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Helmerich & Payne, Inc. Announces Third Quarter Fiscal 2019 Results

July 24, 2019 5:00 PM

TULSA, Okla.--(BUSINESS WIRE)-- Helmerich & Payne, Inc. (NYSE: HP) reported a net loss of $155 million or $(1.42) per diluted share from operating revenues of $688 million for the quarter ended June 30, 2019, compared to income of $61 million, or $0.55 per diluted share, on revenues of $721 million for the quarter ended March 31, 2019. The net loss per diluted share for the third fiscal quarter and the net income for second fiscal quarter include $(1.82) and $(0.01), respectively, of after-tax losses comprised of select items(3). For the third fiscal quarter select items(3) were comprised of:

Net cash provided by operating activities was $250 million for the third quarter of fiscal 2019 compared to $200 million for the second fiscal quarter of fiscal 2019.

President and CEO John Lindsay commented, “The industry saw further softening in U.S. drilling activity resulting from a combination of crude oil price volatility and budget discipline by our customers. Against this backdrop, H&P produced solid quarterly operating results and maintained FlexRig super-spec utilization close to 90% during the quarter.

“Our expectation of seeing the bottom of the Company’s rig count during the quarter turned out to be premature as the full effect of the industry’s emphasis on disciplined capital spending continues to reverberate through the oil field services sector. As such, H&P exited the quarter in the U.S. with 214 active rigs, which was slightly below the low end of our guidance range. We are reluctant to predict another bottom and see further softening during our fourth fiscal quarter as our guidance would indicate. That said, the U.S. land industry super-spec utilization is close to 90%, and pricing remains firm for the best-in-class fleet.

“We believe this market environment, with its renewed emphasis on spending discipline and returns, is ideal for demonstrating the benefits of H&P’s software solutions and the meaningful impact these technologies have on well economics through enhanced wellbore quality and placement. AutoSlide, H&P’s drilling automation technology, has been deployed commercially in four U.S. shale basins; the Midland, the Eagle Ford, Scoop/Stack and the Bakken. The Company anticipates introducing this technology to the Delaware Basin later this fiscal year. Additionally, the adoption of our FlexApps continues as customers see the value of these technologies as demonstrated by their requests to use them on non-H&P rigs. Our preparation to respond to this type of demand includes migrating our FlexApp offerings into our H&P Technologies (HPT) business segment and developing rig-neutral solutions to operate the software on non-H&P rigs.

“Our leadership position in the U.S. unconventional basins with FlexRigs and software solutions is allowing us to gain more traction in international markets. The Company saw a pick-up in activity in Bahrain and now has two active rigs. Last quarter we announced a contract to deliver our first super-spec rig into Argentina, and we expect it to commence operations in the fourth fiscal quarter. An additional letter of intent was signed to send a second super-spec FlexRig from the U.S. to Argentina to drill in the Vaca Muerta basin.”

Vice President and CFO Mark Smith also commented, “Despite the lower than expected activity in the U.S. during the quarter, H&P still performed well, generating $250 million in cash flow from operations. During the quarter, we also concluded an extensive evaluation of our Flex4 rig fleet and the expected future utilization of the related drilling equipment and spares on hand. This assessment resulted in downsizing the FlexRig4 fleet and non-cash impairment charges of approximately $225 million.

"It is important to point out three considerations regarding our Flex4 fleet. First, the Flex4 designed rigs are not currently economical candidates for upgrades or conversions to super-spec. Second, H&P started building these rigs in 2005 and has already received its full investment payback as well as generated excess returns over our internal hurdle rate on the Flex4 fleet. Third, over the next few quarters we anticipate realizing over $1.5 million or roughly $25-50 per revenue day in permanent cash cost savings resulting from the reduced costs associated with the decommissioned FlexRig4s as they are removed from the H&P fleet.

"We are pleased with H&P’s cash flow generation this quarter driven by healthy pricing levels and contractual terms as well as improvements in working capital management. Looking forward, our strong financial position and operating cash flow generation combined with our capex discipline, sets the Company up to deliver high levels of free cash flows.”

John Lindsay concluded, “H&P remains well positioned with the largest fleet of super-spec rigs and software solutions that provide improved wellbore quality and placement to deliver economic value. We believe we have the people, the rig fleet and the technology solutions to provide superior value for our customers and to achieve mutual, long-term success in this changing industry climate."

Operating Segment Results for the Third Quarter of Fiscal 2019

U.S. Land Operations:

Segment operating income decreased by $244.3 million to a loss of $138.2 million sequentially. The decrease in operating results was primarily attributable to the impairment of drilling equipment and spares mainly driven by the downsizing of the Flex4 rig fleet, sequential decreases in revenue days and the adjusted average rig margin per day. The number of quarterly revenue days decreased sequentially by approximately 7%.

Adjusted average rig revenue per day improved by $498 to $26,122(1) largely due to increased contributions from FlexApps and a slight increase in the average dayrate during the quarter.

The adjusted average rig expense per day increased sequentially by $667 to $14,862(1) as the quarter was impacted by unfavorable adjustments to self-insurance expenses compared to the prior quarter that benefited from favorable adjustments to self-insurance expenses. Corresponding adjusted average rig margin per day decreased $169 to $11,260(1).

The segment’s depreciation expense for the quarter includes non-cash charges of $2.1 million for abandonments and accelerated depreciation of used drilling rig components related to rig upgrades, compared to similar non-cash charges of $5.3 million during the second fiscal quarter of 2019.

International Land Operations:

Segment operating income decreased by $13.0 million to a loss of $5.0 million sequentially. The decrease in operating income was primarily attributable to an impairment of drilling equipment and spares driven by the downsizing of the Flex4 rig fleet, sequential decreases in revenue days, and start-up costs for rigs in Argentina and Bahrain. Revenue days decreased during the quarter by 3% to 1,510 while the adjusted average rig margin per day decreased by $3,957 to $7,904(1).

Offshore Operations:

Segment operating income increased by $0.5 million to $5.1 million sequentially. The number of quarterly revenue days on H&P-owned platform rigs increased sequentially by approximately 1%, while the average rig margin per day increased sequentially by $7,001 to $12,421 primarily due to higher margin work during the quarter. Segment operating income from management contracts on customer-owned platform rigs contributed approximately $2.0 million, compared to approximately $4.7 million during the prior quarter.

H&P Technologies:

The segment had an operating loss of $8.8 million this quarter as compared to an operating loss of $7.9 million during the previous quarter. The $0.9 million sequential increase in the operating loss was due primarily to lower revenues associated with the lower industry rig count.

Operational Outlook for the Fourth Quarter of Fiscal 2019

U.S. Land Operations:

International Land Operations:

Offshore Operations:

HP Technologies:

Other Estimates for Fiscal 2019

Select Items Included in Net Income per Diluted Share

Third Quarter of Fiscal 2019 net loss of $(1.42) per diluted share included $(1.82) in after-tax losses comprised of the following:

Second Quarter of Fiscal 2019 net income of $0.55 per diluted share included $(0.01) in after-tax losses comprised of the following:

Conference Call

A conference call will be held on Thursday, July 25, 2019 at 11:00 a.m. (EDT) with John Lindsay, President and CEO, Mark Smith, Vice President and CFO, and Dave Wilson, Director of Investor Relations to discuss the Company’s fiscal third quarter 2019 results. Dial-in information for the conference call is (866) 342-8591 for domestic callers or (203) 518-9713 for international callers. The call access code is ‘Helmerich’. You may also listen to the conference call that will be broadcast live over the Internet by logging on to the Company’s website at http://www.hpinc.com and accessing the corresponding link through the Investor Relations section by clicking on “INVESTORS” and then clicking on “Event Calendar” to find the event and the link to the webcast.

About Helmerich & Payne, Inc.

Founded in 1920, Helmerich & Payne, Inc. (H&P) (NYSE: HP) is committed to delivering industry leading levels of drilling productivity and reliability. H&P operates with the highest level of integrity, safety and innovation to deliver superior results for its 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. H&P’s fleet includes 299 land rigs in the U.S., 31 international land rigs and eight offshore platform rigs. For more information, see H&P online at www.hpinc.com.

Forward-Looking Statements

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, operations outlook, 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 and Analysis of Financial Condition and Results of Operations” 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.

Note Regarding Trademarks. Helmerich & Payne, Inc. owns or has rights to the use of trademarks, service marks and trade names that it uses in conjunction with the operation of its business. Some of the trademarks that appear in this release or otherwise used by H&P include FlexRig, FlexApp and AutoSlide, which may be registered or trademarked in the U.S. and other jurisdictions.

(1) See the Selected Statistical & Operational Highlights table(s) for details on the revenues or charges excluded on a per revenue day basis. The inclusion or exclusion of these amounts results in adjusted revenue, expense, and/or margin per day figures, which are all non-GAAP measures.

(2) The term “super-spec” herein refers to rigs with the following specifications: AC drive, 1,500 hp drawworks, 750,000 lbs. hookload rating, 7,500 psi mud circulating system and multiple-well pad capability.

(3) See the corresponding section of this release for details regarding the select items.

HELMERICH & PAYNE, INC.

(Unaudited)

(in thousands, except per share data)

Three Months Ended

Nine Months Ended

June 30,

March 31,

June 30,

June 30,

2019

2019

2018

2019

2018

CONSOLIDATED STATEMENTS OF OPERATIONS

As adjusted

As adjusted

Operating revenues

Contract drilling

$

684,788

$

717,653

$

637,548

$

2,139,798

$

1,763,939

Other

3,186

3,215

11,324

9,642

26,504

687,974

720,868

648,872

2,149,440

1,790,443

Operating costs and expenses

Contract drilling operating expenses, excluding depreciation and amortization

443,114

441,719

443,087

1,372,426

1,199,422

Operating expenses applicable to other revenues

1,414

1,620

1,424

4,308

3,728

Depreciation and amortization

143,297

143,161

144,579

427,917

433,521

Asset impairment charge

224,327

—

—

224,327

—

Research and development

7,066

7,262

5,479

21,347

13,149

Selling, general and administrative

46,590

43,506

52,310

144,604

147,005

Gain on sale of assets

(9,960

)

(11,546

)

(4,313

)

(27,050

)

(15,133

)

855,848

625,722

642,566

2,167,879

1,781,692

Operating income (loss) from continuing operations

(167,874

)

95,146

6,306

(18,439

)

8,751

Other income (expense)

Interest and dividend income

2,349

2,061

2,109

6,861

5,680

Interest expense

(6,257

)

(6,167

)

(5,993

)

(17,145

)

(17,794

)

Gain (loss) on investment securities

(13,271

)

5,878

—

(50,228

)

—

Other

(1,599

)

17

(61

)

(1,051

)

170

(18,778

)

1,789

(3,945

)

(61,563

)

(11,944

)

Income (loss) from continuing operations before income taxes

(186,652

)

96,935

2,361

(80,002

)

(3,193

)

Income tax provision (benefit)

(32,031

)

25,078

10,535

(5,602

)

(494,028

)

Income (loss) from continuing operations

(154,621

)

71,857

(8,174

)

(74,400

)

490,835

Income from discontinued operations before income taxes

7,244

2,889

8,383

22,798

9,127

Income tax provision

7,306

13,855

8,217

23,231

19,743

Income (loss) from discontinued operations

(62

)

(10,966

)

166

(433

)

(10,616

)

Net income (loss)

$

(154,683

)

$

60,891

$

(8,008

)

$

(74,833

)

$

480,219

Basic earnings (loss) per common share:

Income (loss) from continuing operations

$

(1.42

)

$

0.65

$

(0.08

)

$

(0.71

)

$

4.47

Loss from discontinued operations

$

—

$

(0.10

)

$

—

$

—

$

(0.10

)

Net income (loss)

$

(1.42

)

$

0.55

$

(0.08

)

$

(0.71

)

$

4.37

Diluted earnings (loss) per common share:

Income (loss) from continuing operations

$

(1.42

)

$

0.65

$

(0.08

)

$

(0.71

)

$

4.45

Loss from discontinued operations

$

—

$

(0.10

)

$

—

$

—

$

(0.10

)

Net income (loss)

$

(1.42

)

$

0.55

$

(0.08

)

$

(0.71

)

$

4.35

Weighted average shares outstanding (in thousands):

Basic

109,425

109,406

108,905

109,324

108,818

Diluted

109,425

109,503

108,905

109,324

109,338

“As Adjusted” – Effective October 1, 2018, we adopted Accounting Standards Update No. 2017-07, Compensation-Retirement Benefits – (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The statement of operations for the three and nine months ended June 30, 2018 have been adjusted to reflect changes that were applied retrospectively from that adoption.

HELMERICH & PAYNE, INC.

(Unaudited)

(in thousands)

June 30,

September 30,

CONDENSED CONSOLIDATED BALANCE SHEETS

2019

2018

Assets

Cash and cash equivalents

$

334,775

$

284,355

Short-term investments

45,748

41,461

Other current assets

735,715

789,734

Total current assets

1,116,238

1,115,550

Investments

48,291

98,696

Property, plant and equipment, net

4,583,673

4,857,382

Other noncurrent assets

149,177

143,239

Total Assets

$

5,897,379

$

6,214,867

Liabilities and Shareholders' Equity

Current liabilities

$

390,526

$

377,168

Long-term debt, net of debt issuance costs

491,651

493,968

Other noncurrent liabilities

905,517

946,742

Noncurrent liabilities - discontinued operations

14,631

14,254

Total shareholders’ equity

4,095,054

4,382,735

Total Liabilities and Shareholders' Equity

$

5,897,379

$

6,214,867

HELMERICH & PAYNE, INC.

(Unaudited)

(in thousands)

Nine Months Ended June 30,

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

2019

2018

As adjusted

OPERATING ACTIVITIES:

Net income (loss)

$

(74,833

)

$

480,219

Adjustment for loss from discontinued operations

433

10,616

Income (loss) from continuing operations

(74,400

)

490,835

Depreciation and amortization

427,917

433,521

Asset impairment charge

224,327

—

Amortization of debt discount and debt issuance costs

1,176

798

Provision for bad debt

544

598

Stock-based compensation

25,467

23,472

Loss on investment securities

50,228

—

Gain on sale of assets

(27,050

)

(15,133

)

Deferred income tax benefit

(25,503

)

(498,491

)

Other

5,356

3,735

Changes in assets and liabilities

51,365

(67,757

)

Net cash provided by operating activities from continuing operations

659,427

371,578

Net cash used in operating activities from discontinued operations

(56

)

(150

)

Net cash provided by operating activities

659,371

371,428

INVESTING ACTIVITIES:

Capital expenditures

(403,570

)

(322,658

)

Purchase of short-term investments

(71,852

)

(52,159

)

Payment for acquisition of business, net of cash acquired

(2,781

)

(47,886

)

Proceeds from sale of short-term investments

68,015

52,470

Proceeds from asset sales

36,227

28,049

Net cash used in investing activities

(373,961

)

(342,184

)

FINANCING ACTIVITIES:

Dividends paid

(235,058

)

(230,368

)

Debt issuance costs paid

(3,912

)

—

Proceeds from stock option exercises

2,901

5,160

Payments for employee taxes on net settlement of equity awards

(6,420

)

(5,978

)

Payment of contingent consideration from acquisition of business

—

(10,625

)

Net cash used in financing activities

(242,489

)

(241,811

)

Net increase (decrease) in cash and cash equivalents and restricted cash

42,921

(212,567

)

Cash and cash equivalents and restricted cash, beginning of period

326,185

560,509

Cash and cash equivalents and restricted cash, end of period

$

369,106

$

347,942

“As Adjusted” – Effective October 1, 2018, we adopted Accounting Standards Update No. 2016-18, Statement of Cash Flows – (Topic 230): Restricted Cash and Accounting Standards Update No. 2016-15, Statement of Cash Flows – (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The cash flow statement for the nine months ended June 30, 2018 has been adjusted to reflect changes that were applied retrospectively from those adoptions.

Three Months Ended

Nine Months Ended

June 30,

March 31,

June 30,

June 30,

SEGMENT REPORTING (in thousands)

2019

2019

2018

2019

2018

U.S. LAND OPERATIONS

Operating revenues

$

591,455

$

622,204

$

536,582

$

1,837,900

$

1,480,951

Direct operating expenses

374,097

377,984

362,037

1,160,887

978,789

Research and development

165

—

—

165

—

Selling, general and administrative expense

11,450

11,169

14,788

34,276

42,792

Depreciation

127,040

126,912

125,418

378,062

373,211

Asset impairment charge

216,908

—

—

216,908

—

Segment operating income (loss)

$

(138,205

)

$

106,139

$

34,339

$

47,602

$

86,159

Revenue days

19,846

21,262

19,917

63,040

56,946

Average rig revenue per day

$

26,155

$

25,681

$

23,698

$

25,686

$

23,027

Average rig expense per day

$

15,202

$

14,195

$

14,934

$

14,947

$

14,209

Average rig margin per day

$

10,953

$

11,486

$

8,764

$

10,739

$

8,818

Rig utilization

62

%

67

%

63

%

66

%

60

%

INTERNATIONAL LAND OPERATIONS

Operating revenues

$

46,283

$

50,808

$

63,297

$

163,378

$

178,970

Direct operating expenses

34,146

33,051

46,810

114,736

132,796

Selling, general and administrative expense

1,150

794

995

4,225

2,959

Depreciation

8,591

8,995

11,160

27,423

36,044

Asset impairment charge

7,419

—

—

7,419

—

Segment operating income (loss)

$

(5,023

)

$

7,968

$

4,332

$

9,575

$

7,171

Revenue days

1,510

1,559

1,762

4,828

4,878

Average rig revenue per day

$

29,669

$

31,130

$

33,941

$

32,285

$

34,919

Average rig expense per day

$

21,650

$

19,269

$

23,947

$

21,261

$

24,941

Average rig margin per day

$

8,019

$

11,861

$

9,994

$

11,024

$

9,978

Rig utilization

51

%

54

%

51

%

55

%

47

%

OFFSHORE OPERATIONS

Operating revenues

$

37,674

$

34,583

$

37,669

$

109,167

$

104,018

Direct operating expenses

28,869

26,984

30,146

82,158

74,863

Selling, general and administrative expense

1,145

805

1,126

2,719

3,397

Depreciation

2,582

2,263

2,617

7,512

7,804

Segment operating income

$

5,078

$

4,531

$

3,780

$

16,778

$

17,954

Revenue days

546

540

574

1,611

1,484

Average rig revenue per day

$

39,643

$

31,361

$

35,293

$

35,561

$

34,924

Average rig expense per day

$

27,222

$

25,941

$

30,607

$

26,276

$

26,394

Average rig margin per day

$

12,421

$

5,420

$

4,686

$

9,285

$

8,530

Rig utilization

75

%

75

%

79

%

74

%

68

%

H&P TECHNOLOGIES

Operating revenues

$

9,376

$

10,141

$

7,693

$

29,353

$

16,842

Direct operating expenses

6,357

4,214

4,500

15,859

14,105

Research and development

4,801

7,262

5,479

19,082

13,149

Selling, general and administrative expense

5,204

4,782

5,071

16,085

10,889

Depreciation and amortization

1,824

1,816

1,695

5,415

5,099

Segment operating loss

$

(8,810

)

$

(7,933

)

$

(9,052

)

$

(27,088

)

$

(26,400

)

Operating statistics exclude the effects of offshore platform management contracts and 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:

Three Months Ended

Nine Months Ended

June 30,

March 31,

June 30,

June 30,

2019

2019

2018

2019

2018

U.S. Land Operations

$

72,386

$

76,172

$

64,587

$

218,648

$

169,652

International Land Operations

1,483

2,277

3,492

7,506

8,634

Offshore Operations

7,277

5,507

5,057

18,534

14,354

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 (loss) per the information above to income (loss) from continuing operations before income taxes as reported on the Consolidated Statements of Operations.

Three Months Ended

Nine Months Ended

June 30,

March 31,

June 30,

June 30,

(in thousands)

2019

2019

2018

2019

2018

As adjusted

As adjusted

Operating income (loss)

U.S. Land

$

(138,205

)

$

106,139

$

34,339

$

47,602

$

86,159

International Land

(5,023

)

7,968

4,332

9,575

7,171

Offshore

5,078

4,531

3,780

16,778

17,954

H&P Technologies

(8,810

)

(7,933

)

(9,052

)

(27,088

)

(26,400

)

Other

(731

)

1,165

1,826

1,988

4,842

Segment operating income (loss)

$

(147,691

)

$

111,870

$

35,225

$

48,855

$

89,726

Gain on sale of assets

9,960

11,546

4,313

27,050

15,133

Corporate selling, general and administrative costs and corporate depreciation

(30,143

)

(28,270

)

(33,232

)

(94,344

)

(96,108

)

Operating income (loss)

$

(167,874

)

$

95,146

$

6,306

$

(18,439

)

$

8,751

Other income (expense):

Interest and dividend income

2,349

2,061

2,109

6,861

5,680

Interest expense

(6,257

)

(6,167

)

(5,993

)

(17,145

)

(17,794

)

Gain (loss) on investment securities

(13,271

)

5,878

—

(50,228

)

—

Other

(1,599

)

17

(61

)

(1,051

)

170

Total unallocated amounts

(18,778

)

1,789

(3,945

)

(61,563

)

(11,944

)

Income (loss) from continuing operations before income taxes

$

(186,652

)

$

96,935

$

2,361

$

(80,002

)

$

(3,193

)

“As Adjusted” – Effective October 1, 2018, we implemented organizational changes, consistent with the manner in which our chief operating decision maker evaluates performance and allocates resources. Certain operations previously reported in “other” within our segment disclosures are now managed and presented within the new H&P Technologies reportable segment. All segment disclosures have been recast for these segment changes. Additionally, effective October 1, 2018, we adopted Accounting Standards Update No. 2017-07, Compensation-Retirement Benefits – (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. Operating results for the three and nine months ended June 30, 2019 have been adjusted to reflect changes that were applied retrospectively from that adoption.

SUPPLEMENTARY STATISTICAL INFORMATION

Unaudited

SELECTED STATISTICAL & OPERATIONAL HIGHLIGHTS

(Used to determine adjusted per day statistics for revenue and expense, which are non-GAAP measures)

Three Months Ended

(in dollars per revenue day)

June 30, 2019

March 31, 2019

U.S. Land Operations

Total impact on U.S. Land revenue per day:

$

33

$

57

Total impact on U.S. Land expense per day:

340

0

International Land Operations

Total impact on International Land revenue per day:

$

115

$

0

U.S. LAND RIG COUNTS & MARKETABLE FLEET STATISTICS

July 24,

June 30,

March 31,

Q3FY19

2019

2019

2019

Average

U.S. Land Operations

Term Contract Rigs

138

143

146

142.4

Spot Contract Rigs

69

71

80

75.7

Total Contracted Rigs

207

214

226

218.1

Idle or Other Rigs

92

85

124

131.9

Total Marketable Fleet

299

299

350

350.0

H&P GLOBAL FLEET UNDER TERM CONTRACT STATISTICS

Number of Rigs Already Under Long-Term Contracts(1)

(Estimated Quarterly Average — as of 07/24/19)

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Segment

FY19

FY20

FY20

FY20

FY20

FY21

FY21

U.S. Land Operations

137.9

120.6

91.7

76.5

62.1

44.1

18.9

International Land Operations

11.7

11.0

7.2

2.1

1.0

1.0

1.0

Offshore Operations

0.0

—

—

—

—

—

—

Total

149.6

131.6

98.9

78.6

63.1

45.1

19.9

(1) All of the above rig contracts have original terms equal to or in excess of six months and include provisions for early termination fees.

Dave Wilson, Director of Investor Relations

[email protected]

(918) 588‑5190

Source: Helmerich & Payne, Inc.

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