Helmerich & Payne, Inc. · NYSE:HP
Helmerich & Payne — Non-Deal Roadshow (February 2020)
26 slides from Helmerich & Payne's roadshow presentation, Feb 14, 2020
Slide 1: Meetings with Investors February 2020
HELMERICH & PAYNE, INC. Meetings with Investors February 2020 Data as of 2/3/2020 unless otherwise noted.
Slide 2: Forward-Looking Statements
Forward-Looking Statements Forward Looking Statements This presentation contains forward-looking statements within the meaning of the securities laws. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words or
Slide 3: H&P Investment Thesis
H&P Investment Thesis Industry Leader in U.S. Land Drilling » FlexRig® Fleet Poised for Continued Market Share Gains Most Capable and Uniform Fleet Consistent Operational Excellence (Safety, Customer Satisfaction, Reliability) Financial Position and Strength Technology and Innovation Leader • • • •
Slide 4: H&P Today
H&P Today Founded in 1920, H&P is the industry’s most trusted drilling partner. Committed to operational excellence and conservative financial discipline, H&P is the recognized industry leader in drilling as well as technological innovation. We are a global drilling company based in Tulsa, OK with o
Slide 5: H&P's Winning Strategy
H&P’s Winning Strategy Today’s Focus Points Execute as the dominant U.S. land driller » Continue to lead industry in technology and innovation bringing value to customers » Grow international business opportunistically » Maintain cash flow generating offshore exposure » Maintain and build upon a sol
Slide 6: H&P Global Rigs
H&P Global Rigs Available Rig Fleet Rigs % Contracted(2) Contracted U.S. Land AC Drive FlexRig Fleet Super-spec Upgradeable Other 3,000 hp SCR Rigs 299 297 233 44 20 2 197 197 188 5 4 0 66% 66% 81% 11% 20% 0% International Land Argentina(1) Bahrain U.A.E Colombia 32 20 3 2 7 17 11 3 2 1 53% 55% 100%
Slide 7: Competitive Benefits of Uniform Fleet
Competitive Benefits of Uniform Fleet Uniform fleet creates adaptive environment to reach maximum efficiency for people, equipment and technology Uniform fleet provides consistent and reliable operations in increasingly complex basins Uniform fleet has greater scale than any competitor; ability to u
Slide 8: Differentiated from Land Drilling Peers
Differentiated from Land Drilling Leading U.S. market share • Approximately 24%* of U.S. land fleet, ~37%* of super-spec fleet Peers » Distinctively situated as the incremental supplier of super-spec rigs • Leveraging position in terms of super-spec supply and pricing » Uniquely positioned to provid
Slide 9: The Replacement Cycle Continues
The Replacement Cycle Continues AC Rigs Continue to be the Preferred Choice of Unconventional Drilling 1,100 83% » Legacy style rigs (SCR & Mechanical) struggle to compete as well complexity increases; ~650 basis point decrease in market share during the last 12 months 12 Month Increase of 1,040 81%
Slide 10: Super-Spec Rigs More Resilient
Super-Spec Rigs More Resilient Lower 48 Land Rig Activity (YTD) 1,050 » Unconventional drilling is more efficient with, and often times requires, the use of super-spec rigs Mech. Rigs 900 SCR Rigs 750 Other AC Rigs » Super-spec rigs comprise ~65% of the total rigs drilling unconventional wells and ~
Slide 11: Super-Spec Rig Utilization Varies by Basin
Super-Spec Rig Utilization Varies by Basin 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Industry Super-Spec Rig Utilization Rates H&P's Super-Spec Rig Utilization Rates Total Lower-48 Super-Spec Utilization Rate » » H&P is the market share leader (~37% of all active super-spec rigs are from the H&P F
Slide 12: Evolving Commercial Model
Evolving Commercial Model As H&P demonstrates value creation through operations and safety, and makes investments in technologies and upgrades, the contract model terms must evolve to ensure a reasonable rate of return Current dayrate model does not always adequately compensate for additional value
Slide 13: Leading U.S. Unconventional Driller
Leading U.S. Unconventional Driller Piceance (3, 100%) Utica (2, 17%) Niobrara (4, 10%) Marcellus (5, 15%) Bakken (6, 12%) Haynesville (7, 16%) Woodford (15, 30%) Permian (123, 29%) Eagle Ford (32, 39%) Leading market share in the most active U.S. basins, evidence of strong customer demand for the H
Slide 14: Strong Returns and Market Share Growth
Strong Returns and Market Share Growth 25% H&P has a higher quality of earnings with a greater number of super-spec rigs that are in demand Unmatched competitive edge – largest super-spec and upgradeable rig fleet in the industry Capital stewardship evident over time with H&P making better investmen
Slide 15: HPT – Helmerich & Payne Technologies
HPT – Helmerich & Payne Technologies Adding Value Through Automation: Wellbore Quality, Accuracy & Efficiency H&P Technologies develops, promotes and commercializes software technology offerings that create a compelling value opportunity for E&P companies FlexAppsTM control systems and provide for m
Slide 16: Traditional Directional Drilling Challenges
Traditional Directional Drilling Challenges Wellbore Quality Without Motive » Well Design Difficult to Achieve » Improved Accuracy • • Poor drilling accuracy Missed targets/pay zones • • Well drilled to plan Higher production Planned Trajectory Without MOTIVE MOTIVE Result » Inconsistent Practices »
Slide 17: Wellbore Quality Matters
Wellbore Quality Matters Tortuosity Adversely Affects Overall Well Economics Tortuosity is the amount of bends and twists in a well often referred to as doglegs; unwanted tortuosity is detrimental to well economics. Tortuosity increases pipe fatigue and downhole tool wear and failure » Increases dra
Slide 18: MagVAR Survey Correction Wellbore Accuracy
MagVAR Survey Correction Wellbore Accuracy Why is Wellbore Placement Critical? » Reservoir: Directly impacts well performance by increasing the reservoir volume exposed to stimulation; optimal drainage, more frac wings Completions: improving hydraulic communication, reduce parent/child interference
Slide 19: FlexApps Enhancing Well Efficiency
FlexApps™ Enhancing Well Efficiency FlexApps (software as a service offered through HPT): FlexTorque™ hardware and software designed to decrease downhole drilling vibrations leading to increased drilling efficiencies and increased bit and downhole tool life. FlexOscillator 2.0™ rig control software
Slide 20: AutoSlide: The Next Evolutionary Step in Drilling Automation
AutoSlide The Next Evolutionary Step in Drilling Automation Uses machine learning and automation to interface with FlexRig control systems to perform slide drilling automatically via computer control (vs. traditional human control) Single button execution - fully autonomous sliding with no human int
Slide 21: Opportunistic International Growth
Opportunistic International Growth Important line of business for H&P » 8% of company’s total active rig count Adds diversification, long-term contracting and growth opportunities, especially with unconventional shale growth • • International business has historically had a different value propositi
Slide 22: Established Offshore Business
Established Offshore Business Legacy Gulf of Mexico business for • Drilling offshore since 1968 • Assets consist of platform drilling rigs • Today requires relatively little capex H&P » • Yields free cash flow supporting other segments Long operational track record Niche business line in the Gulf of
Slide 23: Strong Financial Foundation & Returns
Strong Financial Foundation & Returns Total-Debt-to-To tal-Capitalization Ratio1 Dividends Paid (Fiscal 2009 – Current) $350 ~$2 billion returned to shareholders in the form of dividends during the past 10 years maturity u 2025 HP $300 $250 PTEN $200 $150 PDS $100 $50 NBR $0 FY09 FY10 FY11 FY12 FY13
Slide 24: Strong Term Backlog
Strong Term Backlog Term Contract Status – H&P Global Fleet U.S. Land Term Contract Revenues 100 $300 75 $200 50 $100 25 $0 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 0 FY20 FY21 FY22 101.5 81.5 64.2 32.4 23.0 20.1 15.1 9.8 125.6 Average Rigs Working Fixed Term Contracts Source: Company Filings 24
Slide 25: Why H&P in Current Market Conditions?
Why H&P in Current Market Conditions? U.S. Land industry leader with dominant position » Important to be adaptable in volatile markets Majority of rig releases during 2019 related to E&P budgeted rig demand and not dayrate pricing levels Expect 2020 activity to be similar to back half of calendar 20
Slide 26: Thank you for your interest in H&P
Helmerich & Payne, Inc. Thank you for your interest in H&P. Our stock is traded on the NYSE, ticker symbol - HP For more information please visit our website at www.hpinc.com or contact: Dave Wilson, CFA, CPA Director of Investor Relations 918-588-5190, investor.relations@hpinc.com
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