TULSA, Okla., Jan. 31 /PRNewswire-FirstCall/ -- Helmerich &
Payne, Inc. (NYSE:HP) reported net income of $107,830,000 ($1.02
per diluted share) from operating revenues of $456,663,000 for its
first fiscal quarter ended December 31, 2007, compared with net
income of $110,786,000 ($1.06 per diluted share) from operating
revenues of $386,399,000 during last year's first fiscal quarter
ended December 31, 2006. Included in this year's first quarter net
income are after-tax gains from insurance proceeds and the sale of
drilling equipment of $3,614,000 ($.03 per diluted share). Last
year's first quarter net income included $16,490,000 ($.16 per
diluted share) of gains from the sale of portfolio securities and
drilling equipment. The Company's operating income for the quarter
reached a new record level. The continued growth was driven by the
Company's U.S. land segment, where revenue days and average daily
rig revenue and margins were up again sequentially. Strong results
in the U.S. land segment more than offset operating income
reductions in the Company's offshore and international land
segments. Helmerich & Payne, Inc. also announced today that it
has plans to construct eleven additional FlexRigs(R)* to operate
under long-term contracts for three exploration and production
companies. The Company has signed three-year term contracts to
operate four new FlexRigs in the U.S., and has also signed letters
of intent to operate the remaining seven new FlexRigs in Latin
American locations. The four new FlexRigs to operate in the U.S.
are scheduled to be deployed in the Barnett Shale during this
year's third fiscal quarter. Two of these new land rigs will be
working for Quicksilver Resources Inc. and two for Carrizo Oil
& Gas Inc. The seven new international FlexRigs are scheduled
to be completed and mobilized at the rate of one per month
beginning in the fourth fiscal quarter of 2008. The Company expects
to finalize contracts for these seven new international rigs with
the customer within the next thirty days. Five of the seven rigs
are expected to operate under five-year term contracts and the
remaining two under three-year term contracts. The four new FlexRig
commitments in the U.S. and the seven international FlexRigs
subject to letters of intent bring to 94 the total number of
long-term new build orders announced since March 2005. Similar to
the previously announced new build contracts, the Company projects
attractive returns on the investment required for these new
operations. Of the 94 new FlexRigs, 80 have already been completed
bringing the current number of FlexRigs in the Company's fleet to
129. Including all 94 new build orders, FlexRigs are expected to
represent almost 70% of the Company's global land fleet by the end
of calendar 2008. Company President and C.E.O. Hans Helmerich
commented, "We are pleased with the Company's steady progress in
this softer and uncertain market. While spot market dayrates remain
under pressure, we continue to receive interest in newly
constructed FlexRigs as reports of their performance in the field
prove their value to our customers. We're proud of the
accomplishments of our people throughout the Company who have
helped manage the significant growth we've experienced over the
past two years. We believe this organizational strength uniquely
positions us to capture additional market share opportunities in an
industry that continues to retool in pursuit of further
efficiencies in both domestic and international markets." Segment
operating income for U.S. land operations was $143,841,000 for this
year's first quarter, compared with $118,408,000 for last year's
first quarter and $124,191,000 for last year's fourth quarter. As
the Company deployed more newly constructed rigs, revenue days
increased by 614 days, or 4.6% from the fourth fiscal quarter of
2007 to the first fiscal quarter of 2008. Additionally, rig margins
per day rose by $890 (7.3%), from $12,221 during the fourth quarter
of fiscal 2007, to $13,111 during the first quarter of fiscal 2008.
The sequential margin improvement was a result of an increase in
average rig revenue per day of $340 and a reduction in average rig
expense per day of $550. U.S. land rig utilization was 95% in both
the first quarter of 2008 and fourth quarter of 2007, compared with
98% during last year's first quarter. Segment operating income for
the Company's offshore operations was $4,114,000 for this year's
first quarter, compared with $7,380,000 for last year's first
quarter and $6,343,000 for last year's fourth quarter. Rig
utilization in the offshore segment decreased sequentially from 59%
to 56% during the quarter ending December 31, 2007, and is expected
to slightly increase during the current second fiscal quarter. Five
of nine platform rigs in the Company's offshore segment are
currently active and three additional platform rigs are being
mobilized and are expected to be active within the next few months.
As a result, the Company expects offshore segment operating income
to be flat from the first to the second fiscal quarter, but
increase during the third quarter. The ninth rig is currently
undergoing capital improvement and is expected to return to work
with a contract in the second quarter of fiscal 2009. Segment
operating income for the Company's international land operations
was $21,156,000 for this year's first quarter, compared with
$24,074,000 for last year's first quarter and $32,358,000 for last
year's fourth quarter. Although this year's first quarter rig
activity was relatively flat compared to the previous quarter,
average revenue per rig day was down by $3,325. Much of the
sequential revenue decline was attributable to a non-recurring
early-termination fee earned during the fourth quarter of 2007 that
favorably impacted revenue per day by approximately $3,000 during
that quarter. This year's first quarter average daily rig operating
cost rose by $2,103 per rig day, compared to last year's fourth
quarter, primarily as a result of increases in labor and supply
costs in Venezuela, and high well-to-well moving activity in
Argentina. Average international rig utilization remained flat at
81% during the first quarter ending December 31, 2007, and is now
expected to decline by approximately 10% during the second fiscal
quarter. As a result, it is anticipated that second quarter
international land segment operating income will be slightly down
from the first quarter. Helmerich & Payne, Inc. is primarily a
contract drilling company. As of January 31, 2008, the Company's
existing fleet included 167 U.S. land rigs, 27 international land
rigs and nine offshore platform rigs. Helmerich & Payne, Inc.'s
conference call/webcast is scheduled to begin this morning at 11:00
a.m. ET (10:00 a.m. CT) and can be accessed at
http://www.hpinc.com/ under Investors. If you are unable to
participate during the live webcast, the call will be archived for
a year on H&P's website indicated above. Statements in this
release and information disclosed in the conference call and
webcast that are "forward-looking statements" within the meaning of
the Securities Act of 1933 and the Securities Exchange Act of 1934
are based on current expectations and assumptions that are subject
to risks and uncertainties. For information regarding risks and
uncertainties associated with the Company's business, please refer
to the "Risk Factors" and "Management's Discussion & Analysis
of Results of Operations and Financial Condition" 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. * FlexRig(R) is a registered trademark
of Helmerich & Payne, Inc. HELMERICH & PAYNE, INC.
Unaudited (in thousands, except per share data) Three Months Ended
September 30 December 31 CONSOLIDATED STATEMENTS OF INCOME 2007
2007 2006 Operating revenues: Drilling - U.S. Land $332,397
$347,644 $269,900 Drilling - Offshore 29,065 27,281 35,754 Drilling
- International 85,130 78,602 77,846 Real Estate 2,857 3,136 2,899
449,449 456,663 386,399 Operating costs and expenses: Operating
costs 234,306 235,795 199,467 Depreciation 44,814 43,984 30,151
General and administrative 11,900 13,903 10,613 Gain from
involuntary conversion of long-lived assets (5,591) (4,810) -
Income from asset sales (2,689) (842) (486) 282,740 288,030 239,745
Operating income 166,709 168,633 146,654 Other income (expense):
Interest and dividend income 994 1,115 1,244 Interest expense
(4,034) (4,831) (919) Gain on sale of investment securities 13,646
130 26,337 Other (1,782) (616) 64 8,824 (4,202) 26,726 Income
before income taxes and equity in income of affiliates 175,533
164,431 173,380 Income tax provision 62,588 60,146 64,098 Equity in
income of affiliates net of income taxes 3,465 3,545 1,504 NET
INCOME $116,410 $107,830 $110,786 Earnings per common share: Basic
$ 1.13 $ 1.04 $ 1.07 Diluted $ 1.10 $ 1.02 $ 1.06 Average common
shares outstanding: Basic 103,475 103,509 103,312 Diluted 105,498
105,615 104,776 HELMERICH & PAYNE, INC. Unaudited (in
thousands) CONSOLIDATED CONDENSED BALANCE SHEETS 12/31/07 9/30/07
ASSETS Cash and cash equivalents $ 97,507 $ 89,215 Other current
assets 443,775 409,749 Total current assets 541,282 498,964
Investments 222,971 223,360 Net property, plant, and equipment
2,283,982 2,152,616 Other assets 10,554 10,429 TOTAL ASSETS
$3,058,789 $2,885,369 LIABILITIES AND SHAREHOLDERS' EQUITY Total
current liabilities 231,199 $ 226,612 Total noncurrent liabilities
428,571 398,241 Long-term notes payable 485,000 445,000 Total
shareholders' equity 1,914,019 1,815,516 TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $3,058,789 $2,885,369 HELMERICH & PAYNE,
INC. Unaudited (in thousands) Three Months Ended December 31
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS 2007 2006 OPERATING
ACTIVITIES: Net income $107,830 $110,786 Depreciation 43,984 30,151
Changes in assets and liabilities (32,292) 24,157 Gain from
involuntary conversion of long-lived assets (4,810) - Gain on sale
of assets and investment securities (842) (26,685) Other (2,979)
(591) Net cash provided by operating activities 110,891 137,818
INVESTING ACTIVITIES: Capital expenditures (149,844) (187,484)
Insurance proceeds from involuntary conversion of long-lived assets
8,500 - Proceeds from sale of assets and investments 1,386 85,616
Net cash used in investing activities (139,958) (101,868) FINANCING
ACTIVITIES: Dividends paid (4,668) (4,655) Repurchase of common
stock - (17,621) Net decrease in bank overdraft - (14,943) Proceeds
from exercise of stock options 1,365 471 Net proceeds from
short-term notes and long-term debt 40,000 40,000 Excess tax
benefit from stock-based compensation 662 33 Net cash provided by
financing activities 37,359 3,285 Net increase in cash and cash
equivalents 8,292 39,235 Cash and cash equivalents, beginning of
period 89,215 33,853 Cash and cash equivalents, end of period $
97,507 $ 73,088 SEGMENT REPORTING Three Months Ended September 30,
December 31, 2007 2007 2006 (in thousands except days and per day
amounts) U.S. LAND OPERATIONS Revenues $332,397 $347,644 $269,900
Direct operating expenses 170,311 165,565 127,357 General and
administrative expense 3,796 4,394 3,452 Depreciation 34,099 33,844
20,683 Segment operating income $124,191 $143,841 $118,408 Revenue
days 13,263 13,877 10,548 Average rig revenue per day $ 23,666 $
24,006 $ 24,231 Average rig expense per day $ 11,445 $ 10,895 $
10,717 Average rig margin per day $ 12,221 $ 13,111 $ 13,514 Rig
utilization 95% 95% 98% OFFSHORE OPERATIONS Revenues $ 29,065 $
27,281 $ 35,754 Direct operating expenses 18,961 19,211 24,138
General and administrative expense 959 1,098 1,458 Depreciation
2,802 2,858 2,778 Segment operating income $ 6,343 $ 4,114 $ 7,380
Revenue days 485 460 588 Average rig revenue per day $ 39,160 $
41,833 $ 38,824 Average rig expense per day $ 20,347 $ 27,160 $
23,901 Average rig margin per day $ 18,813 $ 14,673 $ 14,923 Rig
utilization 59% 56% 71% SEGMENT REPORTING Three Months Ended
September 30, December 31, 2007 2007 2006 (in thousands except days
and per day amounts) INTERNATIONAL LAND OPERATIONS Revenues $
85,130 $ 78,602 $ 77,846 Direct operating expenses 45,556 50,782
47,660 General and administrative expense 972 938 563 Depreciation
6,244 5,726 5,549 Segment operating income $ 32,358 $ 21,156 $
24,074 Revenue days 2,023 1,981 2,366 Average rig revenue per day $
37,847 $ 34,522 $ 27,690 Average rig expense per day $ 18,250 $
20,353 $ 14,878 Average rig margin per day $ 19,597 $ 14,169 $
12,812 Rig utilization 81% 81% 96% 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. A management contract
for a customer-owned platform rig working in an international
location was moved from the International segment to the Offshore
segment in the fourth quarter of fiscal 2007. The amounts for
Offshore and International land segments for the three months ended
December 31, 2006 have been restated to reflect this change.
Reimbursed amounts were as follows: U.S. Land Operations $ 18,514 $
14,277 $ 14,309 Offshore Operations $ 3,145 $ 2,862 $ 3,704
International Land Operations $ 8,563 $ 10,213 $ 12,156 REAL ESTATE
Revenues $ 2,857 $ 3,136 $ 2,899 Direct operating expenses 910 985
843 Depreciation 653 627 589 Segment operating income $ 1,294 $
1,524 $ 1,467 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 before income
taxes and equity in income of affiliates as reported on the
Consolidated Statements of Income (in thousands). Three Months
Ended September 30, December 31, 2007 2007 2006 Operating income
U.S. Land $124,191 $143,841 $118,408 Offshore 6,343 4,114 7,380
International Land 32,358 21,156 24,074 Real Estate 1,294 1,524
1,467 Segment operating income $164,186 $170,635 $151,329 Corporate
general & administrative (6,173) (7,473) (5,140) Other
depreciation (1,016) (929) (552) Inter-segment elimination 1,432
748 531 Gain from involuntary conversion of long-lived assets 5,591
4,810 - Income from asset sales 2,689 842 486 Operating income
$166,709 $168,633 $146,654 Other income (expense): Interest and
dividend income 994 1,115 1,244 Interest expense (4,034) (4,831)
(919) Gain on sale of investment securities 13,646 130 26,337 Other
(1,782) (616) 64 Total other income (expense) 8,824 (4,202) 26,726
Income before income taxes and equity in income of affiliates
$175,533 $164,431 $173,380 DATASOURCE: Helmerich & Payne, Inc.
CONTACT: Juan Pablo Tardio of Helmerich & Payne, Inc.,
+1-918-588-5383 Web site: http://www.hpinc.com/
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