Helmerich & Payne, Inc. Capital One Securities, Inc. 2015 Energy Conference December 9-10, 2015
About Helmerich & Payne (H&P) Very strong balance sheet U.S. land drilling market share leader Most modern, uniform and capable land drilling fleet Strong term-contracted backlog with high quality customer base Strategy focused…
H&Ps Global Rig Fleet * Estimates include existing rigs and new build commitments as of December 9, 2015 and exclude 17 SCR powered FlexRigs decommissioned at the end of the second quarter of fiscal 2015 and six conventional SCR…
Organic U.S. Land Fleet Growth 350 49 * Estimates include existing rigs and announced new build commitments.
Drilling Activity in the U.S.
U.S. Land Drilling Market Conditions Oil and gas prices remain low Rig count is at 700 and expected to continue to decline Approximately 85% of active rigs are drilling complex wells (horizontal and directional) AC drive market…
H&Ps U.S. Land Activity and Pricing Comments H&Ps U.S. Land segment has approximately 132 contracted rigs generating revenue as of December 9, 2015, down from 145 on September 30, 2015. As rig activity continues to decline, our…
H&P Highlights Very Strong Balance Sheet High Quality Most Advanced Customer Base Fleet Strong Multi-Year Market Leader Backlog Best-in-Class Safety
H&P vs. Peers Credit Statistics (As of September 30, 2015) Total-Debt-to-Total-Capitalization Ratio1 1. Total Capitalization is defined as Total Debt plus Shareholders' Equity. Source: Company Filings
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…
H&P U.S. Land Fleet Family of Solutions Rig Power Type FlexRig Type Pad* AC Drive FlexRigs Drawworks Horsepower ** * Optimal for multiple-well pad drilling applications. ** Approximately 130 FlexRig3s and 6 FlexRig4s of…
H&P U.S. Land Fleet (Contracted Rigs as of 12/9/15) Rig Power Type FlexRig Type Pad* AC Drive FlexRigs Drawworks Horsepower ** * Optimal for multiple-well pad drilling applications. ** Most of the Other FlexRigs can be…
Technology & Quality Service Make a Difference (1) H&Ps Margin Premium (2) (1) Does not include the impact of early contract termination revenue. (2) Represents weighted-average rig margin per day for PTEN, NBR, PDS, and…
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
H&Ps U.S. Land Market Share As of November 2015 (700 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…
U.S. Land Active Rig Count Through Third Quarter of Calendar 2015 BHI Industry Rig Count
U.S. Land Average Daywork Margins(1) Through Third Quarter of Calendar 2015 (1) Does not include the impact of early contract termination revenue.
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.
Delivering Safety H&P vs. Industry (IADC) U.S. Land Safety Performance (2005 Sept 2015) OSHA Recordable Injury Incidence Rates Injuries per 200,000 Man Hours IADC w/o H&P H&P
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 12/9/15. Given notifications as of 12/9/15, the…
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) (3.1 Billion H&P Backlog) * As of September 30, 2015. Consists of 145 contracted U.S. Land rigs, 8…
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
U.S. Land Horizontal and Directional Activity (As of November 2015) Note: The above estimates corresponding to horizontal and directional rig activity by power type are derived from multiple sources including Rig Data, Smith Bits,…
The Replacement Cycle: Customer Adoption U.S. Land Market (as of November 2015) Top 10 E&P Operators Next 90 E&P Operators Remaining E&P Operators (185 Active Rigs by Power Type) (365 Active Rigs by Power Type) (150 Active Rigs by…
The Replacement Cycle Continues As of November 2015 (700 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…
H&Ps Long Term Strategy Innovation Technology Safety and operational excellence Customer satisfaction Financial strength
Additional References
First Fiscal Quarter H&P Operations Outlook (as of November 12, 2015) Drilling Operations Outlook for 1Q of Fiscal 2016 Compared to 4Q of Fiscal 2015 U.S. Land Segment Revenue days expected to decrease by roughly 11% to 14% Average…
H&P Activity as of December 9, 2015 Rigs Rigs Working/ % Available Contracted Contracted U.S. Land 344 132 38% (1) (2) AC Drive FlexRigs 342 131 38% SCR Fleet 2 1 50% Offshore 9 8 89% International Land 38 16 42% Total 391 156 40%…
H&Ps U.S. Land Fleet Activity (1) (1) Includes completed new builds pending delivery and not generating revenue days.
H&P U.S. Land Fleet (Idle Rigs as of 12/9/15) Rig Power Type FlexRig Type Pad* AC Drive FlexRigs Drawworks Horsepower ** * Optimal for multiple-well pad drilling applications. ** Most of the Other FlexRigs can be upgraded…
Leading U.S. Unconventional Driller (138 H&P Contracted Land Rigs as of 12/9/15*) * Includes 6 announced new FlexRigs with customer commitments scheduled for delivery in the first half of fiscal 2016.
U.S. Activity by Well and Rig Type 700 Active U.S. Land Rigs (November 2015) Vertical All Rigs Horiz & Dir Horiz & Dir SCR & Mech Rigs AC Drive Rigs Note: The above estimates corresponding to rig activity and rig type are…
H&Ps International Land Operations Rig Fleet Status (as of December 9, 2015) Long-term Active Idle Total Contracts (1) Argentina 11 8 19 10 Bahrain 1 2 3 1 Colombia 1 7 8 1 Ecuador 1 5 6 U.A.E. 2 2 2 (2) Total 16 22 38 14…
H&P Global Fleet Under Term Contract Number of Rigs Already Under Long-Term Contracts* (Estimated Quarterly Average, Including Announced New Builds - as of 12/9/15) Segment Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY16 FY16 FY16 FY16 FY17 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 December 7, 2015.
Land Drilling Market Valuations Source: Thomson Reuters as of December 7, 2015.
Current Dividend Yields Source: Thomson Reuters. Yields calculated as of market close on December 7, 2015.
Oil and Natural Gas Prices Oil Prices Natural Gas Prices Source: Energy Information Administration and Thomson Reuters.
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