Exhibit 99
January 22, 2004
HELMERICH & PAYNE, INC. ANNOUNCES FIRST QUARTER RESULTS
Helmerich & Payne, Inc. reported net income of $5,629,000 ($0.11 per diluted share) from revenues of $138,894,000 for its first fiscal quarter ended December 31, 2003, compared with net income of $607,000 ($0.01 per diluted share) from revenues of $113,313,000 during last year’s first fiscal quarter ended December 31, 2002. Net income for this year’s first quarter includes $2,098,000 ($.04 per share) of gains (net of tax) from the sale of portfolio securities. There were no portfolio sales in last year’s first quarter.
Operating profits from the Company’s U.S. land and international segments were improved over both last year’s first and fourth quarters, but U.S. offshore platform rig operating profit for the first quarter was substantially lower, compared to either first or fourth quarter of last year. As announced in November 2003, the reduction in U.S. offshore platform rig performance was primarily the result of one rig being stacked and two rigs going from full dayrate to standby status. No significant change in U.S. offshore platform results is anticipated for the second quarter; however, the Company has reached an agreement with a large independent for H&P platform Rig 100 to return to work in the Gulf of Mexico in March 2004.
First quarter U.S. land rig operating profit increased significantly from first quarter of last year due to 25% more revenue days as well as lower field and general and administrative costs. Compared with the previous quarter, first quarter U.S. land rig operating profit was up slightly because lower depreciation and higher revenue per rig day more than offset the effects of slightly lower rig utilization and revenue days.
International operating profit improved from last year’s first and fourth quarters as a result of additional rig revenue days and improved profitability in Venezuela, Argentina, and Hungary. The Company also recently received government approval to convert its bolivar cash balances in Venezuelan banks to U.S. dollars and to remit those dollars in the form of a subsidiary dividend to the parent Company’s U.S. bank account. The dividend of approximately $8.8 million U.S. dollars, which was transferred to the U.S. last week, substantially reduces the Company’s current exposure to potential devaluation loss. The Company has also received a contract to put an eighth H&P rig to work in Venezuela commencing in February 2004.
Real Estate operating profit returned to a more normal level of $1.3 million for this year’s first quarter, compared with last year’s fourth quarter operating profit of $3.2 million, which included the sale of approximately 15 acres of raw land that generated $2.2 million of pre-tax operating profit.
(over)
Page 2
January 22, 2004
News Release
Company President and C.E.O., Hans Helmerich commented, “As we expected, our net income this quarter was negatively affected by the drop in offshore platform operating profit. At the same time, we are encouraged by the positive industry fundamentals of an increasing U.S. land rig count, strong commodity prices, and signs of improvement in our international business.”
Helmerich & Payne, Inc. (HP/NYSE) is a contract drilling company that owns 86 U.S. land rigs, 12 U.S. platform rigs located in the Gulf of Mexico, 30 rigs located in South America, one rig in Hungary, and one rig in Chad, for a total of 130 rigs. The Company currently operates 48 H&P-designed FlexRigs® and is scheduled to complete the construction of an additional two FlexRigs® to be put in service by March 2004.
Helmerich & Payne, Inc.’s conference call/webcast, scheduled for this afternoon, is athttp://www.firstcallevents.com/service/ajwz395831221gf12.html and will begin at 3:30 ET (2:30 CT). If you are unable to participate during the live webcast, the call will be archived for 60 days on the website listed above as well as on H&P’s website atwww.hpinc.com.
The information to be disclosed in the conference call and webcast shall include forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Such forward-looking statements are subject to certain risks and uncertainties, as disclosed by H&P from time to time in its filings with the Securities and Exchange Commission. As a result of these factors, H&P’s actual results may differ materially from those indicated or implied by such forward-looking statements.
Contact: Doug Fears
(918) 588-5208
(more)
Page 3
News Release
January 22, 2004
HELMERICH & PAYNE, INC.
Unaudited
(in thousands, except per share data)
| | | | | | | | | | | | | | |
| | | | Three Months Ended |
| | | |
|
| | | | September 30 | | December 31 |
| CONSOLIDATED STATEMENTS OF INCOME | | 2003 | | 2003 | | 2002 |
| |
| |
| |
|
REVENUES | | | | | | | | | | | | |
| | Operating revenues | | $ | 132,815 | | | $ | 134,870 | | | $ | 112,504 | |
| | Income from investments | | | 5,811 | | | | 4,024 | | | | 809 | |
| | | | |
| | | |
| | | |
| |
| | | | 138,626 | | | | 138,894 | | | | 113,313 | |
| | | | |
| | | |
| | | |
| |
COSTS AND EXPENSES | | | | | | | | | | | | |
| | Direct operating costs | | | 88,408 | | | | 93,527 | | | | 81,056 | |
| | Depreciation | | | 22,817 | | | | 22,268 | | | | 18,236 | |
| | General and administrative | | | 9,119 | | | | 9,102 | | | | 10,980 | |
| | Interest | | | 3,240 | | | | 3,222 | | | | 2,770 | |
| | | | |
| | | |
| | | |
| |
| | | | 123,584 | | | | 128,119 | | | | 113,042 | |
| | | | |
| | | |
| | | |
| |
| Income before income taxes and equity in income (loss) of affiliates | | | 15,042 | | | | 10,775 | | | | 271 | |
| Provision for income taxes | | | 6,473 | | | | 4,526 | | | | 117 | |
| Equity in income (loss) of affiliates net of income taxes | | | (2,039 | ) | | | (620 | ) | | | 453 | |
| | | | |
| | | |
| | | |
| |
NET INCOME | | $ | 6,530 | | | $ | 5,629 | | | $ | 607 | |
| | | | |
| | | |
| | | |
| |
| Earnings per common share: | | | | | | | | | | | | |
| | Basic | | $ | 0.13 | | | $ | 0.11 | | | $ | 0.01 | |
| | Diluted | | $ | 0.13 | | | $ | 0.11 | | | $ | 0.01 | |
| Average common shares outstanding: | | | | | | | | | | | | |
| | Basic | | | 50,108 | | | | 50,154 | | | | 49,979 | |
| | Diluted | | | 50,695 | | | | 50,667 | | | | 50,467 | |
(more)
Page 4
News Release
January 22, 2004
HELMERICH & PAYNE, INC.
Unaudited
(in thousands)
| | | | | | | | | | | |
| CONSOLIDATED CONDENSED BALANCE SHEETS | | 12/31/03 | | 9/30/03 |
| |
| |
|
ASSETS | | | | | | | | |
| | Cash and cash equivalents | | $ | 35,497 | | | $ | 38,189 | |
| | Other current assets | | | 169,838 | | | | 159,342 | |
| | | | |
| | | |
| |
| | | Total current assets | | | 205,335 | | | | 197,531 | |
| | | | |
| | | |
| |
| | Investments | | | 168,157 | | | | 158,770 | |
| | Net property, plant, and equipment | | | 1,065,268 | | | | 1,058,205 | |
| | Other assets | | | 1,315 | | | | 1,329 | |
| | | | |
| | | |
| |
TOTAL ASSETS | | $ | 1,440,075 | | | $ | 1,415,835 | |
| | | | |
| | | |
| |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
| | Total current liabilities | | $ | 88,471 | | | $ | 88,618 | |
| | Total noncurrent liabilities | | | 225,557 | | | | 209,966 | |
| | Long-term notes payable | | | 200,000 | | | | 200,000 | |
| | Total Shareholders’ Equity | | | 926,047 | | | | 917,251 | |
| | | | |
| | | |
| |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | | $ | 1,440,075 | | | $ | 1,415,835 | |
| | | | |
| | | |
| |
(more)
Page 5
News Release
January 22, 2004
| | | | | | | | | | | | |
| | | | | | Three Months Ended |
| | | | | | December 31 |
| CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS | | 2003 | | 2002 |
| |
| |
|
| | | | | | (Amounts in thousands) | | | | | | | | |
OPERATING ACTIVITIES: | | | | | | | | |
| | Net income | | $ | 5,629 | | | $ | 607 | |
| | | Depreciation | | | 22,268 | | | | 18,236 | |
| | | Gain on sale of assets | | | (4,090 | ) | | | (20 | ) |
| | | Changes in assets and liabilities | | | 675 | | | | 8,802 | |
| | | Other | | | 1,254 | | | | (594 | ) |
| | | | |
| | | |
| |
| | | | Net cash provided by operating activities | | | 25,736 | | | | 27,031 | |
| | | | |
| | | |
| |
INVESTING ACTIVITIES: | | | | | | | | |
| | | Capital expenditures | | | (29,746 | ) | | | (69,255 | ) |
| | | Proceeds from sale of assets | | | 4,757 | | | | 351 | |
| | | | |
| | | |
| |
| | | | Net cash used in investing activities | | | (24,989 | ) | | | (68,904 | ) |
| | | | |
| | | |
| |
FINANCING ACTIVITIES: | | | | | | | | |
| | | Net proceeds from notes payable | | | — | | | | 100,000 | |
| | | Dividends paid | | | (4,015 | ) | | | (4,002 | ) |
| | | Proceeds from exercise of stock options | | | 576 | | | | 223 | |
| | | | |
| | | |
| |
| | | | Net cash (used in) provided by financing activities | | | (3,439 | ) | | | 96,221 | |
| | | | |
| | | |
| |
Net increase (decrease) in cash and cash equivalents | | | (2,692 | ) | | | 54,348 | |
Cash and cash equivalents, beginning of period | | | 38,189 | | | | 46,883 | |
| | | | |
| | | |
| |
Cash and Cash Equivalents, end of period | | $ | 35,497 | | | $ | 101,231 | |
| | | | |
| | | |
| |
(more)
Page 6
News Release
January 22, 2004
| | | | | | | | | | | | | |
| SEGMENT REPORTING | | Three Months Ended |
| | |
|
| | | September 30, | | December 31, |
| | | 2003 | | 2003 | | 2002 |
| | |
| |
|
US LAND OPERATIONS | | | | | | | | | | | | |
| Revenues | | $ | 75,507 | | | $ | 75,468 | | | $ | 59,038 | |
| Direct operating expenses | | | 54,079 | | | | 53,490 | | | | 45,856 | |
| General and administrative expense | | | 1,711 | | | | 1,925 | | | | 3,337 | |
| Depreciation | | | 13,356 | | | | 13,063 | | | | 8,950 | |
| | | |
| | | |
| | | |
| |
| Operating profit | | $ | 6,361 | | | $ | 6,990 | | | $ | 895 | |
| | | | | | | | | | | | | |
| Activity days | | | 6,304 | | | | 6,280 | | | | 5,015 | |
| Average rig revenue per day | | $ | 11,236 | | | $ | 11,340 | | | $ | 11,322 | |
| Average rig expense per day | | $ | 7,837 | | | $ | 7,841 | | | $ | 8,693 | |
| Average rig margin per day | | $ | 3,399 | | | $ | 3,499 | | | $ | 2,629 | |
| Rig utilization | | | 83 | % | | | 81 | % | | | 79 | % |
| | | | | | | | | | | | | |
US OFFSHORE OPERATIONS | | | | | | | | | | | | |
| Revenues | | $ | 26,247 | | | $ | 20,865 | | | $ | 27,711 | |
| Direct operating expenses | | | 13,449 | | | | 12,722 | | | | 16,099 | |
| General and administrative expense | | | 626 | | | | 729 | | | | 739 | |
| Depreciation | | | 3,312 | | | | 3,039 | | | | 3,142 | |
| | | |
| | | |
| | | |
| |
| Operating profit | | $ | 8,860 | | | $ | 4,375 | | | $ | 7,731 | |
| | | | | | | | | | | | | |
| Activity days | | | 529 | | | | 460 | | | | 572 | |
| Average rig revenue per day | | $ | 37,514 | | | $ | 32,790 | | | $ | 36,080 | |
| Average rig expense per day | | $ | 17,067 | | | $ | 17,584 | | | $ | 17,852 | |
| Average rig margin per day | | $ | 20,447 | | | $ | 15,206 | | | $ | 18,228 | |
| Rig utilization | | | 48 | % | | | 42 | % | | | 52 | % |
| | | | | | | | | | | | | |
INTERNATIONAL OPERATIONS | | | | | | | | | | | | |
| Revenues | | $ | 26,856 | | | $ | 36,144 | | | $ | 23,524 | |
| Direct operating expenses | | | 20,429 | | | | 26,672 | | | | 18,495 | |
| General and administrative expense | | | 723 | | | | 628 | | | | 718 | |
| Depreciation | | | 5,095 | | | | 5,021 | | | | 4,903 | |
| | | |
| | | |
| | | |
| |
| Operating profit | | $ | 609 | | | $ | 3,823 | | | $ | (592 | ) |
| | | | | | | | | | | | | |
| Activity days | | | 1,108 | | | | 1,534 | | | | 991 | |
| Average rig revenue per day | | $ | 19,820 | | | $ | 19,208 | | | $ | 18,669 | |
| Average rig expense per day | | $ | 13,717 | | | $ | 13,399 | | | $ | 14,812 | |
| Average rig margin per day | | $ | 6,103 | | | $ | 5,809 | | | $ | 3,857 | |
| Rig utilization | | | 38 | % | | | 53 | % | | | 33 | % |
Per day calculations for international operations exclude gains and losses from translation of foreign currency transactions.
(more)
Page 7
News Release
January 22, 2004
| | | | | | | | | | | | | |
| SEGMENT REPORTING | | Three Months Ended |
| | |
|
| | | September 30, | | December 31, |
| | | 2003 | | 2003 | | 2002 |
| | |
| |
| |
|
| Reimbursed amounts were as follows: | | | | | | | | | | | | |
| US Land Operations | | $ | 4,676 | | | $ | 4,252 | | | $ | 2,260 | |
| US Offshore Operations | | $ | 1,537 | | | $ | 1,601 | | | $ | 2,006 | |
| International Operations | | $ | 1,537 | | | $ | 3,261 | | | $ | 1,720 | |
| | | | | | | | | | | | | |
REAL ESTATE | | | | | | | | | | | | |
| Revenues | | $ | 4,205 | | | $ | 2,393 | | | $ | 2,231 | |
| Direct operating expenses | | | 429 | | | | 613 | | | | 430 | |
| Depreciation | | | 544 | | | | 524 | | | | 635 | |
| | | |
| | | |
| | | |
| |
| Operating profit | | $ | 3,232 | | | $ | 1,256 | | | $ | 1,166 | |
| | | | | | | | | | | | | |
| | | Three Months Ended |
| | |
|
| | | September 30, | | December 31, |
| | | 2003 | | 2003 | | 2002 |
| | |
| |
| |
|
Operating Profit | | | | | | | | | | | | |
| US Land | | $ | 6,361 | | | $ | 6,990 | | | $ | 895 | |
| US Offshore | | | 8,860 | | | | 4,375 | | | | 7,731 | |
| International | | | 609 | | | | 3,823 | | | | (592 | ) |
| Real Estate | | | 3,232 | | | | 1,256 | | | | 1,166 | |
| | | |
| | | |
| | | |
| |
Segment operating profits | | $ | 19,062 | | | $ | 16,444 | | | $ | 9,200 | |
| | | | | | | | | | | | | |
| Unallocated amounts: | | | | | | | | | | | | |
| Income from investments | | | 5,811 | | | | 4,024 | | | | 809 | |
| Corporate general & administrative | | | (6,059 | ) | | | (5,820 | ) | | | (6,186 | ) |
| Interest expense | | | (3,240 | ) | | | (3,222 | ) | | | (2,770 | ) |
| Other depreciation | | | (510 | ) | | | (621 | ) | | | (606 | ) |
| Other expense | | | (22 | ) | | | (30 | ) | | | (176 | ) |
| | | |
| | | |
| | | |
| |
| Total unallocated amounts | | | (4,020 | ) | | | (5,669 | ) | | | (8,929 | ) |
| | | |
| | | |
| | | |
| |
Income before income taxes and equity in income of affiliates | | $ | 15,042 | | | $ | 10,775 | | | $ | 271 | |
| | | |
| | | |
| | | |
| |
###
