Helmerich & Payne, Inc. · NYSE:HP
Helmerich & Payne — 2012 GHS-100 Energy Conference
42 slides from Helmerich & Payne's conference presentation, Jun 25, 2012
Slide 1: Helmerich & Payne, Inc. 2012 GHS-100 Energy Conference
Helmerich & Payne, Inc. 2012 GHS-100 Energy Conference June 25-26, 2012
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: Comments on Today's Market
Comments on Today’s Market Although concern about the macro and about future oil and gas prices is ever-present, H&P’s land rig activity levels are increasing as expected during the third fiscal quarter. Spot pricing for FlexRigs remains steady, but E&P budgets appear to be tightening and demand for
Slide 4: U.S. Land Rig Count
U.S. Land Rig Count —BHI U.S. Land Rig Count 2,200 a2 & g 1,200 00 a (uno Bry A1e}0y uesueWy HON Ia) ‘s6]Y pueT ‘S'n eAnoy Jo JeqUNN g
Slide 5: Highest U.S. Activity Level in Company History
Highest U.S. Activity Level in Company History As of 6/22/12 * Represents the sum of the average active rigs for PTEN, NBR and UNT.
Slide 6: Organic U.S. Land Fleet Growth
Organic U.S. Land Fleet Growth * Estimates include existing rigs and announced new build commitments. 304 49
Slide 7: H&P Activity as of June 22, 2012
H&P Activity as of June 22, 2012 Rigs Working/Contracted 244 7 26 277 30 307 Rigs Available 274 9 29 312 30 342 % Contracted 89% 78% 90% 89% U.S. Land Offshore International Land Total FlexRig Construction Total Fleet (1) Includes announced new build commitments. (1)
Slide 8: Expand Market Share, Lead Innovation, Satisfy Customers, Drive Well Costs Down
Expand Market Share Lead Innovation Satisfy Customers Drive Well Costs Down
Slide 9: Lower U.S. Land Market Share - Ten Years Ago
As of June 14, 2002 Lower 48 U.S. Land Market Share Active Rig Market Share - Ten Years Ago Note: The above estimates are derived from Smith Bits
Slide 10: Organically Growing Active Rig Market Share
Lower 48 U.S. Land Market Share Organically Growing Active Rig Market Share Note: The above estimates are derived from Smith Bits As of June 15, 2012
Slide 11: Most Profitable Driller in U.S. Land Business
Most Profitable Driller in U.S. Land Business (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)
Slide 12: Five-Year Relative Shareholder Return
Five-Year Relative Shareholder Return Source: Thomson Financial as of June 21, 2012
Slide 13: H&P's Leading Equity Market Valuation
H&P’s Leading Equity Market Valuation Source: Thomson Financial
Slide 14: Market Trends Favor H&P
Market Trends Favor H&P The transition towards oil and liquids-rich-gas directed drilling continues, along with a clear trend towards more complex well designs and faster cycle times. H&P is fortunate to have a customer roster with substantial multi-year drilling inventory capable of shifting target
Slide 15: The Ongoing Gas to Oil Transition...
The Ongoing Gas to Oil Transition...
Slide 16: Increasing Focus on More Difficult Drilling
Increasing Focus on More Difficult Drilling
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.
Slide 18: Recordable Injuries per 1-MM Feet Drilled in 2011
Recordable Injuries per 1-MM Feet Drilled in 2011 by the Largest U.S. Land Drilling Contractors Note: Injury data taken from IADC ASP Program. Footage data taken from Land Rig Newsletter. 11.7 9.1 5.2 2.2
Slide 19: The Replacement Cycle Continues
The Replacement Cycle Continues AC drive rigs are best positioned to make the transition in the U.S. From 2010 to 2011, H&P’s average footage per day increased over ten percent, and already in 2012, we have seen average footage per day increase another ten percent. While FlexRigs continue to rise to
Slide 20: Week Ended October 4, 2008 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, each land rig included in the above analysis was greater th
Slide 21: Week Ended June 15, 2012 By Power Type
Week Ended June 15, 2012 By Power Type Current Rig Count (~1,850) - 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, each land rig included in the above analysis was greater than 6
Slide 22: 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 23: An Undersupply of AC Drive Rigs
An Undersupply of AC Drive Rigs Note: The above estimates corresponding to rig activity are derived from multiple sources including Rig Data, Smith Bits, and corporate filings. (~1,850 Active Rigs in the U.S. By Power Type)
Slide 24: Technology & Quality Service Make a Difference
Technology & Quality Service Make a Difference (1) Does not include the impact of early contract termination revenue. (2) Represents weighted-average rig margin per day for PTEN, NBR and UNT. (3) Utilization is herein calculated to be average active rigs divided by estimated available marketable rig
Slide 25: H&P New Builds
H&P New Builds Total of 217 new build FlexRigs completed since January 2006. Delivering new FlexRigs at the rate of approximately four per month. As of June 22, 2012, 30 announced new builds remain under construction to be delivered in fiscal 2012 and fiscal 2013. Although the level of inquiries has
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Slide 27: Additional References
ry eet Additional References
Slide 28: H&P's Global Rig Fleet
H&P’s Global Rig Fleet * Estimates include existing rigs and announced new build commitments.
Slide 29: H&P's U.S. Land Operations
H&P’s U.S. Land Operations We still expect total revenue days in the U.S. Land segment to increase by approximately two percent from the second to the third fiscal quarter of 2012. Quarterly average rig revenue per day is expected to improve slightly, by a few hundred dollars per day from the second
Slide 30: H&P's U.S. Land Fleet Activity
H&P’s U.S. Land Fleet Activity (1) Active rigs on term (in blue) generated both revenue and revenue days. (2) Includes completed new builds that were waiting on customers and which generated revenue but did not generate revenue days. (1) (2)
Slide 31: Leading U.S. Unconventional Driller
(275 H&P Contracted Land Rigs as of 6/22/12*) Leading U.S. Unconventional Driller * Includes announced new FlexRigs with customer commitments scheduled for completion in fiscal 2012 and fiscal 2013.
Slide 32: H&P's Global Fleet Under Term Contract
H&P’s Global Fleet Under Term Contract
Slide 33: H&P's Growing Exposure to Oil & Liquids
H&P’s Growing Exposure to Oil & Liquids Estimated proportion of H&P’s active U.S. Land rigs by primary hydrocarbon target as of 6/22/12 Oil and liquids-rich gas percentage includes a small number of contracted rigs that are moving or will soon move from dry gas plays. Includes two rigs in the spot m
Slide 34: H&P's Offshore Operations
H&P’s Offshore Operations Seven of the Company’s nine offshore platform rigs are generating revenue days, including two under long-term contracts. One of the stacked rigs is expected to go back to work in the fourth fiscal quarter of 2012. The number of revenue days during the third fiscal quarter o
Slide 35: H&P's International Land Operations
H&P’s International Land Operations Of the 29 rigs assigned to international operations, 20 are currently active and six additional rigs are contracted and expected to begin new projects in the fourth fiscal quarter of 2012. The total number of revenue days during the third fiscal quarter is expecte
Slide 36: H&P's International Land Operations Rig Fleet Status
Active Contracted Idle Total Long-term Contracts Argentina 4 2 3 9 5 Bahrain 4 4 4 Colombia 5 2 7 2 Ecuador 5 5 Tunisia 2 2 U.A.E. 2 2 2 Total 20 6 3 29 13 H&P’s International Land Operations Rig Fleet Status (as of June 22, 2012) One of the two contracted rigs is currently in transit from the U.S.
Slide 37: AC Drive U.S. Rig Market Share
AC Drive U.S. Rig Market Share (~500 Rigs) Note: The above estimates corresponding to market share are derived from multiple sources including Rig Data, Smith Bits, and corporate filings.
Slide 38: H&P U.S. Land Fleet by Power Type
H&P U.S. Land Fleet by Power Type* * Includes New Build Commitments. SCR Rigs 5%
Slide 39: 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 40: 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 41: 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 2011 (Spot Market) (Spot Market) (Spot Market) 1. Drilling days 20 11 9 Other days 3 3 3 Moving days 7 5 3.5 Total rig revenue days per well 30 19 15.5 2. Dril
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