Helmerich & Payne, Inc. UBS Global Oil and Gas Conference May 22-23, 2012
Forward-looking Statements Statements within this presentation are forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, and are based on current expectations and assumptions…
H&P Basics 342 Drilling Rigs* 5 Billion in Assets 9,500 Employees 9% Debt/Cap * Includes 34 announced new FlexRigs under construction with customer commitments as of May 21, 2012 that are scheduled for completion during fiscal 2012…
Growing Shareholder Value Lead Innovation Expand Drive Well Market Share Costs Down Satisfy Customers
H&Ps Global Rig Fleet * Estimates include existing rigs and announced new build commitments.
Five-Year Relative Shareholder Return Source: Thomson Financial as of May 18, 2012
Most Profitable Driller in U.S. Land Business (1) (2) (1) NBRs operating income corresponds to its U.S. Lower 48 Land Drilling segment. (2) PTENs operating income includes drilling operations in Canada.
Comments on Todays Market Spot pricing remains steady in the U.S. Land market, especially for AC drive rigs. We are pleased to announce incremental commitments to build and operate three additional FlexRigs. Although the pace of…
H&P Activity as of May 21, 2012 Rigs Rigs Working/ % Available Contracted Contracted (1) U.S. Land 271 242 89% Offshore 9 7 78% (2) International Land 28 24 86% Total 308 273 89% (3) FlexRig Construction 34 34 Total Fleet 342…
Announcing Three Additional New Builds Three-year term contracts with two customers to build and operate three incremental FlexRigs in the U.S. Like previously announced contracts, these new contracts are expected to generate…
H&Ps New Build Advantages We have been improving and honing the process for over ten years, prompting our assertion that we build a better rig for less Safety is our first priority, followed by a relentless focus on strong…
Organic U.S. Land Fleet Growth 304 49 * Estimates include existing rigs and announced new build commitments.
Highest U.S. Activity Level in Company History As of 5/21/12 * Represents the sum of the average active rigs for PTEN, NBR and UNT.
Leading U.S. Unconventional Driller (276 H&P Contracted Land Rigs as of 5/21/12*) * Includes announced new FlexRigs with customer commitments scheduled for completion in fiscal 2012 and fiscal 2013.
Active Rig Market Share - Ten Years Ago Lower 48 U.S. Land Market Share As of May 10, 2002 Note: The above estimates are derived from Smith Bits S.T.A.T.S.
Organically Growing Active Rig Market Share Lower 48 U.S. Land Market Share As of May 11, 2012 Note: The above estimates are derived from Smith Bits S.T.A.T.S.
The Replacement Cycle Continues AC drive rigs are best positioned to make the transition in the U.S. From 2010 to 2011, H&Ps average footage per day increased over ten percent, and already in 2012, we have seen average footage per…
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 (1,850) - U.S. Land By Power Type Week Ended May 11, 2012 Note: The above estimates corresponding to rig activity are derived from multiple sources including Rig Data, Smith Bits, and corporate filings.…
An Undersupply of AC Drive Rigs (1,850 Active Rigs in the U.S. 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. 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.
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.
Market Trends Favor H&P The transition towards oil and liquids-rich-gas directed drilling continues, along with a clear trend towards more complex well designs and faster cycle times. H&P is fortunate to have a customer roster with…
Increasing Focus on More Difficult Drilling
Economics Shift Activity Towards Oil Drilling
H&Ps Growing Exposure to Oil & Liquids Estimated proportion of H&Ps active U.S. Land rigs (1) by primary hydrocarbon target Dry Gas (Spot Market) (2) (3) 1% (1) Oil and liquids-rich gas percentage includes a small number of…
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.
Recordable Injuries per 1-MM Feet Drilled in 2011 by the Largest U.S. Land Drilling Contractors 11.7 9.1 5.2 2.2 Note: Injury data taken from IADC ASP Program. Footage data taken from Land Rig Newsletter.
Technology & Quality Service Make a Difference (1) (3) H&Ps H&Ps Margin Utilization Premium Premium (2) (4) (1) Does not include the impact of early contract termination revenue. (2) Represents weighted-average rig margin…
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 We expect total revenue days in the U.S. Land segment to increase by approximately two percent from the second to the third fiscal quarter of 2012. Quarterly average rig revenue per day is expected to…
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 that were waiting on customers and which generated revenue but did not generate…
H&Ps Global Fleet Under Term Contract
H&Ps Offshore Operations Seven of the Companys nine offshore platform rigs are generating revenue days, including two under long-term contracts. One of the stacked rigs is expected to go back to work in the fourth fiscal quarter of…
H&Ps International Land Operations Of the 27 rigs assigned to international operations, 20 are currently active and three additional rigs are contracted and expected to begin new projects in the fourth fiscal quarter of 2012.…
H&Ps International Land Operations (1) Rig Fleet Status (as of May 21, 2012) Long-term Active Contracted Idle Total Contracts Argentina 4 1 3 8 4 Bahrain 4 4 4 (2) Colombia 5 1 1 7 2 Ecuador 5 5 Tunisia 2 2 (3) U.A.E. 2 2 2 Total…
H&P U.S. Land Fleet by Power Type* * Includes New Build Commitments.
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 2011 (Spot Market) (Spot Market) (Spot Market) 1. Drilling days 20 11 9 Other days 3 3 3…
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