Helmerich & Payne, Inc. Barclays 2017 CEO Energy-Power Conference September 7, 2017
About Helmerich & Payne (H&P) Very strong balance sheet Most capable land drilling fleet Market share leader in the U.S. Robust term contract backlog Operational strategy focused on continued innovation, safety, performance…
H&Ps Strong Balance Sheet (As of June 30, 2017) Total-Debt-to-Total-Capitalization Ratio1 1. Total Capitalization is defined as Total Debt plus Shareholders' Equity. Source: Company Filings.
Current Dividend Yields Source: Nasdaq IR Insight (FactSet). Yields calculated as of market close on August 30, 2017.
H&Ps Global Rig Fleet
U.S. Land Market Share Leader As of August 2017 (975 Active Rigs in U.S. Land) Note: The above estimates corresponding to market share are derived from Rig Data. Additionally, the drawworks capacity of each land rig included in…
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 9/7/17. Given notifications as of 9/7/17, the Company…
U.S. Land Drilling Market Conditions Perennial uncertainty surrounding oil prices remains a threat to growth and drilling demand. For now we anticipate that oil prices will remain range bound in the mid to high 40s through calendar…
AC Drive Gains Share with Relatively Flat Rig Count (Historical Example: January 2013 January 2014) Source: The above estimates corresponding to AC Drive market share are derived from Rig Data.
Fourth Fiscal Quarter H&P Outlook (As of September 7, 2017) Drilling Operations Outlook for 4Q of Fiscal 2017 Compared to 3Q of Fiscal 2017 U.S. Land Segment Revenue days now expected to increase by approximately 5% to 6% Average…
Early Hurricane Impact Assessment Finds No Major Damage to the Company Company field personnel were evacuated from onshore areas in the projected impact zones, and no personal injuries were sustained. Early field reports indicate…
U.S. Activity by Well and Rig Type 975 Active U.S. Land Rigs (August 2017) 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…
Active AC Drive U.S. Rig Market Share (650 Rigs as of August 2017) Note: The above estimates corresponding to rig activity are derived from multiple sources including Rig Data and corporate filings. Additionally, the drawworks…
H&P Uniquely Positioned Family of SolutionsTM Positioned to take market share in a strong or moderate market recovery Uniquely leveraged to provide E&P companies the rig of choice Design of the FlexRig fleet allows for a broad…
Incremental CapEx Upgrade Opportunities 7,500 psi mud circulating systems Investing in multi-well pad drilling capability Full utilization of FlexRig3 skid systems led to building additional systems to meet demand FlexRig3…
H&P U.S. Land Fleet Family of SolutionsTM 1,500 hp AC Drive FlexRigs*, including 270 Upgraded or Upgradeable to 350 Available H&P U.S. Land Rigs Rig Specifications in High Demand** * Roughly 65% are optimal for multiple-well pad…
AC Fleet Size Creates Opportunity We have greater scale than any competitor with the ability to upgrade and deploy a total of 270 FlexRigs to rig specifications in highest demand without investing in new builds. With 122 FlexRigs…
H&Ps Lead in U.S. Land AC Drive Rigs with 1,500hp Drawworks Rating and 750,000 lbs. Mast Hookload * The above estimates corresponding to U.S. lower 48 1,500 hp AC Drive fleets with a 750,000 lbs. mast hookload are derived from Rig…
H&Ps Lead in U.S. Land AC Drive Rigs with 1,500hp Drawworks Rating and 750,000 lbs. Mast Hookload 2014 Peak activity (all U.S. land rigs) * The above estimates corresponding to U.S. lower 48 1,500 hp AC Drive fleets with a…
H&Ps Lead in U.S. Land AC Drive Rigs with 1,500hp Drawworks Rating and 750,000 lbs. Mast Hookload August 2017 activity (all U.S. land rigs) 2014 Peak activity (all U.S. land rigs) * The above estimates corresponding to U.S.…
H&P U.S. Land Fleet Family of SolutionsTM 1,500 hp AC Drive FlexRigs*, including 186 Upgraded or Upgradeable to 194 Contracted H&P U.S. Land Rigs Rig Specifications in High Demand** * Roughly 90% are optimal for multiple-well pad…
U.S. Land Market Share Gains Since 2014 Peak Note: The above estimates corresponding to market share are derived from Rig Data. Additionally, the drawworks capacity of each land rig included in the above analysis was equal to or…
H&Ps Experience and Expertise Have the people, systems and the operational support structures to drive high performance and reliability Over 1,900 rig years of AC drive operational experience Our expertise within an integrated…
Benefits of an Integrated Model DESIGN (and redesign) CONTINUOUS IMPROVEMENT OPERATE FABRICATE (and improve) (and upgrade)
FlexRig Family of SolutionsTM - Pad Design The FlexRig3 skid system is designed to meet the requirements for standard pad drilling. Typically customers drill 2-4 wells per pad. The FlexRig5 skid system is a bi- directional design,…
H&Ps Family of SolutionsTM Matches Pad Drilling Trends % of Horizontal Wells Drilled (Permian ONLY) Source: Coras Research, LLC The H&P Family of SolutionsTM provides options that clearly match pad drilling trends.
Walking Option in FlexRig Family of SolutionsTM The FlexRig3 walking system will allow H&P to provide a new design into the market for a much lower investment than having to build a new rig. We believe this could lead to…
U.S. Land Market Share Gains Since 2016 Trough (As Every Contractors Best Rigs Competed for Work) Note: The above estimates corresponding to market share are derived from Rig Data. Additionally, the drawworks capacity of each land…
H&Ps U.S. Land Fleet Activity (1) (2) (1) Includes rigs on standby dayrates. (2) Includes completed new builds pending delivery and not generating revenue days.
Ongoing U.S. Land Market Trends Unconventional plays continue to shape the landscape. Well designs are increasingly complex, including longer laterals and more challenging drilling requirements. Customers continue to focus on…
Leading U.S. Unconventional Driller (194 H&P Contracted Land Rigs as of 9/7/17)
Unconventional Drilling in the Permian (As of August 2017) H&Ps Active Rigs in the Permian Basin Total Active Rigs in the Permian Basin Note: The above estimates are derived from Rig Data. Additionally, the drawworks capacity…
Increasing Focus on More Difficult Drilling
U.S. Land Horizontal and Directional Activity (As of August 2017) Note: The above estimates corresponding to horizontal and directional rig activity by power type are derived from multiple sources including Rig Data and corporate…
The Replacement Cycle: Customer Adoption U.S. Land Market (as of August 2017) Top 10 E&P Operators Next 130 E&P Operators Remaining E&P Operators (220 Active Rigs by Power Type) (575 Active Rigs by Power Type) (180 Active Rigs by…
The Replacement Cycle Continues As of August 2017 (975 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 Horizontal and Directional Activity (895 Rigs as of August 2017) Note: The above estimates corresponding to rig activity are derived from multiple sources including Rig Data and corporate filings. Additionally, the…
Performance Is Not Only About Better Rigs Our competitive advantage is also about: People Uniform Fleet Size & Scale Safety Operational Support Network Experience Processes/Data Training Maintenance Culture Supply Chain
Center of Excellence Tulsa, OK 24/7 Technical and Performance Solutions: Support Structure Data Analysis Best Practices
H&P / Motive Strategic Integration Technology Leaders: H&P Provides- Industry Leader for High Performance Rigs Largest and Most Standardized AC rig Fleet/Platform Solutions for Controls & Automation Market Share Leader in US Land…
MOTIVE Drilling Technologies, Inc. MOTIVEs proprietary Bit Guidance System is a unique directional drilling technology. Industry leader in the use of cognitive computing to guide the directional drilling process Algorithm-driven…
MOTIVE Case Study Directional Drilling Industry Problem: inability to consistently follow a prescribed well path and to hit and stay within the targets identified collectively by the operators geologists, geophysicists, and reservoir…
Customer Satisfaction Matters Value creation for the customer is not only driven by having the right rig. It is also driven by service; the ability of an organization to deliver top performance with that rig. Better service…
H&Ps Long Term Strategy Innovation Technology Safety, operational excellence and reliability Customer satisfaction Financial strength
Additional References
Estimated H&P Activity as of September 7, 2017 Rigs Rigs Working/ % Available Contracted Contracted U.S. Land 350 194 55% AC Drive FlexRigs 348 194 56% (1) SCR Fleet 2 0 0% Offshore 8 5 63% International Land 38 15 39% Total Fleet…
H&P Global Fleet Under Term Contract Number of Rigs Already Under Long-Term Contracts* (Estimated Quarterly Average, Including Announced New Builds - as of 9/7/17) Segment Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY17 FY18 FY18 FY18 FY18 FY19 FY19…
U.S. Land Average Rig Expense per Day * Excludes extraordinary items mentioned in a particular quarters press release (e.g. lawsuit settlement charges). ** Estimated average rig expense per day for operating rigs only excludes…
H&Ps International Land Operations Rig Fleet Status (as of September 7, 2017) Long-term Contracted Idle Total Contracts (1) Argentina 12 7 19 10 Bahrain 1 2 3 Colombia 2 6 8 Ecuador 6 6 U.A.E. 2 2 (2) Total 15 23 38 10 (1)…
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. The category Large Operators includes majors and large…
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…
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…
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. ** Values for PTEN include AC drive rigs recently acquired from Seventy…
H&Ps Lead in U.S. Land AC Drive Rigs with 1,500hp Drawworks Rating * The above estimates corresponding to U.S. lower 48 AC Drive fleets are derived from Rig Data and corporate filings. ** Values for PTEN include AC drive rigs…
H&P Very Well Positioned to Gain Share Idle 1,500 hp AC Drive Land Rigs (as of August 2017) Note: The above estimates are derived from multiple sources including Rig Data and corporate filings. * Includes 90 FlexRigs that have been…
Drilling Activity in the U.S.
Ten-Year Relative Shareholder Return Source: Nasdaq IR Insight (FactSet) as of August 30, 2017.
Land Drilling Market Valuations Source: Nasdaq IR Insight (FactSet) as of August 30, 2017.
Oil vs. Natural Gas Directed Rig Count
Oil and Natural Gas Prices Oil Prices Natural Gas Prices Source: Energy Information Administration and Nasdaq IR Insight (FactSet).
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