HP - Earnings call transcript Q1 2025 | Helmerich & Payne, Inc.

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Operator

Good day, everyone, and welcome to today's Helmerich & Payne's Fiscal First Quarter Earnings Call. [Operator Instructions] Please note that this call is being recorded. [Operator Instructions].

It is now my pleasure to turn the program over to Mr. of VP Wilson, Dave Investor Relations. Wilson,

Dave Wilson

we'll Lindsay, Shana, Conference prepared with Call you, Fiscal Vice XXXX. are President which and Vann, Both us, and First will welcome, Payne's & Year be John call today for us and Helmerich and to With and and Senior comments the questions. open of CEO; Kevin everyone, Quarter Thank President John Webcast Kevin CFO. the for some sharing after

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

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

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

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

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

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

You'll presentation. find reconciliation the in release and and yesterday's calculations press GAAP earnings comments

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

John Lindsay

interest joining everyone, us you, you Thank for your Dave. and thank in today Hello, for H&P. and

first focus our a customers. Solutions the segment reflecting the value continued high quarter remained results industry, company fiscal our providing at During relentless America North of in to level. execute financial to the XXXX, in Operational and on best our the

key We the our international also of growth fronts during X quarter. on progress strategy made significant

they gas FlexRigs of we plan, in completed unconventional into natural part exportation plays. as First, growth drilling organic Saudi where Arabia be our X will of the

ago, KCA we solutions. regulatory providing now close the which onshore in approvals able weeks drilling makes transaction a for final to receiving couple a after leader H&P Deutag of acquisition, global the on the were Second,

positions this customers group But premier us global few industry-leading more fantastic about workforce. this transaction a company best-in-class in with believe of talk we of global I'll drilling and attributes deal minutes. scale, as a the significant technology, the

Solutions providing demonstrate execute Collectively, America term, the goals, the North a prioritizes for strong returns long allocation reduction. position, maintaining across these business and investing which achievements international ability in shareholder our in continue multiple to financial and capital debt to

its are long Throughout many has In from But revolve managing distinct ways, around processes, differentiators. advantages. technology. our itself and history, the our those also distinctives H&P our crucial of by competitors importantly, differentiated attributes our scale the cycles competitive people, and through rigs, developing

been with leader fleet as market long industry today. the XX% known have in U.S. an We FlexRig having our share super-spec over

remain market share market margin of to basins in a U.S., super-spec the wide strong presence growth by position in and H&P, rigs we running major our leader our Permian, today. where rigs share also in addition The market-leading in with have continued by the with we We public E&Ps have benefits in E&P operators. very presence private XXX around all highlighted leading the a

us I creation to allows operating they stronger company the and its alignment our is have and working while manner has by are performance parties which partnerships than contracts our align that accentuate market customer to like common Innovations technologies. been. with technical all ever coupled a driving to around our enabled believe This further advantage value have why cutting-edge distinctive toward focus, customer a leadership deploying performance is in customer-centric Our execute share goal. testament performance approach, a together

results to the in to efforts through we these returns line our cycle. capital with in North ability realize demonstrate Solutions, and Through earn of America cost continue these our

despite in a have and remained declines. accreted margins at healthy market was it a share XXXX, in we row levels, rig our example, second For year where count industry

to us the continue margin best will provide approach possible. way generation customers our opportunity Our in and the to and disciplined strong serve consistent provide

towards solutions. Turning international our attention

spoken years, about importance in along past provides a H&P East. organic with we expanding Middle with of several Middle the the KCAD the the For growth especially our strategic legacy The initiatives acquisition, have in market-leading us scale the position East. geographically,

Let quickly merits the of transaction. me the reiterate

onshore First, help assets KCAD's as the and global legacy that international strategy leader H&P will a and operations growth accelerate establish in drilling.

where generate a oil and Second, operational and markets. revenues. and and will crude we how will U.S. geographic international robust This natural the we mix gas across have diversify

expect to the attractive generate returns. transaction we financial Third,

blue-chip KCA solid by legacy has work a of The customers. $X.X billion, supported backlog approximately totaling

be providing markets. The we approach, closed with and share customers across that and company our the will by in company cash Now the will commitment acquisition, safety to flow we've and H&P. diversification to I'm focus in Oman I've combined a past resilient financially Kuwait, over more work excitement weeks. global few exceptional performance the leading in customer-centric encouraged there excitement with value. been Saudi, from is and

growth markets. new in continue avenues from are organic we've these seeing around H&P way. bring H&P we're values The these that to their addition, of heard in will to forward the as customers with In multiple operate working company numerous looking assets and forward

plans, with in suspensions and Now growth are Saudi. our cyclical industry don't these our acquisition turning are the going Kevin outlook costs related to start-up with they short-term be the I believe reflect value associated significant often growth and temporary, want organic will over on the to the H&P stress that this believe the near-term created these to in highly international KCA by there we challenges detail, is associated we surrounding some rig more for but namely hit to XXXX. headwinds time.

last the legacy X-year rig suspensions. August. Saudi, those are duration was KCA's regarding operations suspension And first in Specifically

now, costs. quarter contribution remain a variability Solutions and segment, the see So and to we in but for the in regards that the to QX due normal as in expect healthy the North in not days direct of at for expect significant term. them margins we're America we decline a from rigs do levels, direct we to revenues with planning modest those margin of With fewer near XXXX

last One resilience of some look and as sales consistent see North our hard of flow. thing across our is cash teams we margins me of the continues work because results couple in years the have our our disciplined Accomplished America. operations variation, quarterly margins generate while to delivered. may customer-centric that the strikes I And at free and and approach

The KCAD multiple grow markets scale basins In and of are exposure and in closing, we around acquisition. aspects scope hydrocarbon believe world the world. H&P global transformational has strongly the in to there to best with profitably the the ability the new

while strong customers. our margin and solutions generation resilient for America deliver providing North innovative and Solutions consistent is to continues

We rating, have another and maintain financial which plan differentiation our peers. to an and achievable us our delever investment-grade between credit is

the quickly and lower grow has business combined we're Our numerous opportunities seeing the to revenues this international starting across from already company. for means point, synergies

flow. business manufacturing free provide solutions cash other with and technology capital-efficient and offshore Our

growth maintaining a to public the shareholders. Finally, balancing in team which years to efficient legacy safe and manner. significant those with drilling H&P will KCA, position, allocation as we a company Like and for returns for prudent continue cash disciplined over H&P shareholders. strong our our CapEx a remain to from customers financial flow, also on now free remains desire have focus committed the a includes outcomes XX and delivering capital committed opportunities our

to I'll over turn the Kevin. now And call

J. Vann

'XX review provide operating update as for a expanded will quarter appropriate fiscal Thanks, guidance John. which second the will XXXX the resulting fiscal guidance of international acquisition, our partial the full closing quarter, year I our first financial remaining our of business comment results, on Today, include and position. quarter from KCAD

for previous quarter. for highlights December the $XXX ended with the quarterly XX, to due decrease Total $XXX Solutions generated for Let costs quarter America of quarterly primarily was first versus slightly from few first were million segment. our me $XXX revenues revenue versus in revenues fiscal previous the the The lower start direct The company quarter. XXXX. operating a quarter $XXX million million million in North sequential

on rather $X a increase. costs basis. unconventional first but and primarily higher quarter, commencement expectations of with to approximately Arabia. is on approximately in costs the Still payout a were sequential were $XX of expenses associated than million decrease Saudi our primarily increase This our to our operations recurring the for attributable attributable plan legacy incentive start-up a million administrative these than annual General

Our reported $X.XX the share was versus income quarter. during quarter per net previous XX% diluted in the

our first press negatively earnings consisting the with share primarily earnings legacy quarter of items, a were was impacted equity previous for loss during historical per in $XXX the integration value business. the was select quarter. line investments adjusted per in were highlighted diluted quarter fiscal change the with $X.XX consistent the regards during release, $X.XX the our select of spend This to in with by costs original amounts and the in first and net versus of As timing adjusted fair expectations items, Absent share fourth is an our our amount for first which and our million, quarter in quarter. quarter. Capital expenditures $X.XX transaction

operations expenditure million the fiscal during flow QX. expanded later and international include guidance for acquisition. our strong guidance at which million capital -- I expected from resilient guidance, will comment from our our cash on CapEx remained $XXX resulting will new the for QX 'XX closing versus $XXX business fiscal of

exit slightly fourth turning which X primarily $XXX of was the count rig approximately XXX daily of XXX down million. count quarter within of fiscal by segments, averaged $XXX and XXX, the lower sequentially average was reduction margin quarter, range America revenue. million $XXX a million, 'XX. Revenues contracted first direct due We rigs of was lower slight Segment were $XX in with North Solutions. our The Now beginning the to our down during rig which is the last recognized from quarter rig XXX. to to million, guided from

As were alignment portion to our These large total contracts a through segment $XX,XXX at utilization flat been performance-based per John of never customer And total make the relatively mentioned our contracts contracted stronger. has day. of expenses rigs. up earlier, continue

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

first Saudi in little were a new have Saudi slower Of X to results in Solutions rigs generating first revenue, Now quarter with were fiscal commence fiscal activity those that rigs, of was contract. XX XX ended yet we the in International our guided International its Solutions financial to XX We the have The rigs quarter. activity and stride. our catching during as range on operations. the below

with help to We learned operations. expect the will lessons have that that expedite of the these rigs activation the of remaining all begin yet rigs

with more the quarter end rig online to thereafter. before of one expect We the the remaining shortly come

our segment. Offshore to Finally, Gulf of Mexico

have offshore platform X rigs We contracted.

customer-owned margin part expenses. the to have on timing below of offshore The $X.X also generated our supply and was contracts during due some which X of the million segment in rigs. just management quarter, a range We direct guide material

Solutions, America North Now have contracted. looking for we ahead to fiscal second quarter of XXX the rigs XXXX

We expect under Solutions roughly to with revenue $XXX end our quarter North million for is XXX rigs America from XXX working term fleet -- and and from Solutions rigs backlog between America second fiscal North contract. our fleet

Average There the and normal $XXX quarter-to-quarter pricing we and fiscal should variations quarter-to-quarter relatively per expectation, on in $XXX the QX contracts. less day couple amount revenues lower between to million factors a flat realized North of direct days performance range influencing in a margin America during the remain the Solutions, expect and million. from few including are quarter

current $X basis. North direct America to an environment, at on margin the commodity expect annual current conditions on Based the least generate we market and of pricing billion Solutions

on or mentioned, be a are going more variability little there across that that some the generate based to John As little quarters. less quarters a

of the current environment, in good rule rate thumb. that However, is a economic

to second look in expect as release, margins international, a from toward we the $X press between H&P quarter loss our million. As Solutions of of be for we International legacy $X 'XX and million mentioned fiscal the had we

As time and acceptance I our we Further, have mentioned improve rig the for in begun earlier, FlexRigs all contributing we X have as we each X have move continued up currently to revenue. country curve. learning rig

For direct we land $XX KCAD's $XX between estimating operations, million. margin legacy are million and

scale approach international customer will is and of and promising, complete hurdles we of adding H&P effect NOCs. the as returns given historical presence, have increase that Now from opportunity our expand be Also, recognize, not in be a of of on the risk consolidated we evaluation. based IOC quarter heard and are we return date looking post The and forward we acquisition and interest close. set the both evaluating projects we our will close to

the for second look we fiscal of segment. the As Mexico toward quarter XXXX of offshore Gulf

of between generate rig flat direct quarter $XX expect margin. between KCAD's $XX We believe to million segments, be margin again. $X and exit million quarter. offshore core $X Outside generates million that of XX fiscal do roughly our contracted solutions direct will will in in contribute $X and million are and operating it those the And additional direct the expected Collectively, margin some XX of Collectively, platforms. business, business million second $X businesses we legacy we margin. between have for we to and between and and management contribute contracts million

let year guidance Now XXXX update me full appropriate. as fiscal

CapEx quarter-to-quarter and the resulting expanded close $XXX acquisition. expect the between with our be business inclusion to expected We the XXXX international timing vary of from full fiscal the million. year million $XXX of for our of expenditures Capital from spend the to

maintenance of our As of close prior approximately as guidance discussed, historical more million rig. lower XXXX descended KCAD normal the $X per previously than substantially ranges post-COVID to was costs to

walking, by new equipment impacted required opportunities. East modifications rig recertifying to with In addition, for idle conducting rigs costs specific and Middle was associated equipment contract the heavily U.S. and like certain converting to XXXX CapEx purchasing

associated cost in included fiscal Some this activity was with XXXX.

that believe been for all project of incurred. necessary the we that substantially capital However, has

expectations as expenses, general $XXX far addition million. the of full be As we for now the to KCAD expect and year approximately with XXXX numbers, the administrative

original capturing some July synergies that savings that we the the cost of have acquisition year. and $XX XXXX We are in discussed in excess put will close additional identified by us million already last post of

integration, opportunities only continue but the get As deeper to opportunity materialize. we for commercial for into reduction cost not expansion,

business. We $XXX the which fiscal XXXX additional are year international cash resulting now of the to tax from $XXX projecting million, range expanded taxes million includes a

for business legacy Depreciation million. projected is still around to $XXX be our expense

purchase We the have depreciation for the the price not balance will impact for the the allocation acquisition, the of of completed which projected year.

over combined the results for $XX the deal Lastly, balance pay million the of million KCAD. savings because international in expanded of achieved $XX of is new paid historically company footprint inclusive versus the amount debt to interest This in those in interest incurred XXXX. of the expense bond about by rates for our for

XXXX. Now our $XXX looking cash and XX, investments approximately million financial H&P position. of had at December short-term at

our X-year KCA bond XX term the for base with not the cash to proceeds, loan term undrawn reminder, of million. With but These million only facility As of and liquidity our cash continue the remaining on of $XXX we the our Drilling generate a equity issuance cash had million back hand, efficiently sold the loan fund adequate the approximately credit together of and in pay investment incurrence $XXX to we have acquisition. proceeds ADNOC September and ample next over to $XXX our XX dividend operations fund the months. funded

H&P maintains operations is our diversified stated, by rating our globally agencies the and rating have credit following rig rating as an large-scale acquisition. KCAD the investment-grade supported

and a contracted history significant holder in to addition our prudently balancing long of cyclical backlog provides industry shareholder that debt and interest. In stability a

and overall acquisition, the of scale, closing profile. diversification our the significantly With business we have enhanced risk

reduce the or to we one long-term debt As turn. committed with our quick are to below goal stated have we to reduction previously, leverage net

I point opportunities. public, quarter results the think we fully is were other important of guidance for KCAD's about quarter, expanded me our let completed data close the international with think last which that was And calendar third one made XXXX. as

roughly During where right minimal to around there showed from rig $XX quarter, basis. equates impact an which suspensions, this on million, annual total million of EBITDA $XXX Saudi was KCAD

of we the synergy does not in and of cost going not a experiencing softness ability to capture. does to quarter bit rig expect the It second pocket is reflect of some reflect full and of optimize our our upside because guidance forward any in is business fully although commercial material the our air of the inclusive the So structure, general impact not market. an suspensions any pro forma see

I'd turn And for like it the with up to to that, back to over operator questions. it open

Operator

Smith We with will take Energy our Instructions] [Operator first David from question Partners. Pickering

David Smith

that any between with you start for it and regarding about XX. margin, for can international to KCA, drive guidance key range Wanted maybe preliminary -- items the talk onshore the that XX could

J. Vann

is the the amount related and rig outside in and of have market there's we the days as generated was that this first some EBITDA team in XX general close with back the some were that actively Saudi. of generating. of suspensions about, -- the allocation getting rigs they Between areas a to XX, timing were in commensurates have to an they're on working a and of what level I to the there seeing those how go countries Kevin. back third -- of back XXXX David, other the of kind the that that of back of there, January. XX general of over work to obviously, talked still during Also, we kind the do we margin getting at softness of Yes. -- But the year the is calendar during much EBITDA through

That's going rig work. timing. suspension to And take of a little bit then the

first bear there if what out with of we The seeing to that also, second we're those really cost our out cost suspensions, about we X quarter soon, -- rigs quarter of kind think quarter operating we of, the need pulling is brunt. then it. system going back some working. relatively to or suspensions. all It's of coming is real don't -- currently the still be And can start we're as work associated we those cost thinking that's see that about we And rig to with just the still pull and will but then rig these first our

David Smith

that But up that's call right? not million. at that quarterly just calendar $XXX but forward last annualized annualized coming appreciate just level I with million. that KCA how around math EBITDA, color much year you any suspensions? the of to that. full the to to of QX results. $XX relates and provide much $XXX compare I calendar recognize to outlook, How I'm $XX at a XQ addition a looking million rate the And -- delta the the Yes. that outlook quarter it might and that Saudi No, up for I between wanted doing of for round And right, million if on XQ run I'm

J. Vann

majority you're it, projections at basis. of now rig work see mean the to full on close do when to as year based on suspensions. those out full relates how the $X $XX back per I of year I And year do taking million basis run rig work. rig really include full million it can think upon of our cost calendar vast to suspensions year. and I we result it closed, a anticipation of able -- that we're we're about may The mean, that a to save those is upon based much rigs a a that doesn't we believe we What go per

Operator

One. Capital from of question next with Doug Our the line Becker

Doug Becker

John, being Arabia. as in Saudi softness you just of area Kuwait Oman, mentioned well outside some as general

So get how I a for Oman, wanted trajectory end recollection couple particular, specifically my of in looks? just rigs is on was calendar And in that of of last to those delivery for looking the your KCA countries thoughts year. at the

John Lindsay

excited and opportunities to is having, new about E&Ps, East in X things up was if one that IOCs -- up, there. worked there's opens Yes, delivered really positive, was we got X were well exposure we actually we're that coming that do Doug, us. spud and before recently just the rig really a of is think that going that rig that I another general recall haven't this previously we Oman They Middle in and conversations or is feedback for well, customers really Kuwait. don't this both have all and I and with but I the both the NOCs the

but to that us there. some So some those won't there's in definitely move into Oman Oman opportunities immediately, some growth some we're rigs are seeing activity hit opportunities. There improve opportunities to for

So again, that. we're pleased about

in very general, that of do haven't will the IOCs the Latin our in to -- have ability with had work feedback to states work we lot we America because H&P very, relatively we countries. think with don't that the some to positive flat But cases, and of the a that be it's in I to down in again, with work with we've that really some been internationally gotten, related probably here footprint. opportunity

relationship So the partnership, here. we great have great

East ahead. can that like we that, Now take we opportunities, transfer and I see other areas or relationship into same said, that Middle the

Doug Becker

America Got in for really is just other quarter. appreciate lower maybe quarter certainly driving the outlook contracts? North moving more days Or would to function the fewer it. rig expand is switching parts of this December of some the And you direct performance-based churn? anything there I there in then calendar U.S. March in Particularly, Solutions. is changing the the the versus margin a But

John Lindsay

There's a sales the Doug, of it continue a tremendous to prepared level our And that are in operations it's continuing value our job, teams And remarks, customers. I question. force, again, churn. be great mentioned is do the us. going great for my to delivering for really to a win in teams,

even said, slightly America Solutions, little flat to a North share. created As even I down of a still bit we industry rig market count in overall with

base. believe value contracts, Again, are responsible rigs based the performance proposition. performance-based that's on the XX% the before safety and about mentioned performance our we of on We've about and fully

of is and quarter-over-quarter, really there, quarter-to-quarter just plus would So take Again, well. churn. some But a sometimes Kevin? to give deliver and lot minuses. add, teams Anything there's you continue the it

J. Vann

Yes.

some It's coming revenue them tech or pricing the but any to the what the I is is but in some projecting of really on in giving really just slightly is we're of and of of day that that we some just -- think, margins down, room the down it's contracts slightly. performance moves expect some quarters dogs of across not cats that we're again, the we pricing, It rate. really that see because and terms stuff variability receive. maybe because

those team leading margins industry. of sales has margins. so our are across the wonderful leading kind And they And and maintaining the about been pretty again, disciplined

basis, maybe that to margins of why see XXX margins excess mentioned see of quarter. to say going and bit little in X variation be as it's a those to billion, an in of annual easy quarterly I going that next that's are you're to up on the down move XXX $X but then we're quarter going But again, kind

the hanging there. So in a bit they're It's quarter. across little variability just really of

Operator

from of Pant question of with the comes line Bank America. Saurabh next Our

Saurabh Pant

Kevin, maybe if operations, know spud. to to go KCA operational, I John, that X spud, in X X Deutag, I country, the just you want and and get international back versus have the are John, focus fully in on I just But deployed Saudi. as Kevin rigs rigs that to they're going some just and the once power the And business? give that your Maybe fully first the flow free you remind we that us portion of profitability on normalizes, right? do on that? to can of happen. that of expect us earnings When cash just color the timing of these happens, power in

John Lindsay

X X really of Well, terms But numbers. we're of chime we're -- the much in line. start or timing the some spud I'll in have in and of rigs first on just pretty the Kevin of really

some behind, think we there. of strong is there really other seen going are then terms come to safety but good drilling And -- and performance with, we're all, first just there closely pleased going performance the earnings the power But focus some forward. wells. I really in rigs we've the the on in of

J. Vann

Yes.

probably expecting we're of the in year. margin through operational, are of EBITDA kind fully close think $XX once million that to I contribution -- and we're those all

Saurabh Pant

of I on thinking I the color $XX your should of taxes KCA flow cash the -- I I cash conversion? free And how about Deutag you side about full again, stuff, the process are I Kevin. side right? contribution. asked cash of especially preliminary business, Perfect, then on and for about know about cash I KCA of it. flow know think raised of David we the Deutag EBITDA think of was equation. thinking guidance know taxes? about the got some any If comes cash But side by Okay. just you the year free move DD&A the in much out maybe that, the million, finalizing but free on still how things, flow

J. Vann

lower acquisition, the beauty we're quarter. in the this -- Even an air mentioned, the that term a guidance, -- interest even additional KCAD you're second cash short the seeing including to of mean I of flow. factor on taxes pocket little that, and with the rate I the on the still think, annualize expense where were Yes. roughly it interest all as if in you in and breakeven those costs, kind I rate

the back to we to start getting that once KCAD and Now the was in anticipating in I for improvement see contributing. that we're fourth some and levels some of that last about third quarter the of business quarter year those talked third

pie $XXX that once see it. generated to to to I -- -- back think flow cash looking of could probably get overall you're if by quarter of contribution get going to at you the you million free closer up that third be level, probably you're

Operator

our MacKey question We Keith will with Markets. from next take Capital RBC

Keith MacKey

relate Can you're all costs bit just just give Certainly, circle maybe Can those have you International been more the to back higher operations? legacy we to? generally have thought. what would start-up incurring we context into much than little the maybe that HP a us might

the little more back just more on bit little a division timing positive then context can, be or you could breakeven a bit So legacy a there. around maybe generation? extent give level margin that just And that, direct expect color to maybe the us of you to

John Lindsay

for that had these learning the in first through question. process. by again, going a and good just curve country and FlexRigs us. just -- acceptance time the saying, big I'll Keith, start Obviously, Yes, the we've it's been

rig costs a -- Each But clearly are learned lot. are little there So out with comes a we've quicker. that. associated

synergies of the side Kevin, combining positive H&P from going and we're is as the we're to? be that going want we the and the and legacy that see there getting have, the the KCAD do the think customer. we're that On And significant. to legacy you are learnings the going feedback about think, to equation to I

J. Vann

just to the start think that and one And costs of and generate the some right relationship now again, we're or And Yes. rigs the incurring again, a we remaining cost anticipating pretty and company. that we sooner up online, close we're they're it's labor much every labor to costs rentals. we've get with additional and those And revenues. learned million the once X step the plate driving getting time working we're I the rentals. $XX primarily -- That's we side. right is we're those But from now, now combined to But that's KCAD. a $XX now, -- associated we're working. of remaining margin rigs learning up million to to

costs those just continuing are so down. to go And

Keith MacKey

Yes. Understood.

Okay. to Maybe turning North America. just back

seeing that we're think because for thought flat incremental see the we'd 'XX thoughts the on that and impact gas-driven you counts 'XX at just your like bit of the through in a you just of right and the market natural thoughts might have bit year. moved on the Some centered certainly activity maybe XXXX. where Can a seems in you're to of your is go unfold point maybe a XXXX. more in around feels now it into can? It to that, extent like talk bit give curious you kind how rig of absent little U.S. a little some But and the maybe has us

John Lindsay

just bullish obviously. we really if oil bullish the gas and again, energy, we're in Well, Keith. about at in market general, Yes, look really general, about

there's capacity obviously, need natural production market. really, But in gas, the would more for long-term to think scenario, significantly. and look rigs they're fundamentals positive. I rigs, all the need that we've predicting opportunity going super-spec over really fundamentals the to at be. in timing at you In look to going As if challenged time you you H&P the know, been an And just grow what

So us for we're there's opportunity bullish. to a believe that that's that lot XXXX it keep really we call and running put of hard But feel the and a rigs whether really good about you're additional a to long lens, that's at through work. if looking whether or phenomenon. XXXX rigs to It's to term

J. Vann

take to see to it's not to start the time those going to believer, that we're long Yes. happen, going you type to it's in to getting while a you be that quickly just 'XX pricing projects start or -- market. about you 'XX the and just that And and lead that pricing in start signals And mean, I increase think are firm how where it's to believer that that -- of if signals. additional to firm signals I demand. lead think a start in before the a 'XX, demand those Those going see probably are projects I'm we it's

John Lindsay

rigs, XXX. think pretty relation most to range to in as bound for know, tell thing has you count, flat. part, count we've rig the general, America, in look North And XXX in I'll rig you other about been the at the been the to activity you H&P's

on industry look bound. you rig If at going it's that's And just pretty range been for the XX count, months. been

down to for to way think have that have XX the year In rigs that a been years. been some the to were one So are for months. idle that X prior about that rigs active cases, is idle now

performance-based maintain again, that talking pricing about. market costs associated to that been with the strong utilizing for So where as And discipline the customers, back continuing creates really us one what performance it driving. into about value rigs out does and back we've we're paid for being those that reactivating, is that helps deliver great to you market, getting a contracts that and it's that think

to the significant of going here take to of a drive they point order trying So I'm assets the work. to go to is to those work. ready amount reactivate lot that that's to go before capital a there's market additional capacity in It's not home in

Operator

take with Benchmark. from Hallead question Kurt next will our We

Kurt Hallead

sloppy to made bet I you with or set opportunity my choppy a bit on guess standpoint, the little whatever. acquisitions or long-term clearly, always are the respect KCA And right, of from a acquisition Deutag.

operated gives recent with be to you're what of 'XX deal. before. the scale conviction you was know able Middle you you that take just kind the What go to is and close away But forward, Middle that that the larger what of and substantially markets as have more in some getting taken the really East. profitability going away improve more So very it's what you're I from the and to it performance operational learnings of I learnings? of going confidence you you have East the of going is, of recent curious been in as getting the the haven't some right? context the be the from But in and efficiency, you in

John Lindsay

growth a that's the Kurt, fundamentals Yes, accelerates feel this very, And strategy. great comment again, of Obviously, acquisition. transaction we and question. very about our long-term good KCA international the

time. a company the followed You for long

been these X we've working for rigs that years. You've we the opportunity have over on with seen X Saudi --

time. internationally grow to so And some takes

so we scope. global And now have

and the earlier, ability We we're basins to IOCs work grow very -- world, hydrocarbon it exposure very, H&P NOCs being about reemphasize, now multiple they about from they're just it in areas. the countries have H&P have basins where scale work, excited think the I but and the gives feedback where that to best the the really in said in I excited or that. getting we to they

the business. you that this cyclical. is been manage timing for cycles. to the record It's through isn't able H&P track a has unfortunate as cyclical always it's again, know, being So a great. But great

I we're our work this. doubt our through with very So to going any don't closely our that work way and have teams -- customers are

excitement about a we the future. have of So lot

Oman, You been just all management That's about -- the very business. haven't business. offshore U.S., Africa, contract with successful. offshore we've think legacy this we about at H&P, a the Obviously, North legacy Saudi, a Argentina, talked had Kuwait,

countries, we've We're business, over we're X XX grown X low us capital-intensive opportunity. gives a Now contracts, really lot additional or in -- that. of very

for you well a see we're think energy the side. We Oil this hard that to bullish. as future. we know of very without quick demand any on the multi-decade we're international look a gas, the globally. doubt just and a at that We Again, timing positioned it's And see shadow I in really opportunity. grow

footprint gives to opportunity this immediate us and grow. an So an

J. Vann

only But unleashing add, question integration the I on pre-close this to We've of planning kind able it post-close do your why we way. we're been why just work. the do weeks other, into And of you workforces would it a work. working do couple like way that to and of being point, or getting X each -- kind

some the already for savings didn't when to acquisition on I think across generate didn't some plan again, deal I We significant early the cost that, are those. the look economics, combined going at that there's company back predicate learnings we those savings.

the be And based months. XX to in the the weeks, of will of so -- there there's I opportunity XX know on that but that learnings next couple realized first a in lot just

Kurt Hallead

just from rigs much right? can, time, the on rigs. at cards or you there in in stuff. some cannibalization, risk KCA is Saudi. John, So the on same got a if you shuffling released country follow-up of the seems just You will, but and put spot right, of handful the And in type they contracts. kind of high-level fleet you either any just too situation, here, the And on to the rigs again, of shuffling I guys that of And kind I brought This U.S. of don't the Is great. curious, know. a That's that's not if timing, coincidental KCA one like the right? of these obviously Saudi, the of got that you that to

the that. side rigs unconventional land incremental that gas to flip would as dynamic to of as the just keep that, take would that possible I advantage is Saudis to the running want given have thought, of the going On spend land many

how just about So you're thinking that.

John Lindsay

great a Yes, that's question.

more Those been rigs offshore, kind They've H&P. of onshore the released. let's but not KCA, both H&P been only been or suspended, H&P been legacy at rigs suspended. look have number rigs are Saudi, rigs, not now it in and broadly, have So that one, suspended. KCA have

differently others. any the KCA rigs the don't that legacy impression So get have than been treated

say of gas. of drilling were rigs XX or the the XX want I to Secondly, X X

others are drilling The oil.

an aspect. the important don't one, were I actually, that's gas. rigs really actually think of unconventional think drilling I Maybe any

point. So that's another

done, past, think, So that. that's of work. to think designed of rigs opportunities prove that and the rigs and I we some I the to some us those some There have and for believe, are type we done being for are evidence do unconventional the that conventional work in have built there's mostly

there's of contractors driven. sure not All would it ago, I Everybody the -- I KCA there Obviously, but about I'm is, happens with talked occasionally, being again, -- conversations, impacted. weeks those. people reality conversations executives basically was it's that is are have the being budget one this had direct this said, So that, is X I legacy of was impacted.

at your processes. performance term, think I looking and longer So about it to point

for lot the respect a have KCA. of We legacy

and performance just think, customers. broader and at our welcomed to culture a you base, If it from going through lens look H&P from are our the I really processes a be

going is a tell They're can of of where lot X a you, there's this the X. us for X. I both footprint. And with there's new It's a equal ahead global employees. think plus equal opportunity legacy lot minute learning situation positive learning feedback ago, we're a said isn't opportunities. And lots together. from we're to lot. getting And X KCA This of going Kevin a I it to

of, I've again, XX years. cyclical it, in don't again, lot and business know a have to I've of cycles for see business. sideways I a and up cycles them, about part hate recognize excited we're manage cycles. But unfortunate, how knows we this. been again, So through many but and a H&P cycles down to this part these been how I been of

J. Vann

timing once closing occur in resulting will constraints do. where of the the customers' rig to And of every poor a stand forever. mentioned, the over there all the all Obviously, back John that, Middle Yes. was is as meet or pockets occurs budgeting ready these the add to This go mentioned -- air won't rigs it's are This a of unfortunately, the budget those is needs last of These this suspensions And work when given existing weeks suspension. as bad in our not they and -- we'll are And in is that of I only normally one that thing relationship. would rig of right while. the not is or we're these part the of the East. a customers, as John historical he of -- ago relationships strong. in couple there KCAD with all performance our customers, acquisition, result a of

John Lindsay

have mention, X, I -- to rigs actually these had The these that extended years. their some been X, other is too, contracts have wanted of thing suspended rigs X

is, into think to -- take were while and some they're period, element the their even been again, keep that's extended. I So to account suspended, into suspension released, rigs, the an not the have rigs important contracts of

that's important. really think I So

to I in just excited quarters. about last isn't -- to next going think, the this the but of happen thing it, we're couple

in first August X-year their periods. The rigs suspended were suspension in

looking likely rigs begin more at would work. even see back August, September you going time than to you're to before So frame

Operator

Syed question last line Waqar Capital Markets. ATB the comes of Our with from

Waqar Syed

it Deutag using putting in rigs? rigs. rigs, following be KCA on you Deutag, the a any technology drilling the Just the well? in do if the up Do the U.S., upgrades And technology demand And -- for that put as markets on can if you're does of that see so, in that KCA that? technology to lot international -- on so, require

John Lindsay

question, Great Waqar.

internationally. As a that matter see of yes, have to of continue fact, more deploy starting We're -- to technologies. we

our the plays, time, is opportunity. adding really that where were do value customers. we'll of We believe to to Of is and developed which be of technologies directly that unconventional more over course, to on, able are most related deploy on also on. legacy that's our technology internally but working X about that we're KCA in really together the the We're really, that excited And FlexRigs, Saudi, something obviously, working rigs. legacy the teams

-- accretive. that we've be have additive technologies And would to this technologies -- point. would what and to margin doing been up we Those be those what

think we ahead a opportunities technology. lot yes, So for there's of that

Waqar Syed

that period backlog it -- could -- KCA much recognize of what what maybe could you could quantify like when period like follow-up. that be could or Could just be XX% you $X.X you Deutag or billion, time how backlog? billion. a that -- of XX% $X The just Is time about And recognized? is to maybe

John Lindsay

finance been knowing as we have do us. and of have the detail. know all at of the that this now get later. to level our can stage did we of XXth teams what extra this Waqar, But on want don't appreciate something make that in to them are have we in imagine, that don't you and just to an you game, that front put I that to try say That's can we happen. the job, to where closing be a really right herculean right they've amazing now, just has effort we time done

Operator

to turn John back I Lindsay. over the will program now

John Lindsay

you, everybody, you Thank us Again, joining for thank Shana. today.

We As decades going to is believe we see we've acquisition well to to changer game mentioned, opportunity is but positioned are H&P. energy of continue. for we And our we a rising. that of a I the business advantage It's this mentioned demand this at of potential opportunities lot take ahead. for it, globally believe come.

So you thank us, again day. for joining have great a and

Operator

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

at any You may disconnect time.

Helmerich & Payne (HP) 6 Feb 252025 Q1 Earnings call transcript