Exhibit 99
April 27, 2005
HELMERICH & PAYNE, INC. ANNOUNCES SECOND QUARTER RESULTS
AND NEW RIG CONSTRUCTION FOR CONOCOPHILLIPS
Helmerich & Payne, Inc. reported net income of $22,350,000 ($0.43 per diluted share) from operating revenues of $185,450,000 for its second fiscal quarter ended March 31, 2005, compared with net income of $6,048,000 ($0.12 per diluted share) from operating revenues of $143,024,000 during last year’s second fiscal quarter ended March 31, 2004. Included in net income were gains from the sale of portfolio securities and drilling equipment of $0.01 per share for this year’s second quarter and $0.09 per share for last year’s second quarter.
For the six months ended March 31, 2005, the Company reported net income of $61,660,000 ($1.20 per diluted share) from operating revenues of $360,129,000, compared with net income of $12,636,000 ($0.25 per diluted share) from operating revenues of $277,297,000 during the first six months ended March 31, 2004. Included in net income were gains from the sale of portfolio securities and drilling equipment of $0.45 per share for the first six months of fiscal 2005 and $0.16 per share for the first six months of fiscal 2004.
Company President and CEO, Hans Helmerich commented, “The U.S. land business continues to improve, fueled by strong energy prices. Customers are paying more for rigs across the board and are particularly attracted to the consistent performance and added drilling efficiency that our fleet offers. During the second quarter, cash margins for our U.S. land fleet increased by $1,381 over the previous quarter, driving operating income up by 40% during that same period.
As expected, our U.S. platform business was steady during the second quarter, while our international segment results were hampered by a $1,555,000 Venezuelan currency revaluation expense, reduction in operating income in Bolivia and Equatorial Guinea, and expenses associated with terminating operations in Chad and Hungary.”
As previously announced on March 23rd, the Company has been contracted by Williams Production RMT Company to operate 10 new FlexRig4s®, each under three-year term contracts at a fixed dayrate plus certain conditional incentive payments based upon savings realized by Williams. The first rig is scheduled for completion by November 2005, with the remaining nine expected to be delivered to the field at the rate of one per month thereafter.
The Company announced today that it had received a letter of intent from ConocoPhillips to operate three new FlexRig4 drilling rigs. ConocoPhillips will contract the new FlexRig4s on three-year term contracts for work in the San Juan Basin in northwestern New Mexico. The Company expects to deliver one new rig per month starting November 2005. The new rigs and transportation equipment are expected to cost the Company approximately $9.5 million each.
Mr. Helmerich added, “We are pleased to be awarded the contract resulting in the construction of three new FlexRig4 rigs for ConocoPhillips. This work represents further validation of the FlexRig’s superior field performance and drilling efficiencies. Building on strong customer satisfaction with our existing 50 FlexRigs, these new FlexRig4s will provide enhanced project economics for the customer and allow us to secure term contracts with attractive financial returns for our shareholders.”
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April 27, 2005
News Release
Helmerich & Payne, Inc. (HP/NYSE) is a contract drilling company that owns 91 U.S. land rigs, 11 U.S. platform rigs located in the Gulf of Mexico, 26 rigs located in South America, for a total of 128 rigs. Included in the total fleet of 128 rigs are 50 H&P-designed and operated FlexRigs.
Helmerich & Payne, Inc.’s conference call/webcast is scheduled for this morning and can be accessed at http://www.hpinc.com under Investor Relations and will begin at 11:00 a.m. ET (10:00 a.m. CT). If you are unable to participate during the live webcast, the call will be archived for a year on H&P’s website indicated above.
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 in itsForm 10-K filed with the Securities and Exchange Commission on December 13, 2004. As a result of these factors, H&P’s actual results may differ materially from those indicated or implied by such forward-looking statements.
*FlexRig® is a registered trademark of Helmerich & Payne, Inc.
Contact: Doug Fears
(918) 588-5208
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News Release
April 27, 2005
HELMERICH & PAYNE, INC.
Unaudited
(in thousands, except per share data)
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| Dec. 31 | March 31 | March 31 | ||||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | 2004 | 2005 | 2004 | 2005 | 2004 | |||||||||||||||
Operating Revenues: | ||||||||||||||||||||
| Drilling – U.S. Land | $ | 109,188 | $ | 122,394 | $ | 82,477 | $ | 231,582 | $ | 157,410 | ||||||||||
| Drilling – U.S. Offshore | 20,356 | 18,649 | 18,675 | 39,005 | 39,377 | |||||||||||||||
| Drilling – International | 42,471 | 41,799 | 39,311 | 84,270 | 75,272 | |||||||||||||||
| Real Estate | 2,664 | 2,608 | 2,561 | 5,272 | 5,238 | |||||||||||||||
| 174,679 | 185,450 | 143,024 | 360,129 | 277,297 | ||||||||||||||||
Operating costs and expenses: | ||||||||||||||||||||
| Operating costs | 111,252 | 114,321 | 104,950 | 225,573 | 198,731 | |||||||||||||||
| Depreciation | 23,262 | 23,950 | 23,402 | 47,212 | 45,670 | |||||||||||||||
| General and administrative | 9,246 | 9,593 | 9,789 | 18,839 | 18,891 | |||||||||||||||
| 143,760 | 147,864 | 138,141 | 291,624 | 263,292 | ||||||||||||||||
Operating income | 30,919 | 37,586 | 4,883 | 68,505 | 14,005 | |||||||||||||||
| Other income (expense): | ||||||||||||||||||||
| Interest and dividend income | 961 | 1,193 | 516 | 2,154 | 1,161 | |||||||||||||||
| Interest expense | (3,309 | ) | (3,246 | ) | (3,112 | ) | (6,555 | ) | (6,334 | ) | ||||||||||
| Gain on sale of investment securities | 26,349 | (36 | ) | 7,072 | 26,313 | 11,976 | ||||||||||||||
| Income from asset sales | 10,816 | 971 | 755 | 11,787 | 1,636 | |||||||||||||||
| Other | (2 | ) | 348 | 109 | 346 | 118 | ||||||||||||||
| 34,815 | (770 | ) | 5,340 | 34,045 | 8,557 | |||||||||||||||
| Income before income taxes and equity in income (loss) of affiliates | 65,734 | 36,816 | 10,223 | 102,550 | 22,562 | |||||||||||||||
| Income tax provision | 27,130 | 15,153 | 4,484 | 42,283 | 9,615 | |||||||||||||||
| Equity in income (loss) of affiliates net of income taxes | 706 | 687 | 309 | 1,393 | (311 | ) | ||||||||||||||
NET INCOME | $ | 39,310 | $ | 22,350 | $ | 6,048 | $ | 61,660 | $ | 12,636 | ||||||||||
| Earnings (loss) per common share: | ||||||||||||||||||||
| Basic | $ | 0.78 | $ | 0.44 | $ | 0.12 | $ | 1.22 | $ | 0.25 | ||||||||||
| Diluted | $ | 0.77 | $ | 0.43 | $ | 0.12 | $ | 1.20 | $ | 0.25 | ||||||||||
| Average common shares outstanding: | ||||||||||||||||||||
| Basic | 50,543 | 50,955 | 50,263 | 50,747 | 50,209 | |||||||||||||||
| Diluted | 51,256 | 51,891 | 50,903 | 51,571 | 50,784 | |||||||||||||||
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News Release
April 27, 2005
HELMERICH & PAYNE, INC.
Unaudited
(in thousands)
| CONSOLIDATED CONDENSED BALANCE SHEETS | 3/31/05 | 9/30/04 | ||||||
ASSETS | ||||||||
| Cash and cash equivalents | $ | 208,453 | $ | 65,296 | ||||
| Other current assets | 184,479 | 180,590 | ||||||
| Total current assets | 392,932 | 245,886 | ||||||
| Investments | 157,076 | 161,532 | ||||||
| Net property, plant, and equipment | 959,487 | 998,674 | ||||||
| Other assets | 662 | 752 | ||||||
TOTAL ASSETS | $ | 1,510,157 | $ | 1,406,844 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Total current liabilities | $ | 55,721 | $ | 59,903 | ||||
| Total noncurrent liabilities | 264,736 | 232,831 | ||||||
| Long-term notes payable | 200,000 | 200,000 | ||||||
| Total shareholders’ equity | 989,700 | 914,110 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 1,510,157 | $ | 1,406,844 | ||||
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News Release
April 27, 2005
HELMERICH & PAYNE, INC.
Unaudited
(in thousands)
| Six Months Ended | ||||||||
| March 31 | ||||||||
| CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS | 2005 | 2004 | ||||||
OPERATING ACTIVITIES: | ||||||||
| Net Income | $ | 61,660 | $ | 12,636 | ||||
| Depreciation | 47,212 | 45,670 | ||||||
| Changes in assets and liabilities | 9,901 | (8,067 | ) | |||||
| Gain on sale of assets and investment securities | (38,100 | ) | (11,666 | ) | ||||
| Non-monetary investment gain | — | (1,946 | ) | |||||
| Other | (2,584 | ) | 546 | |||||
Net cash provided by operating activities | 78,089 | 37,173 | ||||||
INVESTING ACTIVITIES: | ||||||||
| Capital expenditures | (22,693 | ) | (52,657 | ) | ||||
| Purchase of investments | (5,000 | ) | — | |||||
| Proceeds from sale of assets and investment securities | 89,298 | 16,940 | ||||||
Net cash provided by (used in) investing activities | 61,605 | (35,717 | ) | |||||
FINANCING ACTIVITIES: | ||||||||
| Payments of short-term notes | — | (5,000 | ) | |||||
| Dividends paid | (8,380 | ) | (8,050 | ) | ||||
| Proceeds from exercise of stock options | 11,843 | 3,963 | ||||||
Net cash provided by (used in) financing activities | 3,463 | (9,087 | ) | |||||
Net increase (decrease) in cash and cash equivalents | 143,157 | (7,631 | ) | |||||
Cash and cash equivalents, beginning of period | 65,296 | 38,189 | ||||||
Cash and cash equivalents, end of period | $ | 208,453 | $ | 30,558 | ||||
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News Release
April 27, 2005
| SEGMENT REPORTING | Three Months Ended | Six Months Ended | ||||||||||||||||||
| Dec. 31 | March 31 | March 31 | ||||||||||||||||||
| 2004 | 2005 | 2004 | 2005 | 2004 | ||||||||||||||||
| (in thousands, except days and per day amounts) | ||||||||||||||||||||
US LAND OPERATIONS | ||||||||||||||||||||
| Revenues | $ | 109,188 | $ | 122,394 | $ | 82,477 | $ | 231,582 | $ | 157,410 | ||||||||||
| Direct operating expenses | 66,978 | 69,695 | 60,943 | 136,673 | 114,433 | |||||||||||||||
| General and administrative expense | 1,866 | 1,839 | 1,867 | 3,705 | 3,792 | |||||||||||||||
| Depreciation | 14,756 | 15,063 | 13,920 | 29,819 | 26,983 | |||||||||||||||
| Operating income | $ | 25,588 | $ | 35,797 | $ | 5,747 | $ | 61,385 | $ | 12,202 | ||||||||||
| Activity days | 7,588 | 7,589 | 6,758 | 15,177 | 13,038 | |||||||||||||||
| Average rig revenue per day | $ | 13,363 | $ | 15,018 | $ | 11,218 | $ | 14,191 | $ | 11,236 | ||||||||||
| Average rig expense per day | $ | 7,800 | $ | 8,074 | $ | 8,032 | $ | 7,938 | $ | 7,940 | ||||||||||
| Average rig margin per day | $ | 5,563 | $ | 6,944 | $ | 3,186 | $ | 6,253 | $ | 3,296 | ||||||||||
| Rig utilization | 92 | % | 94 | % | 86 | % | 93 | % | 83 | % | ||||||||||
US OFFSHORE OPERATIONS | ||||||||||||||||||||
| Revenues | $ | 20,356 | $ | 18,649 | $ | 18,675 | $ | 39,005 | $ | 39,377 | ||||||||||
| Direct operating expenses | 12,847 | 10,992 | 10,997 | 23,839 | 23,719 | |||||||||||||||
| General and administrative expense | 834 | 817 | 767 | 1,651 | 1,496 | |||||||||||||||
| Depreciation | 2,507 | 2,668 | 3,031 | 5,175 | 6,070 | |||||||||||||||
| Operating income | $ | 4,168 | $ | 4,172 | $ | 3,880 | $ | 8,340 | $ | 8,092 | ||||||||||
| Activity days | 563 | 450 | 455 | 1,013 | 915 | |||||||||||||||
| Average rig revenue per day | $ | 25,793 | $ | 29,297 | $ | 28,644 | $ | 27,350 | $ | 30,617 | ||||||||||
| Average rig expense per day | $ | 14,251 | $ | 14,928 | $ | 14,481 | $ | 14,552 | $ | 16,041 | ||||||||||
| Average rig margin per day | $ | 11,542 | $ | 14,369 | $ | 14,163 | $ | 12,798 | $ | 14,576 | ||||||||||
| Rig utilization | 56 | % | 45 | % | 42 | % | 51 | % | 42 | % | ||||||||||
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News Release
April 27, 2005
| SEGMENT REPORTING | Three Months Ended | Six Months Ended | ||||||||||||||||||
| Dec. 31 | March 31 | March 31 | ||||||||||||||||||
| 2004 | 2005 | 2004 | 2005 | 2004 | ||||||||||||||||
| (in thousands, except days and per day amounts) | ||||||||||||||||||||
INTERNATIONAL OPERATIONS | ||||||||||||||||||||
| Revenues | $ | 42,471 | $ | 41,799 | $ | 39,311 | $ | 84,270 | $ | 75,272 | ||||||||||
| Direct operating expenses | 30,855 | �� | 32,920 | 32,056 | 63,775 | 58,728 | ||||||||||||||
| General and administrative expense | 653 | 497 | 561 | 1,150 | 1,189 | |||||||||||||||
| Depreciation | 4,766 | 4,800 | 5,139 | 9,566 | 10,160 | |||||||||||||||
| Operating income | $ | 6,197 | $ | 3,582 | $ | 1,555 | $ | 9,779 | $ | 5,195 | ||||||||||
| Activity days | 1,823 | 1,728 | 1,473 | 3,551 | 3,007 | |||||||||||||||
| Average rig revenue per day | $ | 19,208 | $ | 19,430 | $ | 21,849 | $ | 19,316 | $ | 20,441 | ||||||||||
| Average rig expense per day | $ | 13,346 | $ | 13,672 | $ | 16,645 | $ | 13,504 | $ | 14,988 | ||||||||||
| Average rig margin per day | $ | 5,862 | $ | 5,758 | $ | 5,204 | $ | 5,812 | $ | 5,453 | ||||||||||
| Rig utilization | 71 | % | 71 | % | 51 | % | 71 | % | 52 | % | ||||||||||
Per day calculations for international operations exclude gains and losses from translation of foreign currency transactions.
Operating statistics exclude the effects of offshore platform and international management contracts, 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:
| US Land Operations | $ | 7,789 | $ | 8,419 | $ | 6,666 | $ | 16,208 | $ | 10,918 | ||||||||||
| US Offshore Operations | $ | 1,471 | $ | 1,410 | $ | 1,551 | $ | 2,881 | $ | 3,152 | ||||||||||
| International Operations | $ | 3,099 | $ | 3,794 | $ | 3,510 | $ | 6,893 | $ | 6,771 | ||||||||||
REAL ESTATE | ||||||||||||||||||||
| Revenues | $ | 2,664 | $ | 2,608 | $ | 2,561 | $ | 5,272 | $ | 5,238 | ||||||||||
| Direct operating expenses | 1,027 | 1,174 | 954 | 2,201 | 1,851 | |||||||||||||||
| Depreciation | 562 | 573 | 561 | 1,135 | 1,085 | |||||||||||||||
| Operating income | $ | 1,075 | $ | 861 | $ | 1,046 | $ | 1,936 | $ | 2,302 | ||||||||||
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News Release
April 27, 2005
The following table reconciles operating income per the information above to income before income taxes and equity in income (loss) of affiliates as reported on the Consolidated Statements of Income (in thousands).
| SEGMENT REPORTING | Three Months Ended | Six Months Ended | ||||||||||||||||||
| Dec. 31 | March 31 | March 31 | ||||||||||||||||||
| 2004 | 2005 | 2004 | 2005 | 2004 | ||||||||||||||||
Operating income | ||||||||||||||||||||
| US Land | $ | 25,588 | $ | 35,797 | $ | 5,747 | $ | 61,385 | $ | 12,202 | ||||||||||
| US Offshore | 4,168 | 4,172 | 3,880 | 8,340 | 8,092 | |||||||||||||||
| International | 6,197 | 3,582 | 1,555 | 9,779 | 5,195 | |||||||||||||||
| Real Estate | 1,075 | 861 | 1,046 | 1,936 | 2,302 | |||||||||||||||
| Segment operating income | $ | 37,028 | $ | 44,412 | $ | 12,228 | $ | 81,440 | $ | 27,791 | ||||||||||
| Corporate general and administrative | (5,893 | ) | (6,440 | ) | (6,594 | ) | (12,333 | ) | (12,414 | ) | ||||||||||
| Other depreciation | (671 | ) | (846 | ) | (751 | ) | (1,517 | ) | (1,372 | ) | ||||||||||
| Inter-segment elimination | 455 | 460 | — | 915 | — | |||||||||||||||
Operating income | $ | 30,919 | $ | 37,586 | $ | 4,883 | $ | 68,505 | $ | 14,005 | ||||||||||
| Other income (expense): | ||||||||||||||||||||
| Interest and dividend income | 961 | 1,193 | 516 | 2,154 | 1,161 | |||||||||||||||
| Interest expense | (3,309 | ) | (3,246 | ) | (3,112 | ) | (6,555 | ) | (6,334 | ) | ||||||||||
| Gain on sale of investment securities | 26,349 | (36 | ) | 7,072 | 26,313 | 11,976 | ||||||||||||||
| Income from asset sales | 10,816 | 971 | 755 | 11,787 | 1,636 | |||||||||||||||
| Other | (2 | ) | 348 | 109 | 346 | 118 | ||||||||||||||
| Total other income (expense) | 34,815 | (770 | ) | 5,340 | 34,045 | 8,557 | ||||||||||||||
Income before income taxes and equity in income (loss) of affiliates | $ | 65,734 | $ | 36,816 | $ | 10,223 | $ | 102,550 | $ | 22,562 | ||||||||||
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