TULSA, Okla., June 24 /PRNewswire-FirstCall/ -- Helmerich &
Payne, Inc. (NYSE: HP) commented on recent media reports that refer
to Venezuelan government authorities affirming that they will seek
to nationalize the Company's 11 rigs in Venezuela. The Company has been in
recent discussions with PDVSA (the Venezuelan national oil company)
in efforts to achieve a mutually beneficial agreement that would
address both PDVSA's desire for the Company's rigs to return to
work and make progress towards collecting unpaid invoices
corresponding to services rendered in prior years. The
Company communicated to PDVSA on numerous occasions that it would
be willing to enter new drilling contracts for drilling work in
Venezuela if and when significant
progress was achieved in terms of such receivable collections and
currency conversion. PDVSA recently informed the Company that
it would be interested in buying the Company's drilling rigs in
Venezuela should the Company not
be willing to return to work without such pre-conditions. The
Company recently offered to sell rig assets to PDVSA. As of
this morning, the Company has not received any notification from
Venezuelan government authorities or from PDVSA regarding
nationalization or expropriation of the Company's rigs or other
assets.
President and CEO Hans Helmerich
commented, "Our dispute with PDVSA has never been very complicated
and our position has remained clear: We simply wanted to be
paid for work already performed. We stated repeatedly we
wanted to return to work, just not for free. We are surprised
by yesterday's announcement only because we have been in ongoing
efforts in a good faith attempt to accommodate a win-win
resolution, including a willingness to sell rigs. We have
worked in Venezuela for 52 years
and wanted to continue under reasonable conditions. At the
same time, Helmerich & Payne has reduced its number of rigs in
Venezuela in half since 1998.
At that point, almost 30% of our land rigs were in that
country, as compared to under 5% of our land rigs today."
As previously reported in the Company's public filings, all 11
Helmerich & Payne rigs that formerly worked for PDVSA completed
their contract obligations during calendar year 2009. Since
then, these conventional land rigs have been idle in Venezuela and remain in our facilities there.
The total invoiced amount by the Company that remains due
from PDVSA as of June 14, 2010, is
valued at approximately $43 million
(U.S. currency equivalent), including approximately $36 million in invoices issued since the Company
changed its revenue recognition to cash basis for its Venezuelan
operation. Also pending resolution is an exchange with PDVSA
of local currency (Bolivar Fuerte) for U.S. dollars as a result of
PDVSA unilaterally paying U.S. dollar invoices (issued in 2007 and
2008) in local currency. Furthermore, since July 22, 2008, the Company has had an outstanding
application with the Venezuelan government requesting approval to
convert local currency cash balances to U.S. dollars for dividend
payment purposes. When and if the Venezuelan government
approves this application, the Company's Venezuelan subsidiary is
expected to remit approximately $14.2
million, adjusted for the January
2010 currency devaluation, as a dividend to its U.S. based
parent.
At May 31, 2010, the Company had
approximately $30 million (U.S.
dollar equivalent) in cash denominated in local currency in
Venezuela. As of the end of
the second fiscal quarter of 2010, the Company's consolidated
balance sheet included approximately $67
million in net book value of long-lived assets comprised of
property, plant and equipment in Venezuela, and approximately $5 million in equipment inventories in that
country. Other less significant current assets and
liabilities related to Venezuela
are also included in the Company's consolidated balance sheet.
For additional details related to the Company's operations
and risks in Venezuela, please
refer to the Company's latest annual report on Form 10-K and to its
latest quarterly report on Form 10-Q.
Helmerich & Payne, Inc. is primarily a contract drilling
company. As of June 8, 2010,
the Company's existing fleet included 214 U.S. land rigs, 39
international land rigs and nine offshore platform rigs.
Statements in this release are "forward-looking statements"
within the meaning of the Securities Act of 1933 and the Securities
Exchange Act of 1934 and 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.
SOURCE Helmerich & Payne, Inc.