Helmerich & Payne, Inc. Meetings with Investors February 9-10, 2016
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 contract backlog with high quality customer base Strategy focused on…
H&Ps Global Rig Fleet * Estimates include existing rigs and new build commitments as of February 9, 2016.
Organic U.S. Land Fleet Growth 350 49 * Estimates include existing rigs and announced new build commitments.
U.S. Land Drilling Market Conditions Oil and gas prices remain low, forcing E&P companies to further reduce drilling budgets U.S. land active rig count is now at levels not seen since 1999…
Oil and Natural Gas Prices Oil Prices Natural Gas Prices Source: Energy Information Administration and Thomson Reuters.
Drilling Activity in the U.S.
H&Ps U.S. Land Activity and Pricing Comments (As of January 28, 2016) H&Ps U.S. Land segment had approximately 121 contracted rigs generating revenue as of January 28, 2016, down from 127 on January 6, 2016. Average FlexRig spot…
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 131 FlexRig3s and 6 FlexRig4s of…
H&P U.S. Land Fleet (Contracted Rigs as of 1/28/16) 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&P Gaining U.S. Land Market Share As of January 2016 (570 Active Rigs in U.S. Land) As of October 2008 (Peak) As of October 2014 (Peak) (1,925 Active Rigs in U.S. Land) (1,930 Active Rigs in U.S. Land) Note: The above…
H&P Positioned to Continue to Gain Share 410 Idle 1,500 hp AC Drive Rigs in U.S. Land (January 2016) Note: The above estimates are derived from multiple sources including Rig Data, Smith Bits, and corporate filings. Additionally,…
U.S. Land Active Rig Count Through Fourth Quarter of Calendar 2015 BHI Industry Rig Count
U.S. Land Average Daywork Margins(1) Through Fourth Quarter of Calendar 2015 (1) Does not include the impact of early contract termination revenue.
Delivering Safety H&P vs. Industry (IADC) U.S. Land Safety Performance (2005 2015) OSHA Recordable Injury Incidence Rates Injuries per 200,000 Man Hours IADC w/o H&P H&P * H&P data available through 2015; IADC w/o 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 1/28/16. Given notifications as of 1/28/16, 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.
Ongoing U.S. Land Market Trends Unconventional plays continue to shape the landscape. AC drive rigs are best suited for more complex horizontal drilling. Customers continue to focus on drilling efficiency, technology and…
Increasing Focus on More Difficult Drilling
U.S. Land Horizontal and Directional Activity (As of January 2016) 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 January 2016) Top 10 E&P Operators Next 90 E&P Operators Remaining E&P Operators (155 Active Rigs by Power Type) (310 Active Rigs by Power Type) (105 Active Rigs by…
The Replacement Cycle Continues As of January 2016 (570 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
Second Fiscal Quarter H&P Operations Outlook (As of January 28, 2016) Drilling Operations Outlook for 2Q of Fiscal 2016 Compared to 1Q of Fiscal 2016 U.S. Land Segment Revenue days expected to decrease by roughly 20% Average rig…
H&P Activity as of January 28, 2016 Rigs Rigs Working/ % Available Contracted Contracted U.S. Land 347 121 35% (1) (2) AC Drive FlexRigs 345 121 35% SCR Fleet 2 0 0% Offshore 9 8 89% International Land 38 14 37% Total 394 143 36%…
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 1/28/16) 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 (124 H&P Contracted Land Rigs as of 1/28/16*) * Includes 3 announced new FlexRigs with customer commitments scheduled for delivery in fiscal 2016.
U.S. Activity by Well and Rig Type 570 Active U.S. Land Rigs (January 2016) Vertical All Rigs Horiz & Dir SCR & Mech Rigs Horiz & Dir 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 January 28, 2016) Long-term Active Idle Total Contracts (1) Argentina 10 9 19 10 Bahrain 1 2 3 1 Colombia 1 7 8 1 Ecuador 6 6 U.A.E. 2 2 2 (2) Total 14 24 38 14 (1)…
H&P Global Fleet Under Term Contract Number of Rigs Already Under Long-Term Contracts* (Estimated Quarterly Average, Including Announced New Builds - as of 1/28/16) Segment Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY16 FY16 FY16 FY17 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 February 5, 2016.
Land Drilling Market Valuations Source: Thomson Reuters as of February 5, 2016.
Current Dividend Yields Source: Thomson Reuters. Yields calculated as of market close on February 5, 2016.
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