Helmerich & Payne, Inc. (NYSE:HP) reported a net loss
of $22 million or $(0.21) per diluted share from operating revenues
of $499 million for the third quarter of fiscal 2017. The net loss
per diluted share includes $0.04 of after-tax income comprised of
select items (3). Net cash provided by operating activities
was $90 million for the third quarter of fiscal 2017.
President and CEO John Lindsay commented, “We are pleased with
the progress made in the third fiscal quarter and continue to reap
the benefits of our integrated business model and the competencies
the Company has developed over the past decade in designing,
building, and now upgrading AC drive FlexRigs. Additional
demand for super-spec FlexRigs remains in the market even in a
mid-$40’s oil price environment and we are responding with upgrades
to our existing AC fleet. H&P is perhaps the only
contractor with the right AC rig fleet capacity to grow
substantially in a manner that avoids the large investment in new
rigs. Despite the oil price uncertainty and the choppiness
that it tends to create in the market, H&P is successfully
growing market share and continuing to build its brand. Our
people remain the driving force of our success and the Company
continues to place great focus on organizational effectiveness and
equipping all of our employees to deliver excellence for the
customer. Technology also plays a pivotal role in our success, and
on June 2, 2017, the Company closed on the acquisition of MOTIVE
Drilling Technologies, Inc. MOTIVE is a software company that
has developed a bit guidance system that utilizes cognitive
computing to improve directional drilling decision automation and
optimization. MOTIVE is a leader in this space and to date has been
used to drill over three million feet of horizontal hole across all
of the major U.S. shale plays.
“We believe H&P is well positioned to successfully manage
the ongoing U.S. land market and any short term volatility that may
exist. We have successfully maintained an industry leading cadence
for upgrades which has allowed us to increase our active fleet by
98 rigs during this fiscal year, 86 of which were super-spec
upgrades. The efforts undertaken over the past couple of years to
enhance organizational effectiveness are paying significant
dividends. We have demonstrated the ability to achieve operational
scalability, maintain a strong balance sheet, and enhance a healthy
team environment throughout the organization. This is
particularly apparent in our ability to respond to demand and add
value to the customer. We remain confident about the future for
H&P as our competitive advantages remain in our people,
performance, technology, reliability and uniform FlexRig
fleet.”
Operating Segment Results
U.S. Land Operations:
Segment operating loss narrowed by $44 million (85%)
sequentially. The favorable change was primarily attributable
to an increase in quarterly revenue days and a higher rig margin
per day average. The number of quarterly revenue days
increased sequentially by approximately 26%, as compared to an
estimated 21% for the overall market (4).
Adjusted average rig revenue per day decreased sequentially by
$525 to $21,676 (2), as additional rigs returned to work at
spot market rates and as long-term contracts signed at higher,
prior peak rates expired or reset at or slightly above spot market
rates during the quarter. The average rig expense per day
decreased sequentially by $1,356 to $14,256; the decrease in the
average was mostly attributable to a decline in upfront rig
start-up expenses as fewer rigs were reactivated this quarter as
compared to the prior quarter. The corresponding adjusted
average rig margin per day increased sequentially by $831 to $7,420
(2).
Offshore Operations:
Segment operating income increased 9% sequentially primarily due
to lower levels of depreciation. The number of quarterly
revenue days decreased sequentially by approximately 8%, and
the average rig margin per day increased sequentially by $686 to
$11,503. Additionally, management contracts on platform rigs
contributed approximately $4 million to the segment’s operating
income.
International Land Operations:
The segment had operating income this quarter as compared to an
operating loss the previous quarter. The $16 million
sequential improvement was primarily attributable to the previously
disclosed withdrawal by a customer of an early termination notice
received for five rigs under long-term contracts. Excluding
the impact of the corresponding retroactive adjustments, the
adjusted average rig margin per day was $8,978 and the number of
quarterly revenue days was 1,183. Adjusted average rig margin
per day and adjusted quarterly revenue days were higher than
expected primarily as a result of the resumption of normal
contractual terms on the five previously mentioned rigs.
Operational Outlook for the Fourth Quarter of Fiscal 2017
U.S. Land Operations:
- Quarterly revenue days expected to increase by
approximately 3% to 5% sequentially
- Average rig revenue per day expected to be slightly over
$21,000 (excluding any impact from early termination revenue)
- Average rig expense per day expected to be roughly $13,700
Offshore Operations:
- Quarterly revenue days expected to decrease by
approximately 10% sequentially
- Average rig margin per day expected to be approximately
$12,500
- Management contracts expected to generate approximately $4
million in operating income
International Land Operations:
- Adjusted quarterly revenue days expected to be roughly
unchanged sequentially, resulting in approximately 13 average rigs
generating revenue days during the quarter
- Average rig margin per day expected to be roughly $7,500
Other Estimates for Fiscal 2017
- FY17 capital expenditures are now estimated at roughly $400
million, and potentially higher depending on the timing of
expenditures related to upgrading opportunities. This
increase from our prior estimate of $350 million is due to more
rigs being upgraded than initially anticipated and higher levels of
maintenance capital expenditures as a result of more rigs working
than previously estimated. The revised estimate excludes the
acquisition of MOTIVE Drilling Technologies, Inc.
- FY17 general and administrative expenses are now expected to be
approximately $150 million primarily due to the acquisition of
MOTIVE Drilling Technologies, Inc., and to a higher level of
resources required to support a much higher active rig count than
originally anticipated.
Other Highlights
- H&P’s spot pricing in the U.S. Land market continued to
increase (approximately 2%) from the date of the second quarter
results announcement (April 27, 2017) to July 27, 2017.
- Since April 27, 2017 (date of second quarter results
announcement), 18 AC drive FlexRigs with 1,500 hp drawworks and
750,000 lbs. hookload ratings were upgraded to include a 7,500 psi
mud circulating system and/or multiple-well pad capability,
resulting in 140 rigs in our fleet today with rig specifications in
highest demand(5).
- During the third fiscal quarter, two FlexRig3s with walking
systems were contracted and a third committed. One of the
contracted rigs, the initial prototype, deployed to West Texas in
May. Initial rig operations have been strong, and the
customer has been pleased with the results.
- During the third fiscal quarter, FlexRig 531, working for an
operator in the Utica Shale, drilled a total measured depth well of
approximately 27,750 feet with an extended reach lateral measuring
approximately 19,500 feet. This was completed in
approximately 17 days (from spud to total depth).
- On May 22, 2017, the Company announced the acquisition of
MOTIVE Drilling Technologies, Inc., the industry leader in the use
of cognitive computing to guide the directional drilling process.
The acquisition closed on June 2, 2017.
- On June 7, 2017, Directors of the Company declared a quarterly
cash dividend of $0.70 per share on the Company’s common stock
payable September 1, 2017 (as filed on Form 8‑K at the
time of the declaration).
Select Items Included in Net Income (or Loss) per Diluted
Share
Third Quarter of Fiscal 2017 included $0.04 in after-tax income
comprised of the following:
- $0.07 of after-tax income related to retroactive revenue
received for five rigs in the International Land Segment
- $0.03 of after-tax income from long-term contract early
termination compensation from customers
- $0.01 of after-tax gains related to the sale of used drilling
equipment
- $0.02 of after-tax losses from charges related to the MOTIVE
Drilling Technologies, Inc. acquisition transaction
- $0.05 of after-tax losses from abandonment charges related to
the decommissioning of used drilling equipment
Second Quarter of Fiscal 2017 included $0.02 in after-tax income
comprised of the following:
- $0.04 of after-tax income from long-term contract early
termination compensation from customers
- $0.09 of after-tax gains related to the sale of used drilling
equipment
- $0.11 of after-tax losses from abandonment charges related to
the decommissioning of used drilling equipment
About Helmerich & Payne, Inc.
Helmerich & Payne, Inc. is primarily a contract
drilling company. As of July 27, 2017, the Company’s
existing fleet includes 350 land rigs in the U.S., 38 international
land rigs, and eight offshore platform rigs. The Company’s
global fleet has a total of 388 land rigs, including 373 AC drive
FlexRigs.
Forward-Looking Statements
This release includes “forward-looking statements” within the
meaning of the Securities Act of 1933 and the Securities Exchange
Act of 1934, and such statements are based on current expectations
and assumptions that are subject to risks and uncertainties.
All statements other than statements of historical facts
included in this release, including, without limitation, statements
regarding the registrant’s future financial position, operations
outlook, business strategy, budgets, projected costs and plans and
objectives of management for future operations, are forward-looking
statements. For information regarding risks and uncertainties
associated with the Company’s business, please refer to the “Risk
Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” sections of the Company’s SEC
filings, including but not limited to its annual report on
Form 10‑K and quarterly reports on Form 10‑Q. As a
result of these factors, Helmerich & Payne, Inc.’s
actual results may differ materially from those indicated or
implied by such forward-looking statements. We undertake no
duty to update or revise our forward-looking statements based on
changes in internal estimates, expectations or otherwise, except as
required by law.
________________________
Note Regarding Trademarks. Helmerich &
Payne, Inc. owns or has rights to the use of trademarks,
service marks and trade names that it uses in conjunction with the
operation of its business. One of the trademarks that appears
in this release is FlexRig, which may be registered or trademarked
in the U.S. and other jurisdictions.
(1)This market share estimate is derived from RigData as of July
2017. Additionally, the drawworks capacity of each land rig
included in the estimate was equal to or greater than 600
horsepower.(2)See the Selected Statistical & Operational
Highlights table(s) for details on the revenues or charges
excluded on a per revenue day basis. The inclusion or
exclusion of these amounts results in adjusted revenue, expense,
and/or margin per day figures, which are all non-GAAP
measures.(3)See the corresponding section of this release for
details regarding the select items.(4)The overall market’s rate of
increase was calculated using the average U.S. Land rig counts from
the first and second calendar quarters of 2017 as publicly
published by BHGE.(5)These combined rig specifications are in high
demand and fit the description of what some industry followers
refer to as “super-spec” rigs.
|
HELMERICH &
PAYNE, INC. |
Unaudited |
(in thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
CONSOLIDATED STATEMENTS OF |
|
June 30 |
|
March 31 |
|
June 30 |
|
June 30 |
OPERATIONS |
|
2017 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling — U.S. Land |
|
$ |
405,516 |
|
|
$ |
330,967 |
|
|
$ |
285,028 |
|
|
$ |
1,000,119 |
|
|
$ |
1,004,116 |
|
Drilling — Offshore |
|
|
33,711 |
|
|
|
36,235 |
|
|
|
30,492 |
|
|
|
103,758 |
|
|
|
106,697 |
|
Drilling — International Land |
|
|
55,075 |
|
|
|
34,757 |
|
|
|
47,983 |
|
|
|
157,863 |
|
|
|
171,529 |
|
Other |
|
|
4,262 |
|
|
|
3,324 |
|
|
|
2,983 |
|
|
|
10,697 |
|
|
|
10,182 |
|
|
|
$ |
498,564 |
|
|
$ |
405,283 |
|
|
$ |
366,486 |
|
|
$ |
1,272,437 |
|
|
$ |
1,292,524 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs
and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
costs, excluding depreciation |
|
|
337,463 |
|
|
|
296,829 |
|
|
|
186,146 |
|
|
|
881,971 |
|
|
|
684,401 |
|
Depreciation |
|
|
145,043 |
|
|
|
152,777 |
|
|
|
138,690 |
|
|
|
431,667 |
|
|
|
422,336 |
|
Asset
impairment charge |
|
|
— |
|
|
|
— |
|
|
|
6,250 |
|
|
|
— |
|
|
|
6,250 |
|
General
and administrative |
|
|
42,890 |
|
|
|
33,519 |
|
|
|
46,496 |
|
|
|
110,671 |
|
|
|
112,381 |
|
Research
and development |
|
|
3,058 |
|
|
|
2,719 |
|
|
|
2,707 |
|
|
|
8,585 |
|
|
|
7,941 |
|
Income
from asset sales |
|
|
(1,862 |
) |
|
|
(14,889 |
) |
|
|
(547 |
) |
|
|
(17,593 |
) |
|
|
(7,820 |
) |
|
|
|
526,592 |
|
|
|
470,955 |
|
|
|
379,742 |
|
|
|
1,415,301 |
|
|
|
1,225,489 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss) |
|
|
(28,028 |
) |
|
|
(65,672 |
) |
|
|
(13,256 |
) |
|
|
(142,864 |
) |
|
|
67,035 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
and dividend income |
|
|
1,700 |
|
|
|
1,338 |
|
|
|
778 |
|
|
|
4,028 |
|
|
|
2,310 |
|
Interest
expense |
|
|
(6,364 |
) |
|
|
(6,084 |
) |
|
|
(6,407 |
) |
|
|
(17,503 |
) |
|
|
(16,652 |
) |
Other |
|
|
(911 |
) |
|
|
174 |
|
|
|
534 |
|
|
|
(350 |
) |
|
|
926 |
|
|
|
|
(5,575 |
) |
|
|
(4,572 |
) |
|
|
(5,095 |
) |
|
|
(13,825 |
) |
|
|
(13,416 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations before income taxes |
|
|
(33,603 |
) |
|
|
(70,244 |
) |
|
|
(18,351 |
) |
|
|
(156,689 |
) |
|
|
53,619 |
|
Income tax
provision |
|
|
(10,478 |
) |
|
|
(21,771 |
) |
|
|
2,842 |
|
|
|
(50,537 |
) |
|
|
33,740 |
|
Income (loss) from
continuing operations |
|
|
(23,125 |
) |
|
|
(48,473 |
) |
|
|
(21,193 |
) |
|
|
(106,152 |
) |
|
|
19,879 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
discontinued operations, before income taxes |
|
|
3,223 |
|
|
|
(94 |
) |
|
|
2,193 |
|
|
|
2,705 |
|
|
|
2,241 |
|
Income tax
provision |
|
|
1,897 |
|
|
|
251 |
|
|
|
2,200 |
|
|
|
2,233 |
|
|
|
6,113 |
|
Income (loss) from
discontinued operations |
|
|
1,326 |
|
|
|
(345 |
) |
|
|
(7 |
) |
|
|
472 |
|
|
|
(3,872 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
(LOSS) |
|
$ |
(21,799 |
) |
|
$ |
(48,818 |
) |
|
$ |
(21,200 |
) |
|
$ |
(105,680 |
) |
|
$ |
16,007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) from continuing operations |
|
$ |
(0.22 |
) |
|
$ |
(0.45 |
) |
|
$ |
(0.20 |
) |
|
$ |
(0.99 |
) |
|
$ |
0.18 |
|
Income
(loss) from discontinued operations |
|
$ |
0.01 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(0.04 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) |
|
$ |
(0.21 |
) |
|
$ |
(0.45 |
) |
|
$ |
(0.20 |
) |
|
$ |
(0.99 |
) |
|
$ |
0.14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) from continuing operations |
|
$ |
(0.22 |
) |
|
$ |
(0.45 |
) |
|
$ |
(0.20 |
) |
|
$ |
(0.99 |
) |
|
$ |
0.17 |
|
Income
(loss) from discontinued operations |
|
$ |
0.01 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(0.04 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) |
|
$ |
(0.21 |
) |
|
$ |
(0.45 |
) |
|
$ |
(0.20 |
) |
|
$ |
(0.99 |
) |
|
$ |
0.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
108,572 |
|
|
|
108,565 |
|
|
|
108,047 |
|
|
|
108,470 |
|
|
|
107,970 |
|
Diluted |
|
|
108,572 |
|
|
|
108,565 |
|
|
|
108,047 |
|
|
|
108,470 |
|
|
|
108,523 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HELMERICH &
PAYNE, INC. |
Unaudited |
(in thousands) |
|
|
|
|
|
|
|
|
|
June 30 |
|
September 30 |
CONSOLIDATED CONDENSED BALANCE SHEETS |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
572,787 |
|
$ |
905,561 |
Short-term investments |
|
|
39,894 |
|
|
44,148 |
Other
current assets |
|
|
637,700 |
|
|
622,913 |
Current
assets of discontinued operations |
|
|
7 |
|
|
64 |
Total
current assets |
|
|
1,250,388 |
|
|
1,572,686 |
Investments |
|
|
76,986 |
|
|
84,955 |
Net
property, plant, and equipment |
|
|
5,062,914 |
|
|
5,144,733 |
Other
assets |
|
|
123,603 |
|
|
29,645 |
|
|
|
|
|
|
|
TOTAL
ASSETS |
|
$ |
6,513,891 |
|
$ |
6,832,019 |
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
Current
liabilities |
|
$ |
333,849 |
|
$ |
330,061 |
Current
liabilities of discontinued operations |
|
|
80 |
|
|
59 |
Total
current liabilities |
|
|
333,929 |
|
|
330,120 |
Non-current liabilities |
|
|
1,434,196 |
|
|
1,445,237 |
Non-current liabilities of discontinued operations |
|
|
3,225 |
|
|
3,890 |
Long-term
debt less unamortized discount and debt issuance costs |
|
|
492,637 |
|
|
491,847 |
Total
shareholders’ equity |
|
|
4,249,904 |
|
|
4,560,925 |
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
$ |
6,513,891 |
|
$ |
6,832,019 |
|
|
|
|
|
|
|
HELMERICH &
PAYNE, INC. |
Unaudited |
(in thousands) |
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
June 30 |
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS |
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
OPERATING
ACTIVITIES: |
|
|
|
|
|
|
Net
income (loss) |
|
$ |
(105,680 |
) |
|
$ |
16,007 |
|
Adjustment for (income) loss from discontinued operations |
|
|
(472 |
) |
|
|
3,872 |
|
Income
(loss) from continuing operations |
|
|
(106,152 |
) |
|
|
19,879 |
|
Depreciation |
|
|
431,667 |
|
|
|
422,336 |
|
Asset
impairment charge |
|
|
— |
|
|
|
6,250 |
|
Changes
in assets and liabilities |
|
|
(97,040 |
) |
|
|
153,624 |
|
Income
from asset sales |
|
|
(17,593 |
) |
|
|
(7,820 |
) |
Other |
|
|
25,367 |
|
|
|
21,071 |
|
Net cash
provided by operating activities from continuing operations |
|
|
236,249 |
|
|
|
615,340 |
|
Net cash
provided by (used in) operating activities from discontinued
operations |
|
|
(115 |
) |
|
|
70 |
|
Net cash provided by operating activities |
|
|
236,134 |
|
|
|
615,410 |
|
|
|
|
|
|
|
|
INVESTING
ACTIVITIES: |
|
|
|
|
|
|
Capital
expenditures |
|
|
(300,275 |
) |
|
|
(219,549 |
) |
Purchase
of short-term investments |
|
|
(48,958 |
) |
|
|
(36,958 |
) |
Payment
for acquisition of business, net of cash acquired |
|
|
(70,416 |
) |
|
|
— |
|
Proceeds
from sale of short-term investments |
|
|
53,150 |
|
|
|
32,681 |
|
Proceeds
from asset sales |
|
|
17,921 |
|
|
|
12,804 |
|
Net cash used in investing activities |
|
|
(348,578 |
) |
|
|
(211,022 |
) |
|
|
|
|
|
|
|
FINANCING
ACTIVITIES: |
|
|
|
|
|
|
Debt
issuance costs |
|
|
— |
|
|
|
(32 |
) |
Dividends
paid |
|
|
(229,061 |
) |
|
|
(224,040 |
) |
Exercise
of stock options, net of tax withholding |
|
|
10,458 |
|
|
|
483 |
|
Tax
withholdings related to net share settlements of restricted
stock |
|
|
(5,848 |
) |
|
|
(3,912 |
) |
Excess
tax benefit from stock-based compensation |
|
|
4,121 |
|
|
|
761 |
|
Net cash used in financing activities |
|
|
(220,330 |
) |
|
|
(226,740 |
) |
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents |
|
|
(332,774 |
) |
|
|
177,648 |
|
Cash and cash
equivalents, beginning of period |
|
|
905,561 |
|
|
|
729,384 |
|
Cash and cash
equivalents, end of period |
|
$ |
572,787 |
|
|
$ |
907,032 |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
June 30 |
|
March 31 |
|
June 30 |
|
June 30 |
|
SEGMENT REPORTING |
|
2017 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except days and per day amounts) |
|
U.S. LAND
OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
405,516 |
|
|
$ |
330,967 |
|
|
$ |
285,028 |
|
|
$ |
1,000,119 |
|
|
$ |
1,004,116 |
|
|
Direct operating
expenses |
|
|
277,372 |
|
|
|
238,249 |
|
|
|
122,694 |
|
|
|
686,227 |
|
|
|
460,119 |
|
|
General and
administrative expense |
|
|
13,347 |
|
|
|
12,573 |
|
|
|
14,221 |
|
|
|
37,562 |
|
|
|
38,790 |
|
|
Depreciation |
|
|
122,777 |
|
|
|
131,995 |
|
|
|
116,061 |
|
|
|
367,048 |
|
|
|
355,102 |
|
|
Asset impairment
charge |
|
|
— |
|
|
|
— |
|
|
|
6,250 |
|
|
|
— |
|
|
|
6,250 |
|
|
Segment operating
income (loss) |
|
$ |
(7,980 |
) |
|
$ |
(51,850 |
) |
|
$ |
25,802 |
|
|
$ |
(90,718 |
) |
|
$ |
143,855 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue days |
|
|
16,577 |
|
|
|
13,166 |
|
|
|
7,483 |
|
|
|
39,527 |
|
|
|
29,029 |
|
|
Average rig revenue per
day |
|
$ |
21,986 |
|
|
$ |
22,654 |
|
|
$ |
35,474 |
|
|
$ |
22,902 |
|
|
$ |
32,251 |
|
|
Average rig expense per
day |
|
$ |
14,256 |
|
|
$ |
15,612 |
|
|
$ |
13,780 |
|
|
$ |
14,942 |
|
|
$ |
13,532 |
|
|
Average rig margin per
day |
|
$ |
7,730 |
|
|
$ |
7,042 |
|
|
$ |
21,694 |
|
|
$ |
7,960 |
|
|
$ |
18,719 |
|
|
Rig utilization |
|
|
52 |
|
% |
|
42 |
|
% |
|
24 |
|
% |
|
42 |
|
% |
|
31 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OFFSHORE
OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
33,711 |
|
|
$ |
36,235 |
|
|
$ |
30,492 |
|
|
$ |
103,758 |
|
|
$ |
106,697 |
|
|
Direct operating
expenses |
|
|
23,656 |
|
|
|
26,023 |
|
|
|
24,249 |
|
|
|
72,524 |
|
|
|
81,607 |
|
|
General and
administrative expense |
|
|
969 |
|
|
|
902 |
|
|
|
975 |
|
|
|
2,787 |
|
|
|
2,674 |
|
|
Depreciation |
|
|
2,630 |
|
|
|
3,398 |
|
|
|
3,184 |
|
|
|
9,295 |
|
|
|
9,311 |
|
|
Segment operating
income |
|
$ |
6,456 |
|
|
$ |
5,912 |
|
|
$ |
2,084 |
|
|
$ |
19,152 |
|
|
$ |
13,105 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue days |
|
|
546 |
|
|
|
595 |
|
|
|
637 |
|
|
|
1,785 |
|
|
|
2,064 |
|
|
Average rig revenue per
day |
|
$ |
35,644 |
|
|
$ |
36,006 |
|
|
$ |
25,568 |
|
|
$ |
34,204 |
|
|
$ |
27,086 |
|
|
Average rig expense per
day |
|
$ |
24,141 |
|
|
$ |
25,189 |
|
|
$ |
18,823 |
|
|
$ |
23,300 |
|
|
$ |
19,721 |
|
|
Average rig margin per
day |
|
$ |
11,503 |
|
|
$ |
10,817 |
|
|
$ |
6,745 |
|
|
$ |
10,904 |
|
|
$ |
7,365 |
|
|
Rig utilization |
|
|
75 |
|
% |
|
77 |
|
% |
|
78 |
|
% |
|
77 |
|
% |
|
84 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTERNATIONAL
LAND OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
55,075 |
|
|
$ |
34,757 |
|
|
$ |
47,983 |
|
|
$ |
157,863 |
|
|
$ |
171,529 |
|
|
Direct operating
expenses |
|
|
35,006 |
|
|
|
32,181 |
|
|
|
38,230 |
|
|
|
120,537 |
|
|
|
140,351 |
|
|
General and
administrative expense |
|
|
714 |
|
|
|
920 |
|
|
|
772 |
|
|
|
2,303 |
|
|
|
2,377 |
|
|
Depreciation |
|
|
14,428 |
|
|
|
12,633 |
|
|
|
13,972 |
|
|
|
40,248 |
|
|
|
42,725 |
|
|
Segment operating
income (loss) |
|
$ |
4,927 |
|
|
$ |
(10,977 |
) |
|
$ |
(4,991 |
) |
|
$ |
(5,225 |
) |
|
$ |
(13,924 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue days |
|
|
1,633 |
|
|
|
870 |
|
|
|
1,274 |
|
|
|
3,660 |
|
|
|
3,992 |
|
|
Average rig revenue per
day |
|
$ |
32,708 |
|
|
$ |
37,340 |
|
|
$ |
34,693 |
|
|
$ |
41,134 |
|
|
$ |
39,382 |
|
|
Average rig expense per
day |
|
$ |
19,645 |
|
|
$ |
33,649 |
|
|
$ |
26,156 |
|
|
$ |
30,328 |
|
|
$ |
29,050 |
|
|
Average rig margin per
day |
|
$ |
13,063 |
|
|
$ |
3,691 |
|
|
$ |
8,537 |
|
|
$ |
10,806 |
|
|
$ |
10,332 |
|
|
Rig utilization |
|
|
47 |
|
% |
|
25 |
|
% |
|
37 |
|
% |
|
35 |
|
% |
|
38 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating statistics exclude the effects of offshore platform
management contracts, gains and losses from translation of foreign
currency transactions, and do not include reimbursements of
“out-of-pocket” expenses in revenue per day, expense per day and
margin calculations.
Reimbursed amounts were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Land
Operations |
|
$ |
41,059 |
|
$ |
32,704 |
|
$ |
19,593 |
|
$ |
94,861 |
|
$ |
67,915 |
Offshore
Operations |
|
$ |
5,181 |
|
$ |
6,066 |
|
$ |
5,270 |
|
$ |
15,678 |
|
$ |
17,687 |
International Land
Operations |
|
$ |
1,663 |
|
$ |
2,272 |
|
$ |
3,784 |
|
$ |
7,312 |
|
$ |
14,316 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating income for all segments is a non-GAAP
financial measure of the Company’s performance, as it excludes
general and administrative expenses, corporate depreciation, income
from asset sales and other corporate income and expense. The
Company considers segment operating income to be an important
supplemental measure of operating performance for presenting trends
in the Company’s core businesses. This measure is used by the
Company to facilitate period-to-period comparisons in operating
performance of the Company’s reportable segments in the aggregate
by eliminating items that affect comparability between periods. The
Company believes that segment operating income is useful to
investors because it provides a means to evaluate the operating
performance of the segments and the Company on an ongoing basis
using criteria that are used by our internal decision makers.
Additionally, it highlights operating trends and aids analytical
comparisons. However, segment operating income has limitations and
should not be used as an alternative to operating income or loss, a
performance measure determined in accordance with GAAP, as it
excludes certain costs that may affect the Company’s operating
performance in future periods.
The following table reconciles operating income per the
information above to income (loss) from continuing operations
before income taxes as reported on the Consolidated Statements of
Operations (in thousands).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
June 30 |
|
March 31 |
|
June 30 |
|
June 30 |
|
|
2017 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Operating
income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Land |
|
$ |
(7,980 |
) |
|
$ |
(51,850 |
) |
|
$ |
25,802 |
|
|
$ |
(90,718 |
) |
|
$ |
143,855 |
|
Offshore |
|
|
6,456 |
|
|
|
5,912 |
|
|
|
2,084 |
|
|
|
19,152 |
|
|
|
13,105 |
|
International Land |
|
|
4,927 |
|
|
|
(10,977 |
) |
|
|
(4,991 |
) |
|
|
(5,225 |
) |
|
|
(13,924 |
) |
Other |
|
|
(1,992 |
) |
|
|
(1,134 |
) |
|
|
(2,186 |
) |
|
|
(5,175 |
) |
|
|
(4,839 |
) |
Segment operating income (loss) |
|
$ |
1,411 |
|
|
$ |
(58,049 |
) |
|
$ |
20,709 |
|
|
$ |
(81,966 |
) |
|
$ |
138,197 |
|
Corporate general and
administrative |
|
|
(27,860 |
) |
|
|
(19,124 |
) |
|
|
(30,528 |
) |
|
|
(68,019 |
) |
|
|
(68,540 |
) |
Other depreciation |
|
|
(3,852 |
) |
|
|
(3,822 |
) |
|
|
(4,456 |
) |
|
|
(11,751 |
) |
|
|
(12,037 |
) |
Inter-segment
elimination |
|
|
411 |
|
|
|
434 |
|
|
|
472 |
|
|
|
1,279 |
|
|
|
1,595 |
|
Income from asset
sales |
|
|
1,862 |
|
|
|
14,889 |
|
|
|
547 |
|
|
|
17,593 |
|
|
|
7,820 |
|
Operating income (loss) |
|
$ |
(28,028 |
) |
|
$ |
(65,672 |
) |
|
$ |
(13,256 |
) |
|
$ |
(142,864 |
) |
|
$ |
67,035 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
and dividend income |
|
|
1,700 |
|
|
|
1,338 |
|
|
|
778 |
|
|
|
4,028 |
|
|
|
2,310 |
|
Interest
expense |
|
|
(6,364 |
) |
|
|
(6,084 |
) |
|
|
(6,407 |
) |
|
|
(17,503 |
) |
|
|
(16,652 |
) |
Other |
|
|
(911 |
) |
|
|
174 |
|
|
|
534 |
|
|
|
(350 |
) |
|
|
926 |
|
Total
other income (expense) |
|
|
(5,575 |
) |
|
|
(4,572 |
) |
|
|
(5,095 |
) |
|
|
(13,825 |
) |
|
|
(13,416 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
from continuing operations before income taxes |
|
$ |
(33,603 |
) |
|
$ |
(70,244 |
) |
|
$ |
(18,351 |
) |
|
$ |
(156,689 |
) |
|
$ |
53,619 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTARY STATISTICAL
INFORMATION
The tables and information that follow are additional
statistical information that may also help provide further clarity
and insight into the operations of the Company.
|
SELECTED STATISTICAL & OPERATIONAL
HIGHLIGHTS |
(Used to determine adjusted per revenue day statistics,
which is a non-GAAP measure) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
June 30 |
|
March 31 |
|
|
2017 |
|
2017 |
|
|
|
|
|
|
|
|
|
(in dollars per revenue day) |
U.S. Land
Operations |
|
|
|
|
|
|
Early contract
termination revenues |
|
$ |
310 |
|
$ |
453 |
Total impact
per revenue day: |
|
$ |
310 |
|
$ |
453 |
|
|
|
|
|
|
|
U.S. LAND RIG COUNTS & MARKETABLE
FLEET STATISTICS |
|
|
|
|
|
|
|
|
|
|
|
July 27 |
|
June 30 |
|
March 31 |
|
Q3FY17 |
|
|
2017 |
|
2017 |
|
2017 |
|
Average |
U.S. Land
Operations |
|
|
|
|
|
|
|
|
Term Contract Rigs |
|
98 |
|
99 |
|
88 |
|
95.5 |
Spot Contract Rigs |
|
91 |
|
91 |
|
79 |
|
86.7 |
Total Rigs
Generating Revenue Days |
|
189 |
|
190 |
|
167 |
|
182.2 |
Other Contracted
Rigs |
|
— |
|
— |
|
1 |
|
0.6 |
Total
Contracted Rigs |
|
189 |
|
190 |
|
168 |
|
182.8 |
Idle or Other Rigs |
|
161 |
|
160 |
|
182 |
|
167.2 |
Total
Marketable Fleet |
|
350 |
|
350 |
|
350 |
|
350.0 |
|
|
|
|
|
|
|
|
|
H&P GLOBAL FLEET UNDER TERM CONTRACT
STATISTICS |
Number of Rigs Already Under Long-Term
Contracts(1) |
|
(Estimated Quarterly Average — as of
7/27/17) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 |
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Q1 |
|
Q2 |
Segment |
|
FY17 |
|
FY18 |
|
FY18 |
|
FY18 |
|
FY18 |
|
FY19 |
|
FY19 |
U.S. Land
Operations |
|
95.3 |
|
83.0 |
|
53.7 |
|
43.3 |
|
33.4 |
|
27.8 |
|
20.4 |
International Land
Operations |
|
10.0 |
|
10.0 |
|
10.0 |
|
10.0 |
|
10.0 |
|
10.0 |
|
10.0 |
Offshore
Operations |
|
2.0 |
|
2.0 |
|
2.0 |
|
1.9 |
|
0.3 |
|
— |
|
— |
Total |
|
107.3 |
|
95.0 |
|
65.7 |
|
55.2 |
|
43.8 |
|
37.8 |
|
30.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_______________________(1) The above term contract coverage
excludes long-term contracts for which the Company received early
contract termination notifications as of 7/27/17. Given
notifications as of 7/27/17, the Company expects to generate
approximately $5 million in the fourth fiscal quarter of 2017 and
approximately $15 million thereafter from early terminations
corresponding to long-term contracts and related to its U.S. Land
segment. All of the above rig contracts include provisions for
early termination fees.
Contact: Investor Relations
investor.relations@hpinc.com
(918) 588‑5190
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