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Article Excerpt
DOUG BECKER, ANALYST, BANC OF AMERICA SECURITIES: Our next presentation is by Helmerich & Payne. As you are aware, we are required to make a number of conflict-of-interest and related disclosures in connection with our participation in this conference and the companies we may discuss. If you would like to review these important disclosures, please pick up the packets containing the Public Appearance Disclosures at the back of this room. A pdf package can be accessed by those of view viewing the presentation via webcast.
Presenting today we have John Lindsay, who is Executive Vice President of US and International Operations. To his left is Juan Pablo Tardio, who fills the Investor Relations function.
And with that, I'll turn it over to John.
JOHN LINDSAY, EVP, US & INTERNATIONAL OPERATIONS, HELMERICH & PAYNE, INC.: Thanks, Doug, and good morning. Great seeing you, by the way; nice conference so far. What I'll do is go through a short presentation and talk a little bit about why H&P, why we think H&P's well positioned to weather the current market and also in great position to improve the Company's position in the future. Then we'll have some Q&A.
And our forward-looking statement. Starting off with our global rig fleet and the growth in the fleet, the blue representing the growth in US land. That has been the growth driver for the Company as it relates to our ability to build FlexRigs since 1998. And in general, looking at, at least in the last quarter, being the most profitable driller of the four largest drillers in terms of operating income.
I think what's most interesting here is our two largest competitors are working in the 250- to 270-rig count range, active rigs. And at this type stage, I think we are around 170 to 172, so quite impressive, and again, we think that has to do with the quality of the rig fleet and the performance.
We've had a differentiated approach, and we've been working on this approach for at least 10 years. Rolled out our first FlexRigs in 1998, six in '98 and 12 in 2001, and then the HP Drive Flex3's from 2002 to 2004 for the first 50 rigs. And the strategy has been to differentiate based on performance, being able to deliver wells more quickly, be able to move rigs more quickly, deliver more wells in the course of a year for the customer. At the same time, doing all that more safely and in a more environmentally friendly way. Ultimately, we've been able to grow our market share--I'll show you something on that in just a moment--and in the end, delivering great value for our shareholders.
This is the growth ramp just in US land, and you can see back in 2001 where we had just under 50 rigs in the fleet, in the active fleet. And again, going back to the comparison of our two largest competitors, at that stage I believe they each had around 250 to 270 rigs. You can see the growth that we've been on. We've gone from a 3% market share in 2001 of an 1,100 rig count fleet to a 9% to 10% market share today. So quite a growth ramp.
This utilization chart, I think, is pretty impressive in that in the high times back in 2006, we were essentially at 100% utilization. The competitors were close to 90%. And then, of course, as the market calmed down a little bit, cooled off in 2007, we continued to maintain a 93% utilization. FlexRigs since 1998 have enjoyed a 98% utilization. And you can see over time we've been able to widen the gap in terms of utilization.
And I think what we've been able to do since 2005 is essentially double the rig fleet from 90 working rigs to 180 working rigs by adding new builds. That growth, represented in the yellow, 100% growth, is about a $1.5 billion investment. Compared to our competition, where they have invested heavily in the business as well, but what you see represented by the purple line is they grew the fleet, but then, of course, the fleet shrunk, which in...
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