Helmerich & Payne(US:HP)2021-07-28 21:07Operations and Rig Count - As of June 30, 2021, the company operated a total of 281 drilling rigs, with 242 in North America Solutions, 7 in Offshore Gulf of Mexico, and 32 in International Solutions[128] - The active rig count in North America Solutions increased from 47 rigs in August 2020 to 121 rigs by June 30, 2021, reflecting a significant recovery in customer capital spending[134] - The company had 113 idle super-spec rigs out of a total of 232 super-spec FlexRig® rigs, resulting in a utilization rate of 51% as of June 30, 2021[135] - The average active rigs in the North America Solutions segment increased to 119 for the three months ended June 30, 2021, a 33.7% increase from 89 in the same period of 2020[159] - Average active rigs in the North America Solutions segment decreased by 35.0% to 102 for the nine months ended June 30, 2021, compared to 157 in the same period of 2020[178] Financial Performance - The company reported a net loss of $56.7 million ($0.53 loss per diluted share) on operating revenues of $332.2 million for the three months ended June 30, 2021, compared to a net loss of $46.0 million ($0.43 loss per diluted share) on revenues of $317.4 million for the same period in 2020[153] - The company reported a net loss from continuing operations of $257.9 million ($2.40 loss per diluted share) on operating revenues of $874.8 million for the nine months ended June 30, 2021, an improvement from a net loss of $435.7 million ($4.05 loss per diluted share) on revenues of $1.6 billion in the same period of 2020[172] - Cash flows from operating activities were approximately $89.8 million for the nine months ended June 30, 2021, a decrease from $446.3 million in the same period of 2020[198] - Total operating revenues across other operations decreased by 18.5% to $31.4 million for the nine months ended June 30, 2021, compared to $38.5 million in 2020[192] Revenue and Expenses - The North America Solutions segment reported operating revenues of $281.1 million for the three months ended June 30, 2021, a 10.5% increase from $254.4 million in the same period of 2020[159] - Direct operating expenses in the North America Solutions segment rose to $206.2 million, a 35.1% increase from $152.7 million in the prior year[160] - Offshore Gulf of Mexico segment operating revenues decreased by 14.4% to $94.9 million for the nine months ended June 30, 2021, compared to $110.8 million in the same period of 2020[183] - International Solutions segment operating revenues decreased by 32.0% to $15.3 million for the three months ended June 30, 2021, while direct operating expenses decreased by 39.5% to $16.7 million[168] - International Solutions segment operating revenues plummeted by 66.2% to $40.6 million for the nine months ended June 30, 2021, down from $120.2 million in 2020[187] Cost Management and Savings - The company reduced its annual dividend by approximately $200 million and cut capital expenditures by about $145 million in fiscal year 2020 to adapt to lower activity levels[141] - The company anticipates further cost reductions, with an estimated annualized savings of $7 million expected to be realized in calendar year 2022[141] - The company incurred $2.1 million in restructuring charges during the three months ended June 30, 2021, significantly lower than the $15.5 million incurred in the same period of 2020[157] - The company incurred $3.9 million in restructuring charges for the nine months ended June 30, 2021, a significant decrease from $15.5 million in the same period of 2020[176] Liquidity and Debt - The company had cash and cash equivalents of $557.8 million and availability under the 2018 Credit Facility of $750 million, totaling approximately $1.3 billion in near-term liquidity as of June 30, 2021[141] - The maturity of the 2018 Credit Facility was extended from November 13, 2024, to November 12, 2025, with $680 million of commitments remaining[144] - As of June 30, 2021, the company had $370.6 million in cash and cash equivalents, alongside $187.3 million in short-term investments[197] - The company issued approximately $487.1 million in unsecured senior notes with a 4.65% interest rate, maturing on March 19, 2025[208] - The long-term debt to total capitalization ratio was 13.9% as of June 30, 2021, compared to 12.8% as of September 30, 2020[211] Impairment and Charges - The company recognized a non-cash impairment charge of $56.4 million during the nine months ended June 30, 2021, related to the reclassification of certain rigs as held-for-sale[145] - An asset impairment charge of $56.4 million was recorded for the nine months ended June 30, 2021, compared to $563.2 million in the same period of 2020[175] - The company recorded no asset impairment charges during the nine months ended June 30, 2021, compared to $156.7 million in impairment charges in the same period of 2020[189] Market Conditions and Challenges - The company experienced a dramatic decline in crude oil prices during 2020, with prices falling from approximately $60 per barrel to the low-to-mid-$20 range, leading to a nearly 50% reduction in customer capital budgets[133] - The ongoing COVID-19 pandemic has led to increased costs due to labor shortages and logistics constraints, impacting the company's operations and financial performance[137] - The contract drilling backlog decreased to $582.5 million as of June 30, 2021, from $658.0 million as of September 30, 2020, with approximately 65.2% expected to be fulfilled in fiscal year 2022 and thereafter[150] Administrative and Research Expenses - Selling, general and administrative expenses decreased to $41.7 million for the three months ended June 30, 2021, down from $43.1 million in the same period of 2020[155] - Selling, general and administrative expenses decreased to $120.4 million for the nine months ended June 30, 2021, down from $134.9 million in the same period of 2020[174] - Research and development expenses increased to $5.6 million for the three months ended June 30, 2021, compared to $3.6 million for the same period in 2020, reflecting a 55.6% increase[154] - Research and development expenses remained relatively stable at $16.5 million for the nine months ended June 30, 2021, compared to $16.7 million in the same period of 2020[173] Compliance and Financial Position - As of June 30, 2021, the company was in compliance with all debt covenants and expects to maintain compliance in the next quarter[207] - There have been no significant changes in the company's financial position since September 30, 2020[212] - The company has no off-balance sheet arrangements as defined in Regulation S-K[213]