Helmerich & Payne (HP) 10-Q 5 May 10 2010 Q2 Quarterly report Financial data

CONSOLIDATED CONDENSED BALANCE

CONSOLIDATED CONDENSED BALANCE SHEETS (USD $)
In Thousands	Mar. 31, 2010	Sep. 30, 2009
Current assets:
Cash and cash equivalents	$125,712	$141,486
Short-term investments		12,500
Accounts receivable, less reserve of $631 at March 31, 2010 and $659 at September 30, 2009	288,647	246,790
Inventories	45,904	44,723
Deferred income taxes	18,652	12,861
Assets held for sale		1,023
Prepaid expenses and other	71,455	63,549
Total current assets	550,370	522,932
Investments	355,654	356,404
Property, plant and equipment, net	3,285,139	3,265,907
Other assets	14,476	15,781
Total assets	4,205,639	4,161,024
Current liabilities:
Accounts payable	55,994	70,218
Accrued liabilities	126,939	126,688
Short-term debt		105,000
Total current liabilities	182,933	301,906
Noncurrent liabilities:
Long-term debt	440,000	420,000
Deferred income taxes	710,671	681,542
Other	77,240	74,567
Total noncurrent liabilities	1,227,911	1,176,109
Shareholders' equity:
Common stock, $.10 par value, 160,000,000 shares authorized, 107,057,904 shares issued as of March 31, 2010 and September 30, 2009 and 105,716,278 and 105,486,218 shares outstanding as of March 31, 2010 and September 30, 2009, respectively	10,706	10,706
Preferred stock, no par value, 1,000,000 shares authorized, no shares issued	0	0
Additional paid-in capital	185,349	176,039
Retained earnings	2,514,320	2,414,942
Accumulated other comprehensive income	112,255	112,451
Treasury stock, at cost	(27,835)	(31,129)
Total shareholders' equity	2,794,795	2,683,009
Total liabilities and shareholders' equity	$4,205,639	$4,161,024

1_CONSOLIDATED CONDENSED BALANC

CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) (USD $)
In Thousands, except Share data	Mar. 31, 2010	Sep. 30, 2009
CONSOLIDATED CONDENSED BALANCE SHEETS
Accounts receivable, reserve (in dollars)	$631	$659
Common stock, par value (in dollars per share)	0.1	0.1
Common stock, shares authorized	160,000,000	160,000,000
Common stock, shares issued	107,057,904	107,057,904
Common stock, shares outstanding	105,716,278	105,486,218
Preferred stock, par value (in dollars per share)
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0

CONSOLIDATED CONDENSED STATEMEN

CONSOLIDATED CONDENSED STATEMENTS OF INCOME (USD $)
In Thousands, except Per Share data	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009	6 Months Ended Mar. 31, 2010	6 Months Ended Mar. 31, 2009
Operating revenues:
Drilling - U.S. Land	$324,439	$414,514	$609,508	$889,718
Drilling - Offshore	47,765	51,331	100,055	101,819
Drilling - International Land	64,681	51,829	124,079	147,007
Other	2,840	2,626	5,926	5,510
Total operating revenues	439,725	520,300	839,568	1,144,054
Operating costs and other:
Operating costs, excluding depreciation	271,509	263,294	484,202	594,222
Depreciation	65,795	57,113	128,598	111,885
General and administrative	20,844	16,434	41,688	31,582
Research and development	3,342	2,176	5,157	3,853
Gain from involuntary conversion of long-lived assets				(277)
Income from asset sales	(1,309)	(2,055)	(2,007)	(2,969)
Total operating costs and other	360,181	336,962	657,638	738,296
Operating income	79,544	183,338	181,930	405,758
Other income (expense):
Interest and dividend income	329	2,150	768	3,936
Interest expense	(4,207)	(2,554)	(8,901)	(6,254)
Other	(432)	(28)	(417)	100
Total other income (expense)	(4,310)	(432)	(8,550)	(2,218)
Income before income taxes and equity in income of affiliate	75,234	182,906	173,380	403,540
Income tax provision	28,487	83,390	63,398	164,638
Equity in income of affiliate net of income taxes		4,222		10,111
NET INCOME	$46,747	$103,738	$109,982	$249,013
Earnings per common share:
Basic (in dollars per share)	0.44	0.98	1.04	2.36
Diluted (in dollars per share)	0.43	0.98	1.02	2.34
Weighted average shares outstanding:
Basic (in shares)	105,711	105,317	105,642	105,283
Diluted (in shares)	107,484	106,197	107,349	106,279
Dividends declared per common share (in dollars per share)	0.05	0.05	0.1	0.1

2_CONSOLIDATED CONDENSED STATEM

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (USD $)
In Thousands	6 Months Ended Mar. 31, 2010	6 Months Ended Mar. 31, 2009
OPERATING ACTIVITIES:
Net income	$109,982	$249,013
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	128,598	111,885
Provision for bad debt	3	15
Equity in income of affiliate before income taxes		(16,308)
Stock-based compensation	9,925	4,238
Other	92
Gain from involuntary conversion of long-lived assets		(277)
Income from asset sales	(2,007)	(2,969)
Deferred income tax expense	23,673	115,237
Change in assets and liabilities-
Accounts receivable	(41,860)	1,819
Inventories	(1,181)	(8,577)
Prepaid expenses and other	(6,636)	5,716
Accounts payable	(5,982)	15,008
Accrued liabilities	(11,587)	9,552
Deferred income taxes	(198)	6,942
Other noncurrent liabilities	3,110	(806)
Net cash provided by operating activities	205,932	490,488
INVESTING ACTIVITIES:
Capital expenditures	(142,737)	(525,884)
Insurance proceeds from involuntary conversion		277
Proceeds from sale of short-term investments	12,516
Proceeds from asset sales	3,950	4,333
Purchase of short-term investments	(16)	(12,500)
Other		(16)
Net cash used in investing activities	(126,287)	(533,790)
FINANCING ACTIVITIES:
Decrease in notes payable		(1,733)
Proceeds from line of credit	710,000	2,030,000
Payments on line of credit	(795,000)	(1,970,000)
Decrease in bank overdraft	(2,038)
Dividends paid	(10,587)	(10,548)
Proceeds from exercise of stock options	309	429
Excess tax benefit from stock-based compensation	1,897	19
Net cash provided by (used in) financing activities	(95,419)	48,167
Net increase (decrease) in cash and cash equivalents	(15,774)	4,865
Cash and cash equivalents, beginning of period	141,486	121,513
Cash and cash equivalents, end of period	$125,712	$126,378

3_CONSOLIDATED CONDENSED STATEM

CONSOLIDATED CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY (USD $)
In Thousands	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Income	Treasury Stock	Total
Balance at Sep. 30, 2009	$10,706	$176,039	$2,414,942	$112,451	($31,129)	$2,683,009
Balance (in shares) at Sep. 30, 2009	107,058				1,572
Comprehensive Income:
Net income			109,982			109,982
Other comprehensive income:
Unrealized losses on available-for-sale securities				(866)		(866)
Amortization of net periodic benefit costs-net of actuarial gain				670		670
Total comprehensive income						109,786
Cash dividends ($0.10 per share)			(10,604)			(10,604)
Exercise of stock options		(1,540)			1,849	309
Exercise of stock options (in shares)					(160)
Tax benefit of stock-based awards, including excess tax benefits of $1.9 million		2,370				2,370
Treasury stock issued for vested restricted stock		(1,445)			1,445
Treasury stock issued for vested restricted stock (in shares)					(70)
Stock-based compensation		9,925				9,925
Balance at Mar. 31, 2010	$10,706	$185,349	$2,514,320	$112,255	($27,835)	$2,794,795
Balance (in shares) at Mar. 31, 2010	107,058				1,342

4_CONSOLIDATED CONDENSED STATEM

CONSOLIDATED CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY (Parenthetical) (USD $)
In Millions, except Per Share data	6 Months Ended Mar. 31, 2010
CONSOLIDATED CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY
Cash dividends, per share (in dollars per share)	0.1
Tax benefit of stock-based awards, excess tax benefits	1.9

Basis of Presentation

Basis of Presentation
	6 Months Ended Mar. 31, 2010
Basis of Presentation
Basis of Presentation	1. Basis of Presentation Unless the context otherwise requires, the use of the terms the Company, we, us and our in these Notes to Consolidated Condensed Financial Statements refers to Helmerich Payne,Inc. and its consolidated subsidiaries. The accompanying unaudited Consolidated Condensed Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States and applicable rulesand regulations of the Securities and Exchange Commission (the Commission) pertaining to interim financial information. Accordingly, these interim financial statements do not include all information or footnote disclosures required by accounting principles generally accepted in the United States for complete financial statements and, therefore should be read in conjunction with the Consolidated Financial Statements and notes thereto in our 2009 Annual Report on Form10-K and other current filings with the Commission. In the opinion of management, all adjustments, consisting of those of a normal recurring nature, necessary to present fairly the results of the periods presented have been included. The results of operations for the interim periods presented may not necessarily be indicative of the results to be expected for the full year. The adoption of the guidance contained in Accounting Standards Codification (ASC) 260-10-45, Earnings per Share, discussed below in Note 2 changed the calculation of basic earnings per share requiring restricted stock grants that have previously been included in our diluted weighted-average shares to be included in basic weighted-average shares. Earnings per share for the three and six months ended March31, 2009 has been recalculated to conform to the current year presentation. As more fully described in our 2009 Annual Report on Form10-K, our contract drilling revenues are comprised of daywork drilling contracts for which the related revenues and expenses are recognized as services are performed. For contracts that are terminated by customers prior to the expirations of their fixed term, contractual provisions customarily require early termination amounts to be paid to us. Revenues from early terminated contracts are recognized when all contractual requirements have been met.

Earnings per Share

Earnings per Share
	6 Months Ended Mar. 31, 2010
Earnings per Share
Earnings per Share	2. Earnings per Share Effective October1, 2009, we adopted the guidance contained in ASC 260-10-45, Earnings per Share. ASC 260-10-45 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and therefore need to be included in the earnings allocation in calculating earnings per share under the two-class method described in ASC 260-10-45. ASC 260-10-45 requires companies to treat unvested share-based payment awards that have non-forfeitable rights to dividend or dividend equivalents as a separate class of securities in calculating earnings per share. We have granted and expect to continue to grant restricted stock grants to employees and non-employee directors that contain non-forfeitable rights to dividend. Such grants are considered participating securities under ASC 260-10-45. As such, we are required to include these grants in the calculation of our basic earnings per share and will need to calculate basic earnings per share using the two-class method. Restricted stock grants have previously been included in our dilutive earnings per share calculation using the treasury stock method. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. Since the adoption of ASC 260-10-45 is to be applied retrospectively, the earnings per share for the prior period have been recalculated to conform to the current year presentation. As a result, the number of shares used to compute earnings per share changed. For the three and six months ended March31, 2009, basic earnings per share was reduced $0.01 from previously disclosed amounts. For the three and six months ended March31, 2009, diluted earnings per share was not impacted by the adoption. Basic net income per share is computed utilizing the two-class method and is calculated based on weighted-average number of common shares outstanding during the periods presented. Diluted net income per share is computed using the weighted-average number of common and common equivalent shares outstanding during the periods utilizing the two-class method for stock options and nonvested restricted stock. The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts): ThreeMonthsEnded SixMonthsEnded March31, March31, 2010 2009 2010 2009 Numerator: Net income $ 46,747 $ 103,738 $ 109,982 $ 249,013 Earnings allocated to unvested shareholders (127 ) (174 ) (267 ) (454 ) Numerator for basic earnings per share 46,620 103,564 109,715 248,559 Effect of reallocating undistributed earnings of unvested shareholders 2 1 4 4 Numerator for diluted earnings per share $ 46,622 $ 103,565 $ 109,719 $ 248,563 Denominator: Denominator for basic earnings per share - weighted-average shares 105,711 105

Operations and Risks in Venezue

Operations and Risks in Venezuela
	6 Months Ended Mar. 31, 2010
Operations and Risks in Venezuela
Operations and Risks in Venezuela	3. Operations and Risks in Venezuela We continue to record revenue in Venezuela as cash is collected from Petroleos de Venezuela, S.A. (PDVSA) as more fully described in Note 14 of the Consolidated Financial Statements in our Annual Report on Form10-K for fiscal year ended September30, 2009. As adjusted for the January2010 currency devaluation discussed below, the amount of revenue that has not been recognized since the end of the first quarter of fiscal 2009 and will be recognized upon collection is approximately $39.5 million. Revenue to be recognized will be offset by approximately 14 percent of associated expenses. During the second quarter of fiscal 2010, we received approximately $6.3 million (U.S. dollars and U.S. currency equivalent). Approximately 55 percent of this amount corresponded to accounts receivable at the end of the first quarter of fiscal 2009 and the remainder to invoices issued for work performed after the first quarter of fiscal 2009. At March31, 2010, the Consolidated Condensed Balance Sheet includes accounts receivable from PDVSA of $8.4 million adjusted for the January2010 currency devaluation discussed below. We do not have enough information to conclude that this remaining receivable balance is not probable of collection. However, there continues to be uncertainty regarding the timing of the collection due to the current political, economic and social instability in Venezuela, the dependence by Venezuela on oil to largely support its economy and the failure of PDVSA to pay many service companies working in Venezuela. We proactively continue efforts to collect unpaid invoice amounts. Subsequent to the quarter ended March31, 2010, payments from PDVSA reduced the accounts receivable balance by approximately $3.1 million (U.S. currency equivalent) and resulted in approximately $1.2 million revenue which will be recognized during the third quarter of fiscal 2010. At March31, 2010, all eleven rigs that formerly worked for PDVSA in Venezuela were idle. We continue to pursue future drilling opportunities for these eleven rigs but we do not expect to commit to new contracts until additional progress is made on pending receivable collections and on conversion of local currency to U.S. dollars. At March31, 2010, the net book value of long-lived assets in Venezuela was $67.4 million. In addition to the outstanding accounts receivable above, PDVSA has unilaterally paid U.S. dollar invoices in bolivar fuerte (Bsf) which increases our exposure to foreign currency devaluation. We have provided all supporting documentation to PDVSA and await approval from them to exchange those payments to U.S. dollars. The approval and subsequent payment would result in reducing the foreign currency exposure. We are unable to determine when payment will be received. On January8, 2010, the Venezuelan government devalued its currency and established a two-tier exchange structure. The official exchange rate has been devalued from 2.15 Bsf to each U.S. dollar to 4.30 for non-essential goods and services and to 2.60 for essential goods. Our drilling services fall into the non-essential classification. As a result of the devaluation, we r

Inventories

Inventories
	6 Months Ended Mar. 31, 2010
Inventories
Inventories	4. Inventories Inventories consist primarily of replacement parts and supplies held for use in our drilling operations.

Financial Instruments and Fair

Financial Instruments and Fair Value Measurement
	6 Months Ended Mar. 31, 2010
Financial Instruments and Fair Value Measurement
Financial Instruments and Fair Value Measurement	5. Financial Instruments and Fair Value Measurement The estimated fair value of our available-for-sale securities is primarily based on market quotes. The following is a summary of available-for-sale securities, which excludes investments in limited partnerships carried at cost and assets held in a Non-qualified Supplemental Savings Plan: Gross Gross Estimated Unrealized Unrealized Fair Cost Gains Losses Value (inthousands) Equity securities 03/31/10 $ 129,183 $ 209,255 $ $ 338,438 Equity securities 09/30/09 $ 129,183 $ 210,640 $ $ 339,823 On an on-going basis, we evaluate the marketable equity securities to determine if a decline in fair market is other-than-temporary. If a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded and a new cost basis established. We review several factors to determine whether a loss is other-than-temporary. These factors include, but are not limited to, (i)the length of time a security is in an unrealized loss position, (ii)the extent to which fair value is less than cost, (iii)the financial condition and near term prospects of the issuer, and (iv)our intent and ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. The cost of securities used in determining realized gains and losses is based on the average cost basis of the security sold. We had no sales of marketable equity available-for-sale securities during the first six months of fiscal 2010 and 2009. Investments in limited partnerships carried at cost were approximately $12.4 million at March31, 2010 and September30, 2009. The estimated fair value of the limited partnerships was $20.7 million and $19.7 million at March31, 2010 and September30, 2009, respectively. The estimated fair value exceeded the cost of investments at March31, 2010 and September30, 2009 and, as such, the investments were not impaired. Assets held in the Non-qualified Supplemental Savings Plan are carried at fair market value which totaled $4.8 million at March31, 2010 and $4.2 million at September30, 2009, respectively. The majority of cash equivalents are invested in taxable and non-taxable money-market mutual funds. The carrying amount of cash and cash equivalents approximates fair value due to the short maturity of those investments. During the second quarter of fiscal 2010, a $12.5 million bank certificate of deposit with an original maturity greater than three months matured. Interest earned is included in interest and dividend income on the Consolidated Condensed Statement of Income. On October1, 2009, we implemented the previously deferred provisions of ASC 820, Fair Value Measurements and Disclosures, for nonfinancial assets and liabilities recorded at fair value, as required. Additionally, we adopted Accounting Standards Update No.2009-05, Measuring Liabilities at Fair Value (ASU 2009-05), which provided amendments to ASC 820 for the fair value measurements of liabilities when a quoted price in an active market is not available. On December15, 2009, we a

Comprehensive Income

Comprehensive Income
	6 Months Ended Mar. 31, 2010
Comprehensive Income
Comprehensive Income	6. Comprehensive Income Comprehensive income, net of related income taxes, is as follows (in thousands): ThreeMonthsEnded SixMonthsEnded March31, March31, 2010 2009 2010 2009 Net Income $ 46,747 $ 103,738 $ 109,982 $ 249,013 Other comprehensive income: Unrealized depreciation on securities (11,337 ) (1,654 ) (1,385 ) (36,252 ) Income taxes 4,251 628 519 13,775 (7,086 ) (1,026 ) (866 ) (22,477 ) Minimum pension liability adjustments 536 1,072 Income taxes (200 ) (402 ) 336 670 Total comprehensive income $ 39,997 $ 102,712 $ 109,786 $ 226,536 The components of accumulated other comprehensive income, net of related income taxes, are as follows (in thousands): March31, September30, 2010 2009 Unrealized appreciation on securities $ 129,731 $ 130,597 Unrecognized actuarial loss and prior service cost (17,476 ) (18,146 ) Accumulated other comprehensive income $ 112,255 $ 112,451

Derivative Financial Instrument

Derivative Financial Instruments
	6 Months Ended Mar. 31, 2010
Derivative Financial Instruments
Derivative Financial Instruments	7. Derivative Financial Instruments We are exposed to market risk in the normal course of business operations due to ongoing investing and financing activities. The risk of loss can be assessed from the perspective of adverse changes in fair values, cash flows and future earnings. ASC 815, Derivatives and Hedging, requires an entity to recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. We have not historically entered into derivative financial instruments for trading purposes or for speculation. For further information regarding our disclosures of an interest rate swap that expired in January2010, refer to Note 10, Debt of these Consolidated Condensed Financial Statements.

Cash Dividends

Cash Dividends
	6 Months Ended Mar. 31, 2010
Cash Dividends
Cash Dividends	8. Cash Dividends The $0.05 cash dividend declared December1, 2009, was paid March1, 2010. On March3, 2010, a cash dividend of $0.05 per share was declared for shareholders of record on May14, 2010, payable June1, 2010. The dividend payable is included in accounts payable in the Consolidated Condensed Balance Sheet.

Stock-Based Compensation

Stock-Based Compensation
	6 Months Ended Mar. 31, 2010
Stock-Based Compensation
Stock-Based Compensation	9. Stock-Based Compensation We have one plan providing for common-stock based awards to employees and to non-employee Directors. The plan permits the granting of various types of awards including stock options and restricted stock. Restricted stock may be granted for no consideration other than prior and future services. The purchase price per share for stock options may not be less than the market price of the underlying stock on the date of grant. Stock options expire ten years after the grant date. Vesting requirements are determined by the Human Resources Committee of our Board of Directors. Readers should refer to Note 5 of the Consolidated Financial Statements in our Annual Report on Form10-K for the fiscal year ended September30, 2009 for additional information related to stock-based compensation. We use the Black-Scholes formula to estimate the value of stock options granted. The fair value of the options is amortized to compensation expense on a straight-line basis over the requisite service periods of the stock awards, which are generally the vesting periods. We have the right to satisfy option exercises from treasury shares and from authorized but unissued shares. On December1, 2009, the plan was amended to provide for continued vesting (and accelerated vesting upon death) of restricted stock and stock options effective upon a participant becoming retirement eligible. A participant meets the definition of retirement eligible if the participant attains age 55 and has 15 or more years of continuous service as a full-time employee. The plan amendments apply retroactively. As a result of the continued vesting provisions, we incurred additional compensation cost of approximately $4.9 million for the six months ended March31, 2010. A summary of compensation cost for stock-based payment arrangements recognized in general and administrative expense is as follows (in thousands): ThreeMonthsEnded SixMonthsEnded March31, March31, 2010 2009 2010 2009 Compensation expense Stock options $ 1,912 $ 1,677 $ 7,588 $ 3,514 Restricted stock 1,005 361 2,337 724 $ 2,917 $ 2,038 $ 9,925 $ 4,238 STOCK OPTIONS The following summarizes the weighted-average assumptions utilized in determining the fair value of options granted during the six months ended March31, 2010 and 2009: 2010 2009 Risk-free interest rate 2.3 % 1.7 % Expected stock volatility 49.9 % 43.4 % Dividend yield .5 % .9 % Expected term (in years) 5.8 5.8 Risk-Free Interest Rate. The risk-free interest rate is based on U.S. Treasury securities for the expected term of the option. Expected Volatility Rate. Expected volatility is based on the daily closing price of our stock based upon historical experience over a period which approximates the expected term of the option. Dividend Yield. The expected dividend yield is based on our current dividend yield. Expected Term. The expected term of the options granted represents the period of time that they are expected to be outstanding. We estimate t

Debt

Debt
	6 Months Ended Mar. 31, 2010
Debt
Debt	10. Debt At March31, 2010 and September30, 2009, we had the following unsecured long-term debt outstanding (in thousands): March31, 2010 September30, 2009 Unsecured intermediate debt issued August15, 2002: SeriesC, due August15, 2012, 6.46% $ 75,000 $ 75,000 SeriesD, due August15, 2014, 6.56% 75,000 75,000 Unsecured senior notes issued July21, 2009: Due July21, 2012, 6.10% 40,000 40,000 Due July21, 2013, 6.10% 40,000 40,000 Due July21, 2014, 6.10% 40,000 40,000 Due July21, 2015, 6.10% 40,000 40,000 Due July21, 2016, 6.10% 40,000 40,000 Unsecured senior credit facility due December18, 2011, .58%-.59% 90,000 70,000 $ 440,000 $ 420,000 Less long-term debt due within one year Long-term debt $ 440,000 $ 420,000 The terms of the fixed rate debt obligations require that we maintain a minimum ratio of debt to total capitalization. We have $200 million senior unsecured fixed-rate notes that mature over a period from July2012 to July2016. Interest on the notes will be paid semi-annually based on an annual rate of 6.10 percent. We will make five equal annual principal repayments of $40 million starting on the third anniversary of the closing date. Financial covenants require us to maintain a funded leverage ratio of less than 55 percent and an interest coverage ratio (as defined) of not less than 2.50 to 1.00. The note purchase agreement also contains additional terms, conditions, and restrictions that we believe are usual and customary in unsecured debt arrangements for companies that are similar in size and credit quality. We have an agreement with a multi-bank syndicate for a $400 million senior unsecured credit facility maturing December2011. While we have the option to borrow at the prime rate for maturities of less than 30 days, we anticipate that the majority of all of the borrowings over the life of the facility will accrue interest at a spread over the London Interbank Bank Offered Rate (LIBOR). We pay a commitment fee based on the unused balance of the facility. The spread over LIBOR as well as the commitment fee is determined according to a scale based on a ratio of our total debt to total capitalization. The LIBOR spread ranges from .30 percent to .45 percent over LIBOR depending on the ratios. At March31, 2010, the LIBOR spread on borrowings was .35 percent and the commitment fee was .075 percent per annum. At March31, 2010, we had two letters of credit totaling $21.9 million under the facility and had $90 million borrowed against the facility with $288.1 million available to borrow. The advances bore interest at an average rate of 0.59 percent at March31, 2010. On January19, 2010, we borrowed $75 million that was used to pay the $105 million unsecured line discussed below. Subsequent to March31, 2010, we repaid $30 million and currently have $318.1 million available to borrow. Financial covenants in the facility require we maintain a funded leverage ratio (as defined) of less than 50 percent and an interest coverage ratio (as defined) of not less than 3.00 to 1.00. The facility c

Income Taxes

Income Taxes
	6 Months Ended Mar. 31, 2010
Income Taxes
Income Taxes	11. Income Taxes Our effective tax rate for the first six months of fiscal 2010 and 2009 was 36.6 percent and 40.8 percent, respectively. The Companys effective tax rate for the three months ended March31, 2010 and 2009 was 37.9 percent and 45.6 percent, respectively. The effective rate differs from the U.S. federal statutory rate of 35.0 percent primarily due to state and foreign taxes. It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain unrecognized tax positions will increase or decrease during the next 12 months; however, we do not expect the change to have a material effect on results of operations or financial position.

Contingent Liabilities and Comm

Contingent Liabilities and Commitments
	6 Months Ended Mar. 31, 2010
Contingent Liabilities and Commitments
Contingent Liabilities and Commitments	12. Contingent Liabilities and Commitments In conjunction with our current drilling rig construction program, purchase commitments for equipment, parts and supplies of approximately $25.0 million are outstanding at March31, 2010. A lawsuit has been filed against us by a former customer for whom we performed drilling services with five rigs under term drilling contracts. The suit alleges, among other things, that we failed to perform drilling operations in accordance with good oilfield practice, breached express performance warranties, and made certain fraudulent representations regarding drilling performance. As a consequence, Plantiff has prayed for actual and punitive damages. We have and will continue to vigorously defend this lawsuit, but the outcome remains uncertain. If we are unsuccessful in this litigation, then the amount of damages awarded could have a material adverse effect on our financial condition and results of operations. Various other legal actions, the majority of which arise in the ordinary course of business, are pending. We maintain insurance against certain business risks subject to certain deductibles. None of these legal actions are expected to have a material adverse effect on our financial condition, cash flows or results of operations. We are contingently liable to sureties in respect of bonds issued by the sureties in connection with certain commitments entered into by us in the normal course of business. We have agreed to indemnify the sureties for any payments made by them in respect of such bonds.

Segment Information

Segment Information
	6 Months Ended Mar. 31, 2010
Segment Information
Segment Information	13. Segment Information We operate principally in the contract drilling industry. Our contract drilling business includes the following reportable operating segments: U.S. Land, Offshore, and International Land. The contract drilling operations consist mainly of contracting Company-owned drilling equipment primarily to large oil and gas exploration companies. Our primary international areas of operation include Colombia, Ecuador, Argentina, Mexico, Venezuela, Tunisia and other South American countries. The International Land operations have similar services, have similar types of customers, operate in a consistent manner and have similar economic and regulatory characteristics. Therefore, we have aggregated our International Land operations into one reportable segment. Each reportable segment is a strategic business unit which is managed separately. Other includes non-reportable operating segments. We evaluate segment performance based on income or loss from operations (segment operating income) before income taxes which includes: revenues from external and internal customers direct operating costs depreciation and allocated general and administrative costs but excludes corporate costs for other depreciation, income from asset sales and other corporate income and expense. General and administrative costs are allocated to the segments based primarily on specific identification and, to the extent that such identification is not practical, on other methods which we believe to be a reasonable reflection of the utilization of services provided. Segment operating income is a non-GAAP financial measure of our performance, as it excludes general and administrative expenses, corporate depreciation, income from asset sales and other corporate income and expense. We consider segment operating income to be an important supplemental measure of operating performance by presenting trends in our core businesses. We use this measure to facilitate period-to-period comparisons in operating performance of our reportable segments in the aggregate by eliminating items that affect comparability between periods. We believe that segment operating income is useful to investors because it provides a means to evaluate the operating performance of the segments on an ongoing basis using criteria that are used by our internal decision makers. Additionally, it highlights operating trends and aids analytical comparisons. However, segment operating income has limitations and should not be used as an alternative to operating income or loss, a performance measure determined in accordance with GAAP, as it excludes certain costs that may affect our operating performance in future periods. Summarized financial information of our reportable segments for the six months ended March31, 2010, and 2009, is shown in the following tables: (in thousands) External Sales Inter- Segment Total Sales Segment Operating Income (Loss) March31, 2010 Contract Drilling: U.S. Land $ 609,508 $ $ 609,508 $ 182,246 Offshore 100,055 100,055 28,731 International Land 124,079 124,079 (2,32

Pensions and Other Post-retirem

Pensions and Other Post-retirement Benefits
	6 Months Ended Mar. 31, 2010
Pensions and Other Post-retirement Benefits
Pensions and Other Post-retirement Benefits	14. Pensions and Other Post-retirement Benefits The following provides information at March31, 2010 and 2009 related to the Company-sponsored domestic defined benefit pension plan. Components of Net Periodic Benefit Cost ThreeMonthsEnded March31, SixMonthsEnded March31, 2010 2009 2010 2009 (inthousands) Interest Cost $ 1,194 $ 1,217 $ 2,388 $ 2,434 Expected return on plan assets (1,107 ) (1,147 ) (2,214 ) (2,294 ) Recognized net actuarial loss 536 1,072 Net pension expense $ 623 $ 70 $ 1,246 $ 140 Employer Contributions We contributed $1.5 million to the Pension Plan during the six months ended March31, 2010 to fund distributions. We estimate contributing at least $3.0 million in fiscal 2010 to meet the minimum contribution required by law and expect to make additional contributions to continue funding distributions. Foreign Plan We maintain an unfunded pension plan in one of the international subsidiaries. Pension expense was approximately $122,000 and $90,000 for the three months ended March31, 2010 and 2009, respectively. Pension expense was approximately $267,000 and $180,000 for the six months ended March31, 2010 and 2009, respectively.

Risk Factors

Risk Factors
	6 Months Ended Mar. 31, 2010
Risk Factors
Risk Factors	15. Risk Factors International operations are subject to certain political, economic and other uncertainties not encountered in U.S. operations, including increased risks of terrorism, kidnapping of employees, expropriation of equipment as well as expropriation of a particular oil company operators property and drilling rights, taxation policies, foreign exchange restrictions, currency rate fluctuations and general hazards associated with foreign sovereignty over certain areas in which operations are conducted. There can be no assurance that there will not be changes in local laws, regulations and administrative requirements or the interpretation thereof which could have a material adverse effect on the profitability of our operations or on our ability to continue operations in certain areas. For additional information regarding risks in Venezuela, refer to Note 3 of these Consolidated Condensed Financial Statements. Effective January1, 2010, Venezuela was designated hyper-inflationary, which is defined as cumulative inflation rates exceeding 100 percent in the most recent three-year period. All of our foreign subsidiaries use the U.S. dollar as the functional currency and local currency monetary assets are remeasured into U.S. dollars with gains and losses resulting from foreign currency transactions included in current results of operations. As such, the designation of Venezuela as hyper-inflationary will have no impact on our Consolidated Financial Statements.

Recently Issued Accounting Stan

Recently Issued Accounting Standards
	6 Months Ended Mar. 31, 2010
Recently Issued Accounting Standards
Recently Issued Accounting Standards	16. Recently Issued Accounting Standards ASC 715-20-65, Transition related to SFAS 132R-1, Employers Disclosures about Postretirement Benefit Plan Assets, was issued by the Financial Accounting Standards Board (FASB) in December2008. The new guidance requires employers of public and nonpublic companies to disclose more information about how investment allocation decisions are made, more information about major categories of assets, including concentration of risk and fair-value measurements, and the fair-value techniques and inputs used to measure plan assets. The disclosure requirements are effective for annual financial statements for years ending after December15, 2009. The disclosure requirements will be adopted for our annual financial statements for the year ended September30, 2010, on a prospective basis. We do not expect the adoption to have a material impact on the Consolidated Financial Statements. On January21, 2010, the FASB issued ASU No.2010-06, Fair Value Measurements and Disclosures (Topic 820) Improving Disclosures about Fair Value Measurements. Effective December15, 2009, we adopted the disclosure requirements requiring reporting entities to provide information about movements of assets among Levels 1 and 2 of the three-tier fair value hierarchy established by ASC 820, Fair Value Measurements. The adoption had no impact on these Consolidated Condensed Financial Statements. Effective for fiscal years beginning after December15, 2010, a reconciliation of purchases, sales, issuance, and settlements of financial instruments valued with a Level 3 method, which is used to price the hardest to value instruments, will be required. We currently believe the adoption related to Level 3 financial instruments will have no impact on the Consolidated Financial Statements. In February2010, the FASB issued ASU No.2010-09, Subsequent Events (Topic 855) Amendments to Certain Recognition and Disclosure Requirements (ASU 2010-09). ASU 2010-09 reiterates that an SEC filer is required to evaluate subsequent events through the date that the financial statements are issued and removes the requirement for an SEC filer to disclose the date through which subsequent events have been evaluated. The updated guidance was effective upon issuance and was adopted by us in the second quarter of fiscal 2010.

Document and Entity Information

Document and Entity Information
	6 Months Ended Mar. 31, 2010	Apr. 30, 2010
Document and Entity Information
Entity Registrant Name	HELMERICH & PAYNE INC
Entity Central Index Key	0000046765
Document Type	10-Q
Document Period End Date	2010-03-31
Amendment Flag	false
Current Fiscal Year End Date	--09-30
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		105,731,170
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q2