Earnings call transcript Q3 2023

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Operator

Good day, everyone, and welcome to today's Helmerich & Payne Fiscal Third 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 period. [Operator Instructions]

It is now my pleasure to turn today's call over to Vice President of Investor Relations, Dave Wilson, please go ahead.

Dave Wilson

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

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

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

our actual such, materially. could differ As and outcomes results

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

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

financial to income, make reference direct We’ll and certain other margin, operating also such statistics. operating non-GAAP as segment measures

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

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

John Lindsay

Thank enabling and service reliable quarter, and outstanding quality, quality technology H&P driven execution, everyone. you, delivered good to for our by deliver outcomes customers. Dave, us another morning,

results fiscal a reasons. for third were significant few for financial the quarter H&P's

in that capital. above First, achieving they are the we low which economic our demonstrate mid-teens, returns to of are just cost

drove during quarter. share Second, prices. market This gas natural slow these contract was period rather results due were than to weak a financial declining demonstrates financial company's achieved when primarily performance rig activity economics the that this

transpired reflects prudence industry, that results highlight fiscal within that the allocation. the capital these behavioral energy has Finally, change and one

crude around fiscal mostly third gas prices. the was during centered continued natural the for macro outlook and and oil Uncertainty quarter

the quarter, more apprehension an during horizon. underlying US readings on sensing sense confident, are this recent the some market in optimism we're created While of drilling and the

as see year. September thus quarter, discipline near modest movements, this of term, response customer calendar budget in than that of continue declines at production commodity function price experienced is industry. pace believe more will far which ended a prime change and these although a example than the the into declines short-term We rig we US behavioral rather a activity the a of more to the In

regarding some in during to are calendar and establish medium we major levels outlook relative expect be their we and for received rig inherent as already energy in that is budgets Commodity rigs an current attractive, long-term the promising positive activity our service increase quarter see demand the will the to prices dynamics customer an in and industry. see Having there capital the fourth for XXXX. supply intensity. fundamental to being We demand fundamentals. theme more The remain believe indications, increase due industry customers

typically harder this Our are economics. drill higher stronger desires with up works customers continue ever. and and do with drive drives These keep to that their Laterals equipment to well these longer, cost customer were than our positions to acreage needs, more higher. require circulating pressures wells

all well faster which cost. the lowers Our well from well cycles benefit reliability, total quality, better customers and of

more working the deliver solutions. ever collaborative are more closely customer sales Our operations than teams and with to

models. recent of customers been firm we've by and collaborating with economics In the rig face alternative our closely on count able contractual to on remain working contract declines, with

contractual enables in Our solutions, result can automation into primary our in commercial model and operational to H&P. alternative combined Having ability is enter technology economics arrangements, for confidence H&P using the both our to including performance with execute our contracts customer solutions. win-win consistently which

are been margins these idled to fiscal ongoing using as America efforts, which fleet Even performance-based active slightly quarter our fourth our of contracts, revenues have the in in margins we XXXX. had rigs fourth model year a North above leading-edge of in and mainly point Solutions XX% approximately of margins which will high anticipating decline the In the absence average spot half is short, this Solutions rigs, contractual our new quarter. market have since compress we the and a fiscal during overall implemented those the North we America Today, during fiscal commercial the the with margins likely fleet had second in in modest result

footprint strategy Expanding slower remains our international it for than a at but the company, unfolding expected. pace a core is

platform the to We in soon. our commence Northern to efficiencies resources of FlexRig Our in unconventional our Australia customer, is the as expertise unlock drilling the they Tamboran, Territory. of demonstrating Beetaloo work Basin forward technology drilling in look for power our and to scheduled the

Middle a second to in plan of results remain look This for award first the rig tender. the Middle other unconventional unconventional foreseeable anticipation future. Additionally, of in Activities super-spec to our in markets would international to rig send East our East. we the steady relatively an the pending become

roughly together company. to approximately the will but million for we for returns Capital remains priority shareholders year-to-date, dividends million $XXX through with capital we Fiscal quarter. the in and specific have to share repurchases. X.X million base Mark a fiscal shares of give repurchased approximately returned supplemental $XXX more details, shareholders

economic In several gas which past is and remain impacted quarters, over that closing, abating. optimistic has we the markets global oil natural the uncertainty political and crude the

achieved the returns customers. drilling moving levels again collaboration third our remain economic to on And of customers. superior quarter, in delivering our the This level of our while During in fiscal will ability cost their attitude forward, we excess returns people, technology to of our performance efficiencies capital. our focus these is maintaining value deliver and with possible outcomes service once of and through because of of

the And now over call will to Mark. turn I

Mark Smith

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

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

rig count. lower As expected, sequentially average revenue the was quarterly to due decrease in primarily

versus also quarter. attributable average for is million decrease the lower The costs the America for solutions. count operating previous North administrative expenses in $XXX $XX were to were and $XXX quarter approximately third quarter. direct for rig Total sequential the General the third million million

the For million and driven services $XXX still sequential by fees. the professional with we the full increase implied expect software timing approximately of year,

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

taxes. Our between and range XX% slightly QX full quarter tax certain to due our rate previously tax year foreign guided effective approximately still expect was range discrete for XX%, effective the which XX%. incremental rate above adjustments We tax and the to was

this profit in share $X.XX results, the a earned To consolidated per quarter's H&P quarter. summarize, diluted previous of versus $X.XX

by negatively an securities. select were of adjusted in highlighted second release, diluted As on third Absent our were quarter per share the items, adjusted earnings quarter. quarter third a the earnings $X.XX $X.XX loss fiscal per items $X.XX during net the the these per in select loss consisting share investment primarily press share impacted versus aforementioned of fiscal

third in million will for remarks. my more the XXXX. third quarter I in of on company's of XXXX than guidance. I the H&P will approximately flow $XXX address fiscal cash expenditures our $XX generated which revised expenditure quarter Capital fiscal the spend. XXXX quarter operating cash capital during million previous million, position later were later the comment $XXX was

and North the contracted were segments, less released to as range rigs America caused in Solutions of Turning of XXX production XXX the three sequentially beginning during average natural rigs averaged weak their levels. exceeding activity exit customers quarter, for an in budget down price decrease than the and segment. with other exhaustion XXX XXX between We fiscal XXX rig This slightly revenues count guided third rigs customer of QX, our from to million. gas was $XX our including reasons, multiple by softening targets,

at Segment million. quarter. previous million, was but within contracted sequentially direct quarter, came approximately third margin rigs up of lower made the Performance $XXX of was the which in our guidance, are total April contracts which in XX% $XXX than

third $XX,XXX select day quarter adjustment quarter $XX,XXX a second related Total segment the of quarter. increased to a to the was earn-out figure previous day acquisition. in per in item day $XXX contingent liability third expenses Included the a per approximately from in for per

Today, fiscal the will leave to of ahead some are have and of super-spec North and quarter, we end for rigs, America quarter. XXX fourth XXX which XXX, of which project rigs we contracted, contracted quarter current rigs the Solutions. Looking between the the continued XXXX XXX fourth during softening at fiscal

of As price through moved concern for macro were and oil topic a customers. forward we uncertainty volatility QX,

levels America ago. expected. and months working had M&A This customer to exhaustion, budget result As of decrease line are releases their solution activity. to headed not for will to outgrow sight of more recent lower QX, led than into more and releases in related rig additional QX QX a some than we had wanting just revenue we customers in customer previously This to we production of couple North levels number units corresponding we ended

reiterate That a US said, reaching additions I activity. and may bottom customer about rig discussions we calendar those lead regarding believe us mentioned to John how in what rig QX be would that for

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

term XX% as to remain by rig Average contract. are of per offset the high fleet flat down, pricing spot today, of approximately rollovers. to rate rate active extent should As term slightly on US a legacy day relatively releases is some

in day in our to due cost calendar of rigs. to would We a $XXX fiscal absorption $XXX flat see smaller couple a and active idling million we day. expectations QX, direct we in levels aforementioned the sequential pricing in In to activity million currently quarters number fourth per of margins If from levels. approximately quarter to activity in expect expect overhead of expect day being third per spread in we North continue. ago, decline pickup fourth $XX,XXX is quarters, cost in results average the which range per over due our America the between segment, the which at results elevated the -- rigs to remain to the our QX This

believe should we John will impact when fiscal some reverse be absorption fiscal on of overhead work, year-end, to more put As the has forward calendar XXXX. beyond mentioned, rigs which costs look in to near-term moving back QX daily we

guidance, International slightly to third the our quarter ended previous activity costs. contract. due results higher-than-expected International drilling Solutions on International were XX below Solutions to segment. rigs Solutions fiscal Next with

Australia toward we hub but international, mid-fourth operations quarter. the look was rate East lower mobilized quarter, quarter planned in to date to recent up direct a are to from efforts $X we hopeful those $XX rig John advancing for margin process. beginning Middle anticipate to continue wrap impacts. we our In the Expenses result fourth any as much many the as fourth preparations, expected that a our of third with fiscal will with that we award aside exchange in quarter as John As mentioned, at expect the of are million drilling associated we in mentioned, an earn to foreign in XXXX from million tender

our on a We was segment. offshore to had of contracted, one of end demobilization reached rate multiyear customer platform our rigs Offshore has which drilling the Finally, seven Gulf the its four program. of Mexico of that

active active customer-owned on segment three of management rigs, million direct estimate. offshore rate. The a have our in-line generated contracts We with quarter, which on of $X.X during the was one which margin is

fiscal generate week, segment, to our million should this look QX. of expect fourth will direct of Gulf we rigs between margin for As million of XXXX Mexico demobilization and the offshore $X platform offshore next we in the its quarter $X complete of one toward

Let guidance range from $XXX as decrease million which XXXX our expected XXXX appropriate. full Capital now expenditures $XX fiscal is guidance fiscal of be to the for a million year are midpoint. full approximately prior update me year

to chain spend push Although from to of CapEx our quarter-to-quarter, we planned continued fiscal the maintenance expect fiscal timing from XXXX some delays supply have CapEx XXXX. to vary

of some component due obtaining planned delayed our have overhauls to certain been lags particular, In in parts.

the for previously $XXX expenses and fiscal As full our mentioned, expectations XXXX administrative million. general remained for year

attributed XX% differences range annual the are the of US income to permanent be rate and above rate effective to estimating tax XX% in taxes. We our with to statutory XX% foreign variance state and book-to-tax of still

we million. the to of pay $XX approximately million paid million to Through in remainder year, tax have we're QX, of cash $XXX resulting of million, an $XXX to $XXX tax annual $XX and million fiscal projecting the range cash for

The $XXX approximately repurchased Now million of million. financial hedged at XX cash and March balance remains X.X position. in an working million $XXX under XX. looking attributable QX about at largely fiscal over our equivalent June our versus investments credit at H&P were unlock. to $XXX short-term increased cash Including in capital for sequentially our availability revolving facility, $X relatively liquidity shares flat million billion, just approximately is

outstanding totaled average of shares about far about today XXXX have X.X approximately authorization shares at million there share X%, the remaining an calendar shares under $XX repurchases and of or beginning X.X are million. $XXX per thus by repurchases XXXX fiscal are have from XXXX The X Fiscal price reduced shares. million of million the

earlier, million as $XXX the million indicated company encompass and in that the million of fiscal base shareholders beginning the in $XX return of October share capital repurchases including items, and dividends at dividends repurchases. $XXX and declared, this John shareholder supplemental As the of dividends, paid $XXX share of the in these approximately follows: allocation and fiscal dividends Each we supplemental model repurchases XXXX. million has in returned to and base capital year-to-date, announced

budgeting refresh factors, anticipated cash expenditure into XXXX, Looking flow we levels, process, annual margin. expected ahead and to including taking planned activity our that capital model various in consideration levels fiscal will

discuss our will on plan this call. November We

John's for capital concludes the Finally, year, this current shareholders. just enhance first the with since returns on November step fiscal cash time and but ROIC. positive focus, returns our H&P's need only our to for third achieved That call, have financial company discussed the a XXXX. cost the the provided of to remarks execution prepared to quarter. on of strategy return our we fiscal underscores shareholders In increase our On comments combined also achieving not above allocation follow-up for returns as returns our necessary that our in about measured our XXXX focus we capital. plan

Let me for call now questions. over turn Ashley to the

Operator

Thank you. Instructions]. [Operator

question Please go from We Becker will first ahead. Doug Capital our take with One.

Doug Becker

you off a John, one the around trying increasing a the get kicking of from more tires just get makes Thanks. looking of interest to sense you customers customer activity. hoping promising incremental highlighted another? bonafide the conversations color indications it's may about contractors tenor what little to I those or to was think versus I'm play

John Lindsay

that -- very there aren't the the think obviously, talking in we're type with do Well, years. I that Doug, last what in customers feedback we still we've in but early three July, specifically talking gotten but have expect it's there received previous XXXX Obviously, we year, consistent again, years. in it's feedback. we've reset not to And of still be it's the are budgets, -- similar seen will about that a

their budget disciplined profile. this their production and As desire in -- you very think their about to be in

customers getting as on really Mark mentioned, year. as levels some to releases the And budget they the the levels their their that had, or we've of have of been forecast based just through rest getting to that. production It's out

conversations. having And what customers and -- So be, calendar in think it's in definitely not would we the activity intend mean, I to response, again, guide a seeing to the the we We activity position but rig it's we're think up count modified. the But early. obviously QX. think we're still towards we're pick that

Doug Becker

sense. clearly, to back when pick sense pick the model. would just rigs share faster to your is in it you of a market when that makes byproduct And a market up, industry. H&P get expect to economic you pick of reasonable start of And bit add seems would up. little That does up activity I But activity wanted share a does

John Lindsay

that I we've they obviously, the back that them go -- ready hopeful Well, easily, low a be in idled fashion in such we very to rigs very quickly, be say that would work position. that to can we cost. very we're that would

is that perspective. large positioned Most from XX% do -- we're well obviously, the that's or from public that are and large the over we So public larger conversations had companies, historically work E&Ps. we've I of private with of that think

be that I positioned So perspective. from And obviously, that we're think well would hope. our

Q –

then And just last a quick one.

effectively preliminary the return XXXX reasonable would supplemental the is shareholder budget outlook well? to gave for year-over-year, flat it assume capital You spending if plan the be is flat as

John Lindsay

We important felt to was cycle up. talking in to be it bring Well, early again, the about. that we're like

think we the and of great and all conversations As the supplemental about our is, able opportunity and do base do of like our buyback. and an with above Board to us to opportunistic kind internally this there's the for been have with share a I

we our it's thinking were We were about just right early. perspective the we know But it how actually budget. give to what seems again, from with now, of So some without reasonable. the budget trying to guiding estimate

Mark Smith

right, That's Doug.

this prepared ability I think we're a we mentioned the through we execute of of to press still in of really from perspective, and back and know, as so continue pandemic remarks, with with up cannibalize as on -- the because half and back release the the said have we're harvest had some our at parts, more least seeing to delays lot to that maintenance CapEx, in CapEx year, that. we a catching you in and in

So this of for execute plan CapEx we've on not to year. in it deferred in been able next being the year, resulting some full

the we is, So little XXXX. fiscal fall, little have see move bit a the fall, a for into more it's on levels to summer get through the indicated, we what as that activity And John we'll more as bit early. into have clarity just

certainly up then So three XXXX that we legs our we supplemental to for part the carry CapEx, that the and forward. we'll year of see the result plan. marry the DNA But that full is ability expectations, what of look plan with the are

Q –

you. Thank All right.

Operator

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

Derek Podhaizer

on the represent given be calendar of part think trend rolling profitability what's markets your day? per comments XQ trough And average off, day below and just going your actually recovery, rate continued daily that around to would repricing and downward the your on where in I spot make calendar for this recovering there. this wanted interplay a about higher would touch margins I the Can would just talk the cycle? cost ultimately between XQ just you maybe the see you fleet

Mark Smith

Derek, off. start I'll us it's Mark.

our the indicates off. will modestly per margins next that quarter I -- have day spot think We coming roll down guidance because of be those

the be to that's see have calendar that's XXXX. think the in some next fiscal QX, a can QX visibility, add-backs is we would if fact, far quarter Again, customer now. we we is in trough fiscal So But that it as as start probably from which our QX.

few that's spot because relates it quite a on the to legacy term, spot, repricing, high-end side, offset contracts we the -- As little the contracts coming off. term have which a bit helps pricing

side, mentioned, help the fact, then I the we're lesser quarter. calendar activity QX with organization midterm. into get issue the QX, across with experienced really that On holding as alleviate If in activity flat we, the think can I cost we've of pretty absorption cost this with that in from coming the in quarter absorption more exception last fiscal

you anything? would John, add

John Lindsay

I think hit you it.

Derek Podhaizer

Yeah.

XXXX, Just expand you because know fiscal your release, see so from fiscal in the calendar can I XQ going where that to go in daily XQ, they're press that's your margins XQ?

John Lindsay

again, Derek, in first try calendar for to we it's hard don't want quarter, and fiscal QX our to point, July. I to really sure say this think, at guide

number be cost an activity pricing the and think Mark for in fiscal equation the back, calendar influence perspective, of quarter, hit going maintain the and that's So we obviously, already had is had again, fourth here able I – from that QX rigs to of we again, we're to improvements on sure going to that. pricing. side our can't some go. we're activity we where in the we expectation the don't on in our an on mean, going the see know to we bottom front, quarter and September hit

Derek Podhaizer

Got it.

you and regionally helpful. bottom oil talk cover. maybe there, all strength you That's basin? talk of seeing expect versus and start we pockets just the rig what the about gas by where Okay. about do Can hit Maybe

John Lindsay

be by that to I think is believe to margin. you operation the going strong. mean, our wide have I Permian it's to area continue of largest a

we some in I so And there. see think pickup activity will

activity that think gas some the in this be oil there will of really point. improvements expectation as of I our would some be most is will as but in sure at that's be course, hard to there. And some related. the But it's there do Ford pickup activity I'm basins, Eagle well. see in Of

Derek Podhaizer

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

John Lindsay

Thank you.

Operator

question Please next with David will go take Smith Energy. We Pickering our from ahead.

David Smith

assume for press really morning. good at for letting levels, but XXXX the least Mark, on. growth CapEx about I international back you CapEx? early, any me for the release, rig outlook thank fiscal had for Hi, to might expected that, if just And the to its if there's also give XXXX color can make XX Lower recognizing can level be any you in fiscal the ask to you comments on but for count, circling comments what the preliminary that

Mark Smith

mentioned, what for question, caveating. up as early. We're Thanks few are maintenance CapEx. It's We the on But catching Dave. things. we a see I --

an So amount maintenance there CapEx. of is

revenue an is to maintenance need other have efficiency obviously we specific in XXXX. capital to a the spares XX-plus have be tied that, so necessarily us there customers In which catch-up the solutions in So of percent to through execute in our we continue we CapEx our U.S. will on to fact, amount words, fleet, level on provide. we on our can spares, not uptime our helps count and rig and to service systems,

$X.X work I it's this be per in may have think about. that catching I'm that active up that. year, going componentry if range million annum but on -- the -- will we But for rig And range to talking skew capital, we $X.X this that still on average. with little a spares So to be elevated with million per -- again, this higher

then you to press typical you release. least you mix sort spend of to in on at we that add get had kind offshore international you if really take of the a typical take And into that. comment So if that, corporate if top, some take the

David Smith

contracts us of it. follow-up I or progress And to steady if mix if rig any more not on may, performance a for seeing who All willing increasing activity performance this could maybe nice previously you're were the the much being adopt give is them. Wondering how related you customers decline in contracts. color right. spot to of on John, I appreciate on if mix

John Lindsay

mix that's are a bit David, see They've some customers released. to are of great performance imagine some mix as contract continue little adopt as can a that both seen you And a Yeah, contracts. that. it But of in there pursue question. get the in And it's our decided area. great we that. and feedback particular performance-based a of with customers And other to they on rigs

And a folks. it So great contract we we're that. about is very with at perform effort, customer been it it But pleased hard continues the when great a do construct again, it's to what's our And the increase. job the on performance teams long And our well. day, effort win side. by of win-win wins, is, end a we because

So have adoption overtime. I to we'll more continue suspect that

So...

Mark Smith

to is want on I David, this And go your previous CapEx. again. back Mark to question

the to think at per Then press math one rig mentioned out walking in, one that in left converging I that did way -- that add I we if piece there, release. $XXX you the back. cadence, just be gets wanted to example add million that would month, comment your for you is your least also by -- we of that which

David Smith

That’s Got it. got. I Appreciate all all. it. Thanks

Operator

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

Saurabh Pant

Hi. Good morning, and Mark. John

Mark Smith

you. Thank

John Lindsay

morning. Good

Saurabh Pant

model performance quick in recent follow-up guess and up M&A of some it maybe the on tying with I a the the Hi. industry.

Right? obviously, to allows the along and that your them deals Assembly, drill bit integrate Hole of One large a manufacturer Bottom acquired

about How to more give to And think along that picture rate from think that you? big control and standpoint an if of them forward? a wellbore. something I make you integrating lines them efficiency from performance-based do allows sense the should more the down about clearly, do Does else models, is maybe standpoint, going or it it

John Lindsay

thinking know I data, a really drive have enhanced in assist for to performance of able bit driving From customers. bit data H&P, software that -- also we a quite downhole we're perspective, from have at utilize to Obviously, wasn't a I that we solutions about performance. it manufacturing

the bit we is data we if the related think talking in about that already drill already that your was data most that have. I to So you're cases question. that have really software

Saurabh Pant

right? I of control John, thinking little you question. the web, have more of bit clarify, if right? the that something of from part the of that just was the that more thinking just drilled, medium just help to I'm going in from is Does from thinking not perspective? tool controlling things performance hole performance standpoint, in data forward more Okay. perspective, how assembly. a components but from having was or just You're a bottom the and wellbore efficient to No, down a from well a you the control long-term guess else in being I the along perspective model

John Lindsay

Right. a have the really connection see really question. rig great I it's going again, back don't to that don't a to that there's competitive there's I But necessarily. be a advantage there.

Mark Smith

the we capital said where is enhancing we for what bottom about drilling businesses, drill from a of ancillary rig. related talking scan in have bit lot intensive, our choose John drilling overall many hole look at I would have the software, software prefer preference. remember, and as we years drove the drill software separately with And it's approach through our add, it's the data again, the we to just completely solutions. customers assembly about And and

see So necessarily a we don't there synergy either.

Saurabh Pant

Okay.

Okay. No, Mark, Mark John quick thanks that for just And for both clarification, answer. maybe you. more for one maybe then and

fiscal likes inaugural know plan. the it's the buyback. are the as the base that know your at about, XXXX I right. supplemental fiscal dividend, you you shareholder you it to to look But plan, still sticking back think about XXXX I dividend see stores early, As your But and I return the supplemental said plan, know you you think as was

the find particularly And the dividend on that can and you see and you can best going going plan thinking the back that? we supplemental find view, where share As your in on XXXX, forward look forward? you I'm from you had think expect most should buybacks. think part? how success in where What was maybe do fiscal about you to mix and what between that you

Mark Smith

question legacy XX dividend plan But dividends is to hard in the comment share of the we paying Well, base returns one that's Saurabh, flexibility. supplemental what a it's on going the the with and three-pronged years buyback dividend to have to shareholders. of -- is our because and

So shares we have repurchased a lot this of year.

company. share in But valuation a In the dollars from that of that investment was believe and in dislocation fact, good quarter was more accurate record last a for it believe this repurchased. what and is for the shares is therefore, also we we the because terms company a a price

that as downside we've assess it, we own we previous we terminal multiple put value good be base and a trading would the So upside, said with that a do on say anything a investment. cases. on have modeling calls, our We below and we DCF

could those we a to looking and wait. report to investments than can where more So be, buying about comment hand not on It's and stock executed them we've comment on in mirror. going a I It's of have the easier we're on want quarter supplemental to back that's as say, we we on see the in the less just at lot guess a if on. you actually the form be lot time, dependent at on rearview the if But is you returning it in dividends one if may cash. of be to all things them situation

Q –

I that's fair. all guess No,

continuity You between got and to maintain balance a flexibility.

going appreciate answer, So you. to go Mark. I Thank back. that

Mark Smith

Thank you.

Operator

go Keith Markets. Capital next our from ahead. you. Thank We'll question RBC Mackey with take Please

Keith Mackey

the my little contracts to contracts. you average Wondering taking a discuss bit discussion I just from of any if those from purely about question. performance-based on rig the uplift you see it? associated morning. Thanks -- or it to around to Good just relative can rate? just wanted for Hi. return contract? what a is from get margin with standard really is a so you might an And more there X,XXX Or X,XXX average to type uplift rate cost day

John Lindsay

don't I in numbers the of me. have front

Dave Wilson

X,XXX to X,XXX still.

John Lindsay

Dave so overall average, but in -- that's the may across have fleet.

the with contracts data perspective, place are and on, that certain having from previous that degree, a having just related a And touched and into set, that's customer. question how to know on staff a the the to -- people to the of so working technologies, cost we performance having

that. So associated there costs some are with

our we're But do we're of at trying the savings end that's real the to where are. performance cost driving for and is day, the customers, improvements what

very days before. saving a heard that about of well, the material or doing probably well where after reliably days the or captured. well, has little the rate Reducing five and You've day day really really are impact us it on two savings cost but our that's talk

-- really our so organization, And focus an that have the in customers. with we, the working that's as

Keith Mackey

up side. Understood. And international I just on could if follow the

the Middle you was purely one anticipation thinking now to what Can the drilling this discuss going some Or very shorter rigs? soon didn't a Middle So incremental way in decision But leading the got your one so cost there go plans for just the was rigs? in the more or in adjusted Is rig of the slated that you're around send that East tender initially maybe term. and think certainly, Australia plans start the to East those that line term? then for time a tender near to some results are in there results. more to handful

Mark Smith

some often slow opportunities participating how of clear to the the weeks to things these costs are helpful and there we incur potentially will processes. that in those we upon and because other Keith, tendering quarters results region such mobilization processes. depend there months of coming in, and until over develop -- are that's don't necessarily plan I hope We are sight line have the it

Keith Mackey

Thanks is. Yes very it much.

Operator

ahead. next And Arun from go take Jayaram will Please we our question JPMorgan. with

Arun Jayaram

the kind a was at clarity if give more year. the October on should wondering, relative us plan? I you to bit a return dead of shareholder thoughts announced program? in plan. think -- gentlemen, some we thoughts to when and pulls And on market. the want about and you how Does you some of pushes supplemental change there's beating could get last to uncertainty think year, the little communicate ask last maybe of the did I on maybe plan to year's the Last Hey, about I risk horse, of that

Mark Smith

Thanks Yeah. Arun. question, I'll the off. start for this

because could we fact us generation we It as a assessing how had was, in in cash but we the I the in cash without different increasing year's dividend with release flow shareholders new. return base to the mechanism terms was foresaw, think more historically. supplemental last necessarily October was plan of for

with plan, investors a While think we a soundings and I up believe did of lot forward. going supplemental and came of lot we in a with it

in it'd declaration plan discuss may think to of see perhaps in us I supplemental to different So that timing. timing be and then such more dependent normal earnings be call the November on a related any

and think, early that about John the call, plan lot the thing would -- hopeful annual But same on we to we of be work get frame, November a year, we lot discuss, the through. we're time the it's fulsomely we sees. market more everyone which would a in I see earlier, that mentioned the guidance as is something the have But more just as have overall

the example, XX%. with calls crystal starting but in the We a into we lot that ball, probability hopeful think are I And that. of up come it, of don't go environment, we we're because prices with what Oilstrip macro recession seeing have recession whole clear baked Ford and know certainly higher consensus for today, below see has for the we to had a oil

into to processes. have field sales commencing lot bake uncertainty, annual which budgeting several teams and a the macro play over the our think, months, in able year's calendar plan. operations of typically next that again, and underway, will as gets that I calendar there's ahead out, be of is, to we'll And customers from coming their intelligence -- our that's So more in next

add I think fits would So November John, frame. any. again, more you the that, time with

John Lindsay

said And the the already see we about which of all share Well, price the think providing it standpoint. on supplemental share is opportunistic an plan then base it and above really, depending flexibility think I it's whether buybacks. we or the from earlier, I having and and

it's this had on. a look and something we really -- too it's because great just very we're won't communicating in building It's we point of It trying our the be So November the lot that just timing game been effective, makes Mark point. sense. a that at at get about we're early be that out something there. to -- something to think new,

Derek Podhaizer

does about customer on And thoughts historically demand the larger kind give with balances, conversation a privates. next on and level E&Ps rig does But from large very as John, you of them I have And whole, lower get just guys the could follow-up, you if that group majors private what thoughts into the -- with my you a some Okay. with us rigs XXXX? was as adding that E&Ps worked maybe just into year? group, deck feed do important obviously, wondering

John Lindsay

you're We've strong lot lot low spent clearly, really historically. they're and never we a company on a very important, private is -- and haven't of I time rigs working. counts right, But of we the think the deck relationships have

of I XX% rigs working companies. the are private our think today for smaller

So important customer group. very

it's early. have the adds for most public think would been larger but not still say calendar QX and cases. conversations, I the of rig about a in completely, I we've been most that talking with most companies of

to they're the role play So customer year an an no smaller private important us. really now. and early companies in important doubt the right Still

to have obviously, to price. strengthened. pretty they And As it of there. commodity prices And whole have improvement a those an tend natural that opportunistic of pretty pricing, as in lot to be relates quickly tendency is course, of gas They -- in don't but to we we sort know know, oil respond all to pricing a price terms about inflections. still we see still do expect

of do So terms we've think can of But been with will there larger at right companies. definitely stage public the that's most about I'd be have the had I now say the some. in responses this I game, -- the of best

Derek Podhaizer

Thanks a lot, John.

John Lindsay

Thank you.

Operator

from Please our go Hallead Benchmark. with take We'll you. Thank next Kurt question ahead.

Kurt Hallead

Hey. Good morning, everybody.

John Lindsay

Good morning, Kurt.

Kurt Hallead

out it do context financial the to And impact? front. about five and mapped market and time years? look kind it, a What like where your there's the international to more opportunities of know takes -- very couple on right, get represent the maybe profit it out in and from see financials? curious, holistically, different uplift presence the and of right? is gross to pursuing see for good you track maybe kind as And on relative you total markets, it do internationally picture as some I'm bigger maybe the in international where I and I an opportunity actual three set you to international to kind you you the on upside the of looks what the John, you just effort the near-term some of want opportunities X% on at build is international of is So

John Lindsay

relationships, unfortunately, us, Well, lot used not we're additional in us a a Curt, great international East here pace job a everyone for the recognize unfortunately, we the have than done at have need scale. obviously just And move there. for US. our the in I what teams well, different in projects for know Middle much we momentum and building to of

of that of to the again, going And growth work that you when so, to obviously, to lot really we're the that size -- operation, we're a at I like see there's there. the of do. verge point some of scale being and look -- additional America feel But our able on North of have

we to that a think international a team. recognize area have the difference. is it. We So, can unconventional plays challenge. we great the We make committed We're think we an do really

unconventional grow, we to as we're we so see going And a think larger have there. plays influence

saying, the five-year you're it. time we're to it's three-year, is But going what challenge it do organically. up some and hear think we take to I -- it this mean time. I recognize period just So, I to a

Kurt Hallead

I thoughtful are very how business. run you appreciate And you your that. diligent always about guys and

context of say organically. of to in curious was so growing the three it say, window of kind And it that, I also five-year to

your As kind international business do planning can strategic reasonably percent you go of your think that through you processes, period? represent of what time over

Mark Smith

at Kurt, said. leave that. I'll it we haven't

Kurt Hallead

to an opportunity give you would I Okay. That's okay. share.

Mark Smith

of this the but plan. That's that for of build focused initial years, John on it that. that is been and some couple X%, then It's at because going positive to that more a on looks we'll complexity as discussed, least of we've the results like and be than -- have some mentioned focus going to we've and

Kurt Hallead

Okay.

an John, it rate now. development hit performance limitations, resurface it for kind you quite to we've referenced of seen ebb a and it rigs is the some you years certain get to adoption of -- kind And or where for from the dynamic flat it get a is performance flow trying evolve, contract. its the weakness. I on contract performance you, that But this could contracts. one number XX% sort follow-up came does has a back an of of up, evolution is you've to on do line extent day also kind every on it. time the adoption? been me of a know kind around a kind of And it there's some of you And guess, I just So guys as my in two really of just hit got point sense steps we you of think, to step here

John Lindsay

necessarily with. the contracts customer customers approach contracts. it reason that that that they similar think is, I continue grow. performance-based way other And some the in and size that drilling the sophistication using wells base I has are we potential that to are look at do very the to when in aren't performance There

there's huge upside. So, a I think

efficiency been couple really been terms that for not performance to correction last think that a force strong greater tool And belief drive is over I of here experiencing there time we on that's And -- key experiencing yes, desire but are it's of customers the tool -- have in this is a the market in there their a of we've the greater sales a Our they and additional out this. that good that customers will it spends what's only from have contract. But lot quarters. reliability. benefit really performance-based also

And on are contracts performance-based there's opportunity works what and -- that's that continue -- to record using we to best. what's outliers. the us, to drill well the yes, record a reliably standardize customer drilling from be and about, have able because and not performance is most so after hear important customer what But process to much well all And important. that's is and to technologies

about upside think So, We excited additional there's to. we're it.

I No, additional upside contracts. I think XXX% some have to we're performance ever but there's do going ahead. think that

Kurt Hallead

appreciate the great. Really color. That’s Thanks.

John Lindsay

Kurt. Thanks,

Operator

call the remarks. Lindsay And like closing at would to for this over John to time, back I turn

John Lindsay

joining you. Thank Appreciate everybody today. us

during fundamentals shareholders. we've long-term the to remain call, the energy about and value opportunities. create This As for H&P optimistic mentioned this we provides

Thank us joining off. we'll today, for thanks sign and again, you. So

Operator

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

any may at time. You disconnect

Helmerich & Payne (HP) 27 Jul 232023 Q3 Earnings call transcript