Helmerich & Payne, Inc. · NYSE:HP
Helmerich & Payne — Investor Presentation (June 2009)
23 slides from Helmerich & Payne's investor presentation, Jun 17, 2009
Slide 1: Presentation to Investors
Investor Relations Contact: Juan Pablo Tardio – (918) 588-5383 – juanpablo.tardio@hpinc.com Helmerich & Payne, Inc. Presentation to Investors June 17, 2009
Slide 2: Forward-looking information
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 262 Total Rigs (Includes New Build Commitments) Offshore * Includes 12 rigs under construction and scheduled for completion by the end of the second quarter of fiscal 2010. ** Includes 1 FlexRig in Tunisia, 6 FlexRigs in South America and 1 FlexRigs pending delivery in fiscal
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 96 111 127 130 128 151 193 224 256 262 0 50 100 150 200 250 300 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009E* 2010E* Rigs Available Fiscal Year (Ending Sept 30) Internationa
Slide 5: H&P's U.S. Land Operations
H&P’s U.S. land rig count has stabilized since April 30, 2009, the date of our last quarterly conference call. 107 of 209 rigs were contracted and generating revenue as of June 15, 2009, 88 of which were under long-term contracts. 19 of the 107 rigs described above were active in the spot market, in
Slide 6: H&P's U.S. Land Fleet Under Term Contracts
H&P’s U.S. Land Fleet Under Term Contracts (as of June 15, 2009) 0% 10% 20% 30 % 40% 50% 60% 70% 0 20 40 60 80 100 120 140 Q3FY09 Q4FY09 Q1FY10 Q2FY10 Q3FY10 Q4FY10 Q1FY11 Q2FY11 Estimated % of Potential Revenue Days Contracted Number of Rigs (Estimated Quarterly Average) . Term Contract Status - H&
Slide 7: Evolution of U.S. Land Drilling Activity
*Represents average active rigs for PTEN, NBR and UNT. Evolution of U.S. Land Drilling Activity -40% -20% 0% 20% 40% 60% 80% 100% 120% Q1CY05 Q2CY05 Q3CY05 Q4CY05 Q1CY06 Q2CY06 Q3CY06 Q4CY06 Q1CY07 Q2CY07 Q3CY07 Q4CY07 Q1CY08 Q2CY08 Q3CY08 Q4CY08 Q1CY09 Change in Average Active Rigs Quarter Ended Gr
Slide 8: 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. $0 $50 $100 $150 $200 $250 $300 Q1CY05 Q2CY05 Q3CY05 Q4CY05 Q1CY06 Q2CY06 Q3CY06 Q4CY06 Q1CY07 Q2CY07 Q3CY
Slide 9: Technology and Quality Service Make a Difference
** Represents 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 Q3CY0
Slide 10: Impact of Downturn on Utilization
Impact of Downturn on Utilization 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. 0% 10% 20% 30% 40% 50
Slide 11: Changes in U.S. Land Rig Count
Changes in U.S. Land Rig Count * PDS’s active rig count includes both PDS and GW rigs. - 90% - 75% - 60% - 45% - 30% - 15% 0% HP U.S. Land NBR PDS* UNT PTEN Change in Rig Count Estimated Change Since Peak in Active U.S. Land Rigs (Smith Bits Weekly Rig Count - October 17, 2008 to June 12, 2009)
Slide 12: New Builds – H&P's FlexRig Program
New Builds – H&P’s FlexRig Program The FlexRig Difference: Key Advantages Increased drilling productivity and reliability Variable frequency (AC) drives with increased precision and measurability Computerized electronic driller that precisely controls weight on bit, rotation and pressure Designed to
Slide 13: A Strong Field Organization
Performance is not only about better rigs It’s also about: People Safety Experience Training Culture Supply chain Maintenance Processes Organizational network Support structure A Strong Field Organization
Slide 14: Value Proposition Example – H&P vs. Competitors
Value Proposition Example – H&P vs. Competitors Estimated Field H&P FlexRig3 Competitor Average 2008 1. Drilling days 13 7.8 Completion days 2 2 Moving days 5 3 Total rig revenue days per well 20 12.8 2. Drilling contractor dayrate $19,500 $26,500 Operator’s other intangible $15,000 $15,000 cost per
Slide 15: This Value Proposition Example Remains Valid
This Value Proposition Example Remains Valid Estimated Field H&P FlexRig3 Competitor Average Early 2009 (Spot) (Term Contract) 1. Drilling days 13 7.8 Completion days 2 2 Moving days 5 3 Total rig revenue days per well 20 12.8 2. Drilling contractor dayrate $15,000 $26,500 Operator’s other intangibl
Slide 16: Value Proposition Example – H&P vs. Competitors
Value added from FlexRig operations Significant H&P dayrate premium Increased wells per rig per year: 10.3 wells Early production: Incremental wells on production Lowest total well cost Value Proposition Example – H&P vs. Competitors
Slide 17: H&P's International Land Operations
Limited progress in terms of receivable collections from PDVSA Will continue with previously stated approach in trying to work through issues in Venezuela (only three of 11 rigs remain active) Eight of 32 total rigs are on term contracts (including seven FlexRigs), and another ten are active without
Slide 18: H&P's Offshore Operations
Seven of the Company’s offshore platform rigs are active Two are idle and one is expected to be released in the fourth fiscal quarter Two of the six remaining rigs are under long-term contracts H&P’s Offshore Operations
Slide 19: Peer Group Return on Equity
Peer Group Return on Equity * NBR’s, PTEN’s and UNT's calculations exclude Q4CY08 & Q1CY09 charges that were a result of impairments, including ceiling test write-downs. 6% 10% 14% 18% 22% PTEN UNT NBR HP Estimated ROE Return on Equity* 12 Months Ended March 31, 2009
Slide 20: H&P's Global Fleet Under Term Contracts
H&P’s Global Fleet Under Term Contracts (as of June 15, 2009) 0 20 40 60 80 100 Q3FY09 Q4FY09 Q1FY10 Q 2 FY 10 Q 3 FY 10 Q4FY10 Q 1 FY 11 Q2FY11 Number of Rigs Under Long-Term Contracts (Estimated Quarterly Average) Term Contract Status - H&P Global Fleet (Including Committed New Builds) U.S. Land I
Slide 21: 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 tend to require highly-capable rigs and appear to be th
Slide 22: H&P is Leading the U.S. Land Retooling Effort
H&P is Leading the U.S. Land Retooling Effort Refurbished rigs, built between 1940s and 1982 AC Driven New Builds Other New Builds Conventional Rigs Total Available U.S. Land Fleet (Estimates) (~ 2, 450 Rigs) AC Driven (FlexRig 3 & 4 ) Other New Builds (FlexRig 1 & 2 ) Conventional Rigs H&P's Availa
Slide 23: End of Presentation
End of Presentation HELMERICH & PAYNE, ING.
Helmerich & Payne — Investor Presentation (June 2009) on 6ix