Tulsa World: HP profits at $53 million

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HP profits at $53 million

By ROD WALTON World Staff Writer
Published: 7/31/2009 2:25 AM
Last Modified: 7/31/2009 4:11 AM

Helmerich & Payne Inc.'s quarterly profits were down more than half from a year ago but still totaled $53 million for the period ending June 30, the Tulsa-based contract drilling company announced Thursday.

A long-standing impasse with Venezuela's state-run oil company, Petroleos de Venezuela SA, also seemed to be improving, with Helmerich and Payne indicating that PDVSA paid $48 million for rig operations there. Yet the company is still owed $97 million by PDVSA and has idled nine of its 11 rigs in Venezuela.

"We've always said that it's a country we have a great history in, and we would like to see things return to normal and go back to work," CEO Hans Helmerich said during a conference call to discuss the quarterly report. "We've always said we need to be caught up."

Helmerich & Payne's net income for its fiscal third quarter was well below the $125.4 million generated during the same period in 2008. Revenues were down nearly 25 percent to $387.8 million, primarily due to a drop in U.S. land drilling efforts.

"The first half of calendar 2009 has seen a dramatic plunge in U.S. land rig activity driven by lower natural gas prices and resultant capital spending reductions by exploration and production companies," Helmerich said in a statement.

"We're encouraged by what appears to be a recent bottoming out in the industry rig count."

U.S. rig utilization fell to 51 percent in the quarter, compared with 96 percent during the same period last year. Helmerich & Payne

has 110 rigs contracted and 100 idled in its domestic land segment.

The company's international land operating segment also lost $8.3 million. Most of that red ink was due to a decision not to record revenue from Venezuela until the cash is collected, according to the earnings report.

On the plus side, Helmerich & Payne announced new contracts with Schlumberger Ltd. for work in Mexico. Four of H&P's FlexRigs will be put to work for at least two years under the deal, according to the report.

A fifth FlexRig is being prepared for contract work in Africa. Helmerich and Payne's patented FlexRig is known for being able to drill horizontally and offer more efficiency than older models.

"We are pleased about the opportunity to increase our international exposure to the FlexRig," Helmerich said.

Many rigs idled in the U.S. can be put to use overseas easily, officials added.

Net income for the fiscal year's first nine months totaled $302 million, according to the report. Last year, Helmerich & Payne generated $335 million in profit by this point.

Rod Walton 581-8457
rod.walton@tulsaworld.com By ROD WALTON World Staff Writer

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