Helmerich & Payne, Inc. Credit Suisse 2014 Energy Summit February 11-12, 2014
A Quick Primer on Helmerich & Payne U.S. land drilling market share leader Focused on innovation and returns on capital Leader in ongoing industry land rig replacement cycle Most modern and capable land drilling fleet Strong…
Evolution of H&Ps Global Rig Fleet 96 Rigs 354 Rigs (Before AC Drive Rigs) U.S. Land 316 International Land 29 Offshore 9 September 2001 February 2014
Overall U.S. Land Market Trends Increasing market demand for AC drive rigs Firm and slightly improving spot market pricing Continued customer focus on drilling efficiency, technology and safety Conversations with customers for…
H&P New Builds Delivered 22 new builds in fiscal 2013, all under long-term contracts. Since the beginning of fiscal 2014, we have announced long-term contracts for 35 new FlexRigs with nine customers in the U.S. As of February…
AC Rigs Continue to Gain Market Share Note: The above estimates corresponding to rig activity are derived from multiple sources including Rig Data, Smith Bits, and corporate filings. Additionally, the drawworks capacity of each land…
The Replacement Cycle Continues As of October 2008 (Peak) As of January 2014 (1,900 Active Rigs in U.S. Land (1,700 Active Rigs in U.S. Land By Power Type) By Power Type) Note: The above estimates corresponding to rig activity…
H&Ps Lead in U.S. Land AC Drive Rigs AC Drive Rigs (existing as of third quarter announcement of calendar 2013) * The above estimates corresponding to U.S. lower 48 AC Drive fleets are derived from Rig Data and corporate filings.…
U.S. Land Average Daywork Margins(1) (1) Does not include the impact of early contract termination revenue.
Ten Year Profit Comparison * PTENs operating income includes drilling operations in Canada. ** NBRs operating income corresponds to its U.S. Lower 48, U.S. Offshore and Alaska business units.
Return on Invested Capital (ROIC) (Source: Thomson Reuters) Source: Thomson Reuters as of February 11, 2014.
Return on Invested Capital (ROIC) (Excluding Extraordinary Items) * Excludes gains from the sale of investment securities and discontinued operations. H&P's unadjusted ROIC resulted in 17.0%. ** The corresponding ROIC values for…
Current Dividend Yields Source: Thomson Reuters. Yields calculated as of market close on February 7, 2014.
Land Drilling Market Valuations Source: Thomson Reuters as of February 7, 2014.
Ten-Year Relative Shareholder Return Source: Thomson Reuters as of February 7, 2014
Growing Shareholder Value Lead Innovation Expand Drive Well Market Share Costs Down Satisfy Customers
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…
Innovation & Applied Technology Computerized Controls Drillers Cabin AC Driven Systems & Integrated Top Drive 31 Satellite Communications Mechanized Tubular BOP Handling Handling Rig Move Capabilities
FlexRigs Delivering Drilling Efficiencies We have over 1,300 rig years of AC Drive FlexRig drilling experience. Drilled over 52 million feet in 2012 Drilled in excess of 61 million feet in 2013 Improved our footage per day by…
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 2013) OSHA Recordable Injury Incidence Rates Injuries per 200,000 Man Hours IADC w/o H&P = 1.81 H&P = 0.84
H&P Continues to Capture Market Share As of October 2008 (Peak) As of January 2013 (1,900 Active Rigs in U.S. Land) (1,700 Active Rigs in U.S. Land) Note: The above estimates corresponding to market share are derived from Rig…
Favorable Market Trends for FlexRigs Customer focus on drilling efficiency, technology and safety Increasing well complexity AC drive rigs replacing SCR and mechanical rigs More customers high-grading their fleets
High-Grading Continues As of January 2013 As of January 2014 (1,610 Active Rigs in U.S. Land (1,700 Active Rigs in U.S. Land By Power Type) By Power Type) Note: The above estimates corresponding to rig activity are derived from…
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.
Unconventional Plays Shaping Landscape Well Complexity is increasing: Horizontal and directional wells make up over 75% of wells drilled in the U.S. Extended reach laterals progressively longer Multi-well pad drilling gaining…
Increasing Focus on More Difficult Drilling
Leading U.S. Unconventional Driller (291 H&P Contracted Land Rigs as of 2/10/14*) * Includes 20 announced new FlexRigs with customer commitments scheduled for delivery in calendar 2014.
Active Rig Count Unconventional Drilling Growth in Permian Note: The above estimates are derived from Rig Data. Additionally, the drawworks capacity of each land rig included in the above analysis was greater than 600 horsepower.
H&Ps Pad Capable Fleet Approximately 50% of H&Ps U.S. Land active fleet, all of which are AC drive rigs, are equipped with hydraulic skid systems. Our pad capable fleet is fully utilized. Customers continue to contract/add…
FlexRigs Leading in Pad Drilling Efforts AC Drive FlexRigs lead in pad drilling efforts in U.S. Land FlexRig3 first pad application in 2004 FlexRig4 was the first bi-directional land drilling design FlexRig5 is the latest…
H&P Activity as of February 10, 2014 Rigs Rigs Working/ % Available Contracted Contracted U.S. Land 316 271 86% AC Drive FlexRigs 283 271 96% SCR Fleet 33 0 0% Offshore 9 8 89% International Land 29 23 79% Total 354 302 85% (1)…
H&Ps U.S. Land Fleet Activity (1) (1) Includes completed new builds pending delivery and not generating revenue days.
H&Ps New Build Program Continues H&P plans to continue a build cadence of two rigs per month through March and then increase to three rigs per month through the rest of the fiscal year. We have the flexibility to modify our…
In Summary: H&Ps long term strategy for growing shareholder value: Innovation Technology Safety, operational excellence and best people Customer satisfaction
Additional References
H&Ps Global Rig Fleet * Estimates include existing rigs and announced new build commitments
Changes in Lower 48 U.S. Land Rig Count * PDS active rig count includes both PDS and Grey Wolf rigs.
H&P Global Fleet Under Term Contract Number of Rigs Already Under Long-Term Contracts (Estimated Quarterly Average, Including Announced New Builds - as of 2/10/14) Segment Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY14 FY14 FY14 FY15 FY15 FY15 FY15…
H&Ps International Land Operations Rig Fleet Status (as of February 10, 2014) Long-term Active Idle Total Contracts Argentina 8 1 9 4 Bahrain 3 3 3 Colombia 4 3 7 2 Ecuador 5 1 6 1 Tunisia 2 2 U.A.E. 2 2 2 (1) Total 22 7 29 12…
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.…
H&Ps Exposure to Oil & Liquids Estimated proportion of H&Ps active U.S. Land rigs by primary hydrocarbon target as of 2/10/14 Dry Gas Dry Gas (Long-term (Spot Contracts) Market) 3% 5%
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