On May 9, 1998, about 1500 central daylight time, a Bell 47G-2, N6714D, registered to Penguin-Air Helicopters, Inc., ditched in the Gulf of Mexico, near Fort Walton Beach, Florida, following loss of engine power, while on a Title 14 CFR Part 91 sightseeing flight. Visual meteorological conditions prevailed at the time and no flight plan was filed. The helicopter received substantial damage and the commercial-rated pilot and two passengers received minor injuries. The flight originated from Fort Walton Beach, Florida, a few minutes before the accident. The pilot stated that he had refueled the helicopter and had about 20 gallons of fuel onboard at the time of the accident. He had completed giving three rides. While on the fourth ride, over the Gulf of Mexico near Fort Walton Beach, at an altitude of 500-600 feet, the engine failed. He entered autorotation and touched down in 4-5 feet of water. The waves caused the helicopter to roll over to the right and the main rotor blades contacted the water and stopped. He and the two passengers then exited the helicopter. Examination of the engine by a mechanic, under the supervision of an FAA inspector, showed the engine assembly rotated and continuity of the crankshaft, valve train, and all accessory drives gears was confirmed. The magneto switch operated normally and each magneto rotated. The magnetos would not fire due to water damage. The carburetor was opened and all ports were found unobstructed. All airframe and engine fuel lines were unobstructed.