- U.S. Land Operations contracted rig count increased by 22 rigs from March 31, 2017 to June 30, 2017 and by 95 rigs
from September 30, 2016 to June 30, 2017
- Growing U.S. Land rig market share(1) is currently at approximately 20% and AC drive rig segment market share at
approximately 30%
- U.S. Land adjusted average rig margin per day increased by over $800(2)
TULSA, Okla., July 27, 2017 (GLOBE NEWSWIRE) -- Helmerich & Payne, Inc. (NYSE:HP) reported a net loss of $22 million or
$(0.21) per diluted share from operating revenues of $499 million for the third quarter of fiscal 2017. The net loss per diluted
share includes $0.04 of after-tax income comprised of select items (3). Net cash provided by operating activities
was $90 million for the third quarter of fiscal 2017.
President and CEO John Lindsay commented, “We are pleased with the progress made in the third fiscal quarter and continue to
reap the benefits of our integrated business model and the competencies the Company has developed over the past decade in
designing, building, and now upgrading AC drive FlexRigs. Additional demand for super-spec FlexRigs remains in the market
even in a mid-$40’s oil price environment and we are responding with upgrades to our existing AC fleet. H&P is perhaps
the only contractor with the right AC rig fleet capacity to grow substantially in a manner that avoids the large investment in new
rigs. Despite the oil price uncertainty and the choppiness that it tends to create in the market, H&P is successfully
growing market share and continuing to build its brand. Our people remain the driving force of our success and the Company
continues to place great focus on organizational effectiveness and equipping all of our employees to deliver excellence for the
customer. Technology also plays a pivotal role in our success, and on June 2, 2017, the Company closed on the acquisition of MOTIVE
Drilling Technologies, Inc. MOTIVE is a software company that has developed a bit guidance system that utilizes cognitive
computing to improve directional drilling decision automation and optimization. MOTIVE is a leader in this space and to date has
been used to drill over three million feet of horizontal hole across all of the major U.S. shale plays.
“We believe H&P is well positioned to successfully manage the ongoing U.S. land market and any short term volatility that
may exist. We have successfully maintained an industry leading cadence for upgrades which has allowed us to increase our active
fleet by 98 rigs during this fiscal year, 86 of which were super-spec upgrades. The efforts undertaken over the past couple of
years to enhance organizational effectiveness are paying significant dividends. We have demonstrated the ability to achieve
operational scalability, maintain a strong balance sheet, and enhance a healthy team environment throughout the organization.
This is particularly apparent in our ability to respond to demand and add value to the customer. We remain confident about the
future for H&P as our competitive advantages remain in our people, performance, technology, reliability and uniform FlexRig
fleet.”
Operating Segment Results
U.S. Land Operations:
Segment operating loss narrowed by $44 million (85%) sequentially. The favorable change was primarily attributable to an
increase in quarterly revenue days and a higher rig margin per day average. The number of quarterly revenue days
increased sequentially by approximately 26%, as compared to an estimated 21% for the overall market (4).
Adjusted average rig revenue per day decreased sequentially by $525 to $21,676 (2), as additional rigs returned
to work at spot market rates and as long-term contracts signed at higher, prior peak rates expired or reset at or slightly above
spot market rates during the quarter. The average rig expense per day decreased sequentially by $1,356 to $14,256; the
decrease in the average was mostly attributable to a decline in upfront rig start-up expenses as fewer rigs were reactivated this
quarter as compared to the prior quarter. The corresponding adjusted average rig margin per day increased sequentially by
$831 to $7,420 (2).
Offshore Operations:
Segment operating income increased 9% sequentially primarily due to lower levels of depreciation. The number of quarterly
revenue days decreased sequentially by approximately 8%, and the average rig margin per day increased sequentially by $686 to
$11,503. Additionally, management contracts on platform rigs contributed approximately $4 million to the segment’s operating
income.
International Land Operations:
The segment had operating income this quarter as compared to an operating loss the previous quarter. The $16 million
sequential improvement was primarily attributable to the previously disclosed withdrawal by a customer of an early termination
notice received for five rigs under long-term contracts. Excluding the impact of the corresponding retroactive adjustments,
the adjusted average rig margin per day was $8,978 and the number of quarterly revenue days was 1,183. Adjusted average rig
margin per day and adjusted quarterly revenue days were higher than expected primarily as a result of the resumption of normal
contractual terms on the five previously mentioned rigs.
Operational Outlook for the Fourth Quarter of Fiscal 2017
U.S. Land Operations:
- Quarterly revenue days expected to increase by approximately 3% to 5% sequentially
- Average rig revenue per day expected to be slightly over $21,000 (excluding any impact from early termination revenue)
- Average rig expense per day expected to be roughly $13,700
Offshore Operations:
- Quarterly revenue days expected to decrease by approximately 10% sequentially
- Average rig margin per day expected to be approximately $12,500
- Management contracts expected to generate approximately $4 million in operating income
International Land Operations:
- Adjusted quarterly revenue days expected to be roughly unchanged sequentially, resulting in approximately 13 average
rigs generating revenue days during the quarter
- Average rig margin per day expected to be roughly $7,500
Other Estimates for Fiscal 2017
- FY17 capital expenditures are now estimated at roughly $400 million, and potentially higher depending on the timing of
expenditures related to upgrading opportunities. This increase from our prior estimate of $350 million is due to more rigs
being upgraded than initially anticipated and higher levels of maintenance capital expenditures as a result of more rigs working
than previously estimated. The revised estimate excludes the acquisition of MOTIVE Drilling Technologies, Inc.
- FY17 general and administrative expenses are now expected to be approximately $150 million primarily due to the acquisition
of MOTIVE Drilling Technologies, Inc., and to a higher level of resources required to support a much higher active rig count than
originally anticipated.
Other Highlights
- H&P’s spot pricing in the U.S. Land market continued to increase (approximately 2%) from the date of the second quarter
results announcement (April 27, 2017) to July 27, 2017.
- Since April 27, 2017 (date of second quarter results announcement), 18 AC drive FlexRigs with 1,500 hp drawworks and 750,000
lbs. hookload ratings were upgraded to include a 7,500 psi mud circulating system and/or multiple-well pad capability, resulting
in 140 rigs in our fleet today with rig specifications in highest demand(5).
- During the third fiscal quarter, two FlexRig3s with walking systems were contracted and a third committed. One of the
contracted rigs, the initial prototype, deployed to West Texas in May. Initial rig operations have been strong, and the
customer has been pleased with the results.
- During the third fiscal quarter, FlexRig 531, working for an operator in the Utica Shale, drilled a total measured depth well
of approximately 27,750 feet with an extended reach lateral measuring approximately 19,500 feet. This was completed in
approximately 17 days (from spud to total depth).
- On May 22, 2017, the Company announced the acquisition of MOTIVE Drilling Technologies, Inc., the industry leader in the use
of cognitive computing to guide the directional drilling process. The acquisition closed on June 2, 2017.
- On June 7, 2017, Directors of the Company declared a quarterly cash dividend of $0.70 per share on the Company’s common stock
payable September 1, 2017 (as filed on Form 8‑K at the time of the declaration).
Select Items Included in Net Income (or Loss) per Diluted Share
Third Quarter of Fiscal 2017 included $0.04 in after-tax income comprised of the following:
- $0.07 of after-tax income related to retroactive revenue received for five rigs in the International Land Segment
- $0.03 of after-tax income from long-term contract early termination compensation from customers
- $0.01 of after-tax gains related to the sale of used drilling equipment
- $0.02 of after-tax losses from charges related to the MOTIVE Drilling Technologies, Inc. acquisition transaction
- $0.05 of after-tax losses from abandonment charges related to the decommissioning of used drilling equipment
Second Quarter of Fiscal 2017 included $0.02 in after-tax income comprised of the following:
- $0.04 of after-tax income from long-term contract early termination compensation from customers
- $0.09 of after-tax gains related to the sale of used drilling equipment
- $0.11 of after-tax losses from abandonment charges related to the decommissioning of used drilling equipment
About Helmerich & Payne, Inc.
Helmerich & Payne, Inc. is primarily a contract drilling company. As of July 27, 2017, the Company’s
existing fleet includes 350 land rigs in the U.S., 38 international land rigs, and eight offshore platform rigs. The
Company’s global fleet has a total of 388 land rigs, including 373 AC drive FlexRigs.
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. One of the trademarks that appears in this
release is FlexRig, which may be registered or trademarked in the U.S. and other jurisdictions.
(1)This market share estimate is derived from RigData as of July 2017. Additionally, the drawworks capacity of
each land rig included in the estimate was equal to or greater than 600 horsepower.
(2)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.
(3)See the corresponding section of this release for details regarding the select items.
(4)The overall market’s rate of increase was calculated using the average U.S. Land rig counts from the first and second
calendar quarters of 2017 as publicly published by BHGE.
(5)These combined rig specifications are in high demand and fit the description of what some industry followers refer to
as “super-spec” rigs.
|
HELMERICH &
PAYNE, INC. |
Unaudited |
(in thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Nine Months Ended |
CONSOLIDATED STATEMENTS OF |
|
June 30 |
|
March 31 |
|
June 30 |
|
June 30 |
OPERATIONS |
|
2017 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling — U.S. Land |
|
$ |
405,516 |
|
|
$ |
330,967 |
|
|
$ |
285,028 |
|
|
$ |
1,000,119 |
|
|
$ |
1,004,116 |
|
Drilling — Offshore |
|
|
33,711 |
|
|
|
36,235 |
|
|
|
30,492 |
|
|
|
103,758 |
|
|
|
106,697 |
|
Drilling — International Land |
|
|
55,075 |
|
|
|
34,757 |
|
|
|
47,983 |
|
|
|
157,863 |
|
|
|
171,529 |
|
Other |
|
|
4,262 |
|
|
|
3,324 |
|
|
|
2,983 |
|
|
|
10,697 |
|
|
|
10,182 |
|
|
|
$ |
498,564 |
|
|
$ |
405,283 |
|
|
$ |
366,486 |
|
|
$ |
1,272,437 |
|
|
$ |
1,292,524 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs, excluding depreciation |
|
|
337,463 |
|
|
|
296,829 |
|
|
|
186,146 |
|
|
|
881,971 |
|
|
|
684,401 |
|
Depreciation |
|
|
145,043 |
|
|
|
152,777 |
|
|
|
138,690 |
|
|
|
431,667 |
|
|
|
422,336 |
|
Asset impairment charge |
|
|
— |
|
|
|
— |
|
|
|
6,250 |
|
|
|
— |
|
|
|
6,250 |
|
General and administrative |
|
|
42,890 |
|
|
|
33,519 |
|
|
|
46,496 |
|
|
|
110,671 |
|
|
|
112,381 |
|
Research and development |
|
|
3,058 |
|
|
|
2,719 |
|
|
|
2,707 |
|
|
|
8,585 |
|
|
|
7,941 |
|
Income from asset sales |
|
|
(1,862 |
) |
|
|
(14,889 |
) |
|
|
(547 |
) |
|
|
(17,593 |
) |
|
|
(7,820 |
) |
|
|
|
526,592 |
|
|
|
470,955 |
|
|
|
379,742 |
|
|
|
1,415,301 |
|
|
|
1,225,489 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
|
(28,028 |
) |
|
|
(65,672 |
) |
|
|
(13,256 |
) |
|
|
(142,864 |
) |
|
|
67,035 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and dividend income |
|
|
1,700 |
|
|
|
1,338 |
|
|
|
778 |
|
|
|
4,028 |
|
|
|
2,310 |
|
Interest expense |
|
|
(6,364 |
) |
|
|
(6,084 |
) |
|
|
(6,407 |
) |
|
|
(17,503 |
) |
|
|
(16,652 |
) |
Other |
|
|
(911 |
) |
|
|
174 |
|
|
|
534 |
|
|
|
(350 |
) |
|
|
926 |
|
|
|
|
(5,575 |
) |
|
|
(4,572 |
) |
|
|
(5,095 |
) |
|
|
(13,825 |
) |
|
|
(13,416 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before income taxes |
|
|
(33,603 |
) |
|
|
(70,244 |
) |
|
|
(18,351 |
) |
|
|
(156,689 |
) |
|
|
53,619 |
|
Income tax provision |
|
|
(10,478 |
) |
|
|
(21,771 |
) |
|
|
2,842 |
|
|
|
(50,537 |
) |
|
|
33,740 |
|
Income (loss) from continuing operations |
|
|
(23,125 |
) |
|
|
(48,473 |
) |
|
|
(21,193 |
) |
|
|
(106,152 |
) |
|
|
19,879 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from discontinued operations, before income taxes |
|
|
3,223 |
|
|
|
(94 |
) |
|
|
2,193 |
|
|
|
2,705 |
|
|
|
2,241 |
|
Income tax provision |
|
|
1,897 |
|
|
|
251 |
|
|
|
2,200 |
|
|
|
2,233 |
|
|
|
6,113 |
|
Income (loss) from discontinued operations |
|
|
1,326 |
|
|
|
(345 |
) |
|
|
(7 |
) |
|
|
472 |
|
|
|
(3,872 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) |
|
$ |
(21,799 |
) |
|
$ |
(48,818 |
) |
|
$ |
(21,200 |
) |
|
$ |
(105,680 |
) |
|
$ |
16,007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations |
|
$ |
(0.22 |
) |
|
$ |
(0.45 |
) |
|
$ |
(0.20 |
) |
|
$ |
(0.99 |
) |
|
$ |
0.18 |
|
Income (loss) from discontinued operations |
|
$ |
0.01 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(0.04 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(0.21 |
) |
|
$ |
(0.45 |
) |
|
$ |
(0.20 |
) |
|
$ |
(0.99 |
) |
|
$ |
0.14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations |
|
$ |
(0.22 |
) |
|
$ |
(0.45 |
) |
|
$ |
(0.20 |
) |
|
$ |
(0.99 |
) |
|
$ |
0.17 |
|
Income (loss) from discontinued operations |
|
$ |
0.01 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(0.04 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(0.21 |
) |
|
$ |
(0.45 |
) |
|
$ |
(0.20 |
) |
|
$ |
(0.99 |
) |
|
$ |
0.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
108,572 |
|
|
|
108,565 |
|
|
|
108,047 |
|
|
|
108,470 |
|
|
|
107,970 |
|
Diluted |
|
|
108,572 |
|
|
|
108,565 |
|
|
|
108,047 |
|
|
|
108,470 |
|
|
|
108,523 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HELMERICH &
PAYNE, INC. |
Unaudited |
(in thousands) |
|
|
|
|
|
|
|
|
|
June 30 |
|
September 30 |
CONSOLIDATED CONDENSED BALANCE SHEETS |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
572,787 |
|
$ |
905,561 |
Short-term investments |
|
|
39,894 |
|
|
44,148 |
Other current assets |
|
|
637,700 |
|
|
622,913 |
Current assets of discontinued operations |
|
|
7 |
|
|
64 |
Total current assets |
|
|
1,250,388 |
|
|
1,572,686 |
Investments |
|
|
76,986 |
|
|
84,955 |
Net property, plant, and equipment |
|
|
5,062,914 |
|
|
5,144,733 |
Other assets |
|
|
123,603 |
|
|
29,645 |
|
|
|
|
|
|
|
TOTAL ASSETS |
|
$ |
6,513,891 |
|
$ |
6,832,019 |
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
Current liabilities |
|
$ |
333,849 |
|
$ |
330,061 |
Current liabilities of discontinued operations |
|
|
80 |
|
|
59 |
Total current liabilities |
|
|
333,929 |
|
|
330,120 |
Non-current liabilities |
|
|
1,434,196 |
|
|
1,445,237 |
Non-current liabilities of discontinued operations |
|
|
3,225 |
|
|
3,890 |
Long-term debt less unamortized discount and debt issuance costs |
|
|
492,637 |
|
|
491,847 |
Total shareholders’ equity |
|
|
4,249,904 |
|
|
4,560,925 |
|
|
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
$ |
6,513,891 |
|
$ |
6,832,019 |
|
|
|
|
|
|
|
HELMERICH &
PAYNE, INC. |
Unaudited |
(in thousands) |
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
June 30 |
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS |
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net income (loss) |
|
$ |
(105,680 |
) |
|
$ |
16,007 |
|
Adjustment for (income) loss from discontinued operations |
|
|
(472 |
) |
|
|
3,872 |
|
Income (loss) from continuing operations |
|
|
(106,152 |
) |
|
|
19,879 |
|
Depreciation |
|
|
431,667 |
|
|
|
422,336 |
|
Asset impairment charge |
|
|
— |
|
|
|
6,250 |
|
Changes in assets and liabilities |
|
|
(97,040 |
) |
|
|
153,624 |
|
Income from asset sales |
|
|
(17,593 |
) |
|
|
(7,820 |
) |
Other |
|
|
25,367 |
|
|
|
21,071 |
|
Net cash provided by operating activities from continuing
operations |
|
|
236,249 |
|
|
|
615,340 |
|
Net cash provided by (used in) operating activities from discontinued
operations |
|
|
(115 |
) |
|
|
70 |
|
Net cash provided by operating activities |
|
|
236,134 |
|
|
|
615,410 |
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES: |
|
|
|
|
|
|
Capital expenditures |
|
|
(300,275 |
) |
|
|
(219,549 |
) |
Purchase of short-term investments |
|
|
(48,958 |
) |
|
|
(36,958 |
) |
Payment for acquisition of business, net of cash acquired |
|
|
(70,416 |
) |
|
|
— |
|
Proceeds from sale of short-term investments |
|
|
53,150 |
|
|
|
32,681 |
|
Proceeds from asset sales |
|
|
17,921 |
|
|
|
12,804 |
|
Net cash used in investing activities |
|
|
(348,578 |
) |
|
|
(211,022 |
) |
|
|
|
|
|
|
|
FINANCING ACTIVITIES: |
|
|
|
|
|
|
Debt issuance costs |
|
|
— |
|
|
|
(32 |
) |
Dividends paid |
|
|
(229,061 |
) |
|
|
(224,040 |
) |
Exercise of stock options, net of tax withholding |
|
|
10,458 |
|
|
|
483 |
|
Tax withholdings related to net share settlements of restricted
stock |
|
|
(5,848 |
) |
|
|
(3,912 |
) |
Excess tax benefit from stock-based compensation |
|
|
4,121 |
|
|
|
761 |
|
Net cash used in financing activities |
|
|
(220,330 |
) |
|
|
(226,740 |
) |
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
|
|
(332,774 |
) |
|
|
177,648 |
|
Cash and cash equivalents, beginning of period |
|
|
905,561 |
|
|
|
729,384 |
|
Cash and cash equivalents, end of period |
|
$ |
572,787 |
|
|
$ |
907,032 |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Nine Months
Ended |
|
|
|
June 30 |
|
March 31 |
|
June 30 |
|
June 30 |
|
SEGMENT REPORTING |
|
2017 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except days and per day amounts) |
|
U.S. LAND OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
405,516 |
|
|
$ |
330,967 |
|
|
$ |
285,028 |
|
|
$ |
1,000,119 |
|
|
$ |
1,004,116 |
|
|
Direct operating expenses |
|
|
277,372 |
|
|
|
238,249 |
|
|
|
122,694 |
|
|
|
686,227 |
|
|
|
460,119 |
|
|
General and administrative expense |
|
|
13,347 |
|
|
|
12,573 |
|
|
|
14,221 |
|
|
|
37,562 |
|
|
|
38,790 |
|
|
Depreciation |
|
|
122,777 |
|
|
|
131,995 |
|
|
|
116,061 |
|
|
|
367,048 |
|
|
|
355,102 |
|
|
Asset impairment charge |
|
|
— |
|
|
|
— |
|
|
|
6,250 |
|
|
|
— |
|
|
|
6,250 |
|
|
Segment operating income (loss) |
|
$ |
(7,980 |
) |
|
$ |
(51,850 |
) |
|
$ |
25,802 |
|
|
$ |
(90,718 |
) |
|
$ |
143,855 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue days |
|
|
16,577 |
|
|
|
13,166 |
|
|
|
7,483 |
|
|
|
39,527 |
|
|
|
29,029 |
|
|
Average rig revenue per day |
|
$ |
21,986 |
|
|
$ |
22,654 |
|
|
$ |
35,474 |
|
|
$ |
22,902 |
|
|
$ |
32,251 |
|
|
Average rig expense per day |
|
$ |
14,256 |
|
|
$ |
15,612 |
|
|
$ |
13,780 |
|
|
$ |
14,942 |
|
|
$ |
13,532 |
|
|
Average rig margin per day |
|
$ |
7,730 |
|
|
$ |
7,042 |
|
|
$ |
21,694 |
|
|
$ |
7,960 |
|
|
$ |
18,719 |
|
|
Rig utilization |
|
|
52 |
|
% |
|
42 |
|
% |
|
24 |
|
% |
|
42 |
|
% |
|
31 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OFFSHORE OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
33,711 |
|
|
$ |
36,235 |
|
|
$ |
30,492 |
|
|
$ |
103,758 |
|
|
$ |
106,697 |
|
|
Direct operating expenses |
|
|
23,656 |
|
|
|
26,023 |
|
|
|
24,249 |
|
|
|
72,524 |
|
|
|
81,607 |
|
|
General and administrative expense |
|
|
969 |
|
|
|
902 |
|
|
|
975 |
|
|
|
2,787 |
|
|
|
2,674 |
|
|
Depreciation |
|
|
2,630 |
|
|
|
3,398 |
|
|
|
3,184 |
|
|
|
9,295 |
|
|
|
9,311 |
|
|
Segment operating income |
|
$ |
6,456 |
|
|
$ |
5,912 |
|
|
$ |
2,084 |
|
|
$ |
19,152 |
|
|
$ |
13,105 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue days |
|
|
546 |
|
|
|
595 |
|
|
|
637 |
|
|
|
1,785 |
|
|
|
2,064 |
|
|
Average rig revenue per day |
|
$ |
35,644 |
|
|
$ |
36,006 |
|
|
$ |
25,568 |
|
|
$ |
34,204 |
|
|
$ |
27,086 |
|
|
Average rig expense per day |
|
$ |
24,141 |
|
|
$ |
25,189 |
|
|
$ |
18,823 |
|
|
$ |
23,300 |
|
|
$ |
19,721 |
|
|
Average rig margin per day |
|
$ |
11,503 |
|
|
$ |
10,817 |
|
|
$ |
6,745 |
|
|
$ |
10,904 |
|
|
$ |
7,365 |
|
|
Rig utilization |
|
|
75 |
|
% |
|
77 |
|
% |
|
78 |
|
% |
|
77 |
|
% |
|
84 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTERNATIONAL LAND OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
55,075 |
|
|
$ |
34,757 |
|
|
$ |
47,983 |
|
|
$ |
157,863 |
|
|
$ |
171,529 |
|
|
Direct operating expenses |
|
|
35,006 |
|
|
|
32,181 |
|
|
|
38,230 |
|
|
|
120,537 |
|
|
|
140,351 |
|
|
General and administrative expense |
|
|
714 |
|
|
|
920 |
|
|
|
772 |
|
|
|
2,303 |
|
|
|
2,377 |
|
|
Depreciation |
|
|
14,428 |
|
|
|
12,633 |
|
|
|
13,972 |
|
|
|
40,248 |
|
|
|
42,725 |
|
|
Segment operating income (loss) |
|
$ |
4,927 |
|
|
$ |
(10,977 |
) |
|
$ |
(4,991 |
) |
|
$ |
(5,225 |
) |
|
$ |
(13,924 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue days |
|
|
1,633 |
|
|
|
870 |
|
|
|
1,274 |
|
|
|
3,660 |
|
|
|
3,992 |
|
|
Average rig revenue per day |
|
$ |
32,708 |
|
|
$ |
37,340 |
|
|
$ |
34,693 |
|
|
$ |
41,134 |
|
|
$ |
39,382 |
|
|
Average rig expense per day |
|
$ |
19,645 |
|
|
$ |
33,649 |
|
|
$ |
26,156 |
|
|
$ |
30,328 |
|
|
$ |
29,050 |
|
|
Average rig margin per day |
|
$ |
13,063 |
|
|
$ |
3,691 |
|
|
$ |
8,537 |
|
|
$ |
10,806 |
|
|
$ |
10,332 |
|
|
Rig utilization |
|
|
47 |
|
% |
|
25 |
|
% |
|
37 |
|
% |
|
35 |
|
% |
|
38 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
$ |
41,059 |
|
$ |
32,704 |
|
$ |
19,593 |
|
$ |
94,861 |
|
$ |
67,915 |
Offshore Operations |
|
$ |
5,181 |
|
$ |
6,066 |
|
$ |
5,270 |
|
$ |
15,678 |
|
$ |
17,687 |
International Land Operations |
|
$ |
1,663 |
|
$ |
2,272 |
|
$ |
3,784 |
|
$ |
7,312 |
|
$ |
14,316 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 (loss) from continuing operations before
income taxes as reported on the Consolidated Statements of Operations (in thousands).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Nine Months Ended |
|
|
June 30 |
|
March 31 |
|
June 30 |
|
June 30 |
|
|
2017 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Operating income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Land |
|
$ |
(7,980 |
) |
|
$ |
(51,850 |
) |
|
$ |
25,802 |
|
|
$ |
(90,718 |
) |
|
$ |
143,855 |
|
Offshore |
|
|
6,456 |
|
|
|
5,912 |
|
|
|
2,084 |
|
|
|
19,152 |
|
|
|
13,105 |
|
International Land |
|
|
4,927 |
|
|
|
(10,977 |
) |
|
|
(4,991 |
) |
|
|
(5,225 |
) |
|
|
(13,924 |
) |
Other |
|
|
(1,992 |
) |
|
|
(1,134 |
) |
|
|
(2,186 |
) |
|
|
(5,175 |
) |
|
|
(4,839 |
) |
Segment operating income (loss) |
|
$ |
1,411 |
|
|
$ |
(58,049 |
) |
|
$ |
20,709 |
|
|
$ |
(81,966 |
) |
|
$ |
138,197 |
|
Corporate general and administrative |
|
|
(27,860 |
) |
|
|
(19,124 |
) |
|
|
(30,528 |
) |
|
|
(68,019 |
) |
|
|
(68,540 |
) |
Other depreciation |
|
|
(3,852 |
) |
|
|
(3,822 |
) |
|
|
(4,456 |
) |
|
|
(11,751 |
) |
|
|
(12,037 |
) |
Inter-segment elimination |
|
|
411 |
|
|
|
434 |
|
|
|
472 |
|
|
|
1,279 |
|
|
|
1,595 |
|
Income from asset sales |
|
|
1,862 |
|
|
|
14,889 |
|
|
|
547 |
|
|
|
17,593 |
|
|
|
7,820 |
|
Operating income (loss) |
|
$ |
(28,028 |
) |
|
$ |
(65,672 |
) |
|
$ |
(13,256 |
) |
|
$ |
(142,864 |
) |
|
$ |
67,035 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and dividend income |
|
|
1,700 |
|
|
|
1,338 |
|
|
|
778 |
|
|
|
4,028 |
|
|
|
2,310 |
|
Interest expense |
|
|
(6,364 |
) |
|
|
(6,084 |
) |
|
|
(6,407 |
) |
|
|
(17,503 |
) |
|
|
(16,652 |
) |
Other |
|
|
(911 |
) |
|
|
174 |
|
|
|
534 |
|
|
|
(350 |
) |
|
|
926 |
|
Total other income (expense) |
|
|
(5,575 |
) |
|
|
(4,572 |
) |
|
|
(5,095 |
) |
|
|
(13,825 |
) |
|
|
(13,416 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before income taxes |
|
$ |
(33,603 |
) |
|
$ |
(70,244 |
) |
|
$ |
(18,351 |
) |
|
$ |
(156,689 |
) |
|
$ |
53,619 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTARY STATISTICAL INFORMATION
The tables and information that follow are additional statistical information that may also help provide further clarity and
insight into the operations of the Company.
|
SELECTED STATISTICAL & OPERATIONAL
HIGHLIGHTS |
(Used to determine adjusted per revenue day
statistics, which is a non-GAAP measure) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
June 30 |
|
March 31 |
|
|
2017 |
|
2017 |
|
|
|
|
|
|
|
|
|
(in dollars per revenue day) |
U.S. Land Operations |
|
|
|
|
|
|
Early contract termination revenues |
|
$ |
310 |
|
$ |
453 |
Total impact per revenue day: |
|
$ |
310 |
|
$ |
453 |
|
|
|
|
|
|
|
U.S. LAND RIG COUNTS & MARKETABLE FLEET
STATISTICS |
|
|
|
|
|
|
|
|
|
|
|
July 27 |
|
June 30 |
|
March 31 |
|
Q3FY17 |
|
|
2017 |
|
2017 |
|
2017 |
|
Average |
U.S. Land Operations |
|
|
|
|
|
|
|
|
Term Contract Rigs |
|
98 |
|
99 |
|
88 |
|
95.5 |
Spot Contract Rigs |
|
91 |
|
91 |
|
79 |
|
86.7 |
Total Rigs Generating Revenue Days |
|
189 |
|
190 |
|
167 |
|
182.2 |
Other Contracted Rigs |
|
— |
|
— |
|
1 |
|
0.6 |
Total Contracted Rigs |
|
189 |
|
190 |
|
168 |
|
182.8 |
Idle or Other Rigs |
|
161 |
|
160 |
|
182 |
|
167.2 |
Total Marketable Fleet |
|
350 |
|
350 |
|
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
7/27/17) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 |
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Q1 |
|
Q2 |
Segment |
|
FY17 |
|
FY18 |
|
FY18 |
|
FY18 |
|
FY18 |
|
FY19 |
|
FY19 |
U.S. Land Operations |
|
95.3 |
|
83.0 |
|
53.7 |
|
43.3 |
|
33.4 |
|
27.8 |
|
20.4 |
International Land Operations |
|
10.0 |
|
10.0 |
|
10.0 |
|
10.0 |
|
10.0 |
|
10.0 |
|
10.0 |
Offshore Operations |
|
2.0 |
|
2.0 |
|
2.0 |
|
1.9 |
|
0.3 |
|
— |
|
— |
Total |
|
107.3 |
|
95.0 |
|
65.7 |
|
55.2 |
|
43.8 |
|
37.8 |
|
30.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_______________________
(1) The above term contract coverage excludes long-term contracts for which the Company received early contract termination
notifications as of 7/27/17. Given notifications as of 7/27/17, the Company expects to generate approximately $5 million in the
fourth fiscal quarter of 2017 and approximately $15 million thereafter from early terminations corresponding to long-term
contracts and related to its U.S. Land segment. All of the above rig contracts include provisions for early termination
fees.
Contact: Investor Relations investor.relations@hpinc.com (918) 588‑5190