Helmerich Payne (HP) Enters Settlement with Keel; Sees Exposure of $21M - $23M

September 20, 2016 4:44 PM EDT

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Helmerich Payne (NYSE: HP) disclosed the following in a U.S. SEC filing on Tuesday:

Item 1.01 Entry into a Material Definitive Agreement.

As previously disclosed, on or about April 28, 2015, Joshua Keel (“Keel”), an employee of Helmerich & Payne International Drilling Co. (“HPIDC”), filed a petition in the 152nd Judicial Court for Harris County, Texas (Cause No. 2015-24531) against Helmerich & Payne Inc. (“Company”), its subsidiary HPIDC, the operator, and several subcontractors of the operator. The suit arises from injuries Keel sustained in an accident that occurred while he was working on HPIDC Rig 223 in New Mexico in July of 2014. Keel alleged that the defendants were negligent and negligent per se, acted recklessly, intentionally, and/or with an utterly wanton disregard for the rights and safety of the plaintiff and was seeking damages well in excess of $100 million.

On September 14, 2016, the parties in the Keel litigation entered into a global settlement agreement, which is subject to court approval, providing for the payment by the Company and its insurers, on behalf of all defendants, of $72 million. After taking into account amounts to be paid by the Company’s various insurers, the Company estimates that its ultimate exposure will be in the range of $21 to $23 million. The payment is due on or before December 24, 2016.

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