Helmerich & Payne, Inc. · NYSE:HP
Helmerich & Payne — Investor Presentation (May 2019)
27 slides from Helmerich & Payne's investor presentation, May 3, 2019
Slide 1: Forward-Looking Statements
Forward-LookingStatements 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 2: H&P Investment Thesis
H&PInvestment Thesis Industry Leader in U.S. Land Drilling FlexRig® Fleet Poised for Continued Market Share Gains Most Capable and Uniform Fleet • • Outperformed OSX in 8 Out of Last 10* Years Consistent Operational Excellence (Safety, Financial Position and Strength Technology and Innovation Leader
Slide 3: 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 4: H&P's Winning Strategy
H&P’sWinning Strategy Today’s Focus Points Execute as the dominant U.S. land driller Grow international business opportunistically Maintain cash flow generating offshore exposure Continue to lead industry in technology and innovation bringing value to customers Maintain and build upon a solid financ
Slide 5: H&P Global Rig Fleet % Contracted
H&P GlobalRig Fleet % Contracted Rigs Available Rigs Contracted U.S. Land AC Drive FlexRigs Super-spec(1) Upgradeable Other 3,000 hp SCR Rigs 350 348 230 47 71 2 220 220 207 8 5 0 63% 63% 90% 17% 7% 0% Offshore 8 6 75% International Land(2) Argentina(3) Bahrain Colombia U.A.E 32 19 3 8 2 17 15 1 1 0
Slide 6: Competitive Benefits of Uniform Fleet
Competitive Benefitsof 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 up
Slide 7: Differentiated from Land Drilling Peers
Differentiated from Land Drilling Peers Leading U.S. market share with significant growth trajectory • Approximately 21%* of U.S. land fleet, over 40%* of super-spec fleet, and ~50%* of idle upgradeable rigs Distinctively situated as the incremental supplier of super-spec rigs • Leveraging position
Slide 8: Leading U.S. Unconventional Driller
Leading U.S. Unconventional Driller (5,90%) (5,13%) (7,14%) (7,17%) (8,13%) (10,17%) (114,24%) (25,25%) (39,40%) Broad exposure to U.S. unconventional basins Well positioned and able to quickly respond to changes in basin demand Leading market share in the 3 most active U.S. basins Market share evid
Slide 9: Strong Returns and Market Share Growth
Strong Returns and Market Share Growth H&P has a higher quality of earnings with a greater number of super-spec rigs that are in demand Unmatched competitive edge – super-spec and upgradeable rig fleet ready to meet 2014 peak levels Erosion of peak earnings power from peer group is pronounced Capita
Slide 10: Super-Spec and Upgradable Utilization
Super-Spec and Upgradable Utilization Industry Super-Spec Utilization Super-Spec Specifications AC drive 1,500 hp drawworks 750,000 lb hookload rating 7,500 psi mud circulating system Multiple-well pad capable Additional capabilities, including third mud pumps, 25,000’ setback, increased mud volume,
Slide 11: Super-Spec Upgrade Program
Super-SpecUpgrade Program H&P’s Super-Spec Upgrades Upgrades generate high returns H&P investing capital to grow the fleet size of its super-spec rigs faster and larger than competitors Over 40% super-spec market share with 230 super-spec rigs Most upgradeable rigs available at low-cost Cost of upgr
Slide 12: Family of Solutions
Family of Solutions™ FlexAppTM Services FlexApps: Commercialization of FlexTorque™ hardware and software offers less drilling vibration, lowers cost and yields more wells for higher reserves and production. FlexConnect™ software optimizes slip-to-slip connection time, reduces flat time and improves
Slide 13: Opportunistic International Growth
OpportunisticInternational Growth Important line of business for H&P 7% 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 proposition/
Slide 14: Established Offshore Business
EstablishedOffshore Business Legacy business for H&P • Drilling offshore since 1968 • Assets consist of platform drilling rigs • Today requires relatively little capex • Yields free cash flow supporting other segments Long operational track record Niche business line in the Gulf of Mexico with few c
Slide 15: Wellbore Quality & Accuracy
Wellbore Quality & Accuracy Extracting Higher Value from Shale Assets Motive and MagVAR acquisitions create a powerful platform and compelling value opportunity for E&P companies Offers flexibility for E&Ps to select best technology regardless of drilling contractor Brings new level of accuracy to d
Slide 16: Traditional Directional Drilling Challenges Without Motive
Traditional Directional Drilling Challenges Without Motive Motive Results Well Design Difficult to Achieve Improved Accuracy • • Poor drilling accuracy Missed targets/pay zones • • Well Drilled to Plan More time in pay zone Planned Trajectory Actual Result MOTIVE Result Inconsistent Practices Consis
Slide 17: MOTIVE Bit Guidance System
MOTIVE Bit Guidance System Motive has commercially drilled over 12 million feet on over 800 wells across all of the major U.S. shale plays and Canada Motive has been issued 19 U.S. Patents Today Motive operates on both H&P FlexRigs and competitor rigs The Bit Guidance System converts directional dri
Slide 18: MagVAR Survey Correction
MagVAR Survey Correction Unconventional Drilling – Why Surveying Accuracy Matters The path can be as important as the MagVAR high accuracy modeling of the Earth’s crustal destination…The industry is leaving behind! hydrocarbons magnetic field significantly improves MWD accuracy Reduces the cost and
Slide 19: Optimized Wellbore Placement
Optimized Wellbore Placement Why is Wellbore Placement Critical? Reservoir: Directly impacts well performance by increasing reservoir volume; optimal drainage, more frac wings Completions: improving hydraulic communication Geology:better mapping improves prospectivity Regulatory: greater confidence
Slide 20: Path Towards Automation
Path Towards Automation Using the autonomous car analogy, H&P with its new AutoSlide functionality is entering level 4 out of the 5 levels, where there is still a driver but he is not required to touch the steering wheel except in rare occasions. Motive AutoSlideSM Source: Company 20 19-9378-1C1.1P2
Slide 21: AutoSlide
AutoSlide The Next Evolutionary Step in Drilling Automation Standardizes highest quality well paths by providing automated and optimized slide execution with no human dependency Searches for optimal parameters in real-time to increase ROP and accuracy Adapts to different downhole formations and tool
Slide 22: H&P FlexRig AutoSlide
H&PFlexRigAutoSlide Currently outperforming very experienced directional drillers Less overall time to drill the curve Improved tool face precision While the Motive Bit Guidance System can be used on all rigs, AutoSlide is only available with FlexRigs today AutoSlide has been running on H&P FlexRigs
Slide 23: Strong Financial Foundation & Returns
Strong Financial Foundation & Returns Total-Debt-to-Total-Capitalization Ratio1 Dividends Paid (Fiscal 2008 – Current) Solid balance sheet stewardship with lowest debt load among peers Free cash flow available to both invest and return to shareholders Source: Company Filings. Total-Debt-to-Total Cap
Slide 24: Strong Term Backlog
StrongTermBacklog Term Contract Status – H&P Global Fleet U.S. Land Term Contract Revenues Source: Company Filings 24 © HELMERICH & PAYNE, INC. 2019 19-9378-1C1.1P27
Slide 25: Why H&P in Current Market Conditions?
Why H&P in Current Market Conditions? U.S. Land industry leader with dominant position poised for future gains Important to be adaptable in volatile markets Rig release notifications from the beginning of the year have moderated supporting the activity outlook Expect H&P rig count to trough in the f
Slide 26: Helmerich & Payne, Inc.
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 19-9378-1C1.1P29
Slide 27: Helmerich & Payne, Inc.