Helmerich & Payne, Inc. 2012 GHS-100 Energy Conference June 25-26, 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…
Comments on Todays Market Although concern about the macro and about future oil and gas prices is ever-present, H&Ps land rig activity levels are increasing as expected during the third fiscal quarter. Spot pricing for FlexRigs…
U.S. Land Rig Count
Highest U.S. Activity Level in Company History As of 6/22/12 * Represents the sum of the average active rigs for PTEN, NBR and UNT.
Organic U.S. Land Fleet Growth 304 49 * Estimates include existing rigs and announced new build commitments.
H&P Activity as of June 22, 2012 Rigs Rigs Working/ % Available Contracted Contracted U.S. Land 274 244 89% Offshore 9 7 78% International Land 29 26 90% Total 312 277 89% (1) FlexRig Construction 30 30 Total Fleet 342 307 (1)…
Growing Shareholder Value Lead Innovation Expand Drive Well Market Share Costs Down Satisfy Customers
Active Rig Market Share - Ten Years Ago Lower 48 U.S. Land Market Share As of June 14, 2002 Note: The above estimates are derived from Smith Bits
Organically Growing Active Rig Market Share Lower 48 U.S. Land Market Share As of June 15, 2012 Note: The above estimates are derived from Smith Bits
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.
Five-Year Relative Shareholder Return Source: Thomson Financial as of June 21, 2012
H&Ps Leading Equity Market Valuation Source: Thomson Financial
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…
The Ongoing Gas to Oil Transition
Increasing Focus on More Difficult Drilling
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.
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 June 15, 2012 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.
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.
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…
H&P New Builds Total of 217 new build FlexRigs completed since January 2006. Delivering new FlexRigs at the rate of approximately four per month. As of June 22, 2012, 30 announced new builds remain under construction to be…
End of Presentation
Additional References
H&Ps Global Rig Fleet * Estimates include existing rigs and announced new build commitments.
H&Ps U.S. Land Operations We still 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…
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…
Leading U.S. Unconventional Driller (275 H&P Contracted Land Rigs as of 6/22/12*) * Includes announced new FlexRigs with customer commitments scheduled for completion in fiscal 2012 and fiscal 2013.
H&Ps Global Fleet Under Term Contract
H&Ps Growing Exposure to Oil & Liquids Estimated proportion of H&Ps active U.S. Land rigs (1) by primary hydrocarbon target as of 6/22/12 Dry Gas (Spot (2) Dry Gas Market) (Long-term 1% Contracts) 6% (3) (1) Oil and…
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 29 rigs assigned to international operations, 20 are currently active and six additional rigs are contracted and expected to begin new projects in the fourth fiscal quarter of 2012. The…
H&Ps International Land Operations Rig Fleet Status (as of June 22, 2012) Long-term Active Contracted Idle Total Contracts (1) Argentina 4 2 3 9 5 Bahrain 4 4 4 Colombia 5 2 7 2 Ecuador 5 5 Tunisia 2 2 (2) U.A.E. 2 2 2 Total 20 6…
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* SCR Rigs 5% * 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…
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 Other days 3 3 3…
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