Helmerich & Payne, Inc. · NYSE:HP
Helmerich & Payne — Non-Deal Roadshow (August 2019)
27 slides from Helmerich & Payne's roadshow presentation, Aug 8, 2019
Slide 1: Meetings with Investors August 2019
HELMERICH & PAYNE, INC. Meetings with Investors August 2019 Data as of 7/24/2019 unless otherwise noted.
Slide 2: Forward-Looking Statements
Forward‐Looking Statements 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 3: H&P Investment Thesis
H&P Investment 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, Customer Satisfaction, Reliability) • Financial Position
Slide 4: 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 wi
Slide 5: H&P's Winning Strategy
H&P’s Winning 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 s
Slide 6: H&P Global Rig Fleet
H&P Global Rig Fleet Rigs Rigs % Available Contracted Contracted U.S. Land 299 207 69% AC Drive FlexRigs 297 207 70% Super-spec(1) 232 198 85% Upgradeable 45 5 11% Other 20 4 20% 3,000 hp SCR Rigs 2 0 0% International Land(2) 31 16 52% Argentina(3) 20 14 70% Bahrain 2 2 100% Colombia 7 0 0% U.A.E 2
Slide 7: Competitive Benefits of Uniform Fleet
Competitive Benefits of 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; abilit
Slide 8: 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, ~40%* of super-spec fleet, and ~55%* of idle upgradeable rigs Distinctively situated as the incremental supplier of super-spec rigs • Leveraging position
Slide 9: Leading U.S. Unconventional Driller
Leading U.S. Unconventional Driller Resource Play (# Rigs, Market Share) (4,90%) (5,19%) (2,11%) 9 (7,19%) (9,18%) (10,19%) 5 2 7 4 (22,27%) (112,25%) 22 112 10 36 (36,43%) Leading market share in the 3 most active U.S. basins Broad exposure to U.S. unconventional basins evidence of strong custo
Slide 10: 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 – largest super- spec and upgradeable rig fleet in the industry Capital stewardship evident over time with H&P making better invest
Slide 11: Super-Spec and Upgradable Utilization
Super‐Spec and Upgradable Utilization Super-Spec Specifications Industry Super-Spec Utilization 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
Slide 12: Super-Spec Upgrade Program
Super‐Spec Upgrade Program H&P’s Super-Spec Upgrades Upgrades generate high returns H&P has invested capital to grow the fleet size of its super-spec rigs faster and larger than competitors Over 40% super-spec market share with 232 super- spec rigs Most upgradeable rigs available at low-cost
Slide 13: Family of Solutions
Family of Solutions™ Commercialization of FlexAppTM Services FlexApps (software as a service offered through HPT): 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
Slide 14: Opportunistic International Growth
Opportunistic International 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 proposi
Slide 15: Established Offshore Business
Established Offshore Business Legacy Gulf of Mexico 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 Gul
Slide 16: 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 accurac
Slide 17: Traditional Directional Drilling Challenges vs. Motive Results
Traditional Directional Drilling Challenges Without Motive Motive Results Well Design Difficult to Achieve Improved Accuracy • Poor drilling accuracy • Well Drilled to Plan • Missed targets/pay zones • More time in pay zone Planned Without MOTIVE Trajectory MOTIVE Result Inconsistent Practices
Slide 18: MOTIVE Bit Guidance System
MOTIVE Bit Guidance System Motive has commercially drilled over 14.5 million feet on over 1,000 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 dir
Slide 19: 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 hydrocarbons magnetic field significantly improves MWD accuracy behind! Reduces the cost
Slide 20: Optimized Wellbore Placement
Optimized Wellbore Placement Why is Wellbore Placement Critical? Reservoir: Directly impacts well performance by increasing stimulate reservoir volume; optimal drainage, more frac wings Completions: improving hydraulic communication Geology: better mapping improves prospectivity Regulatory:
Slide 21: 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. Source: Company Motive AutoSlideSM 20
Slide 22: AutoSlide: The Next Evolutionary Step in Drilling Automation
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 an
Slide 23: H&P FlexRig AutoSlide
H&P FlexRig AutoSlide 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
Slide 24: 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
Slide 25: Strong Term Backlog
Strong Term Backlog Term Contract Status – H&P Global Fleet U.S. Land Term Contract Revenues Source: Company Filings © HELMERICH & PAYNE, INC. 2019 24
Slide 26: 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 Majority of rig releases from the beginning of the year have been related to E&P budgeted rig demand and not dayrate pricing levels H&P
Slide 27: Thank you for your interest in H&P
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