Helmerich & Payne, Inc. · NYSE:HP
Helmerich & Payne — Investor Presentation (November 2011)
40 slides from Helmerich & Payne's investor presentation, Nov 29, 2011
Slide 1: 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 2: * Includes new FlexRigs under construction with customer commitments and scheduled for completion during
* Includes 47 new FlexRigs under construction with customer commitments and scheduled for completion during fiscal 2012 and fiscal 2013.
Slide 3: H&P's Global Rig Fleet
H&P’s Global Rig Fleet * Estimates include existing rigs and announced new build commitments.
Slide 4: Lead Innovation, Expand Market Share, Satisfy Customers, Drive Well Costs Down
Lead Innovation Expand Market Share Satisfy Customers Drive Well Costs Down
Slide 5: Five-Year Relative Shareholder Return
Five-Year Relative Shareholder Return Source: Yahoo! Finance as of November 21, 2011
Slide 6: 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 7: Organic U.S. Land Fleet Growth
Organic U.S. Land Fleet Growth * Estimates include existing rigs and announced new build commitments. 297 49
Slide 8: Highest U.S. Activity Level in Company History
Highest U.S. Activity Level in Company History As of 11/17/11
Slide 9: Lower U.S. Land Market Share – Ten Years Ago
As of November 16, 2001 Lower 48 U.S. Land Market Share Active Rig Market Share – Ten Years Ago Note: The above estimates corresponding to U.S. land rig market share are derived from Smith Bits S.T.A.T.S..
Slide 10: Organically Growing Active Rig Market Share
As of November 18, 2011 Lower 48 U.S. Land Market Share Organically Growing Active Rig Market Share Note: The above estimates corresponding to U.S. land rig market share are derived from Smith Bits S.T.A.T.S..
Slide 11: Market Trends Favor H&P
Market Trends Favor H&P Drilling today involves more complex well designs directed at oil and liquid rich plays. Customers continue to focus on efficiency and technology to achieve lower total well costs. Major customers are increasingly proactive in terms of safety and environmental protection. The
Slide 12: The New Build Replacement Cycle Continues
The New Build Replacement Cycle Continues Industry is undersupplied with high performance AC drive rigs With reportedly over 150 mechanical rigs retired in 2011, it is increasingly clear that older rigs are not well suited for this more complex drilling environment High-efficiency AC drive new build
Slide 13: Rigs Active in the U.S. Land Market
Rigs Active (~1,900) in the U.S. Land Market Note: The above estimates corresponding to rig activity are derived from multiple sources including Rig Data, Smith Bits, and corporate filings. (By Power Type)
Slide 14: H&P's Lead in U.S. High-Efficiency Rig Offering
H&P’s Lead in U.S. High-Efficiency Rig Offering 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 15: Technology & Quality Service Make a Difference: 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 Q3CY11. H&P’s Margin Premium
Slide 16: Technology & Quality Service Make a Difference: Utilization Premium
Technology & Quality Service Make a Difference * Utilization is herein calculated to be average active rigs divided by estimated available marketable rigs during the period. ** Represents estimated average combined utilization for PTEN, NBR and UNT in the Lower 48 through Q3CY11. H&P’s Utilization P
Slide 17: H&P New Builds
H&P New Builds Total of 71 new builds announced since January 2011 Delivering new FlexRigs at the rate of four per month As of November 17, 2011, 47 new builds left to deliver in fiscal 2012 and 2013 10 delivery slots remain open in calendar 2012 Encouraging conversations with customers continue reg
Slide 18: Additional References
Additional References:
Slide 19: Activity as of November 17, 2011
Activity as of November 17, 2011 Rigs Working/ Contracted 228 7 20 255 47 302 Rigs Available 250 9 25 284 47 331 % Contracted 91% 78% 80% 90% U.S. Land Offshore International Land Total FlexRig Construction Total Fleet
Slide 20: H&P's U.S. Land Operations
H&P’s U.S. Land Operations Industry rig counts and spot pricing remain strong. Driven primarily by incremental new builds, we expect total revenue days in the U.S. land segment to increase by approximately five percent from the fourth fiscal quarter of 2011 to the first fiscal quarter of 2012. Quart
Slide 21: H&P's U.S. Land Fleet Activity
H&P’s U.S. Land Fleet Activity ** Includes completed new builds that were waiting on customers and which generated revenue but did not generate revenue days. * Active rigs on term (in blue) generated both revenue and revenue days.
Slide 22: Leading U.S. Unconventional Driller
(275 H&P Contracted Land Rigs as of 11/17/11*) Leading U.S. Unconventional Driller * Includes new FlexRigs with customer commitments scheduled for completion by the first fiscal quarter of 2013.
Slide 23: H&P Global Fleet Under Term Contract
H&P Global Fleet Under Term Contract
Slide 24: H&P's Offshore Operations
H&P’s Offshore Operations Seven of the Company’s nine offshore platform rigs remain active, including two under long-term contracts. The number of revenue days during the first fiscal quarter of 2012 is expected to decrease by approximately five percent as compared to the fourth fiscal quarter of 20
Slide 25: H&P's International Land Operations
H&P’s International Land Operations Of the 25 rigs assigned to international operations, 19 are currently active including nine under long-term contracts. Additionally, a fourth FlexRig on a term contract is in transit to Bahrain with the rig scheduled to begin operations during the second fiscal qu
Slide 26: H&P's International Land Operations Rig Fleet Status
H&P’s International Land Operations Active Contracted Idle Total Long-term Contracts Argentina 5 4 9 4 Bahrain 3 1 4 4 Colombia 5 1 6 2 Ecuador 4 4 Tunisia 2 2 Total 19 1 5 25 10 Rig Fleet Status (as of November 17, 2011) An additional FlexRig is in transit to Bahrain and expected to commence drilli
Slide 27: Economics Shift Activity Towards Oil Drilling
Economics Shift Activity Towards Oil Drilling
Slide 28: 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.
Slide 29: Increasing Focus on More Difficult Drilling
Increasing Focus on More Difficult Drilling
Slide 30: Oil Related Drilling Increasingly Complex
Oil Related Drilling Increasingly Complex
Slide 31: Increasing Focus on More Difficult Drilling
Increasing Focus on More Difficult Drilling
Slide 32: 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 33: Total Industry Available U.S. Land Fleet by Power Type
Total Industry Available U.S. Land Fleet (by Power Type) Note: The above estimates corresponding to the available rig fleet in the U.S. are derived from multiple sources including Rig Data, Smith Bits, and corporate filings.
Slide 34: H&P U.S. Land Fleet by Power Type
H&P U.S. Land Fleet by Power Type* * Includes New Build Commitments.
Slide 35: 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 36: 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 37: 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 38: 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 Completion days 3 3 3 Moving days 7 5 3.5 Total rig revenue days per well 30 19 15.5 2.
Slide 39: EnergyPoint Research Customer Satisfaction Index
Source: EnergyPoint Research, Inc. Customer Satisfaction Index 10 = “Highly Satisfied”, 1 = “Highly Dissatisfied”
Slide 40: End of Document
End of Document
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