Helmerich & Payne, Inc. Howard Weil 41st Annual Energy Conference March 18-19, 2013
Evolution of H&Ps Global Rig Fleet 96 Rigs 336 Rigs (Before AC Drive Rigs) U.S. Land 298 International Land 29 Offshore 9 2001 Today
Market Conditions Our operational outlook for the second fiscal quarter remains unchanged. Our active rig count remains flat. Competitors are aggressively pricing rigs to recapture U.S. Land market share. U.S. Land pricing for…
U.S. Rig Activity by Hydrocarbon Target
H&P Activity as of March 15, 2013 Rigs Rigs Working/ % Available Contracted Contracted U.S. Land 298 242 81% AC Drive FlexRigs 263 242 92% SCR Fleet 35 0 0% Offshore 9 8 89% International Land 29 23 79% Total 336 273 81% 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 Term Contract Coverage 3.5 Billion Backlog As of 12/31/12 (In Billions by Segment) U.S. Land 2.9 Offshore International 0.1 Land 0.5
Leading U.S. Unconventional Driller (H&P Contracted Land Rigs as of 3/15/13*) * Includes announced new FlexRigs with customer commitments scheduled for delivery in fiscal 2013.
H&Ps Pad Capable Fleet Total of 107 pad capable FlexRigs as of 3/15/13, all of which are AC drive rigs In addition, we continue to add new pad capable FlexRigs and have customer interest in additional pad drilling system…
H&Ps International Land Operations Rig Fleet Status (as of March 15, 2013) Long-term Active Idle In-transit Total Contracts Argentina 6 3 9 6 Bahrain 3 3 3 Colombia 5 1 1 7 2 Ecuador 5 1 6 1 Tunisia 2 2 2 U.A.E. 2 2 2 (1)…
What a Difference a Year Makes As of March 2012 As of March 2013 (1,800 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 from…
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
Active Rig Market Share Ten Years Ago Lower 48 U.S. Land Market Share As of March 7, 2003 Note: The above estimates corresponding to U.S. land rig market share are derived from Smith Bits. Precisions historical values correspond…
Organically Growing Active Rig Market Share Lower 48 U.S. Land Market Share AsAs ofof March 8,16, March 20132001 Note: The above estimates corresponding to U.S. land rig market share are derived from Smith Bits.
Changes in Lower 48 U.S. Land Rig Count * PDSs active rig count includes both PDS and GW rigs.
H&Ps Lead in U.S. Land AC Drive Rigs Note: The above estimates corresponding to U.S. lower 48 AC Drive fleets are derived from Rig Data and corporate filings.
Active AC Drive U.S. Rig Market Share (580 Rigs as of March 2013) Note: The above estimates corresponding to market share are derived from multiple sources including Rig Data, Smith Bits, and corporate filings.
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…
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.
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.
U.S. Land Active Rig Count
U.S. Land Average Daywork Margins(1) (1) Does not include the impact of early contract termination revenue.
Return on Equity * The corresponding ROE values for the selected companies exclude certain extraordinary, non-recurring charges.
Land Drilling Market Valuations Source: Thomson Financial as of March 15, 2013.
Five-Year Relative Shareholder Return Source: Thomson Financial as of March 14, 2013
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…
Additional References
H&P Global Fleet Under Term Contract Number of Rigs Already Under Long-Term Contracts (Estimated Quarterly Average, Including Announced New Builds - as of 3/15/13) Segment Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY13 FY13 FY13 FY14 FY14 FY14 FY14…
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 March 1, 2013 Note: The above estimates corresponding to rig activity are derived from multiple sources including Rig Data, Smith Bits, and corporate filings.…
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…
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
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…
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