Exhibit 99
November 16, 2005
HELMERICH & PAYNE, INC. ANNOUNCES FISCAL YEAR EARNINGS AND MORE CONTRACTS
Tulsa, OK — Helmerich & Payne, Inc. announced net income of $127,606,000 ($2.45 per diluted share) from operating revenues of $800,726,000 for its fiscal year ended September 30, 2005, compared with net income of $4,359,000 ($0.09 per diluted share) from operating revenues of $589,056,000 for the previous fiscal year. Net income includes gains from the sale of portfolio securities of $0.32 per share for 2005, and $0.31 per share for 2004. Net income for fiscal 2004 includes a non-cash charge of $51,516,000 ($0.63 per diluted share) for impairment of a portion of the Company’s Gulf of Mexico offshore platform rigs.
Net income for the fourth quarter of fiscal 2005 was $36,121,000 ($0.68 per diluted share) from operating revenues of $233,210,000. Included in this year’s fourth quarter net income was $0.01 per share from gains from the sale of portfolio securities. Including the impairment charge mentioned above, the Company recorded a loss for its fourth quarter of fiscal 2004 of $12,624,000 ($0.25 per diluted share) from operating revenues of $164,068,000. During the fourth quarter of 2004, the Company recorded $0.16 per share of gains from the sale of portfolio securities.
Helmerich & Payne, Inc. also announced today that it had signed separate term agreements with two exploration and production companies to operate a total of nine new FlexRig4s®. Each rig agreement includes a minimum term of at least three years and construction costs are estimated at slightly over $11 million per rig. Other terms and customer names were not disclosed. This brings to 50, the total number of new FlexRigs to be built by H&P with at least three-year commitments that have been announced by the Company since March of this year.
Company President and C.E.O., Hans Helmerich commented, “We are pleased to reach the milestone of our 50th new-build order. This latest announcement will bring our total number of FlexRigs to 100 once completed, or 71% of our entire U.S. land rig fleet. This strong organic growth further establishes our belief that the Company’s overall fleet is the newest and most uniform in the land drilling industry. Customers continue to respond favorably to the proven performance that establishes these rigs as what we believe are best in class. We also believe the market will continue to push demand, not only for more available rigs, but for more capable rigs as well.
“Our 2005 results benefited from the strongest U.S. land market environment in over 20 years as average cash margins per day increased to $9,317. The robust ramp-up in the energy industry has brought to bear its own challenges, including additional pressure on costs and people. Nonetheless, we are confident this energy cycle will continue to present exciting opportunities going forward.”
Operations Summary
Operating income in the Company’s U.S. land rig operations increased to $56,028,000 for the fourth quarter of fiscal 2005, from $13,856,000 for the same period last year, and from $47,244,000 for this year’s third quarter. Average revenue per rig day rose to $18,563 and cash margins per rig day to $9,317 for this year’s fourth quarter, compared with $16,658 revenue per rig day and $8,219 cash margins per rig day for the previous quarter. U.S. land rig operating
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expense per day increased by 9.6% from this year’s third quarter to this year’s fourth quarter. The rise in expenses resulted from labor, materials, and supply cost increases. Average U.S. land rig utilization during the fourth quarter of 2005 was 95%, compared with 92% during last year’s fourth quarter, and 94% during this year’s third quarter.
The Company’s offshore platform rig business reported operating income of $4,720,000 for the fourth quarter of fiscal 2005, compared with $4,648,000 for the third quarter of 2005, and an operating loss of $47,540,000 for the fourth quarter 2004. For quarterly comparisons, the offshore operations would have reported an operating profit of $3,976,000 for the fourth quarter of 2004, without the $51,516,000 impairment charge. Rig utilization was 65% during this year’s fourth quarter, compared with 54% during last year’s fourth quarter, and 45% during this year’s third quarter. This year’s fourth quarter was negatively impacted by lost operating income of approximately $600,000 due to damage from Hurricane Katrina to offshore platform Rig 201. Seven platform rigs are currently operating and one additional rig is scheduled for work commencing the second fiscal quarter of 2006. It is anticipated that Rig 201 will not return to service during fiscal 2006.
International operating income declined during the fourth quarter of 2005 to $3,910,000, from $5,185,000 for last year’s fourth quarter, and $5,284,000 for this year’s third quarter. During the quarter, it was discovered the Company had not adequately reserved for future government stipulated deferred compensation payments to Venezuelan rig employees. As a result, $1,865,000 was expensed during this year’s fourth quarter for those previously earned, but unpaid future obligations. Rig utilization for international operations rose to 85% for the quarter, up from 57% during last year’s fourth quarter, and 80% during this year’s third quarter.
Helmerich & Payne, Inc. is a contract drilling company that owns 90 U.S. land rigs, 11 U.S. platform rigs located in the Gulf of Mexico, and 27 international rigs, for a total of 128 rigs. Included in the total fleet of 128 rigs are 50 H&P-designed and operated FlexRigs. The Company has reached contractual agreements with customers that will result in the construction of 50 additional FlexRigs.
Helmerich & Payne, Inc.’s conference call/webcast is scheduled for this morning and can be accessed at http://www.hpinc.com under Investors and will begin at 11:00 a.m. Eastern Time (10:00 a.m. Central Time). 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 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.
* FlexRig® is a registered trademark of Helmerich & Payne, Inc.
Contacts: Doug Fears
(918) 588-5208
(918) 588-5208
Juan Pablo Tardio
(918) 588-5383
(918) 588-5383
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HELMERICH & PAYNE, INC.
Unaudited
(in thousands, except per share data)
Unaudited
(in thousands, except per share data)
| Three Months Ended | Fiscal Year Ended | |||||||||||||||||||
| June 30 | September 30 | September 30 | ||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | 2005 | 2005 | 2004 | 2005 | 2004 | |||||||||||||||
Operating Revenues: | ||||||||||||||||||||
| Drilling — U.S. Land | $ | 138,720 | $ | 157,335 | $ | 100,055 | $ | 527,637 | $ | 346,015 | ||||||||||
| Drilling — U.S. Offshore | 19,905 | 26,011 | 23,601 | 84,921 | 84,238 | |||||||||||||||
| Drilling — International | 46,030 | 47,180 | 38,029 | 177,480 | 148,788 | |||||||||||||||
| Real Estate | 2,732 | 2,684 | 2,383 | 10,688 | 10,015 | |||||||||||||||
| 207,387 | 233,210 | 164,068 | 800,726 | 589,056 | ||||||||||||||||
Operating costs and expenses: | ||||||||||||||||||||
| Operating costs | 121,470 | 137,188 | 113,423 | 484,231 | 417,716 | |||||||||||||||
| Depreciation | 23,419 | 25,643 | 24,821 | 96,274 | 94,425 | |||||||||||||||
| Asset impairment | — | — | 51,516 | — | 51,516 | |||||||||||||||
| General and administrative | 11,680 | 10,496 | 9,254 | 41,015 | 37,661 | |||||||||||||||
| 156,569 | 173,327 | 199,014 | 621,520 | 601,318 | ||||||||||||||||
Operating income (loss) | 50,818 | 59,883 | (34,946 | ) | 179,206 | (12,262 | ) | |||||||||||||
| Other income (expense): | ||||||||||||||||||||
| Interest and dividend income | 1,671 | 1,984 | 476 | 5,809 | 1,965 | |||||||||||||||
| Interest expense | (3,127 | ) | (2,960 | ) | (3,247 | ) | (12,642 | ) | (12,695 | ) | ||||||||||
| Gain on sale of investment securities | — | 656 | 13,442 | 26,969 | 25,418 | |||||||||||||||
| Income from asset sales | 603 | 1,160 | 3,639 | 13,550 | 5,377 | |||||||||||||||
| Other | 29 | (610 | ) | 66 | (235 | ) | 197 | |||||||||||||
| (824 | ) | 230 | 14,376 | 33,451 | 20,262 | |||||||||||||||
| Income (loss) before income taxes and equity in income of affiliates | 49,994 | 60,113 | (20,570 | ) | 212,657 | 8,000 | ||||||||||||||
| Income tax provision (benefit) | 20,627 | 24,553 | (7,772 | ) | 87,463 | 4,365 | ||||||||||||||
| Equity in income of affiliates net of income taxes | 458 | 561 | 174 | 2,412 | 724 | |||||||||||||||
NET INCOME (LOSS) | $ | 29,825 | $ | 36,121 | $ | (12,624 | ) | $ | 127,606 | $ | 4,359 | |||||||||
| Earnings (loss) per common share: | ||||||||||||||||||||
| Basic | $ | 0.58 | $ | 0.70 | $ | (0.25 | ) | $ | 2.50 | $ | 0.09 | |||||||||
| Diluted | $ | 0.57 | $ | 0.68 | $ | (0.25 | ) | $ | 2.45 | $ | 0.09 | |||||||||
| Average common shares outstanding: | ||||||||||||||||||||
| Basic | 51,233 | 51,616 | 50,426 | 51,087 | 50,312 | |||||||||||||||
| Diluted | 52,236 | 52,748 | 50,883 | 52,033 | 50,833 | |||||||||||||||
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HELMERICH & PAYNE, INC.
Unaudited
(in thousands)
Unaudited
(in thousands)
| CONSOLIDATED CONDENSED BALANCE SHEETS | 9/30/05 | 9/30/04 | ||||||
ASSETS | ||||||||
| Cash and cash equivalents | $ | 288,752 | $ | 65,296 | ||||
| Other current assets | 212,294 | 180,034 | ||||||
| Total current assets | 501,046 | 245,330 | ||||||
| Investments | 178,452 | 161,532 | ||||||
| Net property, plant, and equipment | 981,965 | 998,674 | ||||||
| Other assets | 3,136 | 1,308 | ||||||
TOTAL ASSETS | $ | 1,664,599 | $ | 1,406,844 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Total current liabilities | $ | 90,730 | $ | 59,903 | ||||
| Total noncurrent liabilities | 294,631 | 232,831 | ||||||
| Long-term notes payable | 200,000 | 200,000 | ||||||
| Total shareholders’ equity | 1,079,238 | 914,110 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 1,664,599 | $ | 1,406,844 | ||||
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HELMERICH & PAYNE, INC.
Unaudited
(in thousands)
Unaudited
(in thousands)
| Years Ended | ||||||||
| September 30 | ||||||||
| CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS | 2005 | 2004 | ||||||
OPERATING ACTIVITIES: | ||||||||
| Net Income | $ | 127,606 | $ | 4,359 | ||||
| Depreciation | 96,274 | 94,425 | ||||||
| Asset impairment charge | — | 51,516 | ||||||
| Changes in assets and liabilities | 33,091 | 18,260 | ||||||
| Gain on sale of assets and investment securities | (40,519 | ) | (28,143 | ) | ||||
| Non-monetary investment gain | — | (2,521 | ) | |||||
| Other | (4,214 | ) | (1,256 | ) | ||||
Net cash provided by operating activities | 212,238 | 136,640 | ||||||
INVESTING ACTIVITIES: | ||||||||
| Capital expenditures | (86,805 | ) | (90,212 | ) | ||||
| Purchase of investments | (5,000 | ) | — | |||||
| Proceeds from sale of assets and investment securities | 94,531 | 21,974 | ||||||
Net cash provided by (used in) investing activities | 2,726 | (68,238 | ) | |||||
FINANCING ACTIVITIES: | ||||||||
| Net payments on short-term notes | — | (30,000 | ) | |||||
| Dividends paid | (16,866 | ) | (16,222 | ) | ||||
| Proceeds from exercise of stock options | 25,358 | 4,927 | ||||||
Net cash provided by (used in) financing activities | 8,492 | (41,295 | ) | |||||
Net increase in cash and cash equivalents | 223,456 | 27,107 | ||||||
Cash and cash equivalents, beginning of period | 65,296 | 38,189 | ||||||
Cash and cash equivalents, end of period | $ | 288,752 | $ | 65,296 | ||||
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| SEGMENT REPORTING | Three Months Ended | Fiscal Year Ended | ||||||||||||||||||
| June 30 | September 30 | September 30 | ||||||||||||||||||
| 2005 | 2005 | 2004 | 2005 | 2004 | ||||||||||||||||
| (in thousands, except days and per day amounts) | ||||||||||||||||||||
U.S. LAND OPERATIONS | ||||||||||||||||||||
| Revenues | $ | 138,720 | $ | 157,335 | $ | 100,055 | $ | 527,637 | $ | 346,015 | ||||||||||
| Direct operating expenses | 74,639 | 82,852 | 68,960 | 294,164 | 246,177 | |||||||||||||||
| General and administrative expense | 2,346 | 2,543 | 2,142 | 8,594 | 7,765 | |||||||||||||||
| Depreciation | 14,491 | 15,912 | 15,097 | 60,222 | 56,528 | |||||||||||||||
| Operating income | $ | 47,244 | $ | 56,028 | $ | 13,856 | $ | 164,657 | $ | 35,545 | ||||||||||
| Activity days | 7,797 | 7,994 | 7,363 | 30,968 | 27,472 | |||||||||||||||
| Average rig revenue per day | $ | 16,658 | $ | 18,563 | $ | 12,437 | $ | 15,941 | $ | 11,635 | ||||||||||
| Average rig expense per day | $ | 8,439 | $ | 9,246 | $ | 8,214 | $ | 8,403 | $ | 8,001 | ||||||||||
| Average rig margin per day | $ | 8,219 | $ | 9,317 | $ | 4,223 | $ | 7,538 | $ | 3,634 | ||||||||||
| Rig utilization | 94 | % | 95 | % | 92 | % | 94 | % | 87 | % | ||||||||||
U.S. OFFSHORE OPERATIONS | ||||||||||||||||||||
| Revenues | $ | 19,905 | $ | 26,011 | $ | 23,601 | $ | 84,921 | $ | 84,238 | ||||||||||
| Direct operating expenses | 11,504 | 17,443 | 15,653 | 52,786 | 52,987 | |||||||||||||||
| General and administrative expense | 1,071 | 1,103 | 968 | 3,825 | 3,256 | |||||||||||||||
| Depreciation | 2,682 | 2,745 | 3,004 | 10,602 | 12,107 | |||||||||||||||
| Asset impairment | — | — | 51,516 | — | 51,516 | |||||||||||||||
| Operating income (loss)* | $ | 4,648 | $ | 4,720 | $ | (47,540 | ) | $ | 17,708 | $ | (35,628 | ) | ||||||||
| Activity days | 455 | 654 | 601 | 2,122 | 2,088 | |||||||||||||||
| Average rig revenue per day | $ | 32,614 | $ | 29,782 | $ | 27,777 | $ | 29,228 | $ | 29,070 | ||||||||||
| Average rig expense per day | $ | 16,426 | $ | 17,838 | $ | 17,377 | $ | 15,967 | $ | 16,509 | ||||||||||
| Average rig margin per day | $ | 16,188 | $ | 11,944 | $ | 10,400 | $ | 13,261 | $ | 12,561 | ||||||||||
| Rig utilization | 45 | % | 65 | % | 54 | % | 53 | % | 48 | % | ||||||||||
| *NOTE: | The following is a reconciliation of the operating income (loss) for the U.S. Offshore segment for the fourth quarter of 2004, which is provided to assist with quarterly comparisons. |
| Operating Loss | $ | (47,540 | ) | |||
| Impairment charge | 51,516 | |||||
| Operating income, as adjusted | $ | 3,976 | ||||
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| SEGMENT REPORTING | Three Months Ended | Fiscal Year Ended | ||||||||||||||||||
| June 30 | September 30 | September 30 | ||||||||||||||||||
| 2005 | 2005 | 2004 | 2005 | 2004 | ||||||||||||||||
| (in thousands, except days and per day amounts) | ||||||||||||||||||||
INTERNATIONAL OPERATIONS | ||||||||||||||||||||
| Revenues | $ | 46,030 | $ | 47,180 | $ | 38,029 | $ | 177,480 | $ | 148,788 | ||||||||||
| Direct operating expenses | 35,192 | 36,870 | 27,050 | 135,837 | 113,988 | |||||||||||||||
| General and administrative expense | 619 | 794 | 527 | 2,563 | 2,144 | |||||||||||||||
| Depreciation | 4,935 | 5,606 | 5,267 | 20,107 | 20,530 | |||||||||||||||
| Operating income | $ | 5,284 | $ | 3,910 | $ | 5,185 | $ | 18,973 | $ | 12,126 | ||||||||||
| Activity days | 1,916 | 2,024 | 1,692 | 7,491 | 6,266 | |||||||||||||||
| Average rig revenue per day | $ | 19,536 | $ | 19,168 | $ | 18,746 | $ | 19,332 | $ | 19,580 | ||||||||||
| Average rig expense per day | $ | 14,633 | $ | 14,416 | $ | 12,739 | $ | 14,039 | $ | 14,279 | ||||||||||
| Average rig margin per day | $ | 4,903 | $ | 4,752 | $ | 6,007 | $ | 5,293 | $ | 5,301 | ||||||||||
| Rig utilization | 80 | % | 85 | % | 57 | % | 77 | % | 54 | % | ||||||||||
| 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 | $ | 8,838 | $ | 8,943 | $ | 8,478 | $ | 33,989 | $ | 26,367 | ||||||||||
| U.S. Offshore Operations | $ | 2,412 | $ | 4,213 | $ | 1,680 | $ | 9,506 | $ | 6,012 | ||||||||||
| International Operations | $ | 4,115 | $ | 4,207 | $ | 2,481 | $ | 15,215 | $ | 11,731 | ||||||||||
REAL ESTATE | ||||||||||||||||||||
| Revenues | $ | 2,732 | $ | 2,684 | $ | 2,383 | $ | 10,688 | $ | 10,015 | ||||||||||
| Direct operating expenses | 838 | 583 | 1,760 | 3,622 | 4,564 | |||||||||||||||
| Depreciation | 628 | 589 | 589 | 2,352 | 2,253 | |||||||||||||||
| Operating income | $ | 1,266 | $ | 1,512 | $ | 34 | $ | 4,714 | $ | 3,198 | ||||||||||
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The following table reconciles operating income (loss) per the information above to income (loss) before income taxes and equity in income of affiliates as reported on the Consolidated Statements of Operations (in thousands).
| SEGMENT REPORTING | Three Months Ended | Fiscal Year Ended | ||||||||||||||||||
| June 30 | September 30 | September 30 | ||||||||||||||||||
| 2005 | 2005 | 2004 | 2005 | 2004 | ||||||||||||||||
Operating income (loss) | ||||||||||||||||||||
| U.S. Land | $ | 47,244 | $ | 56,028 | $ | 13,856 | $ | 164,657 | $ | 35,545 | ||||||||||
| U.S. Offshore | 4,648 | 4,720 | (47,540 | ) | 17,708 | (35,628 | ) | |||||||||||||
| International | 5,284 | 3,910 | 5,185 | 18,973 | 12,126 | |||||||||||||||
| Real Estate | 1,266 | 1,512 | 34 | 4,714 | 3,198 | |||||||||||||||
Segment operating income (loss) | $ | 58,442 | $ | 66,170 | $ | (28,465 | ) | $ | 206,052 | $ | 15,241 | |||||||||
| Corporate general and administrative | (7,644 | ) | (6,056 | ) | (5,617 | ) | (26,033 | ) | (24,496 | ) | ||||||||||
| Other depreciation | (683 | ) | (791 | ) | (864 | ) | (2,991 | ) | (3,007 | ) | ||||||||||
| Inter-segment elimination | 703 | 560 | — | 2,178 | — | |||||||||||||||
Operating income (loss) | $ | 50,818 | $ | 59,883 | $ | (34,946 | ) | $ | 179,206 | $ | (12,262 | ) | ||||||||
| Other income (expense): | ||||||||||||||||||||
| Interest and dividend income | 1,671 | 1,984 | 476 | 5,809 | 1,965 | |||||||||||||||
| Interest expense | (3,127 | ) | (2,960 | ) | (3,247 | ) | (12,642 | ) | (12,695 | ) | ||||||||||
| Gain on sale of investment securities | — | 656 | 13,442 | 26,969 | 25,418 | |||||||||||||||
| Income from asset sales | 603 | 1,160 | 3,639 | 13,550 | 5,377 | |||||||||||||||
| Other | 29 | (610 | ) | 66 | (235 | ) | 197 | |||||||||||||
| Total other income (expense) | (824 | ) | 230 | 14,376 | 33,451 | 20,262 | ||||||||||||||
Income (loss) before income taxes and equity in income of affiliates | $ | 49,994 | $ | 60,113 | $ | (20,570 | ) | $ | 212,657 | $ | 8,000 | |||||||||
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