Helmerich & Payne (HP) 14 Nov 242024 Q4 Earnings call transcript

Good day, and welcome to Helmerich & Payne's Fiscal Fourth Quarter Earnings Call. [Operator Instructions] Please note, today's call will be recorded, and I'll be standing by if you should need any assistance. It is now my pleasure to turn the call over to Dave Wilson. Please go ahead.

Thank you, Todd, and welcome, everyone, to Helmerich & Payne's conference call and webcast for the fourth quarter and full fiscal year of 2024. With us today are John Lindsay, President and CEO; and Kevin Vann, Senior Vice President and CFO. Both John and Kevin will be sharing comments with us, after which we'll open the call for questions.

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

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

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

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

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

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

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

statements will Finally, amounts the related times from a call to Deutag the pending this stand-alone made to I'll enterprise hear H&P of acquisition. With a over on otherwise, said, related resulting and guidance couple or any during Lindsay. probably turn include John as on do call not combined that a this call, you KCA on to basis or identified unless KCA expressly basis

morning, Good year I'm everyone, in pleased. XXXX. we joining us appreciate Dave. today. another The fiscal you, Thank extremely strong you company delivered and

satisfaction lead We in continue and the margin safety, to customer generation. industry

going and expectations noteworthy executed will X in a continue elements Looking be and challenging forward. how back being on to on for market, mind my stand our we our company the as strategies out pivotal in

and achieving operational economics to on contract margin customer focus generate strategies safety, continue performance expertise industry-leading our First, solutions deliver by generation. rig and the technology best outcomes executing and that superior

driving the lot commodity approximately solid a U.S. America and to North experienced market grew down our these delivered share market factors slight U.S. In of rig drove price teams those adapted rig H&P rig count swiftly X% year-over-year, volatility while customer XX%. where generated teams in a performance healthy to consolidation count increase. the our Under industry X the solutions tandem, conditions, about margins churn and a was Second,

Solutions The third Saudi We've element has is delivered X the progress Arabia, International X commenced first operations in we've of and the rig in growth strategy. our Aramco. for made FlexRigs

on Additionally, position transformational close drilling depending December KCA we or global as and leader, that will Deutag us upon to a regulatory which expect transaction executing we're of the in acquisition January approvals.

count as relatively for we remain Similarly, big to natural super-spec XXXX. gas approximately U.S. the and performance the from Between industry's prices is during demand expect the remain rigs over the to in been North deliver relatively is fiscal flat consolidation, low margins sustain as margins, XXX the our rig a at we the trended our handful a our at ability count, previous Looking quarter rigs approach. Heading again, the into solutions America our activity fourth expect fiscal our the with customers from rig to count drilling quarter rig Solutions segment direct healthy also Along solutions picture in count of year. rig to which first matched able high is has we rigs testament expected, increased From America up the to was results, a and value overall of Solutions quarter North past the of quarter. exiting flat rig commitments. to through rigs. rigs North with existing choppy incremental rolling perspective, direct improvements, America the customer XX down off

and 'XX, with increased growth. lead safety, contracts we've creation demonstrated efficiency performance-based value technology leading H&P to that in activity that Given profitable delivered and

industry. a customers -- seen continue we have seen activity across of broad work with FlexRig During also we private the the our E&Ps to increase teams fleet with and have year, our closely array

cycle times We customers margins throughout more assist value well strive together allows parties and manner. by approach with laterals, to a in costs, The to line our improving well goal. common execute and align predictable as customers toward deliver delivery a in year outcomes in increase and customer-centric the share reducing all our that us directly working and we has Our market safe to of performance. in and best drilling overall were the longer a manner

contracts drive performance fleet. U.S. makes on reliability in FlexRig utilize drive on and focus automation believe grow alignment utilization operations technologies. key fleet. more and performance the will Our well the We and up continue market The active to market digital of the and laterals, that rig and higher remain count share designs and factors XX% technology our on industry longer super-spec complex approximately the well to the that cutting-edge greater continues placement of unconventional adoption

Looking ahead change if commodity flat to prices rig first slightly to course, trend of count the down for the to be of year XXXX, 'XX the during and XXXX. either similar could dramatically. will tend through or up will That, down we up half believe move

America, between North International in all Saudi with and going for commodity in rigs is bound the our be is XXX that Our In XX count outlook. segment, Arabia. event a been milestone current occurred rig XXX H&P range and -- pricing to Solutions indications has months for

pleased and team's up. FlexRig on Saudi our in culmination of years the progress in These X reliability. a on of by results the X spudded are unconventional about first and work various stages I'm focus moving field our safety team. current next of delivering Our with and over excited are H&P investments and the and FlexRigs hard rigging a returns

safety-first and since as the and but onshore Another acquisition U.S. a land to pleased we been several especially commitment to Deutag. spend announcement and the great the will KCA remain a not it's significant performance share customer-centric our exceptional a as industry significantly be time transaction in mentality this our for Deutag establishes event XXXX expansion. in acquisition rigs approach, there drilling Deutag transformative in We those July, fiscal Saudi that notifications I'm both since a and Middle we've plan This fit included able KCA the leader the been have multiple Deutag the also accelerates acquisition. offshore, was rigs of perspective. suspensions. as the value onshore is KCA many of for a the cultural announcement were But East leader achievement announcement that global of with to reasons acquisition and from being of during suspended, in excited KCA providing customers. There only are H&P more some been confirming the for and a about integration, our in company, team

months. Saudi is in not and firmly X for to the rigs place. rationale industry. Despite strategic this provider a these rigs without in received Arabia, As near-term KCA remain in suspensions rigs a Having of cyclical suspended in for precedent this contract acquisition their of they up XX had of September, reasoning announced headwinds, period

First, it growth strategy. our international accelerates

enhances in presence it Kuwait. East Secondly, Middle conventional the rig our and Oman specifically market, Saudi, in

also the the scale regarding during return long-term acquisition And provide balance also sizable Fourth, and geographically will not will strategy energy and to company's diversification, world-class services manufacturing delever remarks diversifying additional adding facts of but capital ability by company's global offshore increases some our revenue asset-light finally, management on provide strengthening and business. and capability. and just the cash and it cash Third, sheet. a in addition his position our clarity a profile. Kevin some the regarding flow additional

a long stream Deutag flow profile KCA confidence will We diversified have overall the strengthen in more cash acquisition H&P's with durable every the and revenue term. that

we forward, of continue our will on Going to portfolio strategic growing execute objectives.

successfully to delivering be balance our we footprint build disciplined sustainability increase export to By as drill business. focus approach will the America per remained North our seeking international year-over-year XX% base strategically strong superior adjusted emissions and to returns consistency. We've reducing and to First, our also Along durability for having opportunities successes will integrating In decreasing our in outcomes customer-centric and and GHG in shareholders our we maintain that, on incidents solutions during robust FlexRig objectives. we safety now approximately by achieve fiscal unconventional and business a customers flow and of expect shareholders. on We on foot, achieving operating of well technology we steadfast also sheet our customers, our success the with cash markets. We'll our successfully to over KCA the a improved focus closing, H&P maintain continued at allocation. our focused aimed delevering our unconventional and cost profile XXXX, the maintain for help by free in we're peer-leading our achieving employees best Deutag, commercial our U.S. XX%. enhanced dividend capital improved larger our a and potential on and lateral deployed normalized approach, teams their

development, quality the across creating our in people. of Another for our rig foundation invested on in strong and career was improving life the XXXX key We a success focus element a company. growth on prioritized

and of drive the known have adaptability been our employees world-class Our at always for achievements. their heart

is for call to even in XXXX now turn committed delivering I'll by Kevin. distinctive the Looking capabilities. And our greater ahead, to the H&P over results our team leveraging shareholders

Thanks, fiscal results, John. of operating and the provide quarter full for XXXX Today, review quarter operational will fiscal I year fourth and our first guidance XXXX.

want time strategic provide leverage on financial fiscal position focused to resulting and Deutag our update our acquisition position XXXX Additionally, an spend address and it. projections, I some from our and our to also transformative efforts to KCA of annual lower our

absent quarter. right company similar $XXX the with quarter versus any September revenues In was and in $XXX million 'XX previous Correspondingly, fourth and general, fourth General rate million Let highlights year. for ended million previous me looks items, versus fairway XX.X%, completed XXXX July for year with $X.XX $XXX incurred did quarter was middle. and million were the million, and million for have Capital quarter the for our effective very tax the miss pleased operating the share. XXXX. with fourth the line which fourth generated $X.XX quarter. in due high fourth $XXX call. full $XXX the costs previously quarter during year recently per from items we would quarterly guided could range the for direct to fiscal $X.XX of guided and the quarter's $XX not that To fourth not of say We be are of is costs reporting ] The our XXXX, is fiscal at third per full was Earnings $XXX the which approximately start line summarize metrics. for impacted for million were in to share noncash acquisition expensed share fourth previous the results, diluted quarter were end negatively quarter million administrative share some this by [ earnings quarter $X.XX that operating been with $XXX of generated some quarter. $XXX for in H&P expenditures totaling versus expectations. The of total cash our purposes. flow the total expectations totaled in I'm the the which the million, to the per $XXX fiscal XX, net tax year unusual down full on the expenses of a those of income per we in year. million

cash $XXX million, base $XX generation [ million million share $XXX dividends flow repurchases. supplemental ] and from in in Our held and

our which quarter Segment July solutions. quarter, fourth with during Now above day of for XXX was quarter. flat versus same was $XX,XXX our day day turning quarter. the our We with for slightly from rigs, third the were day averaged the segment the was again the which to margin fourth American consistent contracted averaged to third Direct into million, X American direct expectations which during the quarter North we the the we fourth the per quarter midpoint with decreased range. $XX,XXX per quarter. third beginning was exited the with almost quarter in per going $XX,XXX of North during the segments, per and XX,XXX XXX solutions rigs the number revenues guidance margins $XXX Total during

Looking contracted the for fiscal call, of we Solutions, today's quarter of have first American rigs to working. ahead North XXXX XXX as

rigs fiscal quarter all And American flat As such. point our we million sentiment revenue continues have previous North stated, working. quarter. XXX as our fleet from to end rigs under is million we to to solutions from contract, with $XXX expect down relatively $XXX said, and between in for to remain term That rig our XXX market backlog first current roughly the we count expect our

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

costs our in the margins $XXX flat between we to drive quarter. around the based continue a million direct our and we customers, we be structure. expected roughly compared Additionally, as roughly on in on operating with year first contracts fourth them. In margins range currently XX% Expectations to see performance Solutions have our fiscal material rig our to count segment, as $XXX current to of don't change our million American alignment quarter rigs contractual the North to expect expected

rigs not International Regarding is prepped as rigs September for generate we in our XXXX. Accordingly, the quarter segment, higher our the under from direct margin corresponding been of fiscal are being expect at exchange fourth in any first they quarter which we to there of XXXX not Saudi third little approximately expected XX revenue impacts, the XX, when our contract until start-up. margins quarter Hence, aside flat direct to Solutions roughly will be to for had quarter. delivered compared the change is and fiscal these Note year rigs foreign have first spud. than a

quarter a within range. of the which direct Turning of $X to during our offshore was generated segment. We guided million margin our approximately Gulf Mexico

first of of for again million to the fiscal XXXX $X that toward segment, it look margin. generate this $X million we quarter will expect between As we direct

to Now XXXX consolidated quarter full to for and items. like I'd certain transition and first the corporate year

the sheet, to of I maintain very include does change. First, stand-alone KCA this together given the to for want call of balance clear and this investment-grade our not into H&P for that credit our remainder strong metrics, with results. In combining not I impact any expected up and XXXX, will have Deutag our guidance that to strategy point is be

rig-related be Fiscal maintenance $XXX market-leading in million expected to XX% for of spend maintenance gross tender is remaining X planned are deploy rig prudently expenditures rig is We $XXX for X approximately award solutions conversions. upgrades continue approximately it Aramco. planned to growth to on in international expected invest the $X Saudi and equipment of rig capital including to active million, North balance million, around CapEx more North which opportunities. fleet the to with with capital American maintaining line and solutions, American of our walking international and XXXX bucket levels, The historical with and per primarily the represents

decrease [ a fiscal XXXX to our or actuals represents CapEx budget XX% Our $XXX million ]. XXXX

As towards reduction such, be be XXXX allocated to is this $XXX in for cash the future. of substantial fiscal a amount debt will Depreciation up expected frees that approximately million.

administrative and be are is expenses XXXX fiscal full to Our 'XX sales, general for slightly which $XXX approximately year million, expected down from actuals.

million tax customers, wellbore largely R&D results remains development projecting on power focused for be consolidated such automation, $XX management. estimated as fiscal operating of and we to in and million $XXX research upon drilling in solutions anticipate our expenditures to XXXX. investment $XXX Our cash quality are 'XX range Based We roughly in CapEx, a million.

Now our had than the placement short-term we our facility, with for approximately our investments acquisition. XX, a Included yielded are announced on plans KCA Drilling billion. of of short-term the September what the total our debt was under private This in position. more at availability We XX amount cash we substantially approximately Including XXXX. that ADNOC million financial reduction the $X.X and had liquidity after investments Deutag of which associated credit looking we balance anticipated originally through revolving is shares proceeds $XXX million. sold when $XXX September

with staggered have $X.X maturities bonds earmarked cash financing billion we We bond in KCA of a rate also did X unfunded of X%. acquisition. The result loan, years September. $XXX an have term These the an of are XX restricted interest Deutag the funds, X, million as the along and for roughly in with deal of average

continue XX it acquisition to expected expected right are for customary As conditions close -- roughly the around prior John to regulatory and are closing indicated, through thereafter. December to work we to close and the approvals sorry,

That raised the to million and supplemental reminder, base we amount roughly reduction share was million with million long-standing approximately plan of which returns shareholders. our of again maintain Also repurchases result last financing, achieved planned in $XX million deleveraging And to cash XXXX. year rates in $XXX the to million $XXX cash reduce dividend of level concludes of our of dividend, ADNOC available over during our fiscal $XX to along of equity together bond debt. for XXXX as and in on the with on our Inclusive in we'll Drilling back over part is CapEx suspended quarter, XXXX. as that, for sale, $XXX efforts, to questions. right by the Todd track. With reduce have a outlook Regarding we free our the the and still XXXX debt comments now turn that prepared funds it

with JPMorgan. come [Operator from will Jayaram Instructions] Arun Our question first

I rate plus thoughts rate time run wanted acquisition, million $XXX range of suspensions, XXXX? John, know you'd your would But KCA, incorporate some the of million I suspensions. in around of mentioned we're us Deutag. you the EBITDA of the synergies. potential get on X-year for EBITDA on some at highlighted view rate a the of you what a for to if rig of of terms KCA give the as run to about $XX you going what basis thinking run

any haven't given We additional really guidance. other

can't it we it what it Yes, months. months. XX really say X X months, quantify to now because months, -- right be that's could and up be they could Arun, -- for XX

clarity. give of there a too anything much of with it's range So to big really a you

I Fair highlighted that your for to talk North American John, Okay. Solutions. about outlook, you enough. wanted

activity outlook, in seasonality, the mentioned first some characterize expect kind with year, the How similar would maybe correctly? little of that you trends half I rig trend profile this year and your to have HP maybe that expected you flat back be -- maybe up this to bit. You of if count half to the of in as down a kind a maybe the

my perform mentioned we'll as remarks. think I in I No, you did, well, Arun. prepared And had

maintaining a we've gross target I look been when generate drilled, been bit the declining focus. But a you years. pick process, share delivering that during now been for really the even value really pricing, the hasn't several we've that market, think wells. have up are of at talking to margin trying that really in hard able that little to about customers being to and in We our complexity focused But XX% that of wells

laterals, more we're related hear complexities to that You X-mile the and drilling. there's laterals, X-mile more about wells various

a us capacity super-spec really value technology greater technology, for customers. deliver rigs, is having platform so helping And digital good

gross based so a while have. us again, opportunity just great share pick defending continue And XX% for it's to think target pricing, I this that to on up we margin

don't prices. a terms Of know gas that of there's course, lot nat in we

natural I if were an trend some think work. to in what based it's think I additional prices to right I to gas But think put in there's saw improve, we're to will And now, that well. pretty then think a environment, what XXXX. we rigs similar opportunity on back very perform seeing I

talk if because through just got if million favor. Number plans. kind it really do relationship question we was come the side in the coupled versus reach in you what of that modeled things of to we that one, thinking we originally the lens, way going help that my circle on we out, that July, -- that with reduction modeled or -- our just the said, the projections had at to whenever almost of associated price XXXX sales suspensions. on And by with has had at the look back of amount of you the in you to about closed. ADNOC have fact the we definitely model originally at back about goals whenever rig have signed some XXXX, our to and leverage Dave $XX we've CapEx us and the as deal terms stated look do and can the and deleveraging I look just original our and can than were on higher and our end we're in deal we had at million we limited not to what $XX what the shares, Drilling and purchase The about can't obviously, that it's them But clarity impossible the your things can't positive

significantly rates upon we bonds, financing. interest In on that that, addition the lower planned achieved than came originally in the the to that

for of got what by a items the So puts was the turn really we on clarity which anticipated, to which being leverage track below XXXX. we've had us end of on originally

did based get actually upon at the still which track the between level. 'XX. back to So on that we're to had look the deal, 'XX time right halfway projections we and We that in we

will question come from next Kim Our Barclays. Eddie with

the you flat potentially seasonality? U.S. gas into just that expectation second there wanted there kind rigs that, trajectory second down commentary get Does pushed before [indiscernible] back about next in that reflect the on down that market to more trending year. out trending in in trending? Or the the to land half increase it the into we half. commentary going that could half we second to sometime of I the rig count believe slightly second I activity of take on something should the half circle read that? read normal Should your the up was is the the place to or of don't in year. first commentary might an think Does half? the into some in that just XXXX? How that forecast gas is than

-- actually think we rigs of that last been the anticipating rig we've down in the of couple had in years. half Obviously, a over months the year but that's this range in what gas that is in will or that we're And an more. gas it's improvement hopeful isn't the And be of XXX mentioned, improvement we're prices, to expecting good second of now. prices. XX an this XXX over seen again, point. activity I we've Yes, And last there right trending not

up high able the to our related In picked in what share successful the high grading. to have historically that is case, budgets, we function think trend of to performance. a related been downward additional grade I being really has we've been

and terms these changing it this without the It logical seemed see would that commodity a us. But March, been is of then peak rig we that's in so today. QX April differentiation XX-rig then are to bit counts. little Again, about predict we of activity it's starts to of peaks where then QX and the it to and that seeing we're And from calendar in same we declining that increase slightly. know calendar last where anything you for time saw in trend frame how deck us a that year, hard beneficial

Got clear. it. follow-up just cash your flow very is for on KCA for next That's stand-alone Deutag. excluding My free HP, year expectations

of cash did $XXX flow You about million free this fiscal year.

For next year, by $XXX you year-over-year. decline guided CapEx million to almost

Just thinking a $XXX up if simple that reason that expect math, cash any there relates potentially cash for shouldn't we to to Or next we any, expectations? I level free should mean it your to is free flow flow be close be about of year? as million what,

right. exactly you're No,

and math of should to you're result efficiency earnings CapEx to with pretty out But come flow the I the a start consistently being in some capital being -- versus is free XXXX just you the $XXX when expected again, XX. as projections cash generated play in; just of million see anticipating think consistent XXXX. because of of simple be you XXXX we're margins -- cutting of margins into what should

You right is math on. simple can your --

from will One. come Our Doug Becker next Capital with question

about there XX,XXX Just pricing if revenue we're first XX,XXX be the guidance day for into a in cost side day the to per margins think in that the flat Is that start to terms quarter. stable of to U.S. or on on still costs? Just and shift fiscal off forward. going heading trying any to

we're modeling I is a and think equation. the side cost both that's similar, revenue what of

over XX our XX that per XXXX, I into around the think of what seen last is expectations kind going couple consistent to quarters with which day. you've of

the continue to in international, current suspensions rumblings That's really in Saudi shifting then And additional encouraging for to hear potential about environment. Arabia.

your Or Is from too any think market something into you context? intelligence, shouldn't likely? we it is much do that? read Just have you

the and rumors a I it. to commentary, and earlier the or ago a rigs. suspensions of KCA think by in so a not a on we question There there was we're same was and about an the comment all back it's X about obviously, -- earlier see month position suspension announcement

closing, X As us companies They this. appropriate we've so isn't to until stressed, still public announcement really comment. had for separate a on we're it actually

So on there any that. updates additional been hasn't

the XX We been have around rigs have in industry in there's that suspended. overall various that seen publications the

that point. thing Some that that's all this offshore, onshore, to. some It's the but can sees everybody at speak we same really else about really

appreciate it And but doesn't there's KCA been certainly, rigs Fair. Those you for suggests? can't conversations, like that bringing that speak your in. to I conversations Deutag, sound you're nothing the

Correct.

X ready in terms the are spud. in others has positions spud of various and have We the the country, in one to getting rigs

And so no, the not FlexRig. of we have had notifications any suspensions of

next from Scott Citigroup. will Gruber Our question with come

been and continue resiliency looks of it The here. really has our to domestic margins impressive

the the your of size would margins? flat modest impact day the in rates? over of stable bonus of you seeing contribution? bonuses that kind on kind performance-based the is increased, curious, the Or base I'm stability offsetting So light the And some margins, are how erosion domestic in breadth rates a and base flattish on the describe contribution model you the contract you decompose of basically the bonus relatively rig of of years, guys pushed and the X last

range. rate uplift with the quarters, to couple to what Yes. couple Scott, future, could change the been to regards range that see to something the day margins performance in on the now, historically, worked $X,XXX to hopefully, contract. it's right contracts, towards day. a kind we've trended side, straight do. get last of even that's a day and quarters, higher. of they to that's of last that the would But we that relative These an still the we're And higher under But end $X,XXX on $X,XXX really that hard to something of top I $X,XXX a of

Scott, other that here, to the it's a the is in think -- contract, win-win. thing stress thing to this performance I stress other

cost. And so at if also better, and lower faster doing getting to deliver they're when doing we're is a better, we're our customer at pace better wells because doing

win. parties as when as the that So we that And that's and means are quarter, said, our contract performance-based customers quarter of doing also had better the great constructed that a beauty both properly is last Dave well.

the That's capturing gains you think some capturing awards? into great model? that Great does to as base? And really the customer the that efficiency further change these have in the Any the model of terms you say, the You it in rate terms achieving, providing industry of efficiency able success, of guys a about gains benefit to are with next is benchmarks penetration the pushing how hear. bonus to generally, you XXXX, helping hear of the to in deliver. push across And are round private?

There's performance-based anything. think churn adoption. are and But have some also we've do rigs. customers period I some great had performance We've some base. Well, additional an think had adopt adoption I contracts we'll like with

If both contracts really we have it have today, board. that the well. majors, also across I you mean, are as look super it's investing performance-based private large and in companies at we the independents,

the -- to frankly, as for those important. greater it very had of curve So I with think and organization for aspect on on that. very also opportunity deploy increasing, lot there. a and reliability. really, in there's a nonperformance-based our opportunity associated drives our being us both positive technologies. industry of a digital There's both general also lot quite The because advantages of is to performance-based technologies, positive see the It adoption for that's a contracts. We upside safety It's there's great it really technology

continue feel the feel have in I trending the year. about and coming that good to adoption Again, direction we'll like it's So

will Our Jeff from come next with question TPH. LeBlanc

think outlook? we companies HP's fleet upstream into the to about get as as their of about ask, gains we drilling we drilling initially the high migrate the share forward to incorporated grades to have efficiency continue the how gains, that M&A been thought think related should as wanted opportunity preferred highlight than operators it slower And how of these appears additionally, to I programs should legacy then for contractor? stickiness

Yes.

one. greater of number I reliability. isn't I levels think performance anyone even industry the the and of higher that interested And in that than in I don't know think is

in that performance drilling forward. record out. that being going they're We and get what don't I doing cases, wells a complexity targeting see from see consistently well, is drilling that's level at whatever they great. well that to -- don't continue of and want customers, day feedback most I really reliably day in But less

X-mile I think X-mile to laterals. see to laterals continues complexity going more well increase. We

like You've that be It seen of of U-Turn the sort going of there's -- to drilling. more configurations. some seems the

the you share. when that and that that, people H&P to with are going so And grow best companies like means consider best the best rigs, technology

have exact the ago, think I fleet. up a maybe to then my X Tier the call I myself X X, you they're more acreage typically know numbers, asked towards or great I I have don't maybe prepared that's a is a clear definition don't best know going acreage. I and it today then as push Tier but to X, real to, additional that there's probably going drill less. think, that about greater shifting to going I XX% it again, mentioned first Tier but customers that remarks it their the and think for working in what Tier do years -- And so this, wells but and X, there. the fleet And efficiencies. I'd are remember other So even opportunity logically, just we Tier of drive speaking, was super-spec I X XX% makes then

want. super-spec so great in what are I better in again, that in requirements, So plays to unconventional U.S. and going place a H&P puts globally rigs And the really, the capability as think, here here be customers are going well. to

Kurt with from Hallead will Our come next Benchmark. question

cannibalize right? rig high-level some thought you. possibility you then quite kind these there's right, been but just drilling basically HP, not efficiency, XX% you're it can over of the curious, that what call, in U.S., process of to about high-level seeing terms total just the line. And that, that [indiscernible]? to really a thinking right? the in bit, and you that Just The the So how efficiency. existing rigs John, few do attrition this it thoughts now, I'm means on past the in fleet mean right improvement either well right, going this of and of on your there's for just talked rig count think remains kind of conjunction dying the I'm in of other it's Does a lives what We've So XXX% from off significant for HP, right? a flat? potential benefited the essentially rig

price going rig there's greater lot what at -- XX, drive XX, to do improve The a environment. downhole have well continue mean, over many we're are ends additional the think Well, technology, that are driving retired doubt for last and a XX I bringing I stronger commodity think don't I in those the things the again, reasons. any efficiencies rigs rigs how up to think to that I just look you U.S. efficiencies. of technologies the bear, years is going And been -- to as all

the about think continue we terms very past much now, we do we of rigs that's another XX, positioning closely. I so that then feel to that forward work. less we that had fleet that we that good XX I watch going be of where are the think I recently, that's -- most there'll something will But to think. and industry I have, -- And Yes. could in most And rigs. put XXX have the

So Anything would guys you about add? positioning our feel there. good

Just, Kurt, around Yes the only you efficiency. talked that. add, I'd about rig thing

X rig our count in Texas West of years that X You today. X we're count or look ago, within rigs at

resilient. the been Texas there's the gained count West pretty obviously, So years, markets in but the rig remained has efficiencies yet in past H&P X in

customers. less. the they as to John of that, bring, that think And when that, to they proposition I speaks the value it, that we that So performance want said, bring we not see more

little in But to have place do unconventional shifted of rigs context existing absolute placed just bit you guess of there as ultimately and and which of opportunity going be prospect a the to your spend shift appreciate the the follow-up of is had the your along not is KCA my a I natural in on mix displacement color. So that see I right? kind then set to unconventional to that gas, Saudi forward? and a the in then have contracts their off great. the Maybe front they've of it rigs. question bit you Saudi you for a Middle oil Deutag. on East that relates lines, taking That's these your spec

is early times, side of unconventional And on when you think Saudi. are expert on I'm Australia. Saudi what If doing an plays. the that sense. makes are in we're I in do what of sense the rigs the is doing But the unconventional conventional conventional category. into to not in about, drilling, think that there's both are course, in types same the think pardon my is nothing I but and And it's we're of FlexRig rigs that drilling that that doing which or unconventional unconventional work is going rig me, -- which Argentina,

even I countries to answers that. to not. And to I doing -- think conventional think stage. But may be unconventional the probably logically, to gas. it are at we conventional your and if oil question in fleet mention will I in there we think that hesitate have or rig -- some I do this we more don't think just the opportunities continue another work that conventional drill general, know

mechanical conventional in from So ways, was drilling looking maybe the U.S., gone I'm looking starting in is to just well gone I we've there should unconventional, [indiscernible] in again, East. if and back generally, be similar the at curious rigs And here right? some Middle from we transpired a evolve right? at we've X Yes, just to what's trend

So incremental. yes, all it's

Yes.

wells a There's that size, Middle there's types XX,XXX, and or drill pressure, XX,XXX oil the night in I think rating. conventional of pressure wells the a in U.S. the difference we in the wells difference well, casing just conventional those with the the in that East conventional the to drilled day compared work of are types the that -- and that complexity dramatic drilled wells, are being depth, the there's

a look be the entirely the U.S. East we've had in U.S., way I said. we have lot market frankly. least at an to Middle there's in than It's it quite ever different than the the So in at what

Thomas will question Seaport last with Research come Our Curran Partners. from

specifically you emissions what XX%. by data I the your to wanted in you about to that opening point Could had gears remarks John, the expound shift technology, to to upon GHG returned having reduced contributed shared with update on term, main strategy drilling us U.S. mix for your would towards fuel for to kind sort move drivers fleet over the you of were? rate fleet? what like [indiscernible] of the the And long powering then

time. efficiency per more is of that fleet, just better, of the getting our part drilling less Tom, in feet day

rigs the effort collaborative that more is it's on line customer. And high with having a part power. Another of really,

they need. we So the forward, and able to to that going power want they solutions provide be want

and diesel using hand-in-hand natural And so whatever with whether choose, whatever all on gas work willing our that that's that to we've explored kinds of working kind and makes battery, they high providing sense them. combination or for customers really all or that's of line with we're technology customers

thing powering our do other that The with our have I would engines. on-off of we automation add is associated

undergoing the be casing running you're we're depending beauty example. based adjusted that is there actually or is whether And going an so of that load engine amount whether the upon load to as the drilling on you're ahead

With is X you're to load, going lesser X running. X it engine, have a to is, And have don't you a an load, person or or engines a to turn going you're The autonomously, automatically. have send it with beauty it higher does off or turn so to running. on does engines down X it

So advantages. that's one of the

I the energy Dave think what the the the said, not paying we're end of at day, for location. on

move or So we're continuing the our and line direction right lower in power, to definitely whether forward. our we're trending whether it's natural as support But it's to diesel gas, what to do wants customer emissions high going we and do.

of the give you high us or line how fueled on Could idea natural within many being current an it. by active are fleet rigs Got gas? power

to gas year. don't XX more power at number about XX is small natural looking it's ways next what just diesel was fuel quite rigs. hybrid There a some Again, remember some but it's a think for that. talking I be of time but expensive, gas line I it's We'll to mix. is, the relatively count that shifting be natural a number that there and is saw from our we're are going between last I us, high natural gas, The engines. power a,

X Last me. stay Got it. We'll tuned that. for for

the step you are D, for of own seeing strategy, shifted your your in of of to solving you and opportunities taking dog growth or they're their aggressive if goals via is inventory into that super-spec of the a already creating U.S.? more share lion's rigs? now focus to the with bit any become international big because think As guys pivoting available any behavior if who approach you're the they KCA who have wondering pending doing it acquisition comes tenders inventory their that pursuing either your competitors your some of market the Maybe idle peers therefore, up seeing the bid change for it and international to of on and remainder inventory opportunity. I'm of exploring been their when just markets, an start idle that had the of super-spec start foreign

of some our of the There peers have examples some in a been assets. few are where U.S. moving their

markets. our footprint some with that countries I and that weren't to them KCA some send feel that, we were With exposure have to Deutag, exposure before to that possible. definitely like we've assets is to think basin active, didn't particular that time assets over they we FlexRig a think with but got larger in do I fleet. decided idle, as successful been has international

So mobilize think, U.S. to markets, our opportunity. to present a like international I of additional did the we out ability the Saudi, great in ability FlexRig

sure are I'm well. so And others as that looking at

call Thank over you. closing for turn to the At any this remarks. time, to I'd or like John back additional

continue safety a to culture. a you, in company is company really All In closing execute That's Thank our today, to and with approach customer-centric ingrained to going Todd. right. strive focus. the

coming opportunities the our come integration efforts said, additional Deutag to taking closing forward people's and look that, appreciate and the the KCA the provide quarters. I us that with of the acquisition on As acquisition advantage will opportunities really that up front. we in we've the will

do. the same and lot doing keeping for always, got our to delivering continuing as we customers at the We value the H&P we've focus way, have on. everything a on it going At safety and forefront ongoing, of time, integration pre-close

for later. Thank thank joining again So us, you and you talk to you. we'll

your for Helmerich & concludes Fourth Quarter the Payne Call. Thank This participation. Earnings Fiscal you

disconnect time. at You may any