Helmerich & Payne, Inc. · NYSE:HP
Helmerich & Payne — Investor Presentation (May 2022)
26 slides from Helmerich & Payne's investor presentation, May 9, 2022
Slide 1: Helmerich & Payne, Inc.
Helmerich & Payne, Inc. May 2022 Financial data as of 3/31/2022; other data as of 4/27/2022 unless otherwise noted. © 2022 Helmerich & Payne, Inc. All Rights Reserved. 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of securities laws. All statements other than statements of historical facts included in this presentation, including without limitation, statements regarding our future financial position, business s
Slide 3: H&P Today
Helmerich & Payne H&P is recognized as the industry leader in drilling solutions as well as technological innovation. H&P TODAY H&P operates in 3 segments (% of Revenue) o North America Solutions ~88% market leader in U.S. o International Solutions ~6% opportunistic growth Founded IN 1920 o Offshore
Slide 4: Focused on Enhancing Returns
Current Highlights • Increasing NAS rig count ~33% in 1HFY22 • Returning cash to shareholders in 1HFY22: • Repurchased ~$77M of shares at ~$24/share • Paid out ~$55M in dividends • Moving 1st rig to Middle East hub in 2HFY22 • Driving up revenue/day: • Targeting ~50% direct margins(1) in NAS with in
Slide 5: H&P's Winning Strategy
H&P’s Winning Strategy Global Drilling Solutions Provider • Evolve commercial model to be customer centered and value driven • Continue to lead industry in technology automation adoption and differentiation • International expansion • Maintain capital discipline • Continued focus on cost management
Slide 6: Differentiated from Land Drilling Peers
Differentiated from Land Drilling Peers • Strategic advantages – innovation, economies of scale, operational efficiency, financial flexibility, and risk reduction • Changing the commercial model – H&P provides distinctive value to customers • Uniform design of FlexRig® fleet • Highly trained workfor
Slide 7: Benefits of Long Economic Life Assets
Benefits of Long Economic Life Assets Long economic life exceeds accounting life • Weighted average accounting life is 15 years for a super-spec FlexRig® drilling rig, but economic life is ~30 years • Major rig assemblies – mast and substructure, have long economic lives (~30 years) • Major rig comp
Slide 8: H&P Global Rig Fleet
H&P Global Rig Fleet Rigs Rigs % Available Contracted (1) Contracted U.S. Land 236 173 73% • H&P has the largest spare capacity of Super-Spec FlexRig® Fleet 230 171 74% super-spec rigs Upgradeable AC FlexRig 4 0 0% Other AC-Style FlexRig 2 2 100% • Industry utilization of super-spec rigs that Intern
Slide 9: International Expansion
International Expansion Benefits of Allocating Capital Internationally • Diversification from U.S. and outlet for super-spec FlexRig® fleet capacity • Exporting U.S. rigs for appropriately scaled opportunities offers growth outside of U.S. • Ability to have positive impact on overall Company financi
Slide 10: H&P Offerings Create Compelling Value Opportunities for E&Ps
H&P Offerings Create Compelling Value Opportunities for E&Ps
Slide 11: Value Proposition
Value Proposition Wellbore Quality & Placement Lower Cost Consistency at Reduced Risk • Optimize drilling economics • Drill an efficient well, reducing • Provide reliable, repeatable results to customer specifications non-productive time • Enables de-manning of 3rd-party personnel • Drill a less tor
Slide 12: Addressing Industry Challenges Through Automation
H&P Drilling Solutions Addressing Industry Challenges Through Automation The oil and gas industry is still heavily dependent on human decision making to design, execute, and optimize oil and gas extraction. H&P INDUSTRY CHALLENGE AUTOMATION SOLUTION Human Decisions and Execution = Art Converts Art t
Slide 13: Drilling Solutions Value Proposition
Drilling Solutions Value Proposition More than drilling a hole in the ground… Value over the life of the well Drilling Completions Production Primary Focus Drilling Time & Cost Human decisions and execution — variable, inconsistent and at times costly and unfavorable outcomes • Poor well quality and
Slide 14: Evolving Commercial Model
Evolving Commercial Model H&P has a long track record of providing value to customers, the commercial model must evolve to ensure a reasonable rate of return Current day-rate model does not adequately compensate for value being derived in well cost savings and productivity gains Under current indust
Slide 15: H&P is Built to Withstand Volatile Markets
H&P is Built to Withstand Volatile Markets
Slide 16: Fiscal 2022 Cash Projection Waterfall
Fiscal 2022 Cash Projection Waterfall $600 $570 $500 $400 Implied $350-$400 $ Millions $300 $250-$270 $25 $200 $108 $100 $45 $77 $5-$20 $25 $16 $55 $0 (1) (2) (2) (3) (3) (3) (4) (3) (3) (4) (4) 9/30/21 Capex ADNOC rigs Dividend FYTD Share Energy Cash Cash Non-cash Asset CFFO 9/30/22 Cash make ready
Slide 17: H&P's Commitment to Capital Allocation
H&P’s Commitment to Capital Allocation RETURNS TO SHAREHOLDERS • Dividends • Share repurchases • Exploring further possibilities CAPITAL EXPENDITURES CASH FLOW CAPITAL • Maintenance – moves with active rig count FROM ALLOCATION • Walking conversions based on demand OPERATIONS • International – will
Slide 18: Conservative Capital Structure
Conservative Capital Structure CAPITAL EMPLOYED CAPITAL EMPLOYED ($MM) ($MM) LIQUIDITY AVAILABLE LIQUIDITY ($MM) AVAILABLE ($MM) $1,200 250% HP Liquidity as a % of Debt Total Liquidity Available 200% $900 PTEN 150% $600 NBR 100% $300 50% PDS* $0 0% $0 $700 $1,400 $2,100 $2,800 $3,500 HP PTEN NBR PDS
Slide 19: Conservative Capital Structure: Debt Ratio and Maturities
Conservative Capital Structure TOTAL-DEBT-TO-TOTAL-CAPITALIZATION RATIO DEBT MATURITY SCHEDULE TOTAL-DEBT-TO-TOTAL-CAPITALIZATION RATIO DEBT MATURITY (IN MILLIONS) (IN MILLIONS) SCHEDULE $1,000 $900 HP $800 $118 $700 $364 $600 $510 PTEN $349 $500 $400 $745 $700 PDS $300 $558 $550 $200 $390 $400 $100
Slide 20: Rooted in Our Core Values: Do the Right Thing
Helmerich & Payne ROOTED IN OUR CORE VALUES DO THE RIGHT THING H&P continues to refine and evolve its sustainability strategy. Implementing, executing and monitoring the strategy is multi-faceted, spanning across various disciplines within our Company. It is incumbent on us to understand and control
Slide 21: Applying Drilling Expertise to Geothermal
Applying Drilling Expertise to Geothermal We are applying our advanced rigs and technology solutions to unlock unconventional geothermal resources, creating virtually carbon-free, baseload energy. New geothermal concepts Our advantages • Instead of targeting rare • Superior drilling technologies hyd
Slide 22: Our Investments / Geothermal Partners
Our Investements / Geothermal Partners ENHANCED GEOTHERMAL SYSTEMS CLOSED LOOP SYSTEMS © 2022 Helmerich & Payne, Inc. All Rights Reserved. 22
Slide 23: Improving Lives Through Affordable and Responsible Energy
Improving Lives Through Affordable and Responsible Energy WE ARE FOCUSED ON UNDERSTANDING OUR IMPACTS AND ULTIMATELY DEVELOPING STRATEGIES ROOTED IN OUR CORE VALUES TO MANAGE THEM ENVIRONMENTAL SOCIAL GOVERNANCE • Environmental Stewardship • Health & Safety • Board Oversight • Geothermal Investments
Slide 24: H&P Inaugural Sustainability Report
H&P Inaugural Sustainability Report Issued December 2021 Highlights – Provides: • Environmental management and oversight practices • Strong use of data to report over 40 environmental metrics, including Scope 1 & 2 emissions data • Environmental goal setting • Environmental Actively C.A.R.E. Goal (2
Slide 25: H&P Investment Thesis
H&P Investment Thesis INDUSTRY LEADER AS A DRILLING SOLUTIONS PROVIDER • Largest, Uniform and Most Capable Fleet • Consistent Operational Excellence (Safety, Customer Satisfaction, Reliability) • Technology and Innovation Leader • Financial Position and Strength • Differentiated Business Partner FIN
Slide 26: Thank You for Your Interest in H&P
Helmerich & Payne, Inc. Thank You for Your Interest in H&P For more information, please visit our website at www.helmerichpayne.com Contact: Dave Wilson, CFA, CPA VP of Investor Relations 918-588-5190, investor.relations@hpinc.com NYSE : HP © 2022 Helmerich & Payne, Inc. All Rights Reserved. 26