Helmerich & Payne, Inc. Barclays 2015 CEO Energy-Power Conference September 9-10, 2015
About Helmerich & Payne (H&P) Very strong balance sheet U.S. land drilling market share leader Most modern and capable land drilling fleet Focused on superior innovation, safety and returns on capital Strong term-contracted…
H&Ps Global Rig Fleet * Estimates include existing rigs and new build commitments as of September 9, 2015 and exclude nine conventional rigs decommissioned at the end of fiscal 2014 and 17 SCR powered FlexRigs decommissioned at the…
Organic U.S. Land Fleet Growth 354 49 * Estimates include existing rigs and announced new build commitments.
Drilling Activity in the U.S.
U.S. Land Drilling Market Conditions Faced with a global oversupply of oil as well as other macroeconomic headwinds, the short-term outlook for the industry is unfavorable. The energy services landscape is becoming more competitive…
H&Ps U.S. Land Activity and Pricing Comments H&Ps U.S. Land segment had approximately 153 contracted rigs generating revenue as of September 3, 2015, down from 156 on July 30, 2015. The U.S. Land segment had 186 idle AC drive…
Fourth Fiscal Quarter H&P Operations Outlook (as of September 9, 2015) Drilling Operations Outlook for 4Q of Fiscal 2015 Compared to 3Q of Fiscal 2015 U.S. Land Segment Revenue days now expected to decrease by slightly over 5%…
New Build FlexRigs (All Sponsored with Long-Term Contracts) Approximately 40 new FlexRigs are scheduled to be completed during fiscal 2015 and approximately six during early fiscal 2016 All 46 of the above new FlexRigs are…
H&P Highlights Very Strong Unprecedented Balance Sheet Market Leader Idle Capacity High Quality Most Advanced Customer Base Fleet Strong Best-in-Class Multi-Year Superior ROIC Safety Backlog and ROE
H&P vs. Peers Credit Statistics (As of June 30, 2015) Total-Debt-to-Total-Capitalization Ratio1 1. Total Capitalization is defined as Total Debt plus Shareholders' Equity. Source: Company Filings
H&Ps U.S. Land Market Share As of October 2008 (Peak) As of August 2015 (1,925 Active Rigs in U.S. Land) (820 Active Rigs in U.S. Land) Note: The above estimates corresponding to market share are derived from Rig Data. PDS market…
U.S. Land Active Rig Count Through Second Quarter of Calendar 2015 BHI Industry Rig Count
Ten Year Profit Comparison * NBRs operating income corresponds to its U.S. Lower 48, U.S. Offshore, and Alaska business units. ** PTENs operating income includes drilling operations in Canada.
H&Ps Lead in U.S. Land AC Drive Rigs * The above estimates corresponding to U.S. lower 48 AC Drive fleets are derived from Rig Data and corporate filings. **Estimated number of all other available AC Drive rigs not including those…
Innovation & Applied Technology FlexRig Computerized Controls Drillers Cabin AC Driven Systems & Integrated Top Drive 31 Satellite Communications Mechanized Tubular BOP Handling Handling Rig Move Capabilities
Technology & Quality Service Make a Difference (1) (3) H&Ps Margin H&Ps Premium Utilization 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 Our competitive advantage is also about: People Support Structure Safety Processes Experience Organizational Network Training Maintenance Culture Supply Chain
Delivering Safety H&P vs. Industry (IADC) U.S. Land Safety Performance (2005 August 2015) OSHA Recordable Injury Incidence Rates Injuries per 200,000 Man Hours IADC w/o H&P H&P * H&P data available through August 2015;…
Safety Excellence Also Generates Savings Reduced Workers Comp and General Liability Losses per Man Hour EMR = Experience Modifier Ratio (Industry Average = 1.00)
Return on Invested Capital (ROIC) * Excludes abandonment (non-cash) charges in 4QFY14 and 2QFY15. ** The corresponding ROIC values for the selected companies exclude certain extraordinary, non-recurring charges.
H&P Global Fleet Under Term Contract ** * The above term contract coverage excludes long-term contracts for which the Company received early contract termination notifications as of 9/3/15. During the first, second, and third…
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 and corporate filings.
H&P Customer Credit Ratings Number of Active H&P Rigs* Number of Contracted Rig-Years** (Working for Corresponding Customers) (3.5 Billion H&P Backlog) * As of June 30, 2015. Consists of 153 contracted U.S. Land rigs, 8 contracted…
H&P U.S. Land Fleet (Idle Rigs as of 9/3/15) Unprecedented Leverage to Cyclical Recovery Rig Power Type FlexRig Type Pad-Optimal AC Drive FlexRigs Drawworks Horsepower
Ongoing U.S. Land Market Trends Unconventional plays continue to shape the landscape. Multiple wells being drilled from a single pad. AC drive rigs are best suited for more complex horizontal drilling. Customers continue to…
Increasing Focus on More Difficult Drilling
H&P U.S. Land Fleet Proxy for Pad Drilling (Contracted Rigs as of 9/3/2015) Rig Power Type FlexRig Type Pad-Optimal AC Drive FlexRigs Drawworks Horsepower
U.S. Land Horizontal and Directional Activity Note: The above estimates corresponding to horizontal and directional rig activity by power type are derived from multiple sources including Rig Data, Smith Bits, and corporate filings.…
The Replacement Cycle: Customer Adoption U.S. Land Market (as of August 2015) Top 10 Operators Next 90 Operators Remaining Operators (210 Active Rigs by Power Type) (400 Active Rigs by Power Type) (210 Active Rigs by Power Type)…
The Replacement Cycle Continues As of August 2015 (820 Active Rigs in U.S. Land By Power Type) As of October 2008 (Peak) As of October 2014 (Peak) (1,925 Active Rigs in U.S. Land By Power Type) (1,930 Active Rigs in U.S. Land By…
H&Ps Long Term Strategy Innovation Technology Safety and operational excellence Customer satisfaction Financial strength
Additional References
H&P Activity as of September 3, 2015 Rigs Rigs Working/ % Available Contracted Contracted U.S. Land 346 153 44% (1) (2) AC Drive FlexRigs 338 152 45% SCR Fleet 8 1 13% Offshore 9 8 89% International Land 40 17 43% Total 395 178…
H&Ps U.S. Land Fleet Activity (1) (1) Includes completed new builds pending delivery and not generating revenue days.
Leading U.S. Unconventional Driller (161 H&P Contracted Land Rigs as of 9/3/15*) * Includes 8 announced new FlexRigs with customer commitments scheduled for delivery in fiscal 2015 and first half fiscal 2016.
U.S. Activity by Well and Rig Type 820 Active U.S. Land Rigs (August 2015) Vertical All Rigs Horiz & Dir Horiz & Dir AC Drive Rigs SCR & Mech Rigs Note: The above estimates corresponding to rig activity and rig type are…
U.S. Activity by Well and Rig Type 820 Active U.S. Land Rigs (August 2015) Vertical All Rigs Horiz & Dir Horiz & Dir AC Drive Rigs SCR & Mech Rigs Note: The above estimates corresponding to rig activity and rig type are…
H&Ps International Land Operations Rig Fleet Status (as of September 3, 2015) Long-term (1) Active Idle Total Contracts Argentina 11 8 19 10 Bahrain 1 2 3 1 Colombia 2 6 8 1 Ecuador 1 5 6 Tunisia 2 2 U.A.E. 2 2 (2) Total 17 23…
H&P Global Fleet Under Term Contract Number of Rigs Already Under Long-Term Contracts* (Estimated Quarterly Average, Including Announced New Builds - as of 9/3/15) Segment Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY15 FY16 FY16 FY16 FY16 FY17 FY17…
H&Ps FlexRig Advantage The FlexRig Difference: Key Advantages Increased drilling productivity and reliability Variable frequency AC technology providing precise control and increased capability Computerized electronic driller more…
The Value Proposition: The Power of Efficiency Theoretical 20% Efficiency 40% Efficiency Base Case Improvement Improvement 1. Drilling days average 13.5 10.8 8.1 Other days average 5.0 4.0 3.0 Moving days average (several multi-well…
Ten-Year Relative Shareholder Return Source: Thomson Reuters as of September 4, 2015.
Land Drilling Market Valuations Source: Thomson Reuters as of September 4, 2015.
Return on Equity * Excludes abandonment (non-cash) charges in 4QFY14 and 2QFY15. ** The corresponding ROE values for the selected companies exclude certain extraordinary, non-recurring charges.
Current Dividend Yields Source: Thomson Reuters. Yields calculated as of market close on September 4, 2015.
Oil and Natural Gas Prices Oil Prices Natural Gas Prices Source: Energy Information Administration and Thomson Reuters.
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