Helmerich & Payne, Inc. · NYSE:HP
Helmerich & Payne — Goldman Sachs Global Energy Conference 2013
32 slides from Helmerich & Payne's conference presentation, Jan 8, 2013
Slide 1: Helmerich & Payne, Inc. Goldman Sachs Global Energy Conference
Helmerich & Payne, Inc. Goldman Sachs Global Energy Conference January 8-9, 2013
Slide 2: Forward-looking Statements
Statements within this presentation are “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, and are based on current expectations and assumptions that are subject to risks and uncertainties. All statements other than statements of hi
Slide 3: H&P's Global Rig Fleet
H&P’s Global Rig Fleet * Estimates include existing rigs and announced new build commitments. International Land Offshore U.S. Land 96 111 127 130 128 151 193 224 254 257 281 320 336 400 350 300 250 200 150 100 50 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E* Fiscal Year (Endi
Slide 4: Growing Shareholder Value
Growing Shareholder Value Lead Innovation Expand Market Share Drive Well Costs Down Satisfy Customers
Slide 5: Five-Year Relative Shareholder Return
Five-Year Relative Shareholder Return Source: Thomson Financial as of January 4, 2013 250% 200% 150% 100% 50% 0% Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 HP NBR PTEN UNT
Slide 6: Changes in Lower U.S. Land Rig Count
Changes in Lower 48 U.S. Land Rig Count Estimated Change Since 2008 Peak in Active U.S. Land Rigs (Smith Bits Weekly Rig Count - October 17, 2008 to December 28, 2012) Percentage Change in Rig Count Oct-08 Dec-08 Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb
Slide 7: Technology & Quality Service Make a Difference
Technology & Quality Service Make a Difference * Does not include the impact of early contract termination revenue. ** Represents weighted-average rig margin per day for PTEN, NBR and UNT through Q3CY12. H&P’s Margin Premium U.S. Land Average Daywork Margins* $16,000 $14,000 $12,000 $10,000 $8,000 $
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. U.S. Land Drilling Operating Income $300 $250 $200 $150 $100 $50 $0 -$50 2005 2006 2007 2008 2009 2010 201
Slide 9: Record Profits During Industry Slowdown
Record Profits During Industry Slowdown (2) PTEN’s operating income includes drilling operations in Canada. (1) NBR’s operating income corresponds to its U.S. Lower 48 Land Drilling segment. (2) (1) U.S. Land Drilling Operating Income 12 Months Ended September 30, 2012 Operating Income (Millions) $0
Slide 10: U.S. Land Market Conditions
U.S. Land Market Conditions Pricing in the spot market remains firm. Our active rig count remains strong at 240 rigs. We continue to have a few conversations with customers regarding new build orders.
Slide 11: H&P's U.S. Land Fleet Activity
H&P’s U.S. Land Fleet Activity Active rigs on term (in blue) generated both revenue and revenue days. Includes completed new builds that were waiting on operators and which generated revenue but did not generate revenue days. (1) (2) Number of Active H&P U.S. Land Rigs 0 30 60 90 120 150 180 210 240
Slide 12: H&P Global Fleet Under Term Contract
H&P Global Fleet Under Term Contract Term Contract Status - H&P Global Fleet (Including Announced New Builds - as of 1/8/13) U.S. Land Offshore International Land Number of Rigs Already under Long-Term Contracts (Estimated Quarterly Average) 0 20 40 60 80 100 120 140 160 180 200 159 140 133 122 105
Slide 13: Leading U.S. Unconventional Driller
(244 H&P Contracted Land Rigs as of 1/8/13*) Leading U.S. Unconventional Driller * Includes announced new FlexRigs with customer commitments scheduled for completion in fiscal 2013. Utica Shale, 3 Marcellus Shale, 3 Woodbine, 4 Haynesville/Cotton Valley, 5 Other Oil, 5 California Oil, 6 Barnett Shal
Slide 14: Favorable Market Trends for FlexRigs
Favorable Market Trends for FlexRigs AC drive rigs replacing SCR and mechanical rigs More customers high-grading their fleets Increasing well complexity Focus on drilling efficiency, technology and safety
Slide 15: 2008 Peak Rig Count by Power Type
Week Ended October 4, 2008 By Power Type 2008 Peak Rig Count (~1,925) - U.S. Land Note: The above estimates corresponding to rig activity are derived from multiple sources including Rig Data, Smith Bits, and corporate filings. Additionally, the drawworks capacity of each land rig included in the abo
Slide 16: Current Rig Count by Power Type
Week Ended December 28, 2012 By Power Type Current Rig Count (~1,600) - U.S. Land Note: The above estimates corresponding to rig activity are derived from multiple sources including Rig Data, Smith Bits, and corporate filings. Additionally, the drawworks capacity of each land rig included in the abo
Slide 17: H&P vs. Industry U.S. Land Customer Base
H&P vs. Industry U.S. Land Customer Base Note: The above estimates corresponding to the active rig fleet in the U.S. are derived from multiple sources including Rig Data, Smith Bits, and corporate filings. H&P U.S. Land Activity Estimated Customer Distribution (December 2012) Industry U.S. Land Acti
Slide 18: Unconventional Plays Shaping Landscape
Unconventional Plays Shaping Landscape Well complexity is increasing: Technology solutions that provide safe, environmentally sound and efficient operations are required by contractors to be competitive Extended reach laterals progressively longer Multi-well pad drilling gaining acceptance in more a
Slide 19: Increasing Focus on More Difficult Drilling
Increasing Focus on More Difficult Drilling
Slide 20: AC Drive U.S. Rig Market Share
AC Drive U.S. Rig Market Share (~650 Rigs) Note: The above estimates corresponding to market share are derived from multiple sources including Rig Data, Smith Bits, and corporate filings.
Slide 21: H&P's Lead in U.S. Land AC Drive Rigs
H&P’s Lead in U.S. Land AC Drive Rigs Note: The above estimates corresponding to U.S. lower 48 AC Drive fleets and new build commitments are derived from Rig Data and corporate filings.
Slide 22: An Undersupply of AC Drive Rigs
An Undersupply of AC Drive Rigs (~1,600 Active Rigs in the U.S. By Power Type) Note: The above estimates corresponding to rig activity are derived from multiple sources including Rig Data, Smith Bits, and corporate filings. Additionally, the drawworks capacity of each land rig included in the above
Slide 23: H&P's New Build Advantages
H&P’s New Build Advantages We have been improving and honing the process for over 10 years, prompting our assertion that we build a better rig for less Safety is our first priority, followed by a relentless focus on strong execution and performance in the field Exceptional fleet uniformity Extensive
Slide 24: The FlexRig Difference: Key Advantages
The FlexRig Difference: Key Advantages Increased drilling productivity and reliability Variable frequency (AC) drives with increased precision and measurability Computerized electronic driller that more precisely controls weight on bit, rotation and pressure Designed to move quickly from well to wel
Slide 25: A Value Proposition Example – H&P vs. Competitors
A Value Proposition Example – H&P vs. Competitors Estimated Estimated Peer H&P FlexRig3 Conventional Fit-for-purpose Average Average Average 2012 (Spot Market) (Spot Market) (Spot Market) 1. Drilling days 20 13 9 Other days 3 3 3 Moving days 7 4 3 Total rig revenue days per well 30 20 15 2. Drilling
Slide 26: Performance is Not Only About Better Rigs
Performance is Not Only About Better Rigs It’s also about: People Safety Experience Training Culture Support Structure Processes Organizational Network Maintenance Supply Chain
Slide 27: H&P Competitive Advantages
H&P Competitive Advantages Our people, processes and FlexRig technology create a very important competitive advantage for the Company. Our value proposition will continue to be directed toward delivering compelling performance for our customers and shareholders. The shift to drilling more complex un
Slide 28: Additional References
ry eet Additional References
Slide 29: Oil and Natural Gas Prices
Oil and Natural Gas Prices Source: Energy Information Administration Oil Prices Natural Gas Prices
Slide 30: U.S. Rig Activity by Hydrocarbon Target
U.S. Rig Activity by Hydrocarbon Target
Slide 31: H&P's Exposure to Oil & Liquids
Dry Gas (Long-term Contracts) 4% H&P’s Exposure to Oil & Liquids Estimated proportion of H&P’s active U.S. Land rigs by primary hydrocarbon target as of 1/8/13 Dry Gas (Spot Market) 1%
Slide 32: End of Document
End of Document
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