Earnings call transcript Q2 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, everyone, and welcome to today’s Helmerich & Payne Fiscal Second Quarter Earnings Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. [Operator Instructions] Please note this call is being recorded and I’ll be standing by should you need any assistance.

It is now my pleasure to turn today’s call over to Dave Wilson. ahead. go Please

Dave Wilson

and and will call Ashley, call fiscal to & us, Both we’ll Lindsay, Helmerich XXXX. Vice which Smith, Thank and after sharing President webcast welcome questions. some for for conference CFO. President John are and us and of the and the Payne’s Mark With Senior Mark you, John today everyone CEO; be second open year with quarter comments

this prepared statements are Before as include I’ll current remarks, call we that under Such will state not statements everyone laws. information our performance. future are defined as and begin of of the expectations forward-looking remind on guarantees and securities management’s based

involve certain uncertainties statements that risks are assumptions Forward-looking predict. and difficult to

outcomes results and materially. actual differ could such As our

in and SEC our quarterly Report these learn Form on can our other XX-Q about more reports You Form our Annual on risks filings. XX-K,

You statements. should no reliance publicly undertake undue to update forward-looking we and on statements not place these forward-looking obligation

making non-GAAP We margin statistics. also operating financial and other to direct segment as be income, will such operating measures reference certain

in GAAP calculations comments and release. press find the You’ll reconciliation yesterday’s

With over I’ll the John Lindsay. turn that to said, call

John Lindsay

and I’m cost margin capital. objectives. Solutions today. second last the that to Thank morning, for on pathway us the quarter of thank outstanding annualized to have as of North segment, margins fiscal announced everyone, a H&P of we in year, our America with our On direct XX% generating an report goal return results. strategic achieved executed quarter pleased delivered achieve you we you, joining several our QX another call again and Good Dave. earnings to goal

achieved on we to this realize Reaching is year, double-digit XXXX since capital this invested the have return the fiscal first upcycle. milestone annualized mid-teens which us return time a enabled

in progress environment. Our challenging this market now turns to maintaining a focus

stakeholders. return interest of which Our super-spec our this committed of the is in best high economically financial utilization and remains operations, are maintain all to level we to FlexRig sustainable

uncertainty past issues. has has a economic the of transitory takeaway oil be over crude to the gas and market and warm particularly relatively plagued LNG excess following been offline market due and short-term should quarters natural which Political capacity, both few weak global winter the U.S. supply

both sustaining seems industry, volatility we a remind an ourselves short-term believe like and of the XXXX. atmosphere during surrounding broader Still and abundant itself cost second to times good it’s is markets effective have economy. security pessimism these to commodity of and over half critical fostered which challenge secure in could is global reverse It the that the is how to energy

activity long-term remain energy a U.S. a dampening also churn the natural market, in has contractual pricing contracts. Nonetheless, and environmentally in rig more optimistic in energy but current increased between drilling as friendly effect growing rigs not for is source had in global We gas the the contributing on natural increased and terms to an number a time of of of idle the about supply only and level that more will favor softness require future fundamentals, to meet the gas needs. which demand

order and of our prudence reset responsible combination rig in portion March These our activity our softening return preserve partially count necessitates to in for fiscal lower attributable quarter on with a our exiting the count forward rig profile the with of is A be active a return aligns with that of focus reduction this pursuing. factors capital projections. cost they our focus to also pricing can are regard and the budgets in customer’s to

recall over an historical As that the pricing. unusual it some an into rig indicates we within isn’t don’t count was to voice My about decades idle concerns they due two and rig to see ever results experience the straight volatility talk a past investors, that with downturn right. upcycle to pending related up upcycle. capacity I

us. above some to Additionally, favorable from is effective has XX%, decline, the prices. created not for it’s environment natural pricing rig kept a that is of gas And utilization rates weakness color historically add rigs in remember a lowering to working regardless. important stemming those majority To our which it have super-spec our activity would

rig were churn Now, same there the and budgetary were were as related reasons. were that the that number overpricing, line in customers rigs in a were released minority with to normal handful released of but done those there the were the mostly about

be expect low should and We time. correct this to over short-term activity itself

an also longer-term XX% been we of it While much half season with drilling expectation oil the persistent related above years, the for market, outlook customers, of rigs expect be in remain buying the $XX range, per there like demand. last calendar drilling the barrel a towards the improving will from oil recent the rig in natural about second rig count nearly crude our a land believe our oil has QX. calendar year U.S. crude of and rig driver three to fundamentals directed activity the expect be in and strength the we is gas, With should of prices many current but we optimistic for the in current turbulence and

returns. achieving we ultimate of and impact fleet, FlexRig to also higher investing addition consistently rig and our outcomes processes, customers’ deliver the managing In to drilling activity levels able pricing, By desire. in the people our and are technology, costs performance

model develop of new for also customers. we This We XXXX expand remunerate some form us continue are our developing happened between a that overnight construct the not its based and contract. H&P rigs XX% has using we only in create, of today new to not but performance as models value efforts the collaborative commercial and commercial began

the U.S. fleet the the is focused for H&P super-spec last XX years the converting last drive cycle improving over performance years the in to now have investing rigs well on FlexRig spent five customers. has to capacity, reliability XXX fleet These investments and at in which

in are wellbores. us that helping more well technologies software to higher drive multiple accurately quality as automation in invested we addition, rig In placed as

examples by over to lateral some The performance FlexRig XX,XXX well improvements the in feet since XXXX. with provide average feet me has of depth X,XXX increases the average by lateral drilled length Let increased over doubling Simultaneously working times of days cycle customers, feet. roughly average days well with well. have from our to laterals by reduced an per also XX,XXX XX XX while longer XX% drilling to we

will well maintenance, harder. greater cycle expendables, it rigs point into and from working costs These out the higher detail that and to me to working but time this mean a costs during day labor. rigs for increased more in his are per are translates has in efficiently, improvements also a day revenues range. needing is in let for means Mark a $XX,XXX but day remarks, driver $XX,XXX discuss capital XXXX rig our mid-$XX,XXX be day today, that cost a And

a Maintaining we H&P viable to that success remain future on of to enable fiscal a sustainable to our can achieve on returns customers. plan will what focus partner invested our is ensure capital

the Now for front, longer-term and potential shifting to international remains H&P’s growth prospects focus.

we quarter, our our and Australia. the hub another FlexRig super-spec East we to sent moved Middle into have first During

opportunities. to While in we initially will small they two international count, to important doors these believe open terms projects more our of and strategy rig are

steady the additional Along remained back financial those Argentina conversions the to super-spec Operations in rigs specific during plan still for provided lines, East that contributions. undergoing Middle and export in and after to Colombia calendar relatively fit the needs half have operations solid year we of the region. the

have well focused still on our buybacks. have capital to share We of returned in have regular ample strategy and available complete and repurchases announced fiscal executed approximately plans as dividends this million allocation as we Furthermore, capital year, advantage to or October via our additional of supplemental opportunities. shareholder since dividend other take investment $XXX we date conduct and cash

day focus seen rate. over I our rather part outcomes benefits models closing, in in with near any is partner. of as we my realizing That solution career. H&P few large jointly new is than value-added customers their just In more collaboratively productivity to drilling commercial long-term at time working customers due a the past and are the pursuing have the having on using months, economic H&P The

to rig deliver H&P and technologies desired assets of customers. for consistently utilizing is outcomes All possible this our by our employees

And over I’ll call the now, to turn Mark.

Mark Smith

fiscal full third for our provide John. on and second position. guidance appropriate as I quarter guidance comment review financial XXXX update XXXX the will Thanks, year our Today, quarter, fiscal operating results,

recently Let ended with second $XXX the million $XXX previous of from March revenues highlights quarterly generated me quarter. for quarter versus the completed company XX, start XXXX. million The

$XXX focused quarter million per pricing sequential As for to the America expected, were North average second the due direct previous quarterly increase higher to in efforts revenue The was North the to our million America. rig costs is operating in quarter. increase attributable active higher. for costs $XXX versus Total primarily move fleet

information miscellaneous quarter, $XX million approximately costs. General higher and due services administrative for and expenses than slightly expected to second the professional were technology

which primarily During operations. related approximately we on a part reported market of statement gain recognized equity of consolidated our of million, to fair gain securities the the and investments, of as is value a investment quarter, second $XX our

rate quarter’s diluted earned the per Our in this results, of share To tax profit H&P XX%, which approximately $X.XX guided QX within range. summarize effective is previously our previous $X.XX was a versus quarter.

positively consisting of in by cent quarter select a press per share, securities. highlighted items share $X.XX on were net the gain our gain earnings impacted release, per As second a investment aforementioned

of guidance. quarter. previous on adjusted items, fiscal select Capital in versus first for the than the capital the comment second share second a quarter revised will were I XXXX $X.XX $XX less quarter fiscal earnings expenditure $X.XX was which fiscal CapEx. XXXX these million, $XX were an per adjusted Absent fiscal quarter the expenditures diluted during million later

company’s the H&P million cash of generated during remarks. line second the XXXX, second position expectations. which in address approximately our the cash cash payments later of $XXX for inclusive outflows quarter in with and I’ll in my flow quarter tax operating million in is $XXX

our averaged up the contracted an rigs fiscal quarter average than rigs, Solutions second in segments, the QX. exited which with our XXX We expectations. from segment. fiscal three quarter to XXX beginning during with We North XXX less guidance rigs second America the of was Turning contracted

sequentially due by As average $XX to higher million pricing. mentioned earlier, revenues increased

our which $XXX direct and quarter. Performance was rigs the in came sequentially were was to at contracts previous end second the January higher Segment $XXX up total higher in which margin guidance quarter, XX% million, contracted the million. of than at about of

rig conversions, $X.X U.S. costs completes and prior of the during were includes to planned walking had which QX prior the were for three to fiscal This conversions reactivation million the walking incurred in quarter $X.X rig second million market committed in the six compared we entering XXXX. quarter. addition, In

Total from first segment per costs second the expenses $XX,XXX $XX,XXX quarter. quarter per day in reimbursables day excluding and re-commissioning excluding to in increased the

cost today $XX,XXX are fiscal to two day primarily at the our the to XXXX Looking from few of $XX,XXX per in back due over factors. past increases years, a end

XXXX December in on previous a September discussed $X,XXX and increased field as labor rates per First, we about day. of XXXX calls, for related total

labor reminder, approximately XX% for outlook is is labor the forward XX% daily to a As and of operating stable. expenses rates

to are have rig intensity per to is alluded gone day in driving and in the rigs today, items, Recent materials XXX we more we to feet and in feet John increased work increase rigs. our before, of as which than an seeing consumption consuming per due XXXX remarks, thus Second, shows operational our from supplies data to ever his drilling inventory X,XXX materials supplies. harder of

performance added additional costs best to increase, contract and streams. achieve Finally, revenue are revenues technology incurred those

of XXX contracted. rigs between as America fiscal we by to of working, super and of exited fiscal seen since fiscal of that we with have rigs, project have the XXX third XXX today’s we have ahead end are the Solutions, for XXX rigs. XXXX will April rigs Looking QX contracted several XXX call quarter, we releases North and third which the spec although, quarter we and

at working utilization rigs at we we Last recently XX% of peaked the active quarter XX fleet. XXX with approximately idled, recently and super-spec are

invested recently reducing cost double-digit of of to and is uncertainties current As price capital previous capital is pricing market growing in idling our return annualized declines calendar our maintain to on rig over rigs from different achieved moderated maintaining macroeconomic this coupled instead of relative John necessary demand, pricing mentioned, XX%. with and share. This on focus natural cycles. year H&P gas resulted have

elapsed will are term. costs less guarantee or working Moreover, beyond to approximately rig typically only likely the pressure of pricing continues would for the destructive not as would timeline which fleet, keep Instead, the customers particularly individual the long of work on back the immediate rig well, reductions downward again. higher rig of to remainder boost pricing total XX% company, pricing active that be up the reducing cost given return to put a to historical price

cash flow related generation to drops cash risking versus flow In to related summary, sacrifice degradation we some are to near-term willing larger activity pricing.

America $X.X Our term backlog for from contract. fleet under roughly rigs revenue Solutions our current North is billion

of term the today, contract. approximately fleet a is on of U.S. active XX% As

per Our the of performance XX,XXX. average the in day per average and utilization inclusive approximately technology level compared to of revenue bonus spot high currently is $XX,XXX day overall earned revenue QX

In the we remainder will North range million relatively be mentioned third fiscal day remain XXXX We segment, flat approximately would and higher unit per expect QX. costs on are we to inventory direct previously, to $XX,XXX materials expect included for now $XXX quarter stable inflation in margins sheet, per supplies between rates, $XXX believe in at to expect which But experiencing currently the XXXX. cost American in consumption we as will continue our Solutions average we day. fiscal million. balance current QX the our Notwithstanding, inventory cost

third be cost active which XXXX. absorption quarter, over may active for overhead higher smaller slightly a as second the fiscal we our half of the spread number rigs auto of in will rig through push However, the rate more rigs,

effects when such John the daily QX, work the mentioned, some look more believe be beyond near-term overhead of of reversing As calendar we on back absorption end, to fiscal put rigs cost. will year we

line drilling were Bahrain our activity mobilizing rig that business with as rig to Australia. brings quarter segment, in the a which rigs ended fiscal in added results two count spec We expected, second international Solutions guidance. three International International previous the the to our Next to rig super of working country, in XX with Solutions in

steps. and fiscal we idling international, anticipate look XXXX customer contract that in in completed Argentina assesses towards drilled quarter the for well and third that one next rig term of Columbia we recently one the the as its As determines

million to up to is these Our and the opportunities both idle setting working put hub East near preparing our associated back of with Expenses in Middle sales mid-term. rigs team to to rigs results on work to in expect to aside million we from mobilize and direct exchange margin in earn are to QX in abroad, QX. impact. In expected $X effective quarter, third continue the foreign any $X

Gulf customer-owned active offshore generated with on in contracts our of have rate. Mexico flat during are had our the of contracted, our on we offshore quarter, to which in active sequentially. rigs, seven we segment $X.X The direct rigs a Finally, two million estimate line management segment, four which platform and margin of of three was offshore

of fiscal on one the drilling is mid-August. for the segment, to rigs As demobilization of program. This which XXXX customer our has form the [indiscernible] in third look rise we toward the be is will quarter anticipated shipyard, beginning platform end of Gulf as of demobilization the offshore be Mexico some rate multi-year at reached of rig its

million will million expect $X.X $X.X to offshore generate direct We between margin. of

decreasing between expenditures forward update full look million, now guidance to me $XXX appropriate. the $XX year the midpoint XXXX fiscal for full prior let year Capital to fiscal are expected range Now guidance. XXXX from million as million to $XXX

from have horizon. continued push supply spend timing quarter-to-quarter, the planning our chain expect to in maintenance CapEx to out some vary our CapEx we Although, of delays

the professional general for Our to primarily additional $XXX administrative increased expenditures. for and fees technology and fiscal due full expectations services The information to year are costs million. increased expenses

income effective We differences estimating and foreign are to of the XX% taxes. statutory XX% tax our U.S. and still both variances to permanent in above to the rate rate the attributed tax be state XX% of range with annual

$X In million million, approximately QX, we up $XXX in paid cash which tax is of to QX.

$XXX the quarter rig is – year, lower million. to previously a midpoint due the For midpoint the mentioned lower the The than tax we’re $XX $XXX million our full range than guidance activity of to expectations. range anticipating this prior fiscal revised cash now of million

largely Helmer approximately The investments Campaign, financial position, fiscal December million of decrease our our $XXX an equivalent short-term XX in at cash XXXX. million and had repurchases. is March looking share to cash $XXX sequential versus Now at XX, attributable QX balance

provided range activity, CapEx, estimates had and those cash the the to and XXXX discussed year, year-end of cash have taking our implications fiscal we today million taxes have this of our balances on for Regarding $XXX developments we’ve account, forecasted the a fiscal updated into million. balance. $XXX At and recent beginning cash

now revised which million, our Including million $X year-end $XXX were million. remains our Approximately facility, relatively flat shares at of at repurchased about X.X approximately approximately approximately range is the date. Our impact shares billion. to XXXX fiscal the revolving QX availability under liquidity for repurchases million overall is for $XXX cash fiscal reflects thus share repurchases in $XXX largely credit have million, far million fiscal totaled $XXX X.X to

the capital dividend. and year. dividends return North at These longstanding to fiscal supplemental new provided underscores dividend that financial our October encompassed the augments in but and of the repurchases returns our stock and beginning Pricing model also Each and of execution share America repurchases focus returns not base of XXXX shareholder combined items, announced cash these this focus shareholders. we supplemental base allocation fiscal allocation to capital our increase only the in with company, the the

comments turn prepared let Ashley That fiscal now questions. call quarter for second the concludes to for me our and over the

Operator

And first Instructions] question will take Smith [Operator ahead. David our Please with from Pickering we go Certainly. Energy.

David Smith

good my Hey, taking for questions. you Thank morning.

John Lindsay

morning, Good Dave.

David Smith

on from is your to if extra last So rigs give secondly, your of could update that if getting congratulations And color that could natural a know on an Wanted XX% us exit. and give XX any of based what margins. last of keep December contracts exit kind being exit. December and question. factors mix mix gas those an you dropped. June versus congratulations performance portion your target changing the two-part for then to the on fleet the discipline I in on set see us your have lower activity margin you understand customer to you leadership June if you showing rate there. to on the count Thinking projection the I for about

John Lindsay

Sure, contract had – of contract. David. of some a we’re XX% yes, rigs has performance Oh question? private far, at the of fleet under mix thus Yes, – it’s your released the – approximately another. as sort are releases And we’ve performance was working the what of on is we the the Yes, part second we’ve companies. or XX% current

Mark Smith

as with continues for up required, those increase And prior while David, acceptable our revenue we’re they Mark. per tick bit around sales seen some the is force to the get quarter, that gradual side. so XX%, – since XX% KPIs getting this generations also We’ve customers a the to work derive level our our to to day on return need for to their ways customers right value up

David Smith

if extent appreciate follow-up, that growth levels? see for the – thinking back that just of international opportunity kind maybe the to could And quick left deploy buying may. authorization year. this capital How compared I growth do discretionary. CapEx be your that’s I clearly stock these you And allocation, do both $X.X color. to to don’t be the shortsighted, to at want a you but can I a about international million capital on

John Lindsay

the I all right. lean And that’s would above. Yes, toward

opportunity. think from think buy again, assets slow to additional but got perspective it we seen both, of and we’ve talked it we Anything more a moving as would in at do add? there’s backs I But looking about obviously growth, opportunities be of pretty love some back we’ll the a and a it’s our balance an – opportunistic lot this you’ve share you would sheet lot the there’s year. there internationally, hopefully, to half and obviously, do we’ve grip

Mark Smith

No.

David Smith

so you Thank Great. much.

John Lindsay

David. Thanks,

Operator

ahead. next Please our question Derek go Podhaizer Barclays. We with from will take

Derek Podhaizer

Hey guys, good morning.

lower up from coming rig if some are dropping that if rigs you’re rig that exit lower but know price well ads the XX is to E&Ps an picking Just E&Ps rigs count of seeing know to some offsets a your your count, those is want I as or drop you’re you rigs the industry that that’s XX down. off? to tier Do those industry some it’s – rigs? back with. Going decline, about rigs know with rig – or

John Lindsay

prices. on insight rigs not clear being being I’m are mean, have the rigs don’t all into sure I but the competitor our those other those result I comparisons, natural I’m certain and front, that low released of Derek, gas are as rigs replaced. are gas a being Yes. rigs pretty –

being And that’s cost that’s may don’t we replaced think the of instances rig, a really on per a day so but is lower to and it’s key I cost a per I there not are lower it’s overall I’m thing sure lower think surprising. it that cost the project. by there day, other where are be – focus

really been fashion, customer is pricing through traditional we pricing maintain Because negotiate the you’re fortunately, level a all performance that’s to all able rate, your have to the And with a have contract of you construct. value day on. a in if with

there’s great customers working through opportunity and value that a additional with So win-win contract. creating a drive performance to in based

we’re – it’s of contracts rate the performance a to is and traction, it’s lot well. getting a we do we it So as But way those been approach day obviously, traditional customers have different with still positive, have business. very great

Derek Podhaizer

And question, talked of call term last gas, versus private? XX half out little understood. the on were XX% I I rig I – that of I being drops you over Can contracts. rigs those about, gas last Because know said think you were private. half at those the you break know

suspect So were those safe. I would

a the on just drops. maybe oil mix color So between rig gas little versus

Mark Smith

predominance can can privates the it Derek, up with the details. back you of We say we’re follow us this but but is Mark. also to with basins, those weighted suffice gas that we there, get for towards more on details

Derek Podhaizer

Got it.

in. just one sneak more And Okay.

potentially that to activity fiscal to more Given down Have Middle increasing thought maybe not maybe have rig of – started over XXXX? lowered up for around you the even of your maybe East your conversations year, free but of that – you this does than or the the Australia, into this send you maybe for some estimates the the to go the you’ve rest equipment year, over?

John Lindsay

belief we is where the particularly Derek, this of course, response the but second of type a again year, of long-term the similar our not buying three the of same We it been really expect past years that out this we’ve The QX, around response, rigs season. reactivating is haven’t stack. at difference, point, half go

now so get very cost to of idled reactivating been time, be we’ll it’ll short those for rigs reactivate that have And and back those working. period rigs low be a so rigs very

So it’s chain the hard move point take over really our mean, capacity there would super opportunities at chain, time, to arise. say to I but be of those supply obviously this lot spec a pressure does of it have in to markets of out challenges, been supply time. because clearly, our international as goal more

Derek Podhaizer

Great. Appreciate the color. I’ll back. turn it

Operator

take question with go America. We’ll Bank Pant ahead. our next Please from of Saurabh

John Lindsay

morning. Good

Operator

our Saurabh, All take your with Crist Please Johnson next from We’ll go is ahead. line Don question Rice. open. right.

Don Crist

calendar quarters? to Good second more of focus correctly? conversations pick kind get I expected morning, they’re And little kind quarter to kind of I wanted rig about count in quarter kind bottom up of comments that for with you’re that the on thinking the to third is being rigs in. guidance end in customers I and XXX to the back the calendar XXX up And back of rigs – am you is gave the the of your letting fourth bit going a that that into of having about wanted that or U.S. kind that year. of a quarter of me gentlemen. increasing but believe me Thanks leads around color for your the coming the the in there, half to

John Lindsay

way good think it, our I that is. hope at that’s that’s to what look a

about are conversations We with customers some opportunities. June having some

You’ve to we some will And and but having that past quarter are probably heard it’s that that to bottom much say leads is that, so the us up. picking back point. start rigs that a out me conversations, at hopefully before, we see some believe difficult again,

Don Crist

those and the one to event me. to you’re And transitory Okay. would go basins those rigs basins, other in are today, around a they XXXX. only go is out with stacking hopes as stacking in rigs from progress into that The you we basin are that moving them back through and this further work one year just

Mark Smith

a finish to where the is. or this Don, rigs those the it And yard the we because we those of and to the mobilization minimis are rig working compared it XXXX, might what goes for pays then and When example, to district idle period. done in we doing customer idle really for rig, costs preservation when Mark. starts is we lot a out, in preparing region a for were idle and today, de to work long are the comparatively idling that have a say I’d those

sit and them to yard the we’re to in Today, the months. go work roll back to having when in putting just them next months may for to ready they six be able three

back reactivation in cost quickly. So to on other also and go end, that where minimal the is the can it’s the basin it work and was

John Lindsay

the that, really provider the to that position the in the one We’ve basins. at got other we’re just look as we’re in basins great the positions I I’ll in in Permian, rigs, we of and and Haynesville. number just the position you – the the and our add like Yes. Ford, the Eagle basins we

as they there up be to pick said, off. well-positioned left they’ll right where Mark So

Don Crist

I appreciate you letting you. me in. Thank

John Lindsay

Thank you, Don.

Operator

from next Keith take with Capital ahead. Mackey question go will RBC We Markets. our Please

Keith Mackey

good Hi, thanks morning, questions. and the for taking

Just the from for quantify progress you you there to have or its based Is the based you benefit a contracts, current way first of the the XX% understand performance performance one the contracts? on fleet. a commensurately XX% happened the to been to And what’s there in day about Is paid per that exactly footage relative market? way just talked increases. quantify the get

John Lindsay

Yes.

around do that. some We have have – metrics we

day you a an ways drilling at about footage able as a base just customer to just if a lot think also customers to achieve. performance of is, not example, one in to look there’s as but of quality, think lateral, is placement, think to it different look ways wants trying the wellbore at being about the and hit, it performance, wellbore that I what rate a they’re profile then a you will, base

cases, some ultimately mentioned definitely XX% there’s so is had but we’re like get we’re to margin, gross our a what And trying ROIC. at mid-teens which that mid-XXs that I is, doing that premium – in rates delivering and

ultimately end that’s So goal. the

a And rather than before, no. only as and or I basis, day on answer rate is negotiating said either the yes

into. optionality that, we’re value that got the You’ve on some looking proposition,

So it’s the create the our of on at our total win-win on huge this revenue end and a valuable us – customer, day, to really our the it, of because drilling well. rate needle with face well a let’s the mover day of the course isn’t total way cost

and reliability, on benefits talking with days quality, of well quality a all wellbore drivers about. time are those real spending we’re customers our the that things improving lot saving are The placement,

Keith Mackey

Got in it. and means capital about materially your give what given just given capital, capital, up and dynamic, around for maybe follow-up the cost where Can And should it years they happen make cycle your are you where current environment think be are now comments cost are bit rates you to and longer-term – ultimately, of will above ultimately of us in that the our the of need your think catching cost just pricing. you to rates ahead? where of leading rates the to industry exceed to what of if that return your of in of that trajectory and roughly we terms on what things Got it. on you a on commentary sort the we capital could being the in getting just the

John Lindsay

a Keith. great That’s question, Yes.

We’re for a of couple now been saying this quarters. – we’ve

an and since people possible lot with them XXXX our haven’t our to to that, is on about. the leading be price, us that there [ph] for a dead with investments to extremely what talked And we’re focused really have the and doing rigs it’s Again, we that focused on edge try best that been as as that, in to important because We’re for customers and we’re that, return. doing we’ve technologies, – not much as company made that type deliver that getting the our level them. able to organization to average we’re mid-teens obviously, that and all we’ve our and really of partner and rigs and value

that’s talked what’s that. driving the again, side And the so about And equation. of we’ve cost

$X,XXX are a since Our over day costs up XXXX.

let’s the ultimately are got and we’re above or have to driver face that’s returns our really cost not us investible capital of it. an We’ve for So obviously, that company.

you looking us mentioned – occasionally downturn. like a way along that’s comment have It’s investor again, the well, current the this. – of an at I visit that something with is part of the lines We this So we’ll the we’re a say big and see upcycle normal not the that rig longer-term last within a can lot This is years. look downturn. And of periods for There’s at cycle in a back yourself. activity. volatility different part you XX of over can the very a

returns So market again, feel but we good share. that’s It’s position, our the the focused over on focus. about

Keith Mackey

me. That’s it for color. Okay. Thanks the for

John Lindsay

Thank you.

Operator

over And the closing John turn section. I’ll to call this Q&A Lindsay for concludes back our remarks.

John Lindsay

Thank you, lot today. Ashley. for thanks it’s And joining calls us know of really a listen, busy again I a and day. there’s

we challenges, perform have pleased to the the thanks cycle. the with through H&P recognize this So don’t think momentum than positioned about anybody’s for I organization. future. that remain better We optimistic as an us. the but headwinds and Really We joining

today, focused and multiple technology As outcomes well-positioned really great market We and customers. our for great provide on think to solutions over we’re times returns, people returns our we’ve with said really we’re share. creating

again great thanks your have So and for a day. time

Operator

your Thank Thank you for does This you. participation. program. conclude today’s

at may any time. You disconnect

Helmerich & Payne (HP) 27 Apr 232023 Q2 Earnings call transcript