Significant operations in successful oil fields and top-of-the-line drilling equipment kept Helmerich & Payne Inc. as the top stock for area investors for the second year in a row.
"Being a conservatively run and well-run company, it helps me sleep better at night," said Dan Safranek, a certified financial planner with Safranek & Associates.
Tulsa-based Helmerich & Payne focuses on contract drilling for oil and gas exploration and production companies. The company is known for its high-tech FlexRigs and is operating in many of the hottest plays in the current production boom in the United States.
Safranek took a look at Helmerich & Payne's operations and saw success in the three crucial areas: reasonable valuation with room to grow, limited volatility and the ability to grow in a still sluggish economy.
"You mix all those together, it makes a very tasty cookie," Safranek said.
Helmerich & Payne reported a net income of $266 million in its most recent quarter ending June 30. That's about twice the net income reported in the same quarter last year.
The ongoing domestic oil and gas boom is helping grow the business, as well as rising oil prices, said Phillip Bell, vice president of Financial Planning Resources Inc. Bell also ranked Helmerich & Payne high on his list.
"We see continued demand for drilling, and H&P is positioned in a lot of great oil and gas areas," Bell said.
The FlexRig has been a great asset for the company, as well, Safranek said. As more exploration and production has been in shale plays and hard-to-reach areas, the advanced rigs have been a necessity.
"As drilling methods become more complex and more expensive ... that's right in HP's wheelhouse of what they build," Safranek said. "I think that just further cements their leadership in their industry."
The company had 329 land rigs in operation, with 29 of those working internationally. Of the total land rigs, 300 were the Helmerich & Payne-designed and -operated FlexRig.
Many of the investors polled for this guide ranked Helmerich & Payne, though none of them ranked it No. 1. Safranek said he thinks Helmerich & Payne is in a solid position, but the volatility of the oil and gas industry and international oil prices give some pause.
"If something happened to the broader company that slowed these down, but that's a long shot. I see more of a possibility of things speeding up," Safranek said. "Any type of pressure would come from dramatic drop in oil demand."
Bell said drops in oil prices could affect Helmerich & Payne, but he expects oil prices to remain relatively high.
Helmerich & Payne Inc.
Address: 1437 S. Boulder Ave., Suite 1400, Tulsa, OK, 74119-3623
Phone: 918-742-5531
Web: www.hpinc.com
President/CEO: Hans Helmerich
CFO: Juan Pablo Tardio
Symbol (Exchange): HP (NYSE)
Operation: Contract drilling of oil and gas wells on land and offshore rigs
Jerry Wofford 918-581-8310
jerry.wofford@tulsaworld.com
Original Print Headline: Advanced in drilling
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