This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Helmerich & Payne Management Discusses Q3 2012 Results - Earnings Call Transcript

Stocks in this article: HP

I will now turn the call over to Hans Helmerich.

Hans C. Helmerich

Thank you, Juan Pablo. Good morning, everybody. We're pleased to report the company achieved an all-time record level of quarterly income from continuing operations. This is a nice milestone made possible by, literally, thousands of H&P employees who work hard every day to exceed our customers' expectations. We have discussed on a number of these calls the impressive rotation from dry gas direct drilling oil NGL and NGL directed targets. There's been a steady 3-year upward march in oil directed drilling that had been more than enough to offset a slowly deteriorating dry gas drilling rig count. Then, a couple things happened earlier this year. Natural gas prices plunged beneath $2 per mcf and the gas directed rig count dropped by over 1/3, reaching a 13-year low. Next, the oil rig count received a jolt at the time of our last call. WTI prices were over $105, but by the end of the quarter, the oil prices have fallen to $77 and changed. While both oil and gas prices have recovered some lately, the $100 question focuses on what happens next, particularly to the future price of oil. Certainly, that answers entangled with macroeconomic headlines of the euro crisis, the ongoing Middle East turmoil and the sense for a slowing world economy, but the volatility and uncertainty is weighing on the minds of our customers and impacting their spending in the field. I think the right question to ask at the onset of what appears to be a somewhat softening cycle is how deep and will the pain go and how long will it last. While our sense is that the duration and the depth of this slowdown will be on the milder side, I can't think of a time in the company's history that we've been better positioned for the uncertainty ahead. In addition to our quality fleet profile and strong balance sheet, we've never had a more robust term contract coverage. Today, 157 FlexRigs or about 2/3 of our active fleet are under long-term contracts in the U.S. land market. Moreover, we already have in place today an average of 136 FlexRigs under term contract during fiscal 2013 and still an average of 95 FlexRigs under term contracts during fiscal 2014. These rigs are expected to generate average daily rig margins that are higher than the average reported in the segment during this third fiscal quarter. In addition, today, we have 13 rigs under term contracts internationally, as well as 2 platform rigs. Most of these 15 rigs are already contracted through fiscal 2014.

2 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,065.00 +11.29 0.06%
S&P 500 2,092.61 +3.84 0.18%
NASDAQ 4,811.5380 +4.6790 0.10%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs