Helmerich & Payne, Inc. Meetings with Investors May 18-19, 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 announced new build commitments.
Organic U.S. Land Fleet Growth 350 49 * Estimates include existing rigs and announced new build commitments.
U.S. Land Drilling Market Conditions E&P companies living within reduced drilling budgets, further reducing costs, and increasing efficiencies U.S. land active rig count now below 400, comparable to the all-time record lows…
Drilling Activity in the U.S.
Oil and Natural Gas Prices Oil Prices Natural Gas Prices Source: Energy Information Administration and Thomson Reuters.
H&Ps U.S. Land Activity and Pricing Comments (As of May 2, 2016) H&Ps U.S. Land segment had approximately 84 contracted rigs generating revenue and approximately 79 rigs generating revenue days as of May 2, 2016 (18% of the 79 rigs…
H&Ps U.S. Land Fleet Activity (1) (2) (1) Active rigs on term includes rigs on standby dayrates. (2) Includes completed new builds pending delivery and not generating revenue days.
H&P vs. Peers Credit Statistics (As of March 31, 2016) Total-Debt-to-Total-Capitalization Ratio1 1. Total Capitalization is defined as Total Debt plus Shareholders' Equity. Source: Company Filings
Current Dividend Yields Source: Thomson Reuters. Yields calculated as of market close on May 13, 2016.
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 5/2/16) 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&Ps U.S. Land Market Share Gains As of May 2016 (380 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 estimates…
H&P Positioned to Continue to Gain Share 510 Idle 1,500 hp AC Drive Rigs in U.S. Land (May 2016) Note: The above estimates are derived from multiple sources including Rig Data, Smith Bits, and corporate filings. Additionally, the…
U.S. Land Active Rig Count Through First Quarter of Calendar 2016 BHI Industry Rig Count
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 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 5/2/16. Given notifications as of 5/2/16, the Company…
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. Customers continue to focus on drilling efficiency, technology and safety. AC drive rigs are best suited for more complex horizontal…
Increasing Focus on More Difficult Drilling
U.S. Land Horizontal and Directional Activity (As of May 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, and…
The Replacement Cycle: Customer Adoption U.S. Land Market (as of May 2016) Top 10 E&P Operators Next 90 E&P Operators Remaining E&P Operators (105 Active Rigs by Power Type) (205 Active Rigs by Power Type) (70 Active Rigs by Power…
The Replacement Cycle Continues As of May 2016 (380 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
Third Fiscal Quarter H&P Operations Outlook (As of May 2, 2016) Drilling Operations Outlook for 3Q of Fiscal 2016 Compared to 2Q of Fiscal 2016 U.S. Land Segment Revenue days expected to decrease by roughly 25% to 28% Average rig…
H&P Activity as of May 2, 2016 Rigs Rigs Working/ % Available Contracted Contracted U.S. Land 347 84 24% (1) (2) AC Drive FlexRigs 345 84 24% SCR Fleet 2 0 0% Offshore 9 7 78% International Land 38 14 37% Total 394 105 27% (3)…
H&P U.S. Land Fleet (Idle Rigs as of 5/2/16) 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 (87 H&P Contracted Land Rigs as of 5/2/16*) * Includes 3 announced new FlexRigs with customer commitments scheduled for delivery in fiscal 2016.
U.S. Activity by Well and Rig Type 380 Active U.S. Land Rigs (May 2016) 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 May 2, 2016) Long-term Contracted Idle Total Contracts (1) (2) Argentina 10 9 19 10 Bahrain 1 2 3 1 Colombia 1 7 8 1 Ecuador 6 6 U.A.E. 2 2 2 (3) Total 14 24 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 5/2/16) Segment Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY16 FY16 FY17 FY17 FY17 FY17 FY18…
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 May 13, 2016.
Land Drilling Market Valuations Source: Thomson Reuters as of May 13, 2016.
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