Helmerich & Payne, Inc. · NYSE:HP
Helmerich & Payne — Investor Presentation (September 2021)
27 slides from Helmerich & Payne's investor presentation, Sep 9, 2021
Slide 1: Helmerich & Payne, Inc. September 2021
HELMERICH & PAYNE, INC SEPTEMBER 2021 Financial data as of 6/30/2021; other data as of 7/28/2021 unless otherwise noted.
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: H&P Today
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 H&P TODAY in drilling solutions as well as technological innovation. H&P operates in 3 segments (% of Revenue) o North America Solutio
Slide 4: Why H&P in Current Market Conditions?
WHY H&P IN CURRENT MARKET CONDITIONS? Industry leader in U.S. land drilling Leading evolution of commercial model in order to better align economic benefits and outcomes At the forefront of drilling automation creating compelling value opportunities for customers Strong balance sheet and ability to
Slide 5: H&P's Winning Strategy
H&P’S WINNING STRATEGY GLOBAL DRILLING SOLUTIONS PROVIDER Evolve the commercial model to customer centered and value driven Continue to lead industry in technology automation adoption and differentiation International expansion Cost and cash management – manage for structurally smaller industry Adap
Slide 6: Evolving Commercial Model
EVOLVING COMMERCIAL MODEL H&P has a long track record of providing value Under current industry norms, incorporating to customers, the commercial model must more services and solutions into a rig day- evolve to ensure a reasonable rate of return rate model is a losing proposition in the long- term f
Slide 7: Differentiated from Land Drilling Peers
DIFFERENTIATED FROM LAND DRILLING PEERS Strategic advantages – innovation, economies of scale, operational efficiency, financial flexibility and risk reduction Changing the commercial model – H&P provides distinctive value to customers Uniform design of FlexRig fleet • Best and highly trained workfo
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, but economic life is ~30 years • Major rig assemblies – mast and substructure, have long economic lives (~30 years) • Major rig components – well
Slide 9: H&P Global Rig Fleet
H&P GLOBAL RIG FLEET Rigs Rigs % Available (2) Contracted (1) Contracted U.S. Land 236 123 52% Super-Spec FlexRigs 230 121 53% Upgradeable AC FlexRigs 4 0 0% Other AC-Style FlexRigs 2 2 100% International Land 30 6 20% Argentina 20 3 15% Bahrain 3 3 100% Colombia 7 0 0% Offshore 7 4 57% Total Fleet
Slide 10: H&P Well Positioned to Garner More Market Share
H&P WELL POSITIONED TO GARNER MORE MARKET SHARE U.S. Land Driller Market Share (1) Leadership Position December 2019 August 2021 • H&P maintained market share through volatile markets H&P Mkt. Shr. Leader ~ 24% ~ 24% • Position maintained despite Other Drillers changes in make up of industry custome
Slide 11: H&P's Offerings Create Compelling Value Opportunities for E&Ps
H&P’S OFFERINGS CREATE COMPELLING VALUE OPPORTUNITIES FOR E&PS
Slide 12: H&P's Drilling Solutions
H&P’S DRILLING SOLUTIONS FOCUSING ON HIGHEST VARIABILITY AND GREATEST VALUE H&P has focused on the 3 areas that provide the most value in drilling a well, but have the greatest variability • Drilling Rig Provider – FlexRig fleet, market leader • Directional Service Provider – H&P’s digital technolog
Slide 13: Value Proposition
VALUE PROPOSITION WELLBORE QUALITY LOWER COST CONSISTENCY AT AND PLACEMENT REDUCED RISK • Optimize drilling economics • Drill an efficient well, reducing • Provide reliability, repeatable results to customer specifications non-productive time • Enables de-manning of 3rd-party • Drill a less tortuous
Slide 14: H&P Drilling Solutions
H&P DRILLING SOLUTIONS ADDRESSING INDUSTRY CHALLENGES THROUGH AUTOMATION Oil and gas industry is still heavily dependent on human decision making to design, execute, and optimize oil and gas extraction. INDUSTRY CHALLENGE H&P AUTOMATION SOLUTION Human Decisions and Execution = Art Converts Art to Sc
Slide 15: Drilling Solutions Value Proposition
DRILLING SOLUTIONS VALUE PROPOSITION MORE THAN DRILLING A HOLE IN THE GROUND….VALUE OVER THE LIFE OF THE WELL DRILLING COMPLETIONS PRODUCTION Primary Focus Drilling Time & Cost Human decisions and execution — variable, inconsistent and at times costly and unfavorable outcomes • Poor well quality and
Slide 16: Enabling Industry Profitability
ENABLING INDUSTRY PROFITABILITY AUTOMATING THE WELLBORE MANUFACTURING PROCESS EARLY ADOPTERS & INNOVATORS OF WELLBORE MANUFACTURING Focus • Cost of well viewed over well life-cycle • Digital technologies used to improve wellbore quality, placement, and consistency • Greater well efficiencies and val
Slide 17: International Expansion
INTERNATIONAL EXPANSION Benefits of Allocating Capital Internationally Diversification from U.S. and outlet for super- spec FlexRig capacity Ability to have positive impact on overall Company financial returns Rig replacement cycle that has occurred in the U.S. is in the nascent stages international
Slide 18: H&P Is Built to Withstand Volatile Markets
H&P IS BUILT TO WITHSTAND VOLATILE MARKETS
Slide 19: Cash and Cost Management
CASH AND COST MANAGEMENT Then… Now… March 31, 2020 June 30, 2021 Actions: Actions: • Reduced annual dividend by $200MM • Continue to reduce cost structure • Reduced fiscal 2020 capex by $145MM • Decommission rigs & consolidate • Reduced fixed operational overhead by over • Other initiatives in the w
Slide 20: H&P's Commitment to Capital Allocation
H&P’S COMMITMENT TO CAPITAL ALLOCATION RETURNS TO SHAREHOLDERS • Dividends • Share repurchases • Exploring further possibilities CAPITAL EXPENDITURES CASH FLOW CAPITAL • Maintenance – moves with FROM OPERATIONS ALLOCATION active rig count • Upgrades - not expected to be significant; walking conversi
Slide 21: Conservative Capital Structure
CONSERVATIVE CAPITAL STRUCTURE CAPITAL EMPLOYED ($MM) LIQUIDITY AVAILABLE ($MM) 250% $1,250 HP Liquidity as a % of Debt Total Liquidity Available 200% $1,000 PTEN 150% $750 100% NBR $500 $250 50% PDS* $0 0% HP PTEN NBR PDS* $0 $1,000 $2,000 $3,000 $4,000 Cash & ST Investments Revolver Availability T
Slide 22: Conservative Capital Structure
CONSERVATIVE CAPITAL STRUCTURE (1) DEBT MATURITY SCHEDULE TOTAL-DEBT-TO-TOTAL-CAPITALIZATION RATIO (IN MILLIONS) $1,600 $1,400 $178 HP $1,200 $1,000 $855 PTEN $800 $348 $600 $510 $349 PDS $400 $703 $487 $560 $200 $82 $50 $287 $390 $400 NBR $0 2021 2022 2023 2024 2025 2026 2027 2028 2029 0% 20% 40% 6
Slide 23: Rooted in Our Core Values
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 the environmental
Slide 24: Improving Lives Through Affordable and Responsible Energy
IMPROVING LIVES TROUGH AFFORDABLE AND RESPONSIBLE ENERGY We are focused on understanding our impacts and ultimately developing strategies rooted in our core values to manage them. ENVIRONMENT SOCIAL GOVERNANCE • Environmental Stewardship • Health & Safety • Board Oversight SIF Focus • Geothermal Inv
Slide 25: H&P CO2 Emissions
H&P CO2 EMISSIONS • H&P has a history of taking thoughtful methodical approached to solving problems and working with customers to optimize solutions • H&P has reduced CO2 emissions per kilometer drilled by more than 11% over the past 3 years • We remained committed to reduce the impacts most associ
Slide 26: H&P Investment Thesis
H&P INVESTMENT THESIS INDUSTRY LEADER AS A DRILLING SOLUTIONS PROVIDER • Largest, Uniform and Most Capable Fleet • Consistent Operational Excellence (Safety, Customer Satisfaction, Reliability) • Technology and Innovation Leader • Financial Position and Strength • Differentiated Business Partner FIN
Slide 27: 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
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