Helmerich & Payne, Inc. · NYSE:HP
Helmerich & Payne — Investor Presentation (August 2022)
28 slides from Helmerich & Payne's investor presentation, Aug 23, 2022
Slide 1: Helmerich & Payne, Inc.
Helmerich & Payne, Inc. August 2022 Financial data as of 6/30/2022; other data as of 7/27/2022 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 at 6/30/22) o North America Solutions ~88% market leader in U.S. Founded IN 1920 o International Solutions o Offshore Gulf of Mexic
Slide 4: Focused on Enhancing Returns: Current Highlights
Current Highlights • Increased NAS rig count ~33% in 1HFY22 • Guiding to ~55% increase in NAS direct margins(1) in 2HFY22 (2) • Driving up revenue/day: • Targeting ~50% direct margins(1) in NAS with increasing pricing • Double-digit ROIC/ROCE goal • Returning cash to shareholders: • Repurchased ~$77
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: Industry Leading Financials: Revenue per Day
Industry Leading Financials H&P Has Leading Margin Profile in U.S. Land Drilling Market Revenue per Day U.S. Land Drilling Market (CQ2 2022) $13,000 $27 $26.4 $25.9 $25.9 $26 Revenue per Day (in thousands) $25.5 $11,000 Margin per Day $25 $9,000 $24 $23 $7,000 $22 $5,000 HP NBR PTEN PDS $21 Q4CY21 Q
Slide 8: H&P Global Rig Fleet
H&P Global Rig Fleet Super-Spec Rigs Represent Super-Spec Rigs Represent 97% of Total Land Fleet 97% of Total Land Fleet Rigs Rigs % Available Contracted (1) Contracted U.S. Land 236 176 75% Super-Spec FlexRig® Fleet 230 174 76% Upgradeable AC FlexRig 4 0 0% Other AC-Style FlexRig 2 2 100% Internati
Slide 9: 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 10: U.S. Land Rig Count
Rig Count Improved, Looks to Improve Further 900 Sell-side consensus estimate for U.S. land rig count in 2023 800 Average industry rig count YTD in 2022 700 Rig Count Movements: U.S. Land Rig Count 600 • In March 2020, OPEC and Russia disagreements around oil supply 500 and the onset of the COVID-19
Slide 11: 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 12: H&P Offerings Create Compelling Value Opportunities for E&Ps
H&P Offerings Create Compelling Value Opportunities for E&Ps
Slide 13: 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 14: 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 15: 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 16: 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 17: H&P is Built to Withstand Volatile Markets
H&P is Built to Withstand Volatile Markets
Slide 18: Fiscal 2022 Cash Projection
Fiscal 2022 Cash Projection $600 $570 $500 $400 Projecting to return $185 million in cash to Implied shareholders; ~33% of total cash outflows $350-$400 $ Millions $300 $250-$270 $25 $200 $108 $22 $100 $45 $77 $5-$20 $25 $16 $55 $0 (4) (4) (1) (2) (2) (3) (3) (3) (4) (3) (3) (3) 9/30/21 Capex ADNOC
Slide 19: H&P's Commitment to Capital Allocation
H&P’s Commitment to Capital Allocation RETURNS TO SHAREHOLDERS • Dividends • Share repurchases • Exploring further possibilities CAPITAL EXPENDITURES CASH FLOW CAPITAL • Maintenance – moves with active rig count FROM ALLOCATION • Walking conversions based on demand OPERATIONS • International – will
Slide 20: H&P – Compelling Energy Investment
H&P – Compelling Energy Investment 28 Energy Companies in S&P 600 Index 14 OFS, 7 E&Ps, 5 Refining & Marketing, 2 Other H&P Stands Out Balance Sheet Strength • H&P ranks in top quartile in debt-to-cap at 17%; average 42% Cash Returns to Shareholders • Only 9 of 28 are dividend payers of which H&P is
Slide 21: Conservative Capital Structure
Conservative Capital Structure Total-Debt-to-Capitlization Ratio(1) Net Debt / LTM Cashflow from Ops(3) Total Liquidity ($MM) 7.0x $1,200 200% 6.3x Liquidity as a % of Debt Total Liquidity Available HP 17% 83% 6.0x $1,050 175% 5.6x $900 150% 5.0x $750 125% PTEN 35% 65% 4.0x 3.7x $600 100% $450 75% 3
Slide 22: 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 23: Reducing Carbon Footprint – Operating and Investing
Reducing Carbon Footprint – Operating and Investing OPERATING • Drilling efficiencies – operational and technological expertise • Engine management – optimizing engine output to operational power demand • Alternative power sources for customers – natural gas, high-line electrical, battery INVESTING
Slide 24: 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 25: 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 26: H&P CO2 Emissions
H&P CO2 Emissions Normalized by Distance Drilled FY 2018 FY 2019 FY 2020 FY 2021 75 25 • H&P has a history of taking thoughtful and methodical approaches to solving 70 20 problems and working with customers to optimize solutions 65 15 • H&P scope 1 and 2 CO2e emissions per 60 10 kilometer drilled ha
Slide 27: 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 28: 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. 28
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