Helmerich & Payne, Inc. Goldman Sachs Global Energy Conference January 10-11, 2012
H&P Basics 331 Drilling Rigs* 5 Billion in Assets 8,700 Employees 10% Debt/Cap * Includes 40 announced new FlexRigs under construction with customer commitments that are scheduled for completion during fiscal 2012 and fiscal 2013.
Growing Shareholder Value Lead Innovation Expand Drive Well Market Share Costs Down Satisfy Customers
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…
H&P New Builds Total of 71 new builds announced in calendar 2011 Delivering new FlexRigs at the rate of four per month As of January 9, 2012, 40 announced new builds left to deliver in fiscal 2012 and fiscal 2013 Encouraging…
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…
Performance is Not Only About Better Rigs Its also about: People Support Structure Safety Processes Experience Organizational Network Training Maintenance Culture Supply Chain
A Value Proposition Example H&P vs. Competitors Estimated Estimated Peer H&P FlexRig3 Conventional Fit-for-purpose Average Average Average 2011 (Spot Market) (Spot Market) (Spot Market) 1. Drilling days 20 11 9 Completion days 3 3…
Technology & Quality Service Make a Difference H&Ps Margin Premium * Does not include the impact of early contract termination revenue. ** Represents weighted-average rig margin per day for PTEN, NBR and UNT through Q3CY11.
Technology & Quality Service Make a Difference H&Ps Utilization Premium * Utilization is herein calculated to be average active rigs divided by estimated available marketable rigs during the period. ** Represents estimated…
Active Rig Market Share Ten Years Ago Lower 48 U.S. Land Market Share As of December 28, 2001 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 December March 16,30, 2011 2001 Note: The above estimates corresponding to U.S. land rig market share are derived from Smith Bits S.T.A.T.S..
Organic U.S. Land Fleet Growth 296 49 * Estimates include existing rigs and announced new build commitments.
Highest U.S. Activity Level in Company History As of 1/9/12
Most Profitable Driller in U.S. Land Business * 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: Yahoo Finance as of January 6, 2012
H&Ps Global Rig Fleet * Estimates include existing rigs and announced new build commitments.
Activity as of January 9, 2012 Rigs Rigs Working/ % Available Contracted Contracted U.S. Land 256 233 91% Offshore 9 7 78% International Land 26 22 85% Total 291 262 90% FlexRig Construction* 40 40 Total Fleet 331 302 * Includes…
H&Ps U.S. Land Operations Industry rig counts and spot pricing remain strong. Driven primarily by incremental new builds, we expect total revenue days in the U.S. land segment to increase by approximately five percent from the…
H&Ps U.S. Land Fleet Activity * Active rigs on term (in blue) generated both revenue and revenue days. ** Includes completed new builds that were waiting on customers and which generated revenue but did not generate revenue days.
Leading U.S. Unconventional Driller (273 H&P Contracted Land Rigs as of 1/9/12*) * Includes announced new FlexRigs with customer commitments scheduled for completion in fiscal 2012 and fiscal 2013.
H&Ps Growing Exposure to Oil & Liquids Estimated proportion of H&Ps active U.S. Land rigs by primary hydrocarbon target.
H&P Global Fleet Under Term Contract
H&Ps Offshore Operations Seven of the Companys nine offshore platform rigs remain active, including two under long-term contracts. The number of revenue days during the first fiscal quarter of 2012 is now expected to decrease by…
H&Ps International Land Operations Of the 26 rigs assigned to international operations, 22 are currently active or contracted, including ten under long-term contracts. Total revenue days during the first fiscal quarter of 2012…
H&Ps International Land Operations Rig Fleet Status (as of January 9, 2012) Long-term Active Contracted Idle Total Contracts Argentina 5 4 9 4 Bahrain 4 4 4 (1) Colombia 5 1 6 2 Ecuador (2) 4 1 5 Tunisia 2 2 (3) Total 20 2 4 26…
Market Trends Favor H&P Drilling today involves more complex well designs directed at oil and liquid rich plays. Customers continue to focus on efficiency and technology to achieve lower total well costs. Major customers are…
The New Build Replacement Cycle Continues Industry is undersupplied with high performance AC drive rigs With reportedly over 150 mechanical rigs retired in 2011, it is increasingly clear that older rigs are not well suited for…
Total Industry Available U.S. Land Fleet (by Power Type) Note: The above estimates corresponding to the available rig fleet in the U.S. are derived from multiple sources including Rig Data, Smith Bits, and corporate filings.
Rigs Active (1,900) in the U.S. Land Market (By Power Type) Note: The above estimates corresponding to rig activity are derived from multiple sources including Rig Data, Smith Bits, and corporate filings.
H&Ps Lead in U.S. High-Efficiency Rig Offering 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.
AC Drive U.S. Rig Market Share (500 Rigs) Note: The above estimates corresponding to market share are derived from multiple sources including Rig Data, Smith Bits, and corporate filings.
H&P U.S. Land Fleet by Power Type* * Includes New Build Commitments.
Economics Shift Activity Towards Oil Drilling
Increasing Focus on More Difficult Drilling
Oil Related Drilling Increasingly Complex
Increasing Focus on More Difficult Drilling
Customer Satisfaction Index 10 = Highly Satisfied, 1 = Highly Dissatisfied HP Peer A Peer B Peer C 10.00 9.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 2006 2009 2010 Q2 2011* Source: EnergyPoint Research, Inc. *…
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