Helmerich & Payne, Inc. · NYSE:HP
Helmerich & Payne — Investor Presentation (January 2024)
27 slides from Helmerich & Payne's investor presentation, Jan 3, 2024
Slide 1: Helmerich & Payne, Inc.
Helmerich & Payne, Inc. January 2024 Financial data as of 09/30/2023; other data and year-to-date references are as of 11/08/2023 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
Helmerich & Payne H&P is recognized as the industry leader in unconventional drilling solutions as well as technological innovation. H&P TODAY H&P operates in 3 segments (% of revenue at 09/30/23) o North America Solutions ~88% market leader in U.S. Founded IN 1920 o International Solutions o Offsho
Slide 4: Focused on Enhancing Returns: Current Highlights
Current Highlights • Increased NAS direct margins(1) over 100% in FY22(2) and 39% in FY23(2) • Driving up revenue/day & direct margin/day: • Target of > $35k/day in revenue/day in NAS • Mid-teen ROIC/ROCE goal • Reducing capital intensity on revenue generated • Returning cash to shareholders: • Retu
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 focus • Co
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 • Changing the commercial model – H&P provides distinctive value to customers • Uniform design of FlexRig® fleet • Highly trained workfor
Slide 7: H&P Global Rig Fleet
H&P Global Rig Fleet Super-Spec Rigs Represent 99% of Total NAS Fleet Rigs Rigs % Available Contracted(1) Contracted North America Solutions 233 147 63% ® 231 145 63% Super-Spec FlexRig Fleet Other AC-Style FlexRig 2 2 100% International Solutions 22 13 59% (2) South America 17 10 59% ® 9 9 100% Sup
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: Performance Not Rate Impactful to Well Cost
Performance Not Rate Impactful to Well Cost 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 the first ~10% opp
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: Steppingstones – International Unconventional Drilling
Steppingstones – International Unconventional Drilling ▪ Recent rig awards and operations, while relatively small, represent paths towards larger unconventional drilling growth opportunities ▪ Received a one rig award with Saudi Aramco • First time the Company has contracted a rig in Saudi Arabia •
Slide 14: Earmarked International Capex Has Optionality – Lowers Risk
Earmarked International Capex Has Optionality – Lowers Risk Depending upon International tender success, capex spent can be redeployed in US providing optionality 66% earmarked for NAS segment 60% earmarked for NAS segment NAS Active Fleet NAS Active Fleet Possible future exports Corporate and IT FY
Slide 15: 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 16: 2024 Supplemental Shareholder Return Plan
2024 Supplemental Shareholder Return Plan Cashflow From Operations Less: FY2024 Planned Capex ~$450-$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
Slide 17: 2023 Supplemental Shareholder Return Plan – Executed Well
2023 Supplemental Shareholder Return Plan – Executed Well • During fiscal year 2023, H&P returned approximately $450 million of capital to shareholders – $104M base dividend, $98M supplemental dividend, $249M in share repurchases • Maintaining flexibility in both the amount of and method used (base
Slide 18: Leading Shareholder Returns
Leading Shareholder Returns Total Cash Returned Per Share CY16-23YTD Already Leader in Providing Shareholder Returns Total Cash Returned Yield CY16-23YTD Supplemental Shareholder Return Plan Further Enhances Returns Cash Returned Per Share = (Dividends + Share Repurchases) / Avg. Shares Outstanding
Slide 19: H&P – Compelling Energy Investment
H&P – Compelling Energy Investment 28 Energy Companies in S&P 600 Index 13 OFS, 8 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 ~38% Cash Returns to Shareholders • Only 13 of 28 are dividend payers of which H&P
Slide 20: Conservative Capital Structure
Conservative Capital Structure • Solid balance sheet • Prudent balance sheet through the • H&P retains financial flexibility stewardship with lowest debt cycles provides optionality even in severe market conditions load among land drilling peers • One $550 million public bond with • H&P liquidity am
Slide 21: 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 22: 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 23: 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 24: 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 • Includes quantitative scenario analysis to test risks and opportunities • Envi
Slide 25: H&P CO2 Emissions
H&P CO2 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 • We remain focused on reducing the impac
Slide 26: 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 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 © 2024 Helmerich & Payne, Inc. All Rights Reserved. 27
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