Helmerich & Payne, Inc.

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Helmerich & Payne, Inc. Announces Third Quarter Earnings and 20 New FlexRig(R) Contracts

TULSA, Okla., Jul 29, 2011 (GlobeNewswire via COMTEX) -- Helmerich & Payne, Inc. (NYSE:HP) reported income from continuing operations of $109,828,000 ($1.01 per diluted share) from operating revenues of $644,095,000 for its third fiscal quarter ended June 30, 2011, compared to income from continuing operations of $64,883,000 ($0.61 per diluted share) from operating revenues of $483,384,000 during last year's third fiscal quarter ended June 30, 2010. Included in this year's third fiscal quarter income from continuing operations are after-tax gains of $0.01 per share from the sale of portfolio securities and $0.02 per share from the sale of tubulars and other used drilling equipment. Also included in this year's third fiscal quarter income from continuing operations are $0.02 per share of after-tax expenses unrelated to normal operations during the quarter and attributable to the settlement of a lawsuit. Included in income from continuing operations for the third fiscal quarter of 2010 were after-tax gains of $0.01 per share from the sale of tubulars and other used drilling equipment. Net income for the third fiscal quarter of 2011 was $109,826,000 ($1.01 per diluted share), compared to a net loss of $36,715,000 (-$0.34 per diluted share) during last year's third fiscal quarter.

For the nine months ended June 30, 2011, the Company reported income from continuing operations of $313,154,000 ($2.87 per diluted share) from operating revenues of $1,843,143,000 compared with income from continuing operations of $202,790,000 ($1.89 per diluted share) from operating revenues of $1,316,205,000 during the nine months ended June 30, 2010. Included in income from continuing operations for the first nine months of fiscal 2011 are after-tax gains of $0.01 per share from the sale of portfolio securities and $0.06 per share from the sale of tubulars and other used drilling equipment. Also included in income from continuing operations for the first nine months of fiscal 2011 are $0.06 per share of after-tax expenses unrelated to normal operations. Included in income from continuing operations for the first nine months of fiscal 2010 were after-tax gains of $0.03 per share from the sale of tubulars and other used drilling equipment. Net income for the first nine months of fiscal 2011 was $312,766,000 ($2.87 per diluted share), compared to net income of $73,276,000 ($0.68 per diluted share) during the first nine months of fiscal 2010.

Helmerich & Payne, Inc. also announced today that, in addition to the 12 new FlexRig commitments announced earlier this month, the Company has entered into agreements to build and operate 20 additional FlexRigs. These 20 rigs will be built under multi-year term contracts with four exploration and production companies and are scheduled to be completed during fiscal 2012. The names of the customers and other terms were not disclosed.

The Company has now announced commitments during this fiscal year to build a total of 58 new FlexRigs, all under multi-year term contracts with attractive dayrates and economic returns. This represents a 28 percent increase in the number of FlexRigs in the Company's fleet. Including the new builds announced today, 42 remain under construction and are currently being completed at the rate of approximately three FlexRigs per month. In response to the significant increase in demand for FlexRigs, the Company is now planning to increase the production cadence to four FlexRigs per month beginning October 2011.

Consistent with the Company's long standing tradition of innovative leadership, Helmerich & Payne, Inc. also announced today the introduction of the FlexRig5 design, the fifth FlexRig generation. The FlexRig5 is ideally suited for long lateral drilling of multiple wells from a single location, which is increasingly in demand for plays such as unconventional shale reservoirs. The new design preserves the key performance features of H&P's flagship FlexRig3 combined with a bi-directional pad drilling system and equipment capacities suitable for wells in excess of 24,000 feet of measured depth. The FlexRig5 will help the Company expand into new markets as it provides its customers with a broader offering. Upon completion of the announced rig orders, the Company will have produced eleven FlexRig5 rigs.

President and CEO Hans Helmerich commented, "We are pleased with the Company's third quarter results and the announcement of 20 additional rig orders, bringing our quarterly total to 32 new builds. Our introduction of the FlexRig5 reflects our ongoing commitment to innovative design and driving enhanced rig capacity and performance. It promises to deliver all the FlexRig safety, performance and reliability features that our customers have come to rely upon in a greater depth capacity, multi-well pad drilling application."

Segment operating income for U.S. land operations was $176,832,000 for the third fiscal quarter of 2011, compared with $103,138,000 for last year's third fiscal quarter and $164,289,000 for this year's second fiscal quarter. The sequential increase in segment operating income was primarily attributable to increased drilling activity related to the delivery of new build FlexRigs. The Company's quarterly revenue days for the segment increased by approximately six percent to 18,912 revenue days during the third fiscal quarter of 2011, from 17,797 revenue days during the second fiscal quarter of 2011. The corresponding average rig revenue per day also sequentially increased by $330 to $25,970 during the third fiscal quarter of 2011. The $330 increase in average rig revenue per day was largely offset by a $291 increase in average rig expense per day, generating only a slight sequential increase in average rig margin per day, from $13,183 during this year's second fiscal quarter to $13,222 during this year's third fiscal quarter. However, the lawsuit settlement mentioned in the first paragraph (that was unrelated to normal operations during the quarter) resulted in approximately $189 per day that is included in the average rig expense per day of $12,748 during the third fiscal quarter. Rig utilization for the Company's U.S. land segment was 87% for this year's third fiscal quarter, compared with 76% for last year's third fiscal quarter and 85% for this year's second fiscal quarter. At June 30, 2011, the Company's U.S. land segment had 213 contracted rigs and 32 idle rigs. The 213 contracted rigs included 140 rigs under term contracts.

Segment operating income for the Company's offshore operations was $12,944,000 for the third fiscal quarter of 2011, compared with $11,231,000 for last year's third fiscal quarter and $11,476,000 for this year's second fiscal quarter. The sequential increase in segment operating income was primarily a function of a higher average rig margin per day, which was $25,820 for this year's third fiscal quarter as compared to $23,747 for this year's second fiscal quarter.

The Company's international land operations reported a segment operating loss of $624,000 for this year's third fiscal quarter, compared with operating income of $9,893,000 for last year's third fiscal quarter and $2,443,000 for this year's second fiscal quarter. The sequential decline in segment operating income was primarily a function of a lower average rig margin per day, which was $5,353 for this year's third fiscal quarter as compared to $7,106 for this year's second fiscal quarter.

Helmerich & Payne, Inc. is primarily a contract drilling company. As of July 29, 2011, the Company's existing fleet included 249 land rigs in the U.S., 24 international land rigs and nine offshore platform rigs. In addition, the Company is scheduled to complete by the end of fiscal 2012 another 42 new H&P-designed and operated FlexRigs under long-term contracts with customers. Upon completion of these commitments, the Company's global land fleet is expected to have a total of 315 rigs, including 267 FlexRigs.

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 on H&P's website indicated above.

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, 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 & 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. 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.

*FlexRig(R) is a registered trademark of Helmerich & Payne, Inc.


                                   HELMERICH & PAYNE, INC.
                                          Unaudited
                            (in thousands, except per share data)


                                 ----------------------------------  ----------------------

                                         Three Months Ended             Nine Months Ended
                                 ----------------------------------  ----------------------
                                  March 31          June 30                 June 30

  CONSOLIDATED STATEMENTS OF
   OPERATIONS                       2011       2011        2010         2011        2010
  -----------------------------  ---------  ----------  -----------  ----------  ----------

  Operating Revenues:
     Drilling -- U.S. Land       $ 495,459   $ 539,372     $366,989  $1,511,649   $ 976,497
     Drilling -- Offshore           50,586      54,569       53,131     150,022     153,186
     Drilling -- International
      Land                          54,684      46,051       60,045     169,689     177,377

     Other                           3,677       4,103        3,219      11,783       9,145
                                 ---------  ----------  -----------  ----------  ----------

                                   604,406     644,095      483,384   1,843,143   1,316,205
                                 ---------  ----------  -----------  ----------  ----------

  Operating costs and expenses:
     Operating costs, excluding
      depreciation                 340,039     365,586      285,583   1,035,671     742,761
     Depreciation                   76,161      79,109       65,208     228,450     189,418
     General and administrative     24,406      24,071       20,114      68,366      61,296
     Research and development        3,640       4,399        3,254      11,509       8,411

     Income from asset sales       (4,105)     (3,488)      (2,249)    (10,262)     (4,245)
                                 ---------  ----------  -----------  ----------  ----------

                                   440,141     469,677      371,910   1,333,734     997,641
                                 ---------  ----------  -----------  ----------  ----------

  Operating income                 164,265     174,418      111,474     509,409     318,564

  Other income (expense):
     Interest and dividend
      income                           356         903          940       1,573       1,536
     Interest expense              (5,513)     (3,221)      (3,961)    (13,185)    (12,693)
     Gain on sale of investment
      securities                        --         913           --         913          --

     Other                             232       (190)          215         208         253
                                 ---------  ----------  -----------  ----------  ----------

                                   (4,925)     (1,595)      (2,806)    (10,491)    (10,904)
                                 ---------  ----------  -----------  ----------  ----------

  Income from continuing
   operations
  before income taxes              159,340     172,823      108,668     498,918     307,660

  Income tax provision              60,379      62,995       43,785     185,764     104,870
                                 ---------  ----------  -----------  ----------  ----------
  Income from continuing
   operations                       98,961     109,828       64,883     313,154     202,790

  Loss from discontinued
   operations,
  before income taxes                (176)         (2)    (101,548)       (393)   (127,160)

  Income tax provision                 (5)          --           50         (5)       2,363
                                 ---------  ----------  -----------  ----------  ----------
  Loss from discontinued
   operations                        (171)         (2)    (101,598)       (388)   (129,523)
                                 ---------  ----------  -----------  ----------  ----------


  NET INCOME (LOSS)               $ 98,790   $ 109,826   $ (36,715)   $ 312,766    $ 73,267
                                 =========  ==========  ===========  ==========  ==========

  Basic earnings per common
   share:
   Income from continuing
    operations                      $ 0.92      $ 1.02       $ 0.61      $ 2.93      $ 1.92
   Loss from discontinued
    operations                        $ --        $ --     $ (0.96)        $ --    $ (1.23)
                                 ---------  ----------  -----------  ----------  ----------


       Net income (loss)            $ 0.92      $ 1.02     $ (0.35)      $ 2.93      $ 0.69
                                 =========  ==========  ===========  ==========  ==========

  Diluted earnings per common
   share:
   Income from continuing
    operations                      $ 0.91      $ 1.01       $ 0.61      $ 2.87      $ 1.89
   Loss from discontinued
    operations                        $ --        $ --     $ (0.95)        $ --    $ (1.21)
                                 ---------  ----------  -----------  ----------  ----------


       Net income (loss)            $ 0.91      $ 1.01     $ (0.34)      $ 2.87      $ 0.68
                                 =========  ==========  ===========  ==========  ==========

  Weighted average shares
   outstanding:
   Basic                           106,515     106,962      105,743     106,501     105,676
   Diluted                         108,595     108,784      107,444     108,550     107,400


                 HELMERICH & PAYNE, INC.
                       Unaudited
                     (in thousands)


  CONSOLIDATED CONDENSED
   BALANCE SHEETS                6/30/11     9/30/10
  ----------------------------  ----------  ----------

  ASSETS
    Cash and cash equivalents    $ 288,065    $ 63,020
    Other current assets           586,913     579,514
    Current assets of
     discontinued operations         7,631      10,270
                                ----------  ----------

       Total current assets        882,609     652,804
                                ----------  ----------
    Investments                    453,046     320,712
    Net property, plant, and
     equipment                   3,553,743   3,275,020

    Other assets                    21,638      16,834
                                ----------  ----------

  TOTAL ASSETS                  $4,911,036  $4,265,370
                                ==========  ==========


  LIABILITIES AND
   SHAREHOLDERS' EQUITY
    Current liabilities          $ 256,739   $ 224,646
    Current liabilities of
     discontinued operations         5,170       7,992
                                ----------  ----------
       Total current
        liabilities                261,909     232,638
                                ----------  ----------
    Non-current liabilities      1,076,428     862,989
    Non-current liabilities of
     discontinued operations         2,461       2,278
    Long-term notes payable        350,000     360,000

    Total shareholders' equity   3,220,238   2,807,465
                                ----------  ----------

  TOTAL LIABILITIES AND
   SHAREHOLDERS' EQUITY         $4,911,036  $4,265,370
                                ==========  ==========


                       HELMERICH & PAYNE, INC.
                               Unaudited
                            (in thousands)

                                                 Nine Months Ended
                                                     June 30


  CONSOLIDATED CONDENSED STATEMENTS OF CASH
   FLOWS                                         2011        2010
  ------------------------------------------  ----------  ----------

  OPERATING ACTIVITIES:
   Net income                                  $ 312,766    $ 73,267
   Adjustment for loss from discontinued
    operations                                       388     129,523
                                              ----------  ----------
   Income from continuing operations             313,154     202,790
     Depreciation                                228,450     189,418
     Changes in assets and liabilities           157,282    (66,376)
     Gain on sale of assets and investment
      securities                                (11,175)     (4,245)

     Other                                         9,120      12,957
                                              ----------  ----------
     Net cash provided by operating
      activities from
     continuing operations                       696,831     334,544
     Net cash used in operating activities
      from
     discontinued operations                       (388)     (1,507)
                                              ----------  ----------
       Net cash provided by operating
        activities                               696,443     333,037
                                              ----------  ----------

  INVESTING ACTIVITIES:
     Capital expenditures                      (493,776)   (220,200)
     Proceeds from sale of assets and
      investments                                 25,670      18,813
     Purchase of short-term investments               --        (16)
     Acquisition of TerraVici Drilling
      Solutions                                  (4,000)          --
                                              ----------  ----------
     Net cash used in investing activities
      from continuing
     operations                                (472,106)   (201,403)
     Net cash used in investing activities
      from discontinued
     operations                                       --        (55)
                                              ----------  ----------

       Net cash used in investing activities   (472,106)   (201,458)
                                              ----------  ----------

  FINANCING ACTIVITIES:
     Dividends paid                             (19,222)    (15,891)
     Increase (decrease) in bank overdraft         4,844     (2,038)
     Exercise of stock options                    13,734       (391)
     Net proceeds from (payments for)
      short-term and long-term debt             (10,000)   (135,000)
     Excess tax benefit from stock-based
      compensation                                11,352       3,316
                                              ----------  ----------
      Net cash provided by (used in)
       financing activities                          708   (150,004)
                                              ----------  ----------

  Net increase (decrease) in cash and cash
   equivalents                                   225,045    (18,425)
  Cash and cash equivalents, beginning of
   period                                         63,020      96,142
                                              ----------  ----------

  Cash and cash equivalents, end of period     $ 288,065    $ 77,717
                                              ==========  ==========



  SEGMENT REPORTING                      Three Months Ended          Nine Months Ended
                                  -------------------------------  ---------------------
                                   March 31         June 30               June 30

                                     2011       2011       2010       2011        2010
  ------------------------------  ----------  --------  ---------  ----------  ---------
                                     (in thousands, except days and per day amounts)

  U.S. LAND OPERATIONS
  ------------------------------
  Revenues                          $495,459  $539,372   $366,989  $1,511,649   $976,497
  Direct operating expenses          260,834   289,311    206,707     802,383    521,486
  General and administrative
   expense                             6,388     6,330      5,458      18,573     18,193

  Depreciation                        63,948    66,899     51,686     191,211    151,434
                                  ----------  --------  ---------  ----------  ---------
  Segment operating income          $164,289  $176,832   $103,138   $ 499,482   $285,384

  Revenue days                        17,797    18,912     14,374      53,958     38,748
  Average rig revenue per day        $25,640   $25,970    $23,690    $ 25,536    $23,708
  Average rig expense per day        $12,457   $12,748    $12,539    $ 12,391    $11,965
  Average rig margin per day         $13,183   $13,222    $11,151    $ 13,145    $11,743
  Rig utilization                        85%       87%        76%         85%        69%


  OFFSHORE OPERATIONS
  ------------------------------
  Revenues                           $50,586   $54,569    $53,131   $ 150,022   $153,186
  Direct operating expenses           33,936    36,664     37,382     101,527     99,654
  General and administrative
   expense                             1,553     1,532      1,329       4,495      4,437

  Depreciation                         3,621     3,429      3,189      10,580      9,133
                                  ----------  --------  ---------  ----------  ---------
  Segment operating income           $11,476   $12,944    $11,231    $ 33,420    $39,962

  Revenue days                           618       638        638       1,843      1,998
  Average rig revenue per day        $52,507   $54,417    $46,138    $ 50,889    $49,218
  Average rig expense per day        $28,760   $28,597    $25,356    $ 28,234    $26,240
  Average rig margin per day         $23,747   $25,820    $20,782    $ 22,655    $22,978
  Rig utilization                        76%       78%        78%         75%        81%


  INTERNATIONAL LAND OPERATIONS
  ------------------------------
  Revenues                           $54,684   $46,051   $ 60,045   $ 169,689   $177,377
  Direct operating expenses           44,793    39,131     41,113     130,459    120,374
  General and administrative
   expense                               940       825        771       2,633      1,978

  Depreciation                         6,508     6,719      8,268      20,411     22,239
                                  ----------  --------  ---------  ----------  ---------
  Segment operating income
   (loss)                            $ 2,443   $ (624)    $ 9,893    $ 16,186   $ 32,786

  Revenue days                         1,421     1,437      1,881       4,781      5,278
  Average rig revenue per day        $33,043   $29,201   $ 30,669    $ 32,188   $ 32,173
  Average rig expense per day        $25,937   $23,848   $ 20,477    $ 23,791   $ 21,337
  Average rig margin per day         $ 7,106   $ 5,353   $ 10,192     $ 8,397   $ 10,836
  Rig utilization                        64%       65%        76%         69%        68%

  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               $39,143   $48,236   $ 26,474   $ 133,798   $ 57,847
  Offshore Operations                $ 8,131   $12,817   $ 13,771    $ 28,231   $ 26,383
  International Land Operations      $ 7,730   $ 4,089    $ 2,357    $ 15,798    $ 7,569

  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
   from continuing operations before income taxes as reported on the Consolidated
   Statements of Operations (in thousands).


                                       Three Months Ended         Nine Months Ended
                                -------------------------------  --------------------
                                 March 31         June 30               June 30

                                   2011       2011       2010       2011       2010
                                ---------  ---------  ---------  ---------  ---------

  Operating income
  ----------------------------
  U.S. Land                      $164,289   $176,832   $103,138   $499,482   $285,384
  Offshore                         11,476     12,944     11,231     33,420     39,962
  International Land                2,443      (624)      9,893     16,186     32,786

  Other                           (1,815)    (2,078)    (1,803)    (5,044)    (5,020)
                                ---------  ---------  ---------  ---------  ---------
   Segment operating income      $176,393   $187,074   $122,459   $544,044   $353,112
  Corporate general and
   administrative                (15,525)   (15,384)   (12,556)   (42,665)   (36,688)
  Other depreciation              (1,349)    (1,423)   ( 1,295)    (4,153)    (3,966)
  Inter-segment elimination           641        663        617      1,921      1,861

  Income from asset sales           4,105      3,488      2,249     10,262      4,245
                                ---------  ---------  ---------  ---------  ---------
      Operating income           $164,265   $174,418   $111,474   $509,409   $318,564

  Other income (expense):
   Interest and dividend
    income                            356        903        940      1,573      1,536
   Interest expense               (5,513)    (3,221)    (3,961)   (13,185)   (12,693)
   Gain on sale of investment
    securities                         --        913         --        913         --

   Other                              232      (190)        215        208        253
                                ---------  ---------  ---------  ---------  ---------

  Total other income (expense)    (4,925)    (1,595)   ( 2,806)   (10,491)   (10,904)
                                ---------  ---------  ---------  ---------  ---------

  Income from continuing
   operations
  before income taxes            $159,340   $172,823   $108,668   $498,918   $307,660
                                =========  =========  =========  =========  =========

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: Helmerich & Payne, Incorporated

CONTACT: Investor Relations Contact:Mike Drickamer(918) 588-5190