Helmerich & Payne, Inc. Presentation to Investors June 24, 2014
Current Highlights (Announcing Eight Additional New Builds Today) The Company has entered into multi-year term contracts to build and operate eight additional new FlexRigs. These contracts were recently finalized with four U.S.…
Distribution of Announced New Builds Of the 61 announced new builds, 29 are scheduled to be delivered to the Permian, 12 to the Eagle Ford, eight to the SCOOP, four each to the Utica and Bakken, two to the Haynesville and one each…
Evolution of H&Ps Global Rig Fleet * Estimates include existing rigs and announced new build commitments.
H&P Activity as of June 24, 2014 Rigs Rigs Working/ % Available Contracted Contracted U.S. Land 330 289 88% (1) AC Drive FlexRigs 297 288 97% SCR Fleet 33 1 3% Offshore 9 9 100% International Land 32 24 75% Total 371 322 87% (2)…
U.S. Land Market Trends Today Stronger than expected oil and gas prices for 2014 Increasing proportion of horizontal wells with longer laterals and pad drilling requirements Increasing market demand for AC drive rigs Slightly…
H&Ps U.S. Land Fleet Activity (1) (1) Includes completed new builds pending delivery and not generating revenue days.
Leading U.S. Unconventional Driller (319 H&P Contracted Land Rigs as of 6/24/14*) * Includes 30 announced new FlexRigs with customer commitments scheduled for delivery in fiscal 2014 and fiscal 2015.
H&Ps International Land Operations Rig Fleet Status (as of June 24, 2014) Active In-Transit Idle Total Long-term Contracts (1) Argentina 7 1 2 10 2 Bahrain 3 3 3 Colombia 5 3 8 1 Ecuador 4 1 1 6 1 Mozambique 1 1 Tunisia 2 2 U.A.E. 2…
H&P Global Fleet Under Term Contract Number of Rigs Already Under Long-Term Contracts (Estimated Quarterly Average, Including Announced New Builds - as of 6/24/14) Segment Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY14 FY14 FY15 FY15 FY15 FY15 FY16…
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
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
The Replacement Cycle Continues As of October 2008 (Peak) As of June 2014 (1,900 Active Rigs in U.S. Land (1,800 Active Rigs in U.S. Land By Power Type) By Power Type) Note: The above estimates corresponding to rig activity are…
Active U.S. Land Rigs by Rig Type 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 rig…
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&Ps Pad Capable Fleet Roughly half of H&Ps U.S. Land active rigs are equipped with hydraulic skid systems. Our pad capable fleet is fully utilized. Customers continue to contract/add skid systems to existing FlexRigs.
H&P Continues to Capture Market Share As of October 2008 (Peak) As of June 2014 (1,900 Active Rigs in U.S. Land) (1,800 Active Rigs in U.S. Land) Note: The above estimates corresponding to market share are derived from Rig Data.…
H&Ps New Build Program Continues Plan to build three rigs per month through August, and then ramp up to four rigs per month beginning in September of this fiscal year. Flexibility to increase our production cadence and our…
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
U.S. Land Active Rig Count Through First Quarter of Calendar 2014 BHI Industry Rig Count
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 Equity * Including gains from the sale of investment securities and discontinued operations, H&P's corresponding ROE resulted in 17.5%. ** The corresponding ROE values for the selected companies exclude certain…
Current Dividend Yields Source: Thomson Reuters. Yields calculated as of market close on June 20, 2014.
Ten-Year Relative Shareholder Return Source: Thomson Reuters as of June 20, 2014
In Summary: H&Ps long term strategy for growing shareholder value: Innovation Technology Safety and operational excellence Customer satisfaction
Additional References
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…
Innovation & Applied Technology FlexRig Computerized Controls Drillers Cabin AC Driven Systems & Integrated Top Drive 31 Satellite Communications Mechanized Tubular BOP Handling Handling Rig Move Capabilities
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…
FlexRigs Delivering Drilling Efficiencies We have over 1,400 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…
Changes in Lower 48 U.S. Land Rig Count * PDS active rig count includes both PDS and Grey Wolf rigs.
High-Grading Continues As of June 2013 As of June 2014 (1,620 Active Rigs in U.S. Land (1,800 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.
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…
Oil vs. Natural Gas Directed Rig Count
Oil and Natural Gas Prices Oil Prices Natural Gas Prices Source: Energy Information Administration and CME
H&Ps Exposure to Oil & Liquids Estimated proportion of H&Ps active U.S. Land rigs by primary hydrocarbon target as of 6/24/14 Dry Gas Dry Gas (Long-term (Spot Contracts) Market) 3% 3%
Return on Invested Capital (ROIC) * Excludes gains from the sale of investment securities and discontinued operations. H&P's unadjusted ROIC resulted in 16.8%. ** The corresponding ROIC values for the selected companies exclude…
Land Drilling Market Valuations Source: Thomson Reuters as of June 20, 2014.
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