Helmerich & Payne, Inc. · NYSE:HP
Helmerich & Payne — Credit Suisse Annual Energy Summit 2010
24 slides from Helmerich & Payne's conference presentation, Feb 1, 2010
Slide 1: Helmerich & Payne, Inc. Credit Suisse Annual Energy Summit
Investor Relations Contact: Juan Pablo Tardio – (918) 588-5383 – juanpablo.tardio@hpinc.com Helmerich & Payne, Inc. Credit Suisse Annual Energy Summit February 2, 2010
Slide 2: Forward-looking information disclaimer
The information contained within this presentation is forward looking and involves risks and uncertainties that could significantly impact expected results. A discussion of these risks and uncertainties is contained in the “Risk Factors” and “Management’s Discussion & Analysis of Results of Operatio
Slide 3: H&P's Global Rig Fleet
H&P’s Global Rig Fleet 261 Total Rigs (Includes New Build Commitments) Offshore * Includes three new rigs with previously announced customer commitments scheduled for completion by April 2010. ** Includes 15 FlexRigs. U.S. Land 213* U.S. FlexRigs 175* Mobile & Conventional 38 9 International Land 39
Slide 4: H&P's Global Rig Fleet
H&P’s Global Rig Fleet * Estimates include existing rigs and announced new build commitments. 77 90 89 88 96 111 127 130 128 151 193 224 254 261 0 50 100 150 200 250 300 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010E* Rigs Available Fiscal Year (Ending Sept 30) International
Slide 5: Improving Rig Counts
Improving Rig Counts U.S. Land International Land 0 250 500 750 1,000 1,250 1,500 1,750 2,000 0 250 500 750 1,000 1,250 1,500 1,750 2,000 Dec - 1999 Jun - 2000 Dec - 2000 Jun - 2001 Dec - 2001 Jun - 2002 Dec - 2002 Jun - 2003 Dec - 2003 Jun - 2004 Dec - 2004 Jun - 2005 Dec - 2005 Jun - 2006 Dec - 20
Slide 6: H&P's Global Fleet Under Term Contracts
H&P’s Global Fleet Under Term Contracts * Includes delayed new builds which are expected to generate revenue but not revenue days. 0 20 40 60 80 100 120 Q2FY10 Q3FY10 Q4FY10 Q1FY11 Q2FY11 Q3FY11 Q4FY11 Number of Rigs Under Long - Term Contracts (Estimated Quarterly Average) Term Contract Status - H&
Slide 7: Changes in Lower U.S. Land Rig Count
Changes in Lower 48 U.S. Land Rig Count - 80% - 70% - 60% - 50% - 40% - 30% - 20% - 10% 0% 10% Decline in Active U.S. Land Rigs Estimated Change Since Peak in Active U.S. Land Rigs (Smith Bits Weekly Rig Count - October 17, 2008 to January 29, 2010) NBR PTEN HP UNT U.S. Land
Slide 8: Coming out of the Downturn
We are encouraged by improving market conditions We have the industry’s most technologically advanced fleet Since the peak in late 2008 We have attracted 30 new FlexRig customers We maintained our organizational and systems strength We kept most of our skilled people Coming out of the Downturn
Slide 9: Continuing Concerns
Natural gas storage Economic recovery Winter temperatures and heating demand Activity required to offset declining production Impact of increasing shale gas potential LNG import potential Continuing Concerns
Slide 10: Market Trends Favor H&P
Drilling is becoming more challenging and highly-capable rigs are expected to be in short supply Growing focus on technology-based solutions that enable lower total well costs Increasing safety and environmental sensitivity Unconventional plays are the most economically viable and tend to require hi
Slide 11: U.S. Land Footage Drilled
* NBR’s footage drilled corresponds to Nabors Drilling USA, LP. U.S. Land Footage Drilled 0 3 6 9 12 15 UNT PDS PTEN NBR* H&P Footage Drilled (in millions) U.S. Land Footage Drilled (Rig Data Driller Ranking - January 2009 to December 2009)
Slide 12: Most Profitable Driller in U.S. Land Business
Most Profitable Driller in U.S. Land Business * PTEN’s operating income includes drilling operations in Canada. ** NBR’s operating income corresponds to its U.S. Lower 48 Land Drilling segment. -$50 $0 $50 $100 $150 $200 $250 $300 Q1CY05 Q2CY05 Q3CY05 Q4CY05 Q1CY06 Q2CY06 Q3CY06 Q4CY06 Q1CY07 Q2CY07
Slide 13: [LOGO]
[LOGO]
Slide 14: H&P's U.S. Land Operations
H&P’s active rig count continues to increase. Spot market pricing is beginning to improve in selected unconventional plays, especially for our larger FlexRigs. Customers are high-grading their fleets with FlexRigs. We expect a 15 to 20 percent sequential increase in average activity (or revenue days
Slide 15: H&P's U.S. Land Fleet Activity
H&P’s U.S. Land Fleet Activity ** Includes delayed new builds (in gray) which generated revenue but did not generate revenue days. * Active rigs on term (in blue) generated both revenue and revenue days, including a few rigs on standby. 116 128 143 148 0 20 40 60 80 100 120 140 160 Avg. Q4FY09 Avg.
Slide 16: H&P's U.S. Land Fleet Status
H&P’s U.S. Land Fleet Status * Includes three FlexRigs with signed contracts. All of the remaining 26 uncontracted FlexRigs are FlexRig4’s, which target shallower depth wells. (as of January 28, 2010) 101 42 29 45 103 62 0 15 30 45 60 75 90 105 Under Term Spot Market Active Spot Market Stacked* Numb
Slide 17: H&P's Margin Premium
** Represents the weighted-average rig margin per day for PTEN, NBR and UNT in the Lower 48. * Does not include the impact of early contract termination revenue. Technology and Quality Service Make a Difference H&P’s Margin Premium $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 Q1CY05 Q2CY05 Q
Slide 18: H&P's Utilization Premium
** Represents estimated average combined utilization for PTEN, NBR and UNT in the Lower 48. * Utilization is herein calculated to be average active rigs divided by estimated available marketable rigs during the period. H&P’s Utilization Premium Technology and Quality Service Make a Difference 0% 10%
Slide 19: H&P and U.S. Land Fleet (by Rig Type)
H&P and U.S. Land Fleet (by Rig Type) 56% 30% 14% 22% 74% Note: The above estimates corresponding to the total available U.S. fleet are derived from multiple sources including Rig Data, Smith Bits and corporate filings. Only rigs with equal to or greater than 600 horsepower drawworks ratings are con
Slide 20: H&P's International Land Operations
H&P’s International Land Operations We expect quarterly activity (or revenue days) for the segment to sequentially increase by about five percent from the first to the second fiscal quarter of 2010. We expect our average rig margin per day to decline by up to 30 percent over the same time period. Th
Slide 21: International Land Operations Rig Fleet Status
Active Contracted Idle Total Long-term Contracts Argentina 5 4 9 4 Colombia 4 2 6 2 Ecuador 4 4 Mexico 6 6 6 Tunisia 1 1 2 Venezuela 11 11 Other 1 1 1 Total 20 1 18 39 13 H&P’s International Land Operations Rig Fleet Status (As of January 28, 2010) 1) Includes one rig under a long-term contract stil
Slide 22: H&P's Offshore Operations
Seven of the Company’s nine offshore platform rigs are active. Two of the seven active rigs are under long-term contracts. Average rig margins are expected to decline but remain strong at over $20,000 per day. We are now working on three platform rigs owned by customers under management contracts, t
Slide 23: Customer Satisfaction Index
Source: EnergyPoint Research, Inc. * Trailing four quarters average * * Customer Satisfaction Index 10 = “Highly Satisfied”, 1 = “Highly Dissatisfied” * 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00 2006 Q1 2009 Q2 2009 Q3 2009 H&P Peer A Peer B Peer C
Slide 24: End of Presentation
End of Presentation HELMERICH & PAYNE, ING.
Helmerich & Payne — Credit Suisse Annual Energy Summit 2010 on 6ix