Helmerich & Payne, Inc. · NYSE:HP
Helmerich & Payne — Investor Presentation (June 2024)
26 slides from Helmerich & Payne's investor presentation, Jun 14, 2024
Slide 1: Helmerich & Payne, Inc. June 2024
Helmerich & Payne, Inc. June 2024 Financial data as of 3/31/2024; other data and year-to-date references are as of 04/24/2024 unless otherwise noted. © 2024 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: Helmerich & Payne – H&P Today
Helmerich & Payne H&P is recognized as an industry leader in unconventional drilling solutions as well as technological innovation. H&P TODAY H&P operates in 3 segments (% of revenue in Fiscal 2023) o North America Solutions ~88% market leader in U.S. Founded IN 1920 o International Solutions o Offs
Slide 4: Focused on Enhancing Returns
Current Highlights • Striving to generate returns above cost of capital through the cycles • Achieved in fiscal 2023 • Driving up revenue/day & direct margin/day(1): • Target of > $35k/day in revenue/day in NAS • Mid-teen ROIC/ROCE goal • Reducing capital intensity on revenue generated • Returning c
Slide 5: H&P's Winning Strategy
H&P’s Winning Strategy Global Drilling Solutions Provider • Focus on Customercentricity • Evolve commercial model to be customer centered and value driven • Continue to be an industry leader in technology automation adoption and differentiation • International expansion • Maintain capital allocation
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 • Evolving the commercial model – performance contracts • Uniform design of FlexRig® fleet • Highly trained workforce • Safety leadership
Slide 7: H&P Global Rig Fleet
H&P Global Rig Fleet Super-Spec Rigs Represent Pro Forma for 99% of Total NAS Fleet Current Middle East Awards Rigs Rigs % (Export)/ Rigs Rigs % Available Active(1) Contracted (2) Import Available Contracted Contracted North America Solutions 233 150 64% (8) 225 150 67% ® Super-Spec FlexRig Fleet 23
Slide 8: 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 9: Percent of Rigs to Customers
Drilling Contractors’ E&P Clients H&P’s customers hold long lives of high-quality inventory Drilling Contractors' E&P Clients o H&P has the largest percentage 70% of rig fleet with super majors and Percent of Rigs to Customers 60% Exposure to large E&P’s; those customers Supermajors & tend to have m
Slide 10: Evolving Commercial Model – Providing Value with Performance
Evolving Commercial Model – Providing Value with Performance H&P has a long track record of providing value to customers: • The commercial model must evolve to ensure a reasonable rate of return • Historically, day-rate model does not adequately compensate for value being derived in well cost saving
Slide 11: Rig Performance is More Impactful to Well Cost than Rig Rates
Rig Performance is More Impactful to Well Cost than Rig Rates Estimated Total Well Costs o Drilling costs are not synonymous with rig rates ̶ other drilling costs (OCTG, Mud, Bits and Directional) more impactful to overall well cost Rig Tie-In 8% o H&P’s rigs, technology and crews help provide E&Ps
Slide 12: Benefits of Allocating Capital Internationally
Benefits of Allocating Capital Internationally Taking industry leading unconventional drilling expertise, consisting of rigs, technology, people and processes, to emerging unconventional plays around the globe ➢ Diversification from U.S. and outlet for super-spec FlexRig® fleet capacity • Exporting
Slide 13: International Unconventional Drilling – Gaining Momentum
International Unconventional Drilling – Gaining Momentum Capitalizing on unconventional drilling growth opportunities with recent rig awards and operations ▪ Received 8 rig awards with Saudi Aramco • First time the Company has contracted rigs in Saudi Arabia • One rig expected to commence operations
Slide 14: H&P's Commitment to Capital Allocation
H&P’s Commitment to Capital Allocation RETURNS TO SHAREHOLDERS • Established base dividend • Supplemental dividends • Opportunistic share repurchases (4 million share evergreen repurchase authorization per calendar year) CAPITAL EXPENDITURES CASH FLOW CAPITAL • Maintenance – moves with active rig co
Slide 15: 2024 Supplemental Shareholder Return Plan
2024 Supplemental Shareholder Return Plan Cashflow From Operations Less: FY2024 Planned Capex ~$500MM Less: FY2024 Planned Base Dividend ~$100MM ~50%* Remaining Cashflow as Supplemental Dividend ~$68MM ~50%* Remaining Cashflow: Share Repurchases, More Supplemental Dividends or Other Investment Oppor
Slide 16: 2023 Supplemental Shareholder Return Plan – Executed Well
2023 Supplemental Shareholder Return Plan – Executed Well • In fiscal 2023, H&P returned approximately $450 million of capital to shareholders – $104M base dividend, $98M supplemental dividend, $249M in share repurchases • In fiscal 1H 2024, H&P returned approximately $136 million of capital to shar
Slide 17: Leading Shareholder Returns
Leading Shareholder Returns Total Cash Returned Per Share CY16-CY24 YTD Total Cash Returned / Share CY16-24YTD $21 Total Cash Returned / Share CY16-24YTD $24 $21 $18 $18 $15 Already Leader in Providing Shareholder Returns $15 $12 $12 $9 $9 Total Cash Returned Yield $6 CY16-CY24 YTD $6 7% $3 Total Ca
Slide 18: H&P – Compelling Energy Investment
H&P – Compelling Energy Investment 27 Energy Companies in S&P 600 Index 13 OFS, 7 E&Ps, 5 Refining & Marketing, 2 Other H&P Stands Out Balance Sheet Strength • H&P ranks in top quartile in debt-to-cap at ~16%; average ~40% Cash Returns to Shareholders • Only 11 of 27 are dividend payers of which H&P
Slide 19: Conservative Capital Structure
Conservative Capital Structure Total-Debt-to-Capitlization Ratio(1) Net Debt / LTM Cashflow from Ops(3) Total Liquidity ($MM) 4.0x $1,200 200% HP 16% 84% 3.5x Liquidity as a % of Debt Total Liquidity Available 3.5x 3.0x $900 150% PTEN 21% 79% 2.5x $600 100% 2.0x 1.7x NBR 83% 17% 1.5x $300 50% 1.0x 0
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: 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 22: Improving Lives Through Efficient and Responsible Energy
Improving Lives Through Efficient 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 23: H&P Sustainability Report
H&P Sustainability Report Issued December 2023 Highlights – Provides: • Environmental management and oversight practices • Strong use of data to report over 40 environmental metrics, including Scope 1 & 2 emissions data • Quantitative scenario analysis for use in strategy development • Environmental
Slide 24: H&P Greenhouse Gas Emissions
H&P Greenhouse Gas Emissions • H&P has a history of taking thoughtful and methodical approaches to solving problems and working with customers to optimize solutions • H&P scope 1 and 2 CO2e emissions per kilometer drilled have reduced by approximately ~25% since FY2018 • Established a new, long-term
Slide 25: H&P Investment Thesis
H&P Investment Thesis AN INDUSTRY LEADER AS AN UNCONVENTIONAL DRILLING SOLUTIONS PROVIDER • Largest, Uniform and Most Capable Fleet • Consistent Operational Excellence (Safety, Customer Satisfaction, Reliability) • A Technology and Innovation Leader • Financial Position and Strength • Differentiated
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 © 2024 Helmerich & Payne, Inc. All Rights Reserved. 26
Helmerich & Payne — Investor Presentation (June 2024) on 6ix