Helmerich & Payne, Inc. · NYSE:HP
Helmerich & Payne — Howard Weil Energy Conference 2009
36 slides from Helmerich & Payne's conference presentation, Mar 23, 2009
Slide 1: Helmerich & Payne, Inc. Howard Weil Energy Conference
Investor Relations Contact: Juan Pablo Tardio – (918) 588-5383 – juanpablo.tardio@hpinc.com Helmerich & Payne, Inc. Howard Weil Energy Conference March 23, 2009
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 262 Total Rigs (Includes New Build Commitments) Offshore * Includes 18 rigs under construction and scheduled for completion during calendar 2009. ** Includes 1 FlexRig active in Tunisia, 3 FlexRigs operating in South America and 4 FlexRigs pending delivery in FY2009. * U.S. La
Slide 4: H&P's Global Rig Fleet
H&P’s Global Rig Fleet * Estimates include existing rigs and announced new build commitments. 77 90 89 88 96 111 127 130 128 151 193 224 259 262 0 50 100 150 200 250 300 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009E* 2010E* Rigs Available Fiscal Year (Ending Sept 30) Internationa
Slide 5: The downturn has been marked by its speed and fury
The downturn has been marked by its speed and fury “Return to GO, collect $200” * The Market Today * Monopoly board game reference.
Slide 6: The rig count continues to decline
The rig count continues to decline. 118 of 203 rigs are expected to be contracted as of 3/31/09, 94 of which are expected to be under long-term contracts. A total of 31 new build FlexRigs with long-term contracts have received early termination notices. 29 of these 31 early terminated FlexRigs are e
Slide 7: H&P's Estimated 3/31/2009 U.S. Land Fleet Status
92 55 17 H&P’s Estimated 3/31/2009 U.S. Land Fleet Status 24 94 85 0 10 20 30 40 50 60 70 80 90 100 Under Term Spot Market Active Spot Market Stacked Estimated Number of H&P Rigs Highly Mobile Conventional FlexRigs
Slide 8: H&P's U.S. Land Fleet Under Term Contracts
H&P’s U.S. Land Fleet Under Term Contracts (as of March 23, 2009) Term Contract Status - H&P U.S. Land (Including Committed New Builds) 0 20 40 60 80 100 120 140 Q2FY09 Q3FY09 Q4FY09 Q1FY10 Q2FY10 Q3FY10 Q4FY10 Q1FY11 Q2FY11 Q3FY11 Q4FY11 Number of Rigs (Estimated Quarterly Average) . 0% 10% 20% 30%
Slide 9: H&P's International Land Operations
Little progress (under 1%) in terms of receivable collections from PDVSA Will continue with previously stated approach as rig contracts expire in Venezuela International market conditions are softening – nine H&P rigs are now idle Nine of 32 total rigs are on term contracts (including eight FlexRigs
Slide 10: H&P Rapidly Gaining Market Share
*Represents average active rigs for PTEN, NBR and UNT. H&P Rapidly Gaining Market Share - 40% - 20% 0% 20% 40 % 60% 80% 100% 120% Q1 CY 05 Q2 CY 05 Q3 CY 05 Q4 CY 05 Q1 CY 06 Q2 CY 06 Q3 CY 06 Q4 CY 06 Q1CY07 Q2CY07 Q3CY07 Q4CY07 Q1CY08 Q2CY08 Q3CY08 Q4CY08 Change in Average Active Rigs Quarter Ende
Slide 11: Changes in U.S. Land Rig Count
Changes in U.S. Land Rig Count * PDS’s active rig count includes both PDS and GW rigs. - 70% - 60% - 50% - 40% - 30% - 20% - 10% 0% HP NBR U.S. Land PDS* UNT PTEN Change in Rig Count Estimated Change Since Peak in Active U.S. Land Rigs (Smith Bits Weekly Rig Count - October 17, 2008 to March 13, 200
Slide 12: Technology and Quality Service Make a Difference
*** Represents estimated average combined utilization for PTEN, NBR and UNT in the Lower 48. ** Utilization is herein calculated to be average active rigs divided by estimated available marketable rigs during the period. * Represents weighted-average rig margin per day for PTEN, NBR and UNT. Technol
Slide 13: Returns are Ultimately Driven by Performance
Returns are Ultimately Driven by Performance * NBR’s, PTEN’s and UNT's calculations exclude Q4CY08 charges that were a result of impairments, including ceiling test write-downs. * 12% 14% 16% 18% 20% 22% 24% NBR PTEN UNT HP Return on Equity 12 Months Ended December 31, 2008
Slide 14: 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. $0 $100 $200 $300 $400 $500 $600 $700 UNT PTEN* NBR** HP Operating Income (Millions) U.S. Land Drilling Op
Slide 15: H&P is Leading the U.S. Land Retooling Effort
H&P is Leading the U.S. Land Retooling Effort Refurbished rigs, built between 1940s and 1982 AC Driven New Builds Other New Builds Conventional Rigs Total Active U.S. Land Fleet (Estimates) (~1,260 Rigs) AC Driven (FlexRig 3 & 4) Other New Builds (FlexRig 1 & 2) Conventional Rigs Contracted H&P U.S.
Slide 16: How is H&P Positioned?
Our fleet profile is the newest and most advanced High level of contracted revenue day protection Strong position to wait out the storm How is H&P Positioned?
Slide 17: End of Presentation
HELMERICH & PAYNE, INC. End of Presentation
Slide 18: Additional References
HELMERICH & PAYNE, INC. Additional References:
Slide 19: Crude Oil & Natural Gas Prices
Crude Oil & Natural Gas Prices Source: Energy Information Administration, Short-term Energy Outlook as of 3/18/2009. Crude Oil Natural Gas NG (3/18/09) Crude (3/18/09) $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
Slide 20: U.S. Land Rig Count vs. Commodity Prices
U.S. Land Rig Count vs. Commodity Prices $4.50 / mcf $6.00 / mcf $3.00 / mcf $7.50 / mcf February February Source: Energy Information Administration, Short-term Energy Outlook as of 3/18/2009. 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 20
Slide 21: U.S. Natural Gas Storage Level
Week ended 3/13/09 U.S. Natural Gas Storage Level Source: Energy Information Administration 800 1000 1200 1400 1600 1800 2000 2200 2400 2600 2800 3000 3200 3400 3600 Natural Gas Storage (Bcf) Week of the Year Storage 2005 Storage 2006 Storage 2007 Storage 2008 Storage 2009 2000 - 2004 Average
Slide 22: H&P's U.S. Land Fleet
H&P’s U.S. Land Fleet * Estimates include existing rigs and announced new build commitments. 30 36 40 39 49 66 83 90 90 113 157 185 218 221 0 25 50 75 100 125 150 175 200 225 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009E* 2010E* U.S. Land Rigs Fiscal Year (Ending Sept 30)
Slide 23: 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 24: 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 25: 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 26: This Value Proposition Example Remains Valid
This Value Proposition Example Remains Valid Estimated Field H&P FlexRig3 Competitor Average Early 2009 (Spot) (Term Contract) 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 $15,000 $26,500 Operator’s other intangibl
Slide 27: 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 28: FlexRig4 – Performance Sample
FlexRig4 – Performance Sample
Slide 29: FlexRig4 – Performance Sample
FlexRig4 – Performance Sample
Slide 30: 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 31
Slide 31: Driller on a Conventional Rig vs. FlexRig
Driller on a Conventional Rig vs. FlexRig
Slide 32: Roughnecks on a Conventional Rig vs. FlexRig
Roughnecks on a Conventional Rig vs. FlexRig
Slide 33: H&P's Organizational Support Structure
H&P’s Organizational Support Structure
Slide 34: Delivering Safety – H&P vs. Industry (IADC)
Delivering Safety – H&P vs. Industry (IADC) U.S. Land Safety Performance (1994 – 2008) OSHA Recordable Injury Incidence Rates INCIDENTS PER 200,000 MANHOURS MANHOURS WORKED (MM) IADC = 4.03 TRIR = 1.48 11MM H&P MANHOURS 0 2 4 6 8 10 12 14 16 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 ' YEAR 0 2 4
Slide 35: Safety Excellence Also Generates Savings
Safety Excellence Also Generates Savings Reduced Workers Comp and General Liability Losses per Man Hour EMR = Experience Modifier Ratio (Industry Average = 1.00)
Slide 36: End of Document
End of Document HELMERICH & PAYNE, ING.
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