Helmerich & Payne (HP) 9 Nov 232023 Q4 Earnings call transcript

Good day, everyone, and welcome to the Helmerich & Payne Fiscal Fourth Quarter Earnings Call. [Operator Instructions] Please note, this call may be recorded. [Operator Instructions] It is now my pleasure to turn today's conference over to the Vice President of Investor Relations, Dave Wilson. Please go ahead.

Thank you, David, and welcome, everyone, to Helmerich & Payne's conference call and webcast for the fourth quarter and fiscal year ended 2023. John President and and are Smith, and today Vice Senior CFO. us Lindsay, CEO; President Mark With Both John for and with us, Mark will be which open sharing we'll the call questions. after some comments

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

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

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

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

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

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

find reconciliation GAAP that I'll turn yesterday's and John call in said, calculations Lindsay. the You'll to over the press release. With comments

everyone. for Dave. you joining Good you, today. morning, us Thank Thank

want planned, did XXXX mind pivotal fiscal Our going out for in the that forward. as I not X my being company as originally noteworthy items stand but to unfold underscore

First, rig a to still different share. habits challenges historical market we focus rig our maintained focus fiscal much to fiscal contract that revert approaching the Yet, count price versus we we as evident year. economics economic was share. XXXX, count the back heightened was the did of were market This increasing. was XXXX only on the differently of business when the continue in to the demonstrate declined with maintain are In and cutting not

of we We to a to company still set the out margins pivot for more achieving a generated of rate and healthy adapt while do. ability reasonable of stakeholders. and the was Second to challenging market what return much quickly

maintaining capitalization market base we all while supplemental this share shareholders our through approximately of XX% strong and a balance dividends Lastly, and to repurchases, returned sheet.

gas uncertainties that customers impacted was U.S. in market oil the influence the likely increase differentiated below count winter utilization of seen as market. will market our Those highs [ economic industry delivered natural favorable cost we though most and geopolitical XXXX, to declined commercial we well contract much XXXX, value conditions the the super-spec effective perspective. the pricing Even rig to warmer-than-expected level, its rig historically maintained at which on will but focus adversity, economic pricing year. of well to by capital, from adapted for return XXXX details above market and market last super-spec the for adds the resiliency quickly H&P to suppressed tighten demand Again, focus ] traditional levels and returns as share. Despite global XX% achieving rig economics. fiscal negatively on that been Turning incremental during which expect coming above compelling of activity super-spec in weather, a the us has

improve the slightly and that revenue the per the trend further. day Nonetheless, expense margins per we rigs maintain to relatively higher-priced during created quarter. our and sidelining our well despite able on up Notwithstanding were did comment activity. of spot Direct day we quarters, higher, of will per the drag the the fiscal decline industry quarter in fourth by during rig market held couple past during day

to to flat guidance ahead slightly. will our up Looking next be the margins our suggests quarter,

a and drive from determines performance-based for strong the customers of adoption reliability. contracts over through greater Our long fourth solutions that term. ability and share solutions These suite help to increased to ago. drive consistent XX% market ultimately operations deploy technology the and to quarter technology XX% performance reliable H&P's year value contracts in The of

measuring ultimate to the for involved and small improve but operational important an rig financial as and our H&P project. and influence well, performance delivering customers services. our can element a well. An on for improving then in a only overall returns the Identifying, consistently up and make and providing the the outsized technologies drilling cost have of economics efficiency a both services portion Drilling of of solutions costs the are outcomes win-win within both creates economics our contract

ever past the we but the less operational experienced the well cost have drilling increases achieve rising designs, running FlexRig to our related Over in and cost before years, H&P's variable labor to and inflation. equipment consumable inventory the A efficiencies harder is on expenses costs and fleet acceleration lengths X customers. lateral visible due consumption than to growing for

inventory decrease XXXX. inflation and to the labor items related somewhat in seen consumable We've

and being required performance gains. service offset However, will that standards it by equipment intensity continue the and efficiency rigs is at drive to maintain to

example. increased an In average XX%. have the produce. actually the doubled million per rigs cause to those is drilled feet. feet is now consistency, significant of costs This related and lateral more costs increasing means a years, the ago. the XX of on of wellbore, year, provide rig higher that working decade and each than XX,XXX to XXXX, deliver doubled an the length XX fewer by same operational rigs times more has me average time, FlexRig Let expected to to a cycle In the This and at example And last have volume well required exposure today resource. fleet X.X XX wells drills efficiency of over service to work the intensity about improved each

inflationary which details most projected our and experiencing administrative will Mark a the cost America our operating are selling, in services, expenses. North increases are particularly magnitude increase pressures XXXX. over on impact point third-party and XX% of we on give labor Solutions general these behind nonoperational costs drivers his in more put have and increased the finer on contract also economics, Like To around remarks. in key this expenses, our businesses, since

of momentum with deploy to the Beetaloo capitalize particularly and recent further early in pleased we award the outside I'm capital U.S., first build our diversify signs XXXX, the here, for opportunities rig super-spec our We tender future our us of long operations in begun to continue with Saudi the the success growth In have and opportunities. over on international Australia. term. Basin enabling operations on fiscal unconventional plan with to Aramco this to

also Argentina years excited contribution potential the We're and the and these Colombia, are innovative for companies XX Gulf in about we're transition, celebrating in from come. Shifting our consistent deploying Mexico thankful on And XX segments offshore the approaches to strategy to from years advancing of energy operation. to expertise of energy. furthering focused years our the in to we capital efforts our contribution

power providing unconventional in technology to We're to drilling helping investments geothermal our are carbon-free and enhance FlexRig develop learnings example, an As geothermal XX/X enable solutions next-generation an and alternative source. concepts.

in our Energy. highlight field constructing development in well We're geothermal multiyear A X plant surpassed U.S. encouraging plans is first producing geothermal the largest drilling which suite currently in Utah. technology include our second campaign with the will H&P the our of drilling super-spec customers' of along by geothermal project, of megawatts FlexRig one of the XXX anticipated and targets. This fifth has their the with recent a power XXXX. geothermal performance investees, progress is Fervo with

path innovative strategic to alliances our and put companies have drilling the and Fervo to Our on unconventional grow firmly other larger and our geothermal geothermal scale. expertise participate a opportunities with in next-generation us

to shareholder during ingredient approach In allocation. in year, we and believe is an the success accomplishments essential addition to achieving a our operational multipronged capital having growth

First and fiscal prioritize financial of prudence. the we posture position foremost, strong company's a long-standing and

future and organic Second, industry develop look projects so in we returns invest U.S. the in to lead we the attractive that growth to with can continue internationally.

the dividends Finally, year, we capital shareholders return established we'll through H&P H&P such, achievements and continue energy XXXX. company. And new the remain ready, industry. opportunities remains those deliver vigilant share future years will We this by proud I'll exist. the sense when customers provide and his of U.S. seek shareholders. in what entered year the and fiscal to outlook our optimism to turn team's we'll can for over over Mark. encouraging fundamentals take supplemental And well and the additional for plan with success an market remarks. I'm next We and The with through navigate dividend as call attitude as to that, to the actions opportunities the and long-term is of augmented believe to details are around a both Mark this several about repurchases strategic strong. ensure service we international as base we as to

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

to the Solutions quarter. quarter count in Let of the XXXX. $XXX reduction for quarterly million for active me in revenue in recently previous and company North million the $XXX versus America fiscal ended with start fleet. decrease completed due revenues generated the XX, primarily highlights is The September The fourth rig expected year

million this guided and XXXX, being rate for the the totaled The Correspondingly, with approximately quarter. and up 'XX total our supply ended range previously incurred million $XXX tax fourth on was $XXX maintenance of reduction within million $XX were $XXX higher decrease and intensity, direct which for end cost absorption this versus aforementioned costs by fixed operating quarter. General for but which XX%, decline expectations. generally the fiscal quarter is by in the quarter and the the is fiscal was the million driven previous The was muted somewhat activity, line lower in administrative effective expenses for expense which sequential fourth range.

earnings net To during quarter our these expenditures select versus Earnings $XXX up settlements XXXX compared fiscal million, per by expectations were claims, million, a a adjusted for in a generally the which summarize with with the totaling fourth from earnings blue-chip $XXX and third were outstanding per was of adjusted were Absent by per securities an which quarter quarter's items, share on of the $X.XX positively was in fourth swap select offset transaction. previous investment diluted of fiscal diluted full $X.XX July $X.XX partially $X.XX share per with $X.XX line fourth primarily items, fiscal gains the call. H&P the share quarter. Capital gain made share in earned of profit quarter. impacted results,

the generated fiscal operating cash flow in a the full million XXXX. quarter total fourth and million H&P $XXX during $XXX of in

excise in CapEx, $XXX Our and related dividends in million $XXX $XXX million cash taxes. repurchases million million $XX $XXX together and flow deployment, in base generation in dividends supplemental funded with capital including of share million

our discuss will expected fiscal cash later in position remarks. and these generation cash 'XX We accretive

We at X rigs during that within last the beginning from in down fiscal North contracted America contracted with year. the the Turning to the end of high XXX which fourth our super-spec rigs XXX our average utilization XXX quarter quarter, an corresponds exited fourth the have XX% Solutions with segments, segment. We is to the rigs of worked the of rigs, approximately expectation. that XXX Note rigs averaged QX.

sequentially the $XX to were was in working rigs. within number July our the by lower million direct sequential Revenues of million due Segment guidance decrease margin expected $XXX range.

day reimbursables, day the increased during Total from segment per per quarter fourth $XX,XXX the third excluding in quarter. $XX,XXX expenses, to

As this discussed harder. expectation and Further cost due release, absorption. part supplies overhead in labor rig expense was above from maintenance rigs decreased drivers and running and include our to our churn press in

period, scale and lower in During and the this rig personnel, fabrication resulting trough positions maintenance we specialty regional quarter. crew absorption during retained facility staff,

the day in to earnout $XXX related of performance acquisition charge operating change Additionally, incurred value segment fair liability a metrics. the per based to on the an the contingent related

fiscal the to North ahead Looking quarter America for Solutions. of XXXX first

activity adds expected, and XXX in call, which QX. to quarter contractual our than As quarter. in working have expect said, relatively contracted the and flat with level as of XXX rigs thus our far That the higher between we anticipating end XXX are we fiscal additional fiscal rigs has first churn has some kept today's been

backlog term the North current $X.X Our rigs is revenue quarter. contract, from up $XXX fleet for previous million Solutions under roughly from America our billion in

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

segment, current continue activity between average range we remain roll remained to term -- stable $XXX pricing the our margins North expect and given have we $XXX contracts levels pricing expect steady in environment. In into the pricing to QX fiscal Solutions increases, to As million. above in direct America that relatively that North America levels legacy spot million to lower-rate

declines to Given of from et seasonal see cetera. that our it labor-related, XX% costs payroll daily are is taxes, XX% typical to

focused of to X have general, the are by as several since in including on one XXXX Further, appropriate maintaining are factors, of operating the past we fiscal Labor levels our anticipated our higher. and result cost many inflation returns X drives years expenses are costs supplies to investments. longer current XX% cost pricing churn continued on In materials and near inventory chain These aforementioned levels adjustments costs increased and inflation. the approximately of we end supply due laterals. the consumption to recently reasons a acutely as continue levels increased rig elevated earn strive achieved

had active flat Solutions from and we XX, expected Regarding prior sequentially at our International segment, approximately quarter. rigs September XX as

Argentina exchange loss $XX effective in the the rate, results. as As expat in million that commissioning we international $X.X guidance to pesos certain labor a release via our of efficiencies due to are which due exchange a and parallel on based in a revised Separately, blue-chip timing loss swap the million devaluation rig investment press official accessing experienced country is we facility result related a on reminder, October accelerating of XX Argentina. some expenses. Further, to foreign at exchange our the we segment Houston mechanism experienced

able the been $X.X to which that would otherwise Although were we repatriate U.S., not loss, this have we to took million investment available.

first for all Argentina activity we to the constant one remaining XXXX rig expect countries segment, with the international mid-quarter go toward fiscal of at idle quarter levels. other Looking in

Aside $XX from operating the million to first impacts, direct contribution expect any to million -- margin foreign quarter. have direct in contribution between exchange $X we

our Offshore segment. Mexico to Turning of Gulf

the fourth the a rigs expected, X quarter and fiscal in As our rig completed of now have demobilization we contracted. of offshore X platform

management Offshore of one active generated which on rigs, the range. X of million is customer-owned We have which a rate. our margin within guided during was approximately direct contracts quarter, $X on

generate expect of sequentially $X Gulf million toward rig. look stacking it to for will $X first of Offshore we we segment, due quarter margin, the XXXX Mexico aforementioned down As between primarily million is that of to direct the fiscal the which of the

year consolidated and for items. Now to fiscal let first XXXX me the look quarter full forward corporate certain fiscal and

Let that features to allocation John me our mentioned start by approach earlier. reiterating capital in multipronged

balance our internationally fleet credit to Our fleet. strategy maintaining growth to sheet invest diversification opportunities to market-leading investment-grade metrics, support America investments and prudent our rig North strong our in maintain deploy to with together in Solutions and is capital with

Finally, our to a year plan -- strategy return flexibly recently shareholders. plan introduced announced XXXX to shareholder supplemental our continues augment value ago

our discussed in North X XXXX has release and and America, in yesterday's technology. corporate international our October As fiscal buckets: and CapEx XX release, information press

XXXX refurbishment includes part Our bucket to spending per also due into which supply maintenance of for it on delays to above maintenance that to fiscal chain of million catch-up active push at fiscal XXXX $X.X supply and intensity high $X.X solutions 'XX capital in throughput year maintenance CapEx active last anticipated chain level bottoms-up high recertification costs, million the XXXX. Fiscal North it rolled projected fiscal based couple America built end spending is years, in This the due also in are range inflation the some to facility from downturn. continued current capital XXXX of but has CapEx point from expectations. approximate the rig a of -- and year has per equipment should component rig

operating of the fiscal the currently continue current expected primarily conversions attractive will and of at $XXX and 'XX. over approximately and and Depreciation bucket international The X capacity. planned terms. The be depending XXXX utilizing primarily enterprise, a XX million. improvements. partially minor U.S. be and full to international rig and rig walking bids to customer to Houston in demand communications upgrades of on to upgrade them exports consists rigs take approximately corporate consists of conversions technology international funds converting Solutions international Argentina, outcomes in super-spec North system bucket at and for in on split month -- one consists resulting final to per successful capability These facility, excuse fiscal our in plan between information is We America anticipated bucket financial to country, rates slightly me,

are Our prior sales, expected for $XXX expenses full approximate up and administrative million, from the year the which general 'XX is to year. fiscal

value aligned and delivered continued that growth. to Middle pricing capabilities international has America in support with East securing have We to the expertise company, including initial in North build

across to several in run in and we have for which areas experienced fiscal functional introduced We bear in XXXX. and third-party many improve inflation will we also labor our services, finally, for And have the full solutions analysis areas. Software-as-a-Service XXXX data many rate

and anticipate research as customers drilling management. expenditures automation, such on to be in wellbore power for development largely investment our in R&D quality and Our remains focused million $XX solutions We approximately XXXX.

taxes. of We $XXX variance are rate estimated tax Based foreign upon a of XX%, CapEx, state to to million. and expecting XX%, an income of are $XXX consolidated effective stat U.S. by range rate results cash XX% million the the and fiscal we projecting above tax 'XX operating range with driven

Helmerich Now $XXX September million billion. facility, short-term looking investments approximately & XX. XX, June approximately cash XXXX, position. at of our and at $XXX financial in under revolving $X.X million our remains Including Payne liquidity credit had in our availability versus

As subject plan our projected to fiscal flow $XX about after XXXX cash dividends we approval, of after approximately the million, announced of established in to remaining CapEx our release, XX% which pay October press is across dividend. supplemental ongoing Board base and

X/X In to to planned flexibility. is cash be essence, of shareholders returned flow approximately X/X with remaining CapEx after over for

As unallocated, us equivalents million cash investments, for current dividends. this further hand, accretive together supplemental $XX with opportunistic and and/or share of with short-term much flexible today, buybacks provides our flexibility on million $XXX

of Future years shareholders plans to through have our to quarter. further capital increasing share returning concludes cash to XX cash allocation fiscal and comments repurchases. That billion add of dividends roughly the fourth returned prepared look for we our that the priority during shareholders, to long-standing past the $X.X

David turn for over to now call me questions. the Let Creed

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

I shareholder of XX% returning so many pricing generated, impressive second, on I leadership can the not companies success the to a indulge almost shareholders strong returns If me EBITDA the just properly to question. the in 'XX. and discipline, you acknowledge could wanted for frame

But in I program, was 'XX. at think $XXX CapEx million around look million the then $XXX I international which fiscal to

kind closer of get just targeting, you you targeting looks remind year. us timing you're there, it fiscal margin 'XX. the a last segment what if the $XXX levels can that to generated want this other million any is international $XX of fiscal And million million, $XXX kind what investment might for direct frame think ultimately aspirations. to of way the growth to ask I to terms of see activity wanted I in And

a great that That's David. also multiple you, bids internationally. to lot there to -- Thank on I a are aspirational clear tenders, growth I of wanted do in mention have multiple want we question. going did that be different countries really. are that

where And as position competitive out so of far give information at just really details of for we're to just the game, a competitive advantages, reasons. in to a we this that the stage want as not lot related

that. I our But next in be color to more continue a think that it couple export is look give of invest in to that's to suffice the quite to here and capacity to U.S. on the we'll FlexRig the in months, able international. bit say, intention fleet

couple is not suited goal by some term long unconventional add to of grow exporting to that overseas. the emerging related rigs consolidated for obviously, just our specifics might EBITDA of I targets. any of over corporation's are those markets international footnotes. David, we're a the giving But the in these percentage

to competitive don't returns said, -- do and happen will specifics. It's a talk as ROIC key we're for year, prepared 'XX that the long obviously trying John through wins had like the and Arabia process, John investments we in these Saudi want Australia. achieved to couple be in about want we in this generating that double-digit we we a remarks They mentioned lot reasons, fiscal to a of but time. And

confident current contracts, and And term, on anticipate we these generate work these, suffice short-term with returns available bids can it to that pipeline. will in we that for made. to the rigs ongoing say some coming the that near we in the investments the some longer-term for have others down some export we So opportunities, put U.S. having

missed margins, and quick color forward share I sorry QX could the margin, QX view fiscal was flat you all you're appreciate with North sneak But when just look guidance on there, make a follow-up about If could think the OpEx just America this. for if the I implied Solutions guidance. in I to the daily thinking your is to them. able wondering Great. impacting I daily if up. to I how the the slightly announcements

were question. simplification. fourth we Appreciate fiscal Yes, the in put higher, Dave. mentioned The for would quarter. just as X into the And it really costs I buckets

I think that call of versus X,XXX I labor a related estimates. of analyst we're over was And to say it, would to absorption. XXX lot X,XXX

that down. come rigs, increased will with So

really not XXX so us and with to materials items reoccur. or But the higher for hodgepodge be Another of bit. consumption appears other supplies, intensity, balance, rest the related which that the and a a to should are

Benchmark. We'll take from Hallead question our next Kurt with

Appreciate the and color commentary. the

of kind levels as -- the we that activity get back reached of and those for XXXX, I'm to in improved So right, mentioned, the to out you activity curious, highs quite XXXX. expectation into not will

And for rigs. then of around you super-spec incremental kind XX%-plus color provided utilization

curious as providing base. And for them of guess, into what on you're client of kind back And recently, just hearing XXXX? the I kind until turn going bled have they, what's things maybe of lower. rigs from E&P impetus to the kind So to

the natural obviously, were on, you to gas early if activity at levels year, pricing. activity the the gas, natural course during declines a think look the I related of Well, directly of lot

budget-driven, As lot different our it's this, it's associated the and industry showing, we've the customers a seen goes to that showing, year, but which, churn of production-driven, the gone discipline healthy a E&Ps we've whether of for the reasons, what of are whether think lot is I lot again, through back industry. capital a is is Kurt, with

it think a on the general, in as fiscal in largely has I of for first I think seeing. describing QX. I consensus rigs mean really that's XXXX. for XX it quarter with I reasonable you year, current what in think market And somewhat is we're fits we're share, to seeing being their we're capital look what reset relates our next our for budgets I XX expectation. cases, many added it a average And in at So to think if

Appreciate Okay. that.

follow-up drilled going indicated, you needed rigs is, kind of -- the as so leading by a ultimately guess, a fewer in least and leading fewer forward. of substantial market at maybe gains in I the efficiency industry Now to footage right, to number U.S. on, the

context, in opportunities. that me these seems playing that some too to into to of that? reading it your part of that So strategy is Am I international into much pursue

I that's grow mean there's doubt a we to international that have our think no desire No, fair. I footprint.

As currently previously. we the all know, are when seen you it rig U.S. levels we're we -- production necessarily what's aligned and talk count about production U.S. know, not activity there's and directly as we've current on, and going with experiencing, that

export we capacity to in FlexRigs international U.S. But here markets. into have the

that's starting -- said to we're one lot our more as And see in. the of to a of to we're more couple activity, starting participate been a for bids strategies last I see there So out years. earlier, lot

again, we're And by that. encouraged so

multiple that much hard up fully important also very recognize XXX we all it's rig the XXXX, count intended a then get to around We counts quarters, you couple XXX we And years, to activity think as to had out we've had market and our of know. so. that predict to during got experienced. course, rig I less or to correction it's and very, But of

out what happen can And time prices Who knows field. natural XXXX gas strengthen happens so in when left that frame. XXXX, of

left internationally. planning we're of grow But original lot clearly, to of time a us. to a definitely it's -- ahead your So point, there's

Syed from question our ATB Markets. next We'll with Waqar Capital take

for ] basket Your see Good a they've performance-based running contracts, to the been up. has gone while. [

the day added margins? underlying over you X.X the the how have year, contracts last If much back you look rate-driven performance-based years, to think do

when to averaged and $X,XXX average back. those $X,XXX day added About per are in bonuses on

That's average -- rig. on an a per on that's

Yes.

the performance-based double on it's that contracts. actually -- So that rigs are that have

Okay.

-- in. that's in going were expectations pretty been with it's what line your So

Waqar, progress make where we the with we're have to on think We are. we performance-based contracts. pleased additional

and And makes need I sense all things to our what's makes think it particularly automation of a deploying more too wells longer reliable laterals, in think technology unconventional you're and makes drill going that, the market. model capacity sense. of and be really additional for and on that. that and like I when much And lot -- it

think I how margin growth to on that how performance. in there's the still potential compares I delivering to there's and on percentage of And that terms just our of competitor we we're continue So rigs. growth the think improve further additional based

this XXX% XX%. said before, of think gosh, that that. with were rigs fleet, we're it we're contracts. But probably on additional have at, going do ever today, at don't necessarily and XX% performance? that to performance-based some I've XX%, I So oh, to growth we're our I our of wasn't ago we think No, long And starting see

So we're encouraged by the opportunity.

now expectations is and capital million. guidance, Okay. think you mentioned dividends and allocation XXXX year to for about And dividends right then in you EBITDA, I supplemental your which the your consensus regular of fiscal framework, CapEx so if $XXX reverse-engineer there from

with and your allocation a range feel comfortable maybe So as little you well guidance? consensus guidance -- in upside that capital there bit

do the comments numbers further Waqar, really to to no the out we math. put

You're us work for then. leaving the hard

Yes, sir.

there could count which increase further? active finally, Okay. out of anything then just or the decrease offshore, And kind U.S. the

had have rig we definitive but expected. occur and as demobilized And offshore, the as one stacked opportunities year, back we a fiscal Well, sales the that. of potential that mentioned, sight got on team half in our couple that to line of a the does could of nothing

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

have of last that rate of than a came back come rigs we lot leading-edge more early off counts rates think amount of that would last perspective, certainly rig have in from down, in looking day late things now. stable given the over probably held saw the peak have for Just the industry this I the a the U.S., year, year, have come expected year. out But

-- the is, any Would you the yourselves be -- how over And worse that? I first has comments responded would the to anything, question second you than or has agree Or around So last much surprised is, you to part guess have decrease be demand what, expected if be appreciated. of that part this would to better? in the with about the things year? industry much

the Well, last with I'll start question. your part of

and and there's I associated a consider, for gas that when prices part mentioned an in to I I think think or the anyone. activity forward. really don't pullback surprise the us you improve this is to I opportunity, of to And course, think earlier, going with that that,

private we think I probably to mentioned little that of it more to maybe private, -- public, amazing, released -- and back that I to getting but but churn equation is just work. the whether a put the side a related think, theme surprising, getting It's bit there's it's little oil mostly, continuous rigs goes or back the churn. of a related amount of to

force that, leads pricing. that Our great doing with is into sales the job and a

is And highest at we drill hard lot. as we to possible partner able of and And our deliver to lot. very a work the the and in that worth effectively And way. hear value day customers level a it that's efficiency day in efficiently and from consistent that with end doing day, the worth to of customers wells a out, being very and those reliability and

terms capital investing. that's do puts for we're I in as and that just spending. And getting really customers. our to thing it on a starts certain -- the is being that it And earlier, it of disciplined with, requirement return making And we're their starts so with -- said same again, that us the the more

lot got know, have it's great money, we we're high technology. is, that. and people a capital-intensive great drilling of to and you As we've a investing and for get paid And business,

amount can competitors. going were of about just can't another speak back we our you were we John calendar the could to add returns to only 'XX, it if is to that we for speak I think on beginning putting the way to said our rigs we get But limit out -- H&P. we're so the that, -- just I that to might way the of Keith, you if to go and mentioned. I focus pricing going

has this maintain decision the focused taken idle the reverse pricing, to we've the on happened We've been to And that. and rigs year.

same in both last what to returns of the and rigs rigs operating that our focus do scenario but year really couple shareholders. a coming going the with of years, for the down, So to we up way is need then laser in on generate this of different

that. I appreciate Yes.

much the in tenders you I respect magnitude up terms on tenders want disclose of rig tenders, you're down? speeding slowing could that Any amount from share to be there tenders, amount or of of range or a too can be what appear participating here, know is you secondly, anything commentary Just whether would of with the in not helpful. to the to to you're around international activity of amount the but see going potential

tenders thinking we Keith, XX, of probably we're I think was number, worth through there's I But more. last an aware tends that this pretty firsthand -- there's also rigs' internationally XX mean that XX know to and I night, to slow. know not exact but I growth of, be

with. any might we number So percentage not number rig be or a the successful of that out putting of there rigs on we're sure that count

of lot a work. There's

happen. Our teams hard are make working this really to

than quarters, more announcing hopefully, other. the at I any some not more there's But Mark, have that upcoming can come. success. a stage, that, this So whole say, lot unless really to you In we're

And active No. what on. referencing current discussions just things in we're that you're is

multiple with countries. discussions Active

some country. that. X XX multiple months, processes or past is XX one the And go just not even it's quite to actually So countries. bid another time. or take the rigs then And work when It's

just a So to any sort very of it's hard number to put it.

positively more last P&L we that footnote Sort likely this point, 'XX. I would in see in would of that just John, to our expect fiscal

yes. 'XX,

take question next from Marc TD We'll with Cowen. our Bianchi

your in rigs were revenue opportunity us understand help were is everything edge reprice what to if to to that you I what you some contract current the Mark, backlog per leading mark we book. lower-priced those? of mean there Maybe think, the in day? your would for Could remarks, that today, mentioned the

that. back a you get is I about there the and in of at of release, under see But term some some the think table No. press -- indication bit the can what's

now, QX. help rollovers fiscal think of which then more us repricing I batch And some QX, will in we in have have We another frankly.

John, And the XX-rig for of less would many to thoughts see taking might to an add number sort And I a going power. of not think, that made the really 'XX required start that get to about in be leading we XX- like see more utilization comment to is really Okay. specifically release than seem And would take pricing to to increase we thought utilization Any some on you press tight. how had reasonable. much when it could for rigs get for tight, start movement and it's upward and some edge?

rig market that now. the kind would working. again, on be -- super-spec I the of And focused the tend to have that right only tight it's we fleet. fleet again, argue we pretty That's is Marc,

that is really so tight. And already

an see the XX So I industry reference super-spec you. count we The necessarily of as continue super-spec. really That's more with capacity requirement, to non-super-spec. kind agree increase, an more of XX and industry rig to not although less is

So we to think that's trend. going

market would just there's frankly, we in say what -- based I quite right So power would the now on see. pricing I

is And make just -- had that, that again, why so any to it's adds make to which just additional going net a is, market, that tighter we clear.

Yes.

That's going sneak just ought forward? your this tax more a Is book Mark. book outlook assuming should tax several If level that be your The looks like Or bit should for years bit quite is quite could something it be I tax we higher above tax more implies cash of a cash here? assuming tax your we Okay. what for be. to cash one in than great.

No.

are -- million have 'XX. going think XXXX to of $XX so in payable we that be I taxes it's or around actually

Okay.

driving... that was So

that cash is the So to expecting We're amount not same. related tax 'XX. purely

XX% just really next differences payments. this range, had effective we well. It's actually and the that's from timing the when rate -- as to year, it's as some saw the a you year's midpoint make tax of As range we

Tom will our Curran with from question take next We Seaport Research.

Just kind for one left of a open-ended but me, one. it's bigger,

you the or MagVAR, X did you last the and over leader, remain In you technology acquisitions over, innovation industry's the scale-up what playing role foresee AJC DrillScan. cycle, endeavor to MOTIVE, and year next X? as say, do M&A So XXXX through XXXX,

automation or is bolt-on, topic? to now? it and a advancement, for approach some themes prioritizing And what be software, other specific M&A appetite Just optimization, would what you drilling be your capabilities

acquisitions And are of to great gap made see other and make automate. -- that things about do rig being more, skill I have. sets a also And and only the And we're continue There's on lot working portfolio question. a good advances delivering to it. There we really helping progress. our capabilities that that that's what we drilling we're really able in downhole the deliver to don't themselves value on. to lend not good The a automated customers. feel Tom, that about we for on on those the things is continuing I really really directional to I but feel itself.

good been feel to and we team about I the that we very fortunate really acquisitions the that from retain what are So have have. and we brainpower a lot where made. we that We've of

gaps good So of I that, know feel about and don't I that really have. any other we

John, this existing organically it to chapter you place that next if hearing with technologically. to correctly you development able So platform achieve as I'm via of the -- be in sounds would R&D expect

to a it's good summarize it. Yes, Yes. way

do we have I M&A that think doing. capability to and order don't parties, have Obviously, think think for to but we're necessarily go things always other I the I in-house the in requires with and opportunities are there we what skill out set, third that. do

have. be that we can relationships that think the currently with done I

Modak Ati Goldman our take from We'll with next question Sachs.

that appreciate acceleration really of if you that? think changes color visible, is But that so we gave mentioned and there, You should some How XX% that. expectations into less I at equipment your baked or normalized about curious margin term. was longer cost some

could I'm that sorry, you question? Ati, repeat

Yes.

again? a that You Can broke up on you us try just bit. little

sure. for Yes, Hopefully, this is better.

into that the is Or How margin expectations we acceleration near of expectation that cost term? at Just baked that change think that? does about in longer XX%? on normalized term, your equipment, the should

you're about accelerated That's America. think international what we was that segment. only about? the I Is something in talking North that you're talking that mentioned, the thing not

mentioned in America. I you inflation. and acceleration I thought thought some North FlexRig that equipment was

Yes, how of progress inflation do continues that service it It -- only sorry more we It is I'm built the and delivering is increase, longer it. to for Yes, is. volume. that. hard got of because and but running intensity. service to It's exactly costs very and equipment determine you're to harder continue in. intensity because because not

yes, margin. yes. is, into is It baked is, that So our there but

of accelerating plans understand segment, international or your as and the these there. of margin should deployment That's ongoing, in helpful. color might some 'XX? the the And the mentioned then Okay. international markets be you think I difficult about we some tenders think in But cadence how about you

going be don't to it's we know that's -- yet. just Well, --

the any the And we the hold final of level saw to outcomes shipping the expectations. margin throughout notwithstanding international incur You countries us charges. year, cause quarter's guide processes, these the for would for if that's expenses this bidding flat, which and of of anticipate would successful recommissioning

John bidding, just earlier, really happen bid. to processes and of it's stated sort on determined are based slowly the be bid unique for which, So very to as

Mark deploy to that it's back countries half. few could some a be like -- said, would most yes, that if successful, there into going rigs the in of we more XXXX, probably So that are but There will XXXX. push have towards

a on not numbers. it's impact large XXXX going So to have

expenses have 'XX, incurred. it's won't any we but Well, for revenue

Exactly.

to now remarks. I'll closing call And turn for the Lindsay any John back

Thank you, for again, joining everybody, David, and us today. thanks

We long-term shareholders. can As we said the there's fundamentals. a that out earlier, we remain use create think optimistic of of energy opportunities advantage lot and H&P take for there about value to

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

conclude disconnect. now and does program. This participation, your for today's you Thank you may