Exhibit 99
July 27, 2005
HELMERICH & PAYNE, INC. ANNOUNCES THIRD QUARTER RESULTS
Helmerich & Payne, Inc. reported net income of $29,825,000 ($0.57 per diluted share) from operating revenues of $207,387,000 for its third fiscal quarter ended June 30, 2005, compared with net income of $4,347,000 ($0.09 per diluted share) from operating revenues of $147,691,000 during last year’s third fiscal quarter ended June 30, 2004.
For the nine months ended June 30, 2005, the Company reported net income of $91,485,000 ($1.77 per diluted share) from operating revenues of $567,516,000, compared with net income of $16,983,000 ($0.33 per diluted share) from operating revenues of $424,988,000 during the first nine months ended June 30, 2004. Included in net income were gains from the sale of portfolio securities and drilling equipment of $0.45 per share for the first nine months of fiscal 2005, and $0.17 per share for the first nine months of fiscal 2004.
This year’s third quarter operating income was up in all four of the Company’s business segments compared with both last year’s third quarter and this year’s second quarter. The most significant impact came from the U.S. land rig operations with operating profit totaling $47,244,000 for the third quarter, compared with $9,487,000 for last year’s third quarter and $35,797,000 for this year’s second quarter. Third quarter U.S. land profit margins per rig day rose 18% over the previous quarter from $6,944 to $8,219 per day, despite labor cost increases that drove daily rig expenses up by 4.5% during the same period. Third quarter average rig revenue reached an all time high of $16,658 per day. (See attached financial reports for additional operating statistics.)
Since March 2005, the Company has announced separate agreements with six companies to construct and operate a total of 22 newly designed FlexRigs, all under three-year contracts with attractive dayrates and economics. The first of the new rigs will be delivered this November.
Company President and CEO, Hans Helmerich commented, “As the land rig industry experiences capacity limitations resulting in improved profitability and an intensified demand for new rigs, Helmerich & Payne is in the enviable position as the market leader in new-build orders. We are excited about the growth opportunities that lie ahead for the Company and the value created for our shareholders.”
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July 27, 2005
News Release
July 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
(918) 588-5208
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July 27, 2005
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July 27, 2005
HELMERICH & PAYNE, INC.
Unaudited
(in thousands, except per share data)
Unaudited
(in thousands, except per share data)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| March 31 | June 30 | June 30 | ||||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | 2005 | 2005 | 2004 | 2005 | 2004 | |||||||||||||||
Operating Revenues: | ||||||||||||||||||||
| Drilling — U.S. Land | $ | 122,394 | $ | 138,720 | $ | 88,550 | $ | 370,302 | $ | 245,960 | ||||||||||
| Drilling — U.S. Offshore | 18,649 | 19,905 | 21,260 | 58,910 | 60,637 | |||||||||||||||
| Drilling — International | 41,799 | 46,030 | 35,487 | 130,300 | 110,759 | |||||||||||||||
| Real Estate | 2,608 | 2,732 | 2,394 | 8,004 | 7,632 | |||||||||||||||
| 185,450 | 207,387 | 147,691 | 567,516 | 424,988 | ||||||||||||||||
Operating costs and expenses: | ||||||||||||||||||||
| Operating costs | 114,321 | 121,470 | 105,562 | 347,043 | 304,293 | |||||||||||||||
| Depreciation | 23,950 | 23,419 | 23,934 | 70,631 | 69,604 | |||||||||||||||
| General and administrative | 9,593 | 11,680 | 9,516 | 30,519 | 28,407 | |||||||||||||||
| 147,864 | 156,569 | 139,012 | 448,193 | 402,304 | ||||||||||||||||
Operating income | 37,586 | 50,818 | 8,679 | 119,323 | 22,684 | |||||||||||||||
| Other income (expense): | ||||||||||||||||||||
| Interest and dividend income | 1,193 | 1,671 | 328 | 3,825 | 1,489 | |||||||||||||||
| Interest expense | (3,246 | ) | (3,127 | ) | (3,114 | ) | (9,682 | ) | (9,448 | ) | ||||||||||
| Gain on sale of investment securities | (36 | ) | — | — | 26,313 | 11,976 | ||||||||||||||
| Income from asset sales | 971 | 603 | 102 | 12,390 | 1,738 | |||||||||||||||
| Other | 348 | 29 | 13 | 375 | 131 | |||||||||||||||
| (770 | ) | (824 | ) | (2,671 | ) | 33,221 | 5,886 | |||||||||||||
| Income before income taxes and equity in income of affiliates | 36,816 | 49,994 | 6,008 | 152,544 | 28,570 | |||||||||||||||
| Income tax provision | 15,153 | 20,627 | 2,522 | 62,910 | 12,137 | |||||||||||||||
| Equity in income of affiliates net of income taxes | 687 | 458 | 861 | 1,851 | 550 | |||||||||||||||
NET INCOME | $ | 22,350 | $ | 29,825 | $ | 4,347 | $ | 91,485 | $ | 16,983 | ||||||||||
| Earnings per common share: | ||||||||||||||||||||
| Basic | $ | 0.44 | $ | 0.58 | $ | 0.09 | $ | 1.80 | $ | 0.34 | ||||||||||
| Diluted | $ | 0.43 | $ | 0.57 | $ | 0.09 | $ | 1.77 | $ | 0.33 | ||||||||||
| Average common shares outstanding: | ||||||||||||||||||||
| Basic | 50,955 | 51,233 | 50,404 | 50,909 | 50,273 | |||||||||||||||
| Diluted | 51,891 | 52,236 | 50,880 | 51,793 | 50,816 | |||||||||||||||
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July 27, 2005
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July 27, 2005
HELMERICH & PAYNE, INC.
Unaudited
(in thousands)
Unaudited
(in thousands)
| CONSOLIDATED CONDENSED BALANCE SHEETS | 6/30/05 | 9/30/04 | ||||||
ASSETS | ||||||||
| Cash and cash equivalents | $ | 236,285 | $ | 65,296 | ||||
| Other current assets | 198,998 | 180,590 | ||||||
| Total current assets | 435,283 | 245,886 | ||||||
| Investments | 165,500 | 161,532 | ||||||
| Net property, plant, and equipment | 967,153 | 998,674 | ||||||
| Other assets | 2,652 | 752 | ||||||
TOTAL ASSETS | $ | 1,570,588 | $ | 1,406,844 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Total current liabilities | $ | 65,584 | $ | 59,903 | ||||
| Total noncurrent liabilities | 278,724 | 232,831 | ||||||
| Long-term notes payable | 200,000 | 200,000 | ||||||
| Total shareholders’ equity | 1,026,280 | 914,110 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 1,570,588 | $ | 1,406,844 | ||||
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HELMERICH & PAYNE, INC.
Unaudited
(in thousands)
Unaudited
(in thousands)
| Nine Months Ended | ||||||||
| June 30 | ||||||||
| CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS | 2005 | 2004 | ||||||
OPERATING ACTIVITIES: | ||||||||
| Net Income | $ | 91,485 | $ | 16,983 | ||||
| Depreciation | 70,631 | 69,604 | ||||||
| Changes in assets and liabilities | 13,578 | 2,166 | ||||||
| Gain on sale of assets and investment securities | (38,703 | ) | (11,766 | ) | ||||
| Non-monetary investment gain | — | (1,946 | ) | |||||
| Other | (3,316 | ) | (801 | ) | ||||
Net cash provided by operating activities | 133,675 | 74,240 | ||||||
INVESTING ACTIVITIES: | ||||||||
| Capital expenditures | (54,082 | ) | (70,536 | ) | ||||
| Purchase of investments | (5,000 | ) | — | |||||
| Proceeds from sale of assets and investment securities | 92,207 | 17,313 | ||||||
Net cash provided by (used in) investing activities | 33,125 | (53,223 | ) | |||||
| �� | ||||||||
FINANCING ACTIVITIES: | ||||||||
| Net proceeds (payments) from short-term notes | 379 | (27,000 | ) | |||||
| Dividends paid | (12,607 | ) | (12,083 | ) | ||||
| Proceeds from exercise of stock options | 16,417 | 4,324 | ||||||
Net cash provided by (used in) financing activities | 4,189 | (34,759 | ) | |||||
Net increase (decrease) in cash and cash equivalents | 170,989 | (13,742 | ) | |||||
Cash and cash equivalents, beginning of period | 65,296 | 38,189 | ||||||
Cash and cash equivalents, end of period | $ | 236,285 | $ | 24,447 | ||||
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| SEGMENT REPORTING | Three Months Ended | Nine Months Ended | ||||||||||||||||||
| March 31 | June 30 | June 30 | ||||||||||||||||||
| 2005 | 2005 | 2004 | 2005 | 2004 | ||||||||||||||||
| (in thousands, except days and per day amounts) | ||||||||||||||||||||
U.S. LAND OPERATIONS | ||||||||||||||||||||
| Revenues | $ | 122,394 | $ | 138,720 | $ | 88,550 | $ | 370,302 | $ | 245,960 | ||||||||||
| Direct operating expenses | 69,695 | 74,639 | 62,784 | 211,312 | 177,217 | |||||||||||||||
| General and administrative expense | 1,839 | 2,346 | 1,831 | 6,051 | 5,623 | |||||||||||||||
| Depreciation | 15,063 | 14,491 | 14,448 | 44,310 | 41,431 | |||||||||||||||
| Operating income | $ | 35,797 | $ | 47,244 | $ | 9,487 | $ | 108,629 | $ | 21,689 | ||||||||||
| Activity days | 7,589 | 7,797 | 7,071 | 22,974 | 20,109 | |||||||||||||||
| Average rig revenue per day | $ | 15,018 | $ | 16,658 | $ | 11,537 | $ | 15,028 | $ | 11,342 | ||||||||||
| Average rig expense per day | $ | 8,074 | $ | 8,439 | $ | 7,893 | $ | 8,108 | $ | 7,924 | ||||||||||
| Average rig margin per day | $ | 6,944 | $ | 8,219 | $ | 3,644 | $ | 6,920 | $ | 3,418 | ||||||||||
| Rig utilization | 94 | % | 94 | % | 89 | % | 93 | % | 85 | % | ||||||||||
U.S. OFFSHORE OPERATIONS | ||||||||||||||||||||
| Revenues | $ | 18,649 | $ | 19,905 | $ | 21,260 | $ | 58,910 | $ | 60,637 | ||||||||||
| Direct operating expenses | 10,992 | 11,504 | 13,615 | 35,343 | 37,334 | |||||||||||||||
| General and administrative expense | 817 | 1,071 | 792 | 2,722 | 2,288 | |||||||||||||||
| Depreciation | 2,668 | 2,682 | 3,033 | 7,857 | 9,103 | |||||||||||||||
| Operating income | $ | 4,172 | $ | 4,648 | $ | 3,820 | $ | 12,988 | $ | 11,912 | ||||||||||
| Activity days | 450 | 455 | 572 | 1,468 | 1,487 | |||||||||||||||
| Average rig revenue per day | $ | 29,297 | $ | 32,614 | $ | 27,955 | $ | 28,981 | $ | 29,593 | ||||||||||
| Average rig expense per day | $ | 14,928 | $ | 16,426 | $ | 16,347 | $ | 15,133 | $ | 16,158 | ||||||||||
| Average rig margin per day | $ | 14,369 | $ | 16,188 | $ | 11,608 | $ | 13,848 | $ | 13,435 | ||||||||||
| Rig utilization | 45 | % | 45 | % | 52 | % | 49 | % | 45 | % | ||||||||||
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| SEGMENT REPORTING | Three Months Ended | Nine Months Ended | ||||||||||||||||||
| March 31 | June 30 | June 30 | ||||||||||||||||||
| 2005 | 2005 | 2004 | 2005 | 2004 | ||||||||||||||||
| (in thousands, except days and per day amounts) | ||||||||||||||||||||
INTERNATIONAL OPERATIONS | ||||||||||||||||||||
| Revenues | $ | 41,799 | $ | 46,030 | $ | 35,487 | $ | 130,300 | $ | 110,759 | ||||||||||
| Direct operating expenses | 32,920 | 35,192 | 28,210 | 98,967 | 86,938 | |||||||||||||||
| General and administrative expense | 497 | 619 | 428 | 1,769 | 1,617 | |||||||||||||||
| Depreciation | 4,800 | 4,935 | 5,103 | 14,501 | 15,263 | |||||||||||||||
| Operating income | $ | 3,582 | $ | 5,284 | $ | 1,746 | $ | 15,063 | $ | 6,941 | ||||||||||
| Activity days | 1,728 | 1,916 | 1,567 | 5,467 | 4,574 | |||||||||||||||
| Average rig revenue per day | $ | 19,430 | $ | 19,536 | $ | 18,827 | $ | 19,393 | $ | 19,888 | ||||||||||
| Average rig expense per day | $ | 13,672 | $ | 14,633 | $ | 14,577 | $ | 13,900 | $ | 14,846 | ||||||||||
| Average rig margin per day | $ | 5,758 | $ | 4,903 | $ | 4,250 | $ | 5,493 | $ | 5,042 | ||||||||||
| Rig utilization | 71 | % | 80 | % | 53 | % | 74 | % | 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: | ||||||||||||||||||||
| U.S. Land Operations | $ | 8,419 | $ | 8,838 | $ | 6,971 | $ | 25,046 | $ | 17,889 | ||||||||||
| U.S. Offshore Operations | $ | 1,410 | $ | 2,412 | $ | 1,180 | $ | 5,293 | $ | 4,332 | ||||||||||
| International Operations | $ | 3,794 | $ | 4,115 | $ | 2,479 | $ | 11,008 | $ | 9,250 | ||||||||||
REAL ESTATE | ||||||||||||||||||||
| Revenues | $ | 2,608 | $ | 2,732 | $ | 2,394 | $ | 8,004 | $ | 7,632 | ||||||||||
| Direct operating expenses | 1,174 | 838 | 953 | 3,039 | 2,804 | |||||||||||||||
| Depreciation | 573 | 628 | 579 | 1,763 | 1,664 | |||||||||||||||
| Operating income | $ | 861 | $ | 1,266 | $ | 862 | $ | 3,202 | $ | 3,164 | ||||||||||
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The following table reconciles operating income per the information above to income before income taxes and equity in income of affiliates as reported on the Consolidated Statements of Income (in thousands).
| SEGMENT REPORTING | Three Months Ended | Nine Months Ended | ||||||||||||||||||
| March 31 | June 30 | June 30 | ||||||||||||||||||
| 2005 | 2005 | 2004 | 2005 | 2004 | ||||||||||||||||
Operating income | ||||||||||||||||||||
| U.S. Land | $ | 35,797 | $ | 47,244 | $ | 9,487 | $ | 108,629 | $ | 21,689 | ||||||||||
| U.S. Offshore | 4,172 | 4,648 | 3,820 | 12,988 | 11,912 | |||||||||||||||
| International | 3,582 | 5,284 | 1,746 | 15,063 | 6,941 | |||||||||||||||
| Real Estate | 861 | 1,266 | 862 | 3,202 | 3,164 | |||||||||||||||
| Segment operating income | $ | 44,412 | $ | 58,442 | $ | 15,915 | $ | 139,882 | $ | 43,706 | ||||||||||
| Corporate general and administrative | (6,440 | ) | (7,644 | ) | (6,465 | ) | (19,977 | ) | (18,879 | ) | ||||||||||
| Other depreciation | (846 | ) | (683 | ) | (771 | ) | (2,200 | ) | (2,143 | ) | ||||||||||
| Inter-segment elimination | 460 | 703 | — | 1,618 | — | |||||||||||||||
Operating income | $ | 37,586 | $ | 50,818 | $ | 8,679 | $ | 119,323 | $ | 22,684 | ||||||||||
| Other income (expense): | ||||||||||||||||||||
| Interest and dividend income | 1,193 | 1,671 | 328 | 3,825 | 1,489 | |||||||||||||||
| Interest expense | (3,246 | ) | (3,127 | ) | (3,114 | ) | (9,682 | ) | (9,448 | ) | ||||||||||
| Gain on sale of investment securities | (36 | ) | — | — | 26,313 | 11,976 | ||||||||||||||
| Income from asset sales | 971 | 603 | 102 | 12,390 | 1,738 | |||||||||||||||
| Other | 348 | 29 | 13 | 375 | 131 | |||||||||||||||
| Total other income (expense) | (770 | ) | (824 | ) | (2,671 | ) | 33,221 | 5,886 | ||||||||||||
Income before income taxes and equity in income of affiliates | $ | 36,816 | $ | 49,994 | $ | 6,008 | $ | 152,544 | $ | 28,570 | ||||||||||
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