Helmerich & Payne, Inc. Responds to Volatile Market Conditions
March 23 2020 - 8:00AM
Business Wire
Helmerich & Payne, Inc. (“H&P” or the “Company”)
(NYSE:HP) today announced it is implementing additional cost
controls and re-evaluating its capital allocation to proactively
preserve its strong financial position in response to a combination
of a weakened commodity price environment, broader uncertainties
related to COVID-19 and the resulting high market volatility.
Concurrently, due to the rapidly evolving market conditions over
the past few weeks, the Company feels that it is appropriate to
withdraw its fiscal second quarter guidance, which was previously
provided on February 3, 2020.
The Company regularly reviews its costs, both operational and
SG&A, as well as capital expenditures and is doing so now in
light of the precipitous fall in the active rig count following the
recent OPEC meeting in mid-March 2020 and the increasing concerns
over the ultimate impact of COVID-19, which together manifested in
the lowest oil prices in 20 years this past week. H&P is
reassessing its cost structure based on newly developing rig
activity levels and will provide updated guidance as part of the
upcoming fiscal second quarter results process.
In addition to these measures, the Company and its Board of
Directors are currently reassessing optimal cash deployment plans,
including the levels of future dividends, in order to balance the
Company’s commitment to shareholder returns while maintaining its
ongoing financial strength. At the same time, H&P remains
committed to paying the previously announced $0.71 per share
dividend on June 1, 2020, to stockholders of record at the close of
business May 11, 2020.
“The preservation of a strong financial position for the Company
is paramount, and one of the primary reasons we have been in
business for 100 years,” said John Lindsay, President and Chief
Executive Officer. “H&P is deeply committed to returning cash
to shareholders as demonstrated by our long-standing and 48-year
increasing dividend. We have always done what we believe is in the
best interest of our shareholders for the long-term, so the
decision to re-evaluate the current level of shareholder returns at
this time is prudent. Dividends will continue to be a top priority
as the Company re-evaluates its capital allocation options going
forward. Maintaining our conservative capital structure is core to
H&P’s long term success.”
Mark Smith, Senior Vice-President and Chief Financial Officer,
added, “The adverse and abrupt changes in market conditions we have
experienced in these last few weeks have culminated this past week
in being severe enough to cause us to withdraw our previous
guidance for our fiscal second quarter. We are moving forward to
rapidly decrease costs and reduce levels of capital expenditures.
Our balance sheet remains strong, with a debt-to-capitalization of
11% and over $1 billion in liquidity. After repurchasing
approximately 1.5 million shares of common stock recently, we still
have approximately $370 million in cash and short-term investments
on hand as of March 20, 2020. H&P remains very well positioned
to face the challenging times ahead.”
About Helmerich & Payne, Inc.: Founded in 1920,
Helmerich & Payne, Inc. (H&P) (NYSE:HP) is committed to
delivering industry leading drilling productivity and reliability.
H&P operates with the highest level of integrity, safety and
innovation to deliver superior results for our customers and
returns for shareholders. Through its subsidiaries, the Company
designs, fabricates and operates high-performance drilling rigs in
conventional and unconventional plays around the world. H&P
also develops and implements advanced automation, directional
drilling and survey management technologies. For more information,
visit www.hpinc.com.
Forward Looking Statements This release contains
forward-looking statements within the meaning of the securities
laws. Forward-looking statements can be identified by the fact that
they do not relate strictly to historical or current facts. They
often include words or variation of words such as "expect," "look
forward to,” "anticipate," "intend," "plan," "believe," "seek,"
"estimate," "will," "project" or words of similar meaning or other
similar expressions. Forward-looking statements provide
management's current expectations or predictions of future
conditions, events or results. All statements that address events
or developments that we expect or anticipate will occur in the
future are forward-looking statements. They may include estimates
of revenues, market share, income, effective tax rate, earnings per
share, cost savings, capital expenditures, dividends, share
repurchases, liquidity, capital structure or other financial items,
descriptions of management's plans or objectives for future
operations, products or services, or descriptions of assumptions
underlying any of the above. All forward-looking statements speak
only as of the date they are made and reflect the Company's good
faith beliefs, assumptions and expectations, but they are not
guarantees of future performance or events. Furthermore, the
Company disclaims any obligation to publicly update or revise any
forward-looking statement to reflect changes in underlying
assumptions, factors, or expectations, new information, data or
methods, future events or other changes, except as required by
law.
By their nature, forward-looking statements are subject to risks
and uncertainties that could cause actual results to differ
materially from those suggested by the forward-looking statements.
Factors that might cause such differences include, but are not
limited to a variety of economic, competitive and regulatory
factors, many of which are beyond the Company's control, that are
described in our Annual Report on Form 10-K for the fiscal year
ended September 30, 2019 in the sections entitled "Risk Factors”
and “Management’s Discussion & Analysis of Financial Condition
and Results of Operations” and additional factors we may describe
from time to time in other filings with the Securities and Exchange
Commission.
You may get such filings for free at our website at
https://www.hpinc.com/. You should understand that it is not
possible to predict or identify all such factors and, consequently,
you should not consider any such list to be a complete set of all
potential risks or uncertainties.
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version on businesswire.com: https://www.businesswire.com/news/home/20200323005093/en/
IR: Dave Wilson, Director of Investor Relations
918-588-5190 investor.relations@hpinc.com
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