Helmerich & Payne, Inc. · NYSE:HP
Helmerich & Payne — Bank of America Energy Conference 2008
36 slides from Helmerich & Payne's conference presentation, Nov 13, 2008
Slide 1: Helmerich & Payne, Inc. Bank of America Energy Conference
Helmerich & Payne, Inc. Bank of America Energy Conference November 13-14, 2008 Investor Relations Contact: Juan Pablo Tardio – (918) 588-5383 – juanpablo.tardio@hpinc.com
Slide 2: Forward-looking information
The information contained within this presentation is forward looking and involves risks and uncertainties that could significantly impact expected results. A discussion of these risks and uncertainties is contained in the Company’s Form 10-K filed with the Securities and Exchange Commission on Nove
Slide 3: H&P's Global Rig Fleet
H&P’s Global Rig Fleet * Includes existing rigs and announced new build commitments. 77 90 89 88 96 111 127 130 128 151 193 224 249 0 50 100 150 200 250 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009E* Rigs Available Fiscal Year (Ending Sept 30) International Land Offshore U.S. Lan
Slide 4: U.S. Land Drilling Operating Income
$0 $100 $200 $300 $400 $500 $600 GW* PTEN** NBR*** HP Operating Income (Millions) U.S. Land Drilling Operating Income 12 Months Ended June 30, 2008 Most Profitable Driller in U.S. Land Business ** PTEN’s operating income includes drilling operations in Canada. *** NBR’s operating income corresponds
Slide 5: H&P's Differentiated Approach
Create value through efficiency and safety Provide the most innovative and advanced drilling rigs Structure the organization required to support them Drive customers’ total well costs down Seize opportunities to expand market share Deliver premium margins and sustainable growth to shareholders H&P’s
Slide 6: Growth in H&P's U.S. Land Fleet
Growth in H&P’s U.S. Land Fleet * Includes existing rigs and announced new build commitments only. 30 36 40 39 49 66 83 90 90 113 157 185 208 0 25 50 75 100 125 150 175 200 225 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009E* U.S. Land Rigs Fiscal Year (Ended Sept 30)
Slide 7: U.S. Land Estimated Average Rig Utilization
60% 70% 80% 90% 100% Q1CY05 Q2CY05 Q3CY05 Q4CY05 Q1CY06 Q2CY06 Q3CY06 Q4CY06 Q1CY07 Q2CY07 Q3CY07 Q4CY07 Q1CY08 Q2CY08 Estimated Avarege Rig Utilization Quarter Ended U.S. Land Estimated Average Rig Utilization* H&P Peers** ** Represents estimated average combined utilization for PTEN, NBR, UNT and
Slide 8: U.S. Land Average Daywork Margins
$4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 Q1CY05 Q2CY05 Q3CY05 Q4CY05 Q1CY06 Q2CY06 Q3CY06 Q4CY06 Q1CY07 Q2CY07 Q3CY07 Q4CY07 Q1CY08 Q2CY08 Average Rig Margin per Day Quarter Ended U.S. Land Average Daywork Margins H&P Peers* *Represents weighted-average rig margin per day for PTEN, NBR,
Slide 9: Returns are Ultimately Driven by Performance
12% 14% 16% 18% 20% 22% 24% PTEN NBR GW HP Return on Equity 12 Months Ended June 30, 2008 Returns are Ultimately Driven by Performance
Slide 10: Delivering Earnings Growth to Shareholders
Estimated Growth from 2007-2008 and 2008-2009 (Calendar Years) Delivering Earnings Growth to Shareholders Earnings per Share Growth Analyst Estimates CY2007-CY2008 (First Call Consensus - November 10, 2008) -40% -30% -20% -10% 0% 10% 20% 30% GW PTEN NBR HP Earnings per Share Growth Analyst Estimates
Slide 11: Actual and Consensus EPS, CPS and EBITDA
$907 $1,065 6.17 7.24 4.21 4.84 $0 $2 $4 $6 $8 $10 $12 $0 $200 $400 $600 $800 $1,000 $1,200 2002 2003 2004 2005 2006 2007 2008C* 2009C* Consensus EPS and CPS Expectations Consensus EBITDA Expectations (Millions) Fiscal Year** Actual and Consensus EPS, CPS and EBITDA EBITDA CPS EPS Delivering Growth
Slide 12: H&P's Active Fleet
H&P’s Active Fleet (11/14/08) * Includes pending deliveries corresponding to new build commitments announced through 7/31/08 ** The idle Offshore rig is contracted and waiting on the customer’s platform. H&P New Builds Drilling Pending Segment Active Delivery* Idle U.S. Land 180 21 7 International L
Slide 13: Well Positioned to Cope with Market Volatility
Long-term contracts – Over half of our fiscal 2009 potential U.S. land revenue days are already contracted at attractive dayrates Customer base – About 80% of our U.S. land fleet is operated by majors and very large independents Over half of H&P’s rigs in the U.S. land spot market are FlexRigs Stron
Slide 14: End of Presentation
HELMERICH & PAYNE, INC. End of Presentation
Slide 15: Additional References
HELMERICH & PAYNE, INC. Additional References:
Slide 16: H&P Basics
H&P Basics Founded: 1920 Activity: Contract Drilling for Oil and Gas Symbol: HP (NYSE, Since 1963) Employees: 7,400 (Worldwide) Market Cap: $2.7 (In Billions, November 12, 2008) Assets: $3.4 (In Billions, June 30, 2008) EBITDA: $849 (In Millions, 12 months ended June 30, 2008) Debt: $455 (In Million
Slide 17: H&P's Global Rig Fleet
U.S. Land 208 U.S. FlexRigs 169* Mobile & Conventional 39 International Land 32** H&P’s Global Rig Fleet 249 Total Rigs (Includes New Build Commitments) * Includes 23 rigs scheduled for delivery during fiscal 2009 (October 1, 2008 through September 30, 2009). ** Includes 1 FlexRig operating in Tunis
Slide 18: H&P's Growth in Operating Income
$0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Operating Income per Quarter (Millions) Quarter Ended H&P Segment Ope
Slide 19: H&P's U.S. Land Operations
180 of 187 rigs active as of 11/14/08, including 110 under term contracts FlexRigs continue to deliver outstanding field performance at 100% utilization More than half of the segment’s potential revenue days for fiscal 2009 are already contracted Expansion continues through new build program H&P’s U
Slide 20: The Remarkable Success of the H&P FlexRig
50 67 60 0 20 40 60 80 100 120 140 160 180 200 Thru FY2004 FY2005 - 2006 FY2007 - 2008 Number of FlexRigs FlexRig Announcements and Completions LT Contracts Announced Since Peak of 2006 LT Contracts Announced Thru Peak of 2006 Previously Existing FlexRigs Completed and Active FlexRigs The Remarkable
Slide 21: H&P is Leading the U.S. Land Retooling Effort
AC Driven New Builds Other New Builds Conventional Rigs Total Active U.S. Land Fleet (Estimates) (~2,200 Rigs) AC Driven (FlexRig 3 & 4) Other New Builds (FlexRig 1 & 2) Conventional Rigs Active H&P U.S. Land Fleet (180 Rigs as of 11/14/08) H&P is Leading the U.S. Land Retooling Effort Refurbished r
Slide 22: New Builds – H&P's FlexRig Program
New Builds – H&P’s FlexRig Program The FlexRig Difference: Key Advantages Increased drilling productivity and reliability Variable frequency (AC) drives with increased precision and measurability Computerized electronic driller that precisely controls weight on bit, rotation and pressure Designed to
Slide 23: A Strong Field Organization
Performance is not only about better rigs It’s also about: People Safety Experience Training Culture Supply chain Maintenance Processes Organizational network Support structure A Strong Field Organization
Slide 24: Value Proposition Example – H&P vs. Competitors
Value Proposition Example – H&P vs. Competitors Estimated Field H&P FlexRig3 Competitor Average 2008 1. Drilling days 13 7.8 Completion days 2 2 Moving days 5 3 Total rig revenue days per well 20 12.8 2. Drilling contractor dayrate $19,500 $26,500 Operator’s other intangible $15,000 $15,000 cost per
Slide 25: Value Proposition Example – H&P vs. Competitors
Value added from FlexRig operations Significant H&P dayrate premium Increased wells per rig per year: 10.3 wells Early production: Incremental wells on production Lowest total well cost Value Proposition Example – H&P vs. Competitors
Slide 26: FlexRig4 – Performance Sample Rocky Mountains
FlexRig4 – Performance Sample ROCKY MOUNTAINS Depth (ft) 0 2,000 4,000 6,000 8,000 10,000 Time (days) 0 2 4 6 8 10 12 14 16 37% Improvement 2008 Average Spud to Spud Parachute - Conventional 2008 H&P Average - Parachute - 44 Wells
Slide 27: FlexRig4 – Performance Sample Barnett Shale
FlexRig4 – Performance Sample FlexRig4s Barnett Shale Depth (ft) 0 2,000 4,000 6,000 8,000 10,000 12,000 Time (days) 0 2 4 6 8 10 12 14 16 18 20 22 24 40% Improvement Customer’s Target Curve H&P Average - Apr. to Aug. ‘08
Slide 28: H&P's Offshore Operations
Strong daily margins Eight of nine rigs are currently active The ninth rig is contracted and expected to begin operations in early to mid 2009 H&P’s Offshore Operations
Slide 29: H&P's International Land Operations
International industry rig count is increasing H&P international land rigs currently 100% utilized Seven new FlexRigs to be delivered in Latin America beginning in early fiscal 2009 Actively seeking additional growth opportunities around the world H&P’s International Land Operations
Slide 30: Crude Oil & Natural Gas Prices
$0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $0 $20 $40 $60 $80 $100 $120 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008E 2009F U.S. Dollars per Thousand Cubic Feet U.S. Dollars per Barrel Crude Oil & Natural Gas Prices West Texas Intermediate Spot Average Henry Hub Spot A
Slide 31: U.S. Land Rig Count vs. Commodity Prices
0 250 500 750 1000 1250 1500 1750 2000 $0 $2 $4 $6 $8 $10 $12 $14 $16 2000 2001 2002 2003 2004 2005 2006 2007 2008 Land Rig Count (Monthly Average) Gas Price (Monthly Average - mcf) Gas Price (Henry Hub) BHI Rig Count (Monthly Avg) U.S. Land Rig Count vs. Commodity Prices $4.50 / mcf $6.00 / mcf $3.
Slide 32: Leader in New Ideas & Applied Technology
AC Driven Systems & Integrated Top Drive Mechanized Tubular Handling Computerized Controls BOP Handling Driller’s Cabin Satellite Communications Rig Move Capabilities Leader in New Ideas & Applied Technology
Slide 33: Driller on a Conventional Rig vs. FlexRig
Driller on a Conventional Rig vs. FlexRig
Slide 34: Roughnecks on a Conventional Rig vs. FlexRig
Roughnecks on a Conventional Rig vs. FlexRig
Slide 35: H&P's Organizational Support Structure
H&P’s Organizational Support Structure
Slide 36: End of Document
HELMERICH & PAYNE, INC. 1G: JHELMERICH & PAYNE End of Document
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