Helmerich & Payne, Inc. Credit Suisse 2013 Energy Summit February 6-7, 2013
H&P Basics 339 Drilling Rigs* 6 Billion in Assets 9,700 Employees 6% Debt/Cap * As of January 31, 2013, includes 5 announced new FlexRigs with customer commitments and pending to be delivered during fiscal 2013.
H&Ps Global Rig Fleet * Estimates include existing rigs and announced new build commitments.
The U.S. Land Market Today There is a growing sense within the industry that the rig count has bottomed and that it will increase by one hundred rigs or so during 2013. Customers remain deliberate with their capital spending and…
H&P New Builds Delivered 48 new FlexRigs during calendar 2012. Announced orders for three additional FlexRigs on January 31, 2013. Five announced new builds pending delivery in fiscal 2013. Now delivering new FlexRigs at the…
Technology & Quality Service Make a Difference (1) (3) H&Ps H&Ps Utilization Margin Premium Premium (2) (4) (1) Does not include the impact of early contract termination revenue. (2) Represents weighted-average rig…
What a Difference a Year Makes As of January 2012 As of January 2013 (1,900 Active Rigs in the U.S. (1,600 Active Rigs in the U.S. By Power Type) By Power Type) Note: The above estimates corresponding to rig activity are derived…
Active Rig Market Share Ten Years Ago Lower 48 U.S. Land Market Share As of January 24, 2003 Note: The above estimates corresponding to U.S. land rig market share are derived from Smith Bits S.T.A.T.S.
Organically Growing Active Rig Market Share Lower 48 U.S. Land Market Share AsAs ofof January 25, 2001 March 16, 2013 Note: The above estimates corresponding to U.S. land rig market share are derived from Smith Bits S.T.A.T.S.
Changes in Lower 48 U.S. Land Rig Count * PDS active rig count includes both PDS and GW rigs.
Record Profits During Industry Slowdown * PTENs operating income includes drilling operations in Canada. ** NBRs operating income corresponds to its U.S. Lower 48 Land Drilling segment.
Five-Year Relative Shareholder Return Source: Thomson Financial as of January 30, 2013
Growing Shareholder Value Lead Innovation Expand Drive Well Market Share Costs Down Satisfy Customers
Innovation & Applied Technology Computerized Controls Drillers Cabin AC Driven Systems & Integrated Top Drive 31 Satellite Communications Mechanized Tubular BOP Handling Handling Rig Move Capabilities
FlexRigs Delivering Drilling Efficiencies We have over 1,000 rig years of AC FlexRig drilling experience. Drilled over 53 million feet in 2012 Improved our footage per day by 23% between 2011 and 2012 While adding 48 new FlexRigs in…
Delivering Safety H&P vs. Industry (IADC) U.S. Land Safety Performance (1994 2012) OSHA Recordable Injury Incidence Rates INJURIES PER 200,000 MANHOURS MANHOURS WORKED (MM) H&P MANHOURS = 17.4 MM IADC 3Q12 = 1.92 H&P 4Q12 =…
Safety Excellence Also Generates Savings Reduced Workers Comp and General Liability Losses per Man Hour EMR = Experience Modifier Ratio (Industry Average = 1.00)
Unconventional Plays Shaping Landscape Well Complexity is increasing: Technology solutions that provide safe, environmentally sound and efficient operations are required by contractors to be competitive Extended reach laterals…
Increasing Focus on More Difficult Drilling
Leading U.S. Unconventional Driller (248 H&P Contracted Land Rigs as of 1/31/13*) * Includes announced new FlexRigs with customer commitments scheduled for delivery in fiscal 2013.
The Replacement Cycle Continues AC drive rigs are best positioned to make the transition. Older, underperforming rigs are more likely to be sidelined. High efficiency rigs continue to displace mechanical and SCR rigs. H&P is…
AC Rigs Continue to Gain Market Share Note: The above estimates corresponding to rig activity are derived from multiple sources including Rig Data, Smith Bits, and corporate filings. Additionally, the drawworks capacity of each land…
H&Ps Lead in U.S. Land AC Drive Rigs Note: The above estimates corresponding to U.S. lower 48 AC Drive fleets and new build commitments are derived from Rig Data and corporate filings.
Active AC Drive U.S. Rig Market Share (575 Rigs as of January 2013) Note: The above estimates corresponding to market share are derived from multiple sources including Rig Data, Smith Bits, and corporate filings.
H&P Activity as of January 31, 2013 Rigs Rigs Working/ % Available Contracted Contracted U.S. Land 296 243 82% AC Drive FlexRigs 261 243 93% SCR Fleet 35 0 0% Offshore 9 8 89% International Land 29 22 76% Total 334 273 82% FlexRig…
H&Ps U.S. Land Fleet Activity (1) (2) (1) Active rigs on term (in blue) generated both revenue and revenue days. (2) Includes completed new builds pending delivery and not generating revenue days.
H&Ps New Build Advantages We have been improving and honing the process for over 10 years, prompting our assertion that we build a better rig for less Safety is our first priority, followed by a relentless focus on strong…
A Value Proposition Example H&P vs. Competitors Estimated Estimated Peer H&P FlexRig3 Conventional Fit-for-purpose Average Average Average 2012 (Spot Market) (Spot Market) (Spot Market) 1. Drilling days 20 13 9 Other days 3 3 3…
Performance is Not Only About Better Rigs Its also about: People Support Structure Safety Processes Experience Organizational Network Training Maintenance Culture Supply Chain
End of Presentation
Additional References
H&Ps U.S. Land Operations (As of January 31, 2013) We expect total revenue days in the U.S. land segment to be relatively flat between the first and second fiscal quarter of 2013. Quarterly average rig revenue per day is expected…
H&P Global Fleet Under Term Contract
H&P vs. Industry U.S. Land Customer Base Note: The above estimates corresponding to the active rig fleet in the U.S. are derived from multiple sources including Rig Data, Smith Bits and corporate filings.
H&Ps Offshore Operations (As of January 31, 2013) Eight of the Companys nine offshore platform rigs are expected to remain active throughout the second fiscal quarter of 2013. The number of revenue days during the second fiscal…
H&Ps International Land Operations (As of January 31, 2013) Of the 29 rigs assigned to international operations, 22 are active and two rigs are expected to resume operations soon. Total revenue days during the second fiscal quarter…
H&Ps International Land Operations Rig Fleet Status (as of January 31, 2013) Active Idle Total Long-term Contracts Argentina 5 4 9 5 Bahrain 3 1 4 3 Colombia 5 2 7 2 Ecuador 5 5 1 Tunisia 2 2 2 U.A.E. 2 2 2 (1) Total 22 7 29 15…
Favorable Market Trends for FlexRigs AC drive rigs replacing SCR and mechanical rigs More customers high-grading their fleets Increasing well complexity Expectation to drill more wells with fewer rigs Focus on drilling…
2008 Peak Rig Count (1,925) - U.S. Land By Power Type Week Ended October 4, 2008 Note: The above estimates corresponding to rig activity are derived from multiple sources including Rig Data, Smith Bits, and corporate filings.…
Current Rig Count (1,600) - U.S. Land By Power Type Week Ended January 25, 2013 Note: The above estimates corresponding to rig activity are derived from multiple sources including Rig Data, Smith Bits, and corporate filings.…
Oil and Natural Gas Prices Oil Prices Natural Gas Prices Source: Energy Information Administration
U.S. Rig Activity by Hydrocarbon Target
H&Ps Exposure to Oil & Liquids Estimated proportion of H&Ps active U.S. Land rigs by primary hydrocarbon target as of 1/31/13 Dry Gas Dry Gas (Long-term (Spot Contracts) Market) (1) 3% 1% (1) Includes 2 rigs with term contracts…
H&Ps FlexRig Advantage The FlexRig Difference: Key Advantages Increased drilling productivity and reliability Variable frequency (AC) drives with increased precision and measurability Computerized electronic driller that more…
Building a New FlexRig Processing Raw Materials Fabricating New Lean Manufacturing Structures Commissioning / Delivery Test Assembly and Unitizing Packages Outfitting New Electrical Systems
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