Helmerich & Payne, Inc. · NYSE:HP
Helmerich & Payne — Capital One Southcoast 7th Annual Energy Conference 2012
45 slides from Helmerich & Payne's conference presentation, Dec 5, 2012
Slide 1: Capital One Southcoast 7th Annual Energy Conference
Helmerich & Payne, Inc. Capital One Southcoast 7th Annual Energy Conference December 4-6, 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: Fleet overview with new FlexRigs under construction
* Includes eight announced new FlexRigs under construction with customer commitments as of December 4, 2012, that are scheduled for completion during fiscal 2013. 3
Slide 4: Increasing Quarterly Dividend by 114%
Increasing Quarterly Dividend by 114% Delivered increasing dividend levels every year for over 40 years Now significantly increasing quarterly dividend from $0.07 to $0.15 per share (~114%)
Slide 5: Discussion Outline
Discussion Outline H&P strategy and results Fleet activity update Favorable market trends for FlexRigs H&P new build advantages 5
Slide 6: Strategy: Lead Innovation, Expand Market Share, Drive Well Costs Down
Lead Innovation Expand Drive Well Market Share Costs Down Satisfy Customers
Slide 7: Changes in Lower U.S. Land Rig Count
Changes in Lower 48 U.S. Land Rig Count
Slide 8: H&P's Margin Premium
Technology & Quality Service Make a Difference * Does not include the impact of early contract termination revenue. ** Represents weighted-average rig margin per day for PTEN, NBR and UNT through Q3CY12. H&P’s Margin Premium 8
Slide 9: Most Profitable Driller in U.S. Land Business
Most Profitable Driller in U.S. Land Business * PTEN’s operating income includes drilling operations in Canada. ** NBR’s operating income corresponds to its U.S. Lower 48 Land Drilling segment.
Slide 10: Record Profits During Industry Slowdown
Record Profits During Industry Slowdown (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 11: Five-Year Relative Shareholder Return
Five-Year Relative Shareholder Return Source: Thomson Financial as of November 30, 2012
Slide 12: H&P's Global Rig Fleet
H&P’s Global Rig Fleet * Estimates include existing rigs and announced new build commitments. 12
Slide 13: H&P Activity as of December 4, 2012
H&P Activity as of December 4, 2012 Rigs Working/ Contracted 240 237 3 8 26 274 8 282 Rigs Available 290 255 35 9 29 328 8 336 % Contracted 83% 93% 9% 89% 90% 84% U.S. Land AC Drive FlexRigs SCR Fleet Offshore International Land Total FlexRig Construction Total Fleet Includes announced new build com
Slide 14: H&P Global Fleet Under Term Contract
H&P Global Fleet Under Term Contract 14
Slide 15: U.S. Land Market Conditions
U.S. Land Market Conditions Since our last webcast, pricing in the spot market remains firm and our active rig count has increased from 237 to 240 active rigs. Our U.S. Land operational outlook for the first fiscal quarter remains unchanged. Excluding the impact of early termination revenues, we sti
Slide 16: H&P's U.S. Land Fleet Activity
H&P’s U.S. Land Fleet Activity Active rigs on term (in blue) generated both revenue and revenue days. Includes completed new builds that were waiting on operators and which generated revenue but did not generate revenue days. (1) (2) 16
Slide 17: Leading U.S. Unconventional Driller
(248 H&P Contracted Land Rigs as of 12/4/12*) Leading U.S. Unconventional Driller * Includes announced new FlexRigs with customer commitments scheduled for completion in fiscal 2013. 17
Slide 18: Favorable Market Trends for FlexRigs
Favorable Market Trends for FlexRigs AC drive rigs replacing SCR and mechanical rigs More customers high-grading their fleets Increasing well complexity Focus on drilling efficiency, technology and safety 18
Slide 19: 2008 Peak Rig Count 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 20: Current Rig Count by Power Type
Week Ended November 23, 2012 By Power Type Current Rig Count (~1,600) - 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: 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. 21
Slide 22: Unconventional Plays Shaping Landscape
Unconventional Plays Shaping Landscape Well complexity is increasing: Technology solutions that provide safe, environmentally sound and efficient operations are required by contractors to be competitive Extended reach laterals progressively longer Multi-well pad drilling gaining acceptance in more a
Slide 23: Increasing Focus on More Difficult Drilling
Increasing Focus on More Difficult Drilling 23
Slide 24: The Replacement Cycle Continues
The Replacement Cycle Continues We are not only the most active driller in the U.S. land market, but also continue to have a very significant lead in the growing segment of advanced technology AC drive rigs. We continue to make new build deliveries on time and on budget, including one new FlexRig si
Slide 25: AC Drive U.S. Rig Market Share
AC Drive U.S. Rig Market Share (~625 Rigs) Note: The above estimates corresponding to market share are derived from multiple sources including Rig Data, Smith Bits, and corporate filings. 25
Slide 26: 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 27: An Undersupply of AC Drive Rigs
An Undersupply of AC Drive Rigs (~1,600 Active Rigs in the U.S. By Power Type) Note: The above estimates corresponding to rig activity are derived from multiple sources including Rig Data, Smith Bits, and corporate filings. Additionally, the drawworks capacity of each land rig included in the above
Slide 28: Changes in Lower U.S. Land Rig Count
Changes in Lower 48 U.S. Land Rig Count * PDS’ active rig count includes both PDS and GW rigs. 28
Slide 29: H&P's New Build Advantages
H&P’s New Build Advantages We have been improving and honing the process for over 10 years, prompting our assertion that we build a better rig for less Safety is our first priority, followed by a relentless focus on strong execution and performance in the field Exceptional fleet uniformity Extensive
Slide 30: 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 31: 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 2012 (Spot Market) (Spot Market) (Spot Market) 1. Drilling days 20 13 9 Other days 3 3 3 Moving days 7 4 3 Total rig revenue days per well 30 20 15 2. Drilling
Slide 32: 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 32
Slide 33: Recordable Injuries per 1-MM Feet Drilled in 2011
Note: Injury data taken from IADC ASP Program. Footage data taken from Land Rig Newsletter. 11.7 9.1 5.2 2.2 Recordable Injuries per 1-MM Feet Drilled in 2011 by the Largest U.S. Land Drilling Contractors 33
Slide 34: H&P Competitive Advantages
H&P Competitive Advantages Our people, processes and FlexRig technology create a very important competitive advantage for the Company. Our value proposition will continue to be directed toward delivering compelling performance for our customers and shareholders. The shift to drilling more complex un
Slide 35: End of Presentation
End of Presentation 35
Slide 36: Additional References
Additional References 36
Slide 37: H&P's Offshore Operations
H&P’s Offshore Operations Our offshore operational outlook for the first fiscal quarter remains unchanged. Eight of the Company’s nine offshore platform rigs remain active. As compared to the prior quarter, we still expect revenue days to increase by approximately five percent. Margin per day is sti
Slide 38: H&P's International Land Operations
H&P’s International Land Operations Our international land operational outlook for the first fiscal quarter remains unchanged. Of the 29 rigs assigned to international operations, 26 remain active. Total revenue days during the first fiscal quarter are still expected to increase by about fifteen per
Slide 39: International Land Operations Rig Fleet Status
Active Idle Total Long-term Contracts Argentina 6 3 9 5 Bahrain 4 4 4 Colombia 7 7 2 Ecuador 5 5 1 Tunisia 2 2 2 U.A.E. 2 2 2 Total 26 3 29 16 H&P’s International Land Operations Rig Fleet Status (as of December 4, 2012) (1) 15 of 16 FlexRigs, included in the international fleet of 29 rigs, are unde
Slide 40: Oil and Natural Gas Prices
Oil and Natural Gas Prices Source: Energy Information Administration 40 Oil Prices Natural Gas Prices
Slide 41: H&P's Exposure to Oil & Liquids
Dry Gas (Long-term Contracts) 4% H&P’s Exposure to Oil & Liquids Estimated proportion of H&P’s active U.S. Land rigs by primary hydrocarbon target as of 9/4/12 Approximately one-fourth of rigs in this category are primarily drilling for liquids-rich gas. Dry Gas (Spot Market) 1% (1)
Slide 42: U.S. Land Industry Rig Count
U.S. Land Industry Rig Count 42
Slide 43: Organic U.S. Land Fleet Growth
Organic U.S. Land Fleet Growth * Estimates include existing rigs and announced new build commitments. 298 49 43
Slide 44: H&P's Advanced Technology Footprint
H&P’s Advanced Technology Footprint (240 Active Rigs in the U.S. By Power Type) 44
Slide 45: End of Document
End of Document 45
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