December meeting of the Compensation Committee in the prior year or during the committee’s first meeting of the applicable year. In February of each year, prior to granting a bonus with respect to the prior year, the President and Chief Executive Officer reviews each executive officer’s responsibilities and performance for the prior year, reviews whether our goals and criteria were achieved during the prior year and makes a recommendation to the Compensation Committee. The committee awards bonuses for the previous year at its first meeting of the year based upon the exercise of its discretion (as discussed in more detail below) considering the previously approved target bonus and after its review of the data provided by management. Bonuses are typically paid in March. The Compensation Committee evaluated many factors and components when determining a bonus payment including the following:

Company Performance

•

The Compensation Committee reviews our performance, both financial and otherwise, including whether we achieved the budgeted diluted earnings per share for the year, after taking into account the payment of the potential bonuses. The budgeted diluted earnings per share objective established for the payment of bonuses is within the guidance provided to shareholders, potential investors and investment advisors on an annual basis. As a result, our objectives, as stated to the shareholders, potential investors and investment advisors, are aligned with the performance objectives of our named executive officers. In this way, we incentivize each named executive officer to successfully perform during the year in terms of his or her respective responsibilities which, together with its efforts of others, would ultimately cause us to meet our stated business and strategic objectives, including our earnings per share objective. As described below, we did not achieve our financial objectives in 2008.

Group Performance

•

The Compensation Committee reviews the performance of each of our business segments or groups. The committee evaluates whether the department or division for which each named executive officer has responsibility was well managed, performed effectively in light of market and other conditions, and achieved its budgetary and other goals, i.e., its budgeted revenue (in the case of Mr. Murphy, year over year metrics related to reserves, production and financial results) and/or budgeted cost levels for the year, as well as the overall performance of such department or division.

Personal Performance

•

The Compensation Committee reviews the overall performance of each executive officer, including the named executive officers, in light of the officer’s job responsibilities, any personal objectives, and general effectiveness of such executive officer with respect to his or her position and responsibilities.

          Set forth below are the actual base salaries for each named executive officer, the target bonus and the actual bonus (paid in March 2009) of the named executive officer:

						Bonus
		Base Salary(1)				Target				Actual
Owen Kratz		$	700,000			$	1,000,000	(2)		$	0
Martin R. Ferron			94,231	(4)			1,000,000	(2)				(4)
A. Wade Pursell			188,115	(4)			450,000	(3)				(4)
Anthony Tripodo			186,711	(5)			450,000	(5)			300,000
Bart Heijermans			450,000				600,000	(3)			300,000
Robert Murphy			450,000				450,000	(2)			180,000
Alisa Johnson			325,000				325,000	(2)			285,000

          The cash bonuses paid for 2008 were completely based on the discretion of the Compensation Committee, considering some of the factors described above. The committee, after consultation with Mr. Kratz, determined that the Company had not met its financial and certain other performance objectives for the year and had experienced a substantial deterioration of the share price, and as a result, the three most senior executive officers in charge of the operations of the Company were awarded cash bonuses in amounts substantially less than their bonus targets. The three executive officers in corporate functions (including Mr. Hajdik) were awarded a higher percentage of their bonus targets, because the committee determined that each such officer had performed at a very high level in the performance of his or her responsibilities particularly in light of the various challenges faced by the Company as a result of both factors unique to the Company and a difficult economic environment overall during the second half of 2008. Mr. Kratz, at his recommendation made to the Compensation Committee prior to its deliberations regarding executive officer bonuses, received no bonus for 2008. Mr. Heijermans, our Chief Operating Officer, received 50% of his bonus target and, Mr. Murphy received 40% of his bonus target.

          2009 Bonus Plan

     For 2009, the Compensation Committee determined the bonus target for each executive officer in its December meeting. The committee will award bonuses for 2009 at its first meeting in 2010 based upon the exercise of its discretion (as discussed in more detail below) after its review of the data provided by management and any other data deemed appropriate by the Compensation Committee in its discretion without reference to specific company, group or individual goals. For fiscal 2009, all executive officers, including the named executive officers, will be awarded their cash bonus based on the discretion of the Compensation Committee. The bonus target for each named executive officer is set forth below:

Owen Kratz -		$	1,400,000
Bart Heijermans -		$	600,000
Robert Murphy -		$	600,000
Tony Tripodo -		$	450,000
Alisa B. Johnson -		$	375,000

          Equity Incentive Awards

          In addition to total cash compensation, each officer receives a long-term equity award under our 2005 Plan (with respect to 2008, in the form of restricted stock) in an amount based on the value of the underlying award necessary to place the applicable officer in the 50^th to 75^th percentile for equity compensation for companies in our peer group. As a result of the changes to regulatory, tax and accounting treatment of certain types of long-term equity incentives, we currently believe that restricted stock awards are the most efficient way to reward executive officers and provide them with the chance to receive a proprietary interest in the Company, but we will periodically reevaluate that determination and may grant other types of equity-based incentive compensation in the future, including stock options. The Compensation Committee believes that equity-based incentive awards provide a proprietary interest for the executive officers in the Company and encourages such executive officer to continue in their employment with us. We believe that as a result of their proprietary interest in the Company, the economic interests of our executive officers are more closely aligned to those of our shareholders. We also believe such grants are an important retention tool with respect to such employees, including our executive officers. The restricted stock awards contain restrictions such that the executive officer must remain with us until the date of vesting. Restricted stock awards typically vest one-fifth annually after the original award date. Pursuant to the terms of the restricted stock award agreements, any unvested stock award is forfeited if the executive officer terminates employment with the Company.

          In determining each executive officer’s equity grant, the Compensation Committee reviews the survey information and peer group data provided by the compensation consultant, as discussed above, and the Chief Executive Officer’s recommendation regarding the equity grant and, through the exercise of its discretion, makes its determination at its December meeting. After

reviewing all information it deemed to be relevant, including the compensation reported in industry surveys and by peer group companies with respect to their executive officers, management proposals or recommendations, historical information regarding Helix’s equity incentive compensation and any other fact the Compensation Committee deemed relevant in its sole discretion, the equity awards for each of the named executive officers were set by the committee. Historically, executive officers have received significant grants on or immediately after the start of their employment with the Company, and this practice is reflected in the grant to Mr. Tripodo.

          Approximately 61.42% of the shares of restricted stock granted under the 2005 Plan have been granted to employees that are named executive officers or directors through December 31, 2008. During 2008, a total of 70 employees and six non-employee directors received restricted stock awards equal to an aggregate of 0.67% of the outstanding shares of our common stock on March 9, 2009, including the named executive officers, who received 375,320 shares of restricted stock or 57.0% of the total restricted stock grants in fiscal year 2008 and the non-employee directors, who received 138,665 shares of restricted stock or 21.1% of the total restricted stock grants for fiscal year 2008.

          Perquisites

          We limit the perquisites that we make available to our named executive officers, particularly in light of recent developments with respect to disclosure of and abuse involving perquisites. Our named executive officers are entitled to no significant benefits that are not otherwise available to all of our employees. In this regard it should be noted that we do not provide pension arrangements, post-retirement health coverage, or similar benefits for our named executive officers.

          Benefits

          We offer a variety of health and welfare and retirement programs to all eligible employees. The executive officers generally are eligible for the same benefit programs on the same basis as the rest of our broad-based employees. Our health and welfare programs include medical, pharmacy, dental, vision, life insurance and accidental death and disability insurance. In addition, we offer a retirement program intended to supplement the employee’s personal savings and social security. The retirement program is our Helix Energy Solutions Group, Inc. Employees Retirement Savings Plan, which is a 401(k) plan. With respect to all employees who participate in our 401(k) plan, the Company currently matches 50% of the employees’ pre-tax contributions up to 5% of the employee’s salary (including bonus) subject to contribution limits. All of our named executive officers participated in our 401(k) plan and received matching funds in 2008. Our health and insurance plans are the same for all employees. In general, our employees pay approximately 30% of the health insurance premium due.

          Pension Benefits

          Although our named executive officers do not generally have pension or other retirement benefits, Mr. Murphy had benefits pursuant to a pension plan made available to certain officers of Remington Oil & Gas Corporation, which we acquired in July 2006. All benefits under that plan were accrued by a trust established by Remington and we have incurred no additional obligation related thereto. All benefits under that pension plan were paid to Mr. Murphy during 2008 and he has no further rights under such pension plan.

Components of the Compensation Committee Analysis

          Set forth below are some of the components that impact the compensation decisions made by the Compensation Committee. These factors or components are not intended to be exhaustive.

          Considerations Regarding Roles and Responsibilities

          The roles and responsibilities of each named executive officer are taken into account in two distinct ways when determining compensation. First, the roles and responsibilities are considered by the Compensation Committee, as well as by its independent compensation consultant, when determining the applicable comparable position for inclusion in the peer group and survey data compensation information. Second, the Compensation Committee evaluates the responsibilities and the complexity of the respective officer’s specific position to determine whether such officer should receive compensation, or a mix of compensation, that is different from the other named executive officers. The Compensation Committee has the authority to consider the respective roles and responsibilities of each named executive officer in any way it deems appropriate in its judgment. For example, it is possible that the Compensation Committee could exercise its discretion and decide that a certain officer should receive base salary equal to the 75^th

percentile of his or her respective peer group or survey data because the responsibilities of the position were more demanding than his or her peers within the peer group.

          Discretion of the Compensation Committee

          The Compensation Committee retains overall discretion with respect to all aspects of our compensation program for our executive officers, and in particular, has complete discretion with respect to executive officer bonuses. The committee may elect to consider any performance criteria (company, department and/or individual), the achievement of strategic objectives, a change in the stock price or financial position of the Company, and any other factor it deems appropriate. The Compensation Committee may grant additional discretionary bonuses as a result of our achievements during the year.

          General Information

          No element of an officer’s compensation is directly linked to any other element and the Compensation Committee does not have an exact formula for allocating between cash and non-cash compensation. We strive to design a compensation package that uses total cash compensation (salary plus annual cash bonus) to recognize each individual officer’s responsibilities, role in the organization, experience and contributions to the Company and uses long-term equity-based incentives to align employee and shareholder interests, as well as to attract, retain and motivate employees. All such compensation is compared against our peer group or survey reference data.

          The Compensation Committee believes that a significant portion of the executive officers’ compensation should be tied to performance. The Compensation Committee reviews financial and non-financial data related to the performance of the Company, the business segment or group, if applicable, and the individual in determining compensation.

          Generally speaking, the elements of our compensation program, as well as the percentage mix of the various elements, are in line with those of other companies in our industry, as is evidenced by data obtained from the compensation consultant engaged by the Compensation Committee, as described above. It is our belief that the compensation program as adopted by the Compensation Committee achieves our objectives of attracting and retaining key executive officers, motivating such officers to achieve our financial and strategic objectives and rewarding such officers for successfully performing the responsibilities of their respective positions.

          Tax Considerations

          Section 162(m) of the Internal Revenue Code of 1986, as amended, places a limit of $1,000,000 on the amount of compensation that may be deducted by us in any year with respect to the named executive officers unless the compensation is performance-based compensation as described in Section 162(m) and the related regulations. Although the Compensation Committee may take into account the potential application of Section 162(m) on its compensation decisions, including the grant of long-term incentive compensation awards, it may approve compensation that exceeds the above-referenced limit in order to ensure competitive levels of compensation for our executive officers. As a result, certain compensation paid to the named executive officers may not be deductible for tax purposes.

Compensation Processes

          As described above, annual executive compensation consists of a base salary, cash bonus and long-term equity incentive awards plus benefits. The Compensation Committee reviews each component of such compensation, other than benefits that are available to all employees, for the next fiscal year at its meeting in December of each year and typically grants restricted stock awards to all of our executive officers and certain other eligible employees and determines executive officer base salaries and bonus targets at that meeting. At its first meeting of the following year, after the Compensation Committee has had an opportunity to evaluate performance results for the preceding year, the Compensation Committee approves the cash bonus for each of the executive officers payable with respect to the preceding year.

          The compensation consultant is retained by the Compensation Committee well in advance of the December meeting, and provides a report to the Compensation Committee regarding market compensation data for each executive officer in advance of such meeting. After reviewing the data in such report, the Chief Executive Officer evaluates each executive officer’s compensation based upon each executive officer’s current and historical compensation information; information provided by the compensation consultant regarding the compensation practices of similarly situated competitors; the responsibilities, difficulty and complexity of the position; and performance during the year and makes a recommendation to the Compensation Committee based on that evaluation. The Compensation Committee then, in its discretion, determines each element of the compensation of each of the executive officers.

          Senior members of our management team including the Chief Executive Officer provide recommendations regarding many aspects of our compensation program, including executive compensation. The Compensation Committee does not, however, delegate any of its functions or authority to management (other than the issuance of certain equity incentive compensation awards pursuant to the terms of the 2005 Plan to new hires or employees who are promoted).

          With respect to restricted stock grants to certain management employees, including grants to the named executive officers, our practice is to make the grants on the first business day of each calendar year, with the amount of the grant based on dividing the dollar value of each proposed grant by the closing price for our common stock on the last business day of the prior year. (For example, grants made in 2008 were made on January 2, 2008, and were based on the closing price of our stock on December 31, 2007). In addition, restricted stock may be awarded on certain other dates during the year including the start date of new employees (including any new executive officer), promotions of existing employees, and certain anniversary dates for non-employee directors. Under the 2005 Plan, our Chief Executive Officer has the power to grant options and restricted stock with respect to not more than 200,000 shares per fiscal year as an inducement to hire prospective employees or to employees who receive promotions during the year, in each case who will not be officers of the Company subject to the provisions of Section 16 of the Exchange Act. Grants to newly hired employees are effective on the employee’s first day of employment. Mr. Tripodo received an equity grant upon beginning his employment with us which is reflected in the compensation tables contained herein.

Services Provided by Former CFO

          We entered into an eighteen-month consulting agreement with Mr. Pursell, our former Executive Vice President and Chief Financial Officer, for transition and advisory consulting services pursuant to which Mr. Pursell receives monthly consulting fees equal to $30,415. The consulting arrangement was negotiated simultaneously with Mr. Pursell’s resignation from the Company and the negotiation of his severance arrangement. The Compensation Committee reviewed and approved the consulting agreement in connection with Mr. Pursell’s resignation.

Severance Arrangement with Former CEO and Former CFO

          We entered into severance agreements with each of Mr. Ferron, our former Chief Executive Officer, and Mr. Pursell, our former Chief Financial Officer, at the time of their resignation as executive officers. Neither the Company nor the Compensation Committee has specific guidelines for determining the amount of any severance payment. After taking into account the provisions of his or her employment agreement, the Compensation Committee may exercise its discretion to determine the amount and timing of any termination related payments and benefits that will be offered to the executive officer, including any named executive officer. The committee considers a number of factors in making its determination regarding the payment of severance benefits. The Compensation Committee considered the years of service to the Company, the terms of each former executive officer’s employment agreement, the specific circumstances regarding the resignation and the type of compensation to be received when approving the termination agreements negotiated between us and Mr. Ferron and Mr. Pursell, respectively. The amounts paid to such executive officers were not based on a mathematical calculation or formula-based determination.

          The Compensation Committee of the Board of Directors (the “Committee”) is composed of Messrs. Lovoi (Chair), Ahalt, Transier and Watt. Each member of the Committee is a non-employee independent director. The Committee is responsible for establishing the compensation policies and administering the compensation programs for Helix’s executive officers, and administers the grant of stock-based awards under our 2005 Long Term Incentive Plan.

          The Committee has reviewed and discussed with management the “Compensation Discussion and Analysis” provisions to be included in our 2009 Proxy Statement on Schedule 14A, filed pursuant to Section 14(a) of the Securities Exchange Act of 1934 (the “Proxy”). Based on that review and discussion, the Committee recommends to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Proxy.

COMPENSATION COMMITTEE:

John V. Lovoi, Chair
Gordon F. Ahalt
William L. Transier
James A. Watt

     The executive officers of Helix are as follows:

Name		Age		Position
Owen Kratz		54		President and Chief Executive Officer and Director
Bart H. Heijermans		42		Executive Vice President and Chief Operating Officer
Robert P. Murphy		50		Executive Vice President — Oil & Gas
Anthony Tripodo		56		Executive Vice President and Chief Financial Officer
Alisa B. Johnson		51		Executive Vice President, General Counsel and Corporate Secretary
Lloyd A. Hajdik		43		Senior Vice President — Finance and Chief Accounting Officer

     Owen Kratz is President and Chief Executive Officer of Helix. He was named Executive Chairman in October 2006 and served in that capacity until February 2008 when he resumed the position of President and Chief Executive Officer. He was appointed Chairman in May 1998 and served as the Company’s Chief Executive Officer from April 1997 until October 2006. Mr. Kratz served as President from 1993 until February 1999, and has served as a Director since 1990. He served as Chief Operating Officer from 1990 through 1997. Mr. Kratz joined Helix in 1984 and held various offshore positions, including saturation diving supervisor, and had management responsibility for client relations, marketing and estimating. From 1982 to 1983, Mr. Kratz was the owner of an independent marine construction company operating in the Bay of Campeche. Prior to 1982, he was a superintendent for Santa Fe and various international diving companies, and a diver in the North Sea. Mr. Kratz is also Chairman of the Board of Directors of Cal Dive International, Inc. Mr. Kratz has a Bachelor of Science degree from State University of New York.

     Bart H. Heijermans became Executive Vice President and Chief Operating Officer of Helix in September 2005. Prior to joining Helix, Mr. Heijermans worked as Senior Vice President Offshore and Gas Storage for Enterprise Products Partners, L.P. from 2004 to 2005 and previously from 1998 to 2004 was Vice President Commercial and Vice President Operations and Engineering for GulfTerra Energy Partners, L.P. Before his employment with GulfTerra, Mr. Heijermans held various positions with Royal Dutch Shell in the United States, the United Kingdom and the Netherlands. Mr. Heijermans received a Master of Science degree in Civil and Structural Engineering from the University of Delft, the Netherlands and is a graduate of the Harvard Business School Executive Program.

     Robert P. Murphy was elected as Executive Vice President — Oil & Gas of Helix on February 28, 2007, and as President and Chief Operating Officer of Helix Oil & Gas, Inc., a wholly owned subsidiary, on November 29, 2006. Mr. Murphy joined Helix on July 1, 2006 when Helix acquired Remington Oil & Gas Corporation, where Mr. Murphy served as President, Chief Operating Officer and was on the Board of Directors. Prior to joining Remington, Mr. Murphy was Vice President — Exploration of Cairn Energy USA, Inc,

of which Mr. Murphy also served on the Board of Directors. Mr. Murphy received a Bachelor of Science degree in Geology from The University of Texas at Austin, and has a Master of Science in Geosciences from the University of Texas at Dallas.

     Anthony Tripodo was elected as Executive Vice President and Chief Financial Officer on June 28, 2008. Mr. Tripodo oversees the finance, treasury, accounting, tax, information technology, administration and corporate planning functions. Mr. Tripodo was a director of Helix from February 2003 until June 2008. Prior to joining Helix, Mr. Tripodo was the Executive Vice President and Chief Financial Officer of Tesco Corporation. From 2003 through the end of 2006, he was a Managing Director of Arch Creek Advisors LLC, a Houston based investment banking firm. From 2002 to 2003, Mr. Tripodo was Executive Vice President of Veritas DGC, Inc., an international oilfield service company specializing in geophysical services. Prior to becoming Executive Vice President, he was President of Veritas DGC’s North and South American Group. From 1997 to 2001, he was Executive Vice President, Chief Financial Officer and Treasurer of Veritas. Previously, Mr. Tripodo served 16 years in various executive capacities with Baker Hughes, including serving as Chief Financial Officer of both the Baker Performance Chemicals and Baker Oil Tools divisions. Mr. Tripodo also serves as a director of TXCO Resources Inc., an independent oil and gas enterprise with operations primarily in Texas, onshore Gulf Coast region and Western Oklahoma. He graduated Summa Cum Laude with a Bachelor of Arts degree from St. Thomas University (Miami).

     Alisa B. Johnson joined the Company as Senior Vice President, General Counsel and Secretary of Helix in September 2006, and in November 2008 became Executive Vice President, General Counsel and Secretary of the Company. Ms. Johnson has been involved with the energy industry for over 18 years. Prior to joining Helix, Ms. Johnson worked for Dynegy Inc. for nine years, at which company she held various legal positions, including Senior Vice President and Group General Counsel — Generation. From 1990 to 1997, Ms. Johnson held various legal positions at Destec Entergy, Inc. Prior to that Ms. Johnson was in private law practice. Ms. Johnson received her Bachelor of Arts degree Cum Laude from Rice University and her law degree Cum Laude from the University of Houston.

     Lloyd A. Hajdik joined the Company in December 2003 as Vice President — Corporate Controller. Mr. Hajdik became Chief Accounting Officer in February 2004 and in November 2008 he became Senior Vice President — Finance and Chief Accounting Officer. Prior to joining Helix, Mr. Hajdik served in a variety of accounting and finance-related roles of increasing responsibility with Houston-based companies, including NL Industries, Inc., Compaq Computer Corporation (now Hewlett Packard), Halliburton’s Baroid Drilling Fluids and Zonal Isolation product service lines, Cliffs Drilling Company and Shell Oil Company. Mr. Hajdik was with Ernst & Young LLP in the audit practice from 1989 to 1995. Mr. Hajdik graduated Cum Laude from Texas State University receiving a Bachelor of Business Administration degree. Mr. Hajdik is a Certified Public Accountant and a member of the Texas Society of CPAs as well as the American Institute of Certified Public Accountants.

          The following table provides a summary of the cash and non-cash compensation for the years ended December 31, 2006, December 31, 2007 and December 31, 2008 for each of (i) the principal executive officer, the Chief Executive Officer and the Chief Financial Officer, (ii) each of the three most highly compensated executive officers of the Company during 2008 other than the principal executive officer, the Chief Executive Officer or Chief Financial Officer and (iii) the former Chief Executive Officer and the former Chief Financial Officer.

																						Non-Equity
														Stock				Option				Incentive Plan				All Other
										Bonus				Awards				Awards				Compensation				Compensation				Total
Name and Principal Position		Year				Salary ($)				($)(2)(3)				($)(4)				($)(4)				($)(5)				($)(6)				($)
Owen Kratz, Chief Executive			2008			$	697,307			$	-0-			$	1,712,459			$	135,109			$	-0-			$	5750			$	2,950,625
Officer and President (1)			2007			$	662,000				-0-			$	1,112,461			$	218,510			$	400,000			$	5,625			$	2,398,596
			2006			$	389,423				-0-			$	550,461			$	218,510			$	529,760			$	5,500			$	1,693,654
Anthony Tripodo, Executive			2008			$	186,711			$	375,000	(8)		$	334,264	(9)			-0-				-0-			$	5,750			$	901,725
Vice President and Chief Financial Officer(7)
Bart Heijermans, Executive			2008			$	448,269			$	300,000			$	1,557,486				-0-				-0-			$	7,765			$	2,313,520
Vice President and Chief			2007			$	425,000				68,400			$	1,502,318				-0-			$	441,600			$	11,189			$	2,448,507
Operating Officer			2006			$	340,000			$	125,000			$	1,257,117				-0-			$	200,000			$	12,038			$	1,934,155
Robert Murphy, Executive			2008			$	448,269			$	180,000			$	1,200,018				-0-				-0-			$	8,160			$	1,836,447
Vice President — Oil &			2007			$	425,000				-0-			$	1,300,076				-0-			$	680,000			$	13,267			$	2,418,343
Gas (10)			2006			$	425,000			$	850,000	(11)		$	900,068				-0-				-0-				-0-			$	2,175,068
Alisa B. Johnson, Executive			2008			$	323,750			$	285,000			$	364,400				-0-				-0-			$	7,062			$	980,212
Vice President and			2007			$	278,000				-0-			$	174,396				-0-			$	188,800			$	8,119			$	649,315
General Counsel(12)			2006			$	80,000				-0-			$	43,332				-0-			$	130,000			$	600			$	253,932
Martin R. Ferron, former Chief			2008			$	94,230				-0-			$	3,132,535			$	507,731				-0-			$	1,654,599			$	5,389,095
Executive Officer and President(13)			2007			$	662,000				-0-			$	1,172,756			$	111,650			$	978,000			$	13,365			$	2,937,771
			2006			$	446,189			$	250,000			$	610,756			$	111,650			$	599,386			$	12,324			$	2,030,305
A. Wade Pursell, former Executive			2008			$	188,115				-0-			$	842,630			$	154,368				-0-			$	55,074	(7)(8)		$	1,491,067
Vice President and Chief			2007			$	340,000				-0-			$	419,111			$	77,917			$	250,880			$	13,383			$	1,101,291
Financial Officer (14)			2006			$	245,102			$	75,000			$	187,312			$	77,917			$	255,940			$	12,310			$	853,581

          Under our compensation program, the value of the combined base salary and annual bonus for each of our named executive officers is approximately 23.6% to 66% of their total compensation. No element of an officer’s compensation is directly linked to any other element and the Compensation Committee does not have an exact formula for allocating between cash and non-cash compensation. We strive to design a compensation package that uses total cash compensation (salary plus annual cash bonus) to recognize each individual officer’s responsibilities, role in the organization, experience and contributions to the Company and uses

long-term equity-based incentives to align employee and shareholder interests, as well as to attract, retain and motivate employees. All such compensation is compared against our peer group or survey reference data.

          In 2005, we adopted the 2005 Plan which provides that we may grant up to 6,000,000 shares (adjusted for the two-for-one stock split on December 10, 2005) of our common stock in the form of options, restricted stock or restricted stock units subject to the terms and conditions of the 2005 Plan. As of March 27, 2009, 2,583,059 shares of restricted stock had been granted pursuant to the 2005 Plan. Our restricted stock awards generally vest 20% per annum beginning on the first anniversary of the grant date, and each such share awarded is eligible to vote at each meeting of shareholders and to receive any dividend declared after the grant date.

          The following table sets forth certain information with respect to grants of plan-based awards during the fiscal year ended December 31, 2008 to each of our named executive officers:

						Estimated Future				All Other Stock
						Payouts Under Non-				Awards :
						Equity Incentive				Number of Shares of				Grant Date Fair Value of Stock
Name		Type of Award		Grant Date		Plan Awards(1)				Stock				and Options Awarded
Owen Kratz,		Restricted Stock Grant		January 2, 2008			-0-				72,289			$	3,000,000
Bart Heijermans		Restricted Stock Grant		January 2, 2008			-0-				48,193			$	2,000,000
Robert Murphy		Restricted Stock Grant		January 2, 2008			-0-				48,193			$	2,000,000
Anthony Tripodo		Restricted Stock Grant		June 25, 2008			-0-				70,500			$	2,865,120
Alisa Johnson		Restricted Stock Grant		January 2, 2008			-0-				22,892			$	950,000
Martin R. Ferron (2)		Restricted Stock Grant		January 2, 2008			-0-				72,289			$	3,000,000
A. Wade Pursell (3)		Restricted Stock Grant		January 2, 2008			-0-				31,325			$	1,300,000

		2008 Bonus								2009 Bonus
		Target				Actual				Target
Owen Kratz		$	1,000,000			$	0			$	1,400,000
Martin R. Ferron			1,000,000					(2)			N/A
A. Wade Pursell			450,000					(3)			N/A
Anthony Tripodo			450,000				300,000				450,000
Bart Heijermans			600,000				300,000				600,000
Robert Murphy			450,000				180,000				600,000
Alisa Johnson			325,000				285,000				375,000

          The following table sets forth certain information with respect to the restricted stock granted during or for the fiscal year ended December 31, 2008, 2007 and 2006 to each of our executive officers listed in the Summary Compensation Table, respectively.

										All Other
										Stock Awards:
										Number of
										Shares of
										Stock or				Grant Date Fair
		Grant				Approval				Units				Market Value of
Name		Date				Date				(#)(1)				Stock Awards ($)(1)
Owen Kratz,			1/2/2008				12/6/2007				72,289			$	3,000,000
President and Chief Executive Officer			1/2/2007				12/6/2006				89,576			$	2,809,999
			1/3/2006				12/13/2005				44,250			$	1,588,133
Anthony Tripodo			6/25/2008				6/26/2008				70,500			$	2,865,120
Executive Vice President and Chief Financial Officer
Bart Heijermans,			1/2/2008				12/6/2007				48,193			$	2,000,000
Executive Vice President and Chief Operating Officer			1/2/2007				12/6/2006				39,082			$	1,226,002
			1/3/2006				12/13/2005				13,600			$	488,104
Robert Murphy,			1/2/2008				12/6/2007				48,193			$	2,000,000
Executive Vice President — Oil & Gas (2)			7/1/2006				6/26/2006				123,890			$	5,000,200
Alisa Johnson,			1/2/2008				12/6/2007				22,892			$	950,000
Executive Vice President and General Counsel			1/2/2007				12/6/2006				7,077			$	222,000
			9/18/2006				9/18/2006				19,117			$	650,000
Martin R. Ferron,			1/2/2008				12/6/2007				72,289			$	3,000,000
Chief Executive Officer and President			1/2/2007				12/6/2006				89,576			$	2,809,999
			1/3/2006				12/13/2005				52,650			$	1,889,609
A. Wade Pursell,			1/2/2008				12/6/2007				31,325			$	1,300,000
Executive Vice President and			1/2/2007				12/6/2006				36,946			$	1,158,996
Chief Financial Officer			1/3/2006				12/13/2005				14,950			$	536,556

     The following table includes certain information with respect to the value at December 31, 2008 of all unexercised options and all unvested restricted stock awards outstanding for each of the named executive officers. The number of options and unvested restricted stock awards held at December 31, 2008 includes options and restricted stock awards granted under the 1995 Plan and the 2005 Plan.

Option Awards																		Stock Awards
																						Market
																		Number of				Value of
		Number of				Number of												Shares or				Shares or
		Securities				Securities												Units of				Units of
		Underlying				Underlying				Option								Stock That				Stock That
		Unexercised				Unexercised				Exercise				Option				Have Not				Have Not
		Options				Options				Price				Expiration				Vested				Vested
Name		(#)				(#)				($)				Date				(#)(2)				($)(3)(4)
		Exercisable				Unexercisable
Owen Kratz,			-0-				13,400	(5)		$	12.18				2/25/2014				23,807	(6)		$	172,363
President and Chief Executive																			26,550	(7)		$	192,222
Officer (1)																			71,661	(8)		$	518,826
																			72,289	(9)		$	523,372
Anthony Tripodo,			51,000				-0-			$	8.57				2/17/2013				670	(10)		$	4,851
Executive Vice President and Chief																			658	(11)		$	4,764
Financial Officer																			648	(12)		$	4,692
																			723	(13)		$	5,234
																			833	(14)		$	6,031
																			600	(15)		$	4,344
																			70,500	(16)		$	510,420
Bart Heijermans,			-0-				-0-				N/A				N/A				8,055	(17)		$	58,318
Executive Vice President and Chief																			8,160	(18)		$	59,078
Operating Officer																			31,266	(19)		$	226,366
																			48,193	(20)		$	348,917
Robert Murphy,			-0-				-0-				N/A				N/A				99,110	(21)		$	717,556
Executive Vice President — Oil &																			48,193	(22)		$	348,917
Gas
Alisa B. Johnson,			-0-				-0-				N/A				N/A				11,470	(23)		$	83,043
Executive Vice President and																			5,662	(24)		$	40,993
General Counsel																			22,892	(25)		$	165,738
Martin R. Ferron,			26,280				-0-			$	12.18				2/25/2009				-0-				-0-
former Chief Executive Officer and President
A. Wade Pursell,			-0-				-0-				-0-				-0-				-0-				-0-
former Executive Vice President and Chief Financial Officer

          The following table includes certain information with respect to the options exercised by the named executive officers and with respect to restricted stock vesting for such executive officers during the year ended December 31, 2008.

		Option Awards												Stock Awards
		Number of Shares				Value Realized				Number of Shares				Value Realized
		Acquired on Exercise				on Exercise				Acquired on Vesting				on Vesting
Name		(#)				($)				(#)				($)
Owen Kratz, President and Chief			31,663				836,853				38,669			$	1,630,733
Executive Officer			26,800				631,676
Bart Heijermans, Executive Vice			-0-				-0-				37,361			$	1,080,854
President and Chief Operating Officer											10,536			$	441,795
Robert Murphy, Executive Vice			-0-				-0-				-0-				-0-
President — Oil & Gas
Alisa B. Johnson, Executive Vice			-0-				-0-				3,823			$	103,833
President and General Counsel											1,415			$	59,020
Martin R. Ferron, former Chief			11,317				262,102				40,349			$	1,702,250
Executive Officer and President											95,156			$	3,132,536
A. Wade Pursell, former Executive Vice			38,000				1,112,165				6,448			$	270,678
President and Chief Financial Officer			20,000				562,850				20,734			$	842,630
			24,530				730,013
			21,440				576,736
			5,360				101,304