TULSA, Okla., Jan. 26 /PRNewswire-FirstCall/ -- Helmerich &
Payne, Inc. reported record net income of $50,814,000 ($0.96 per
diluted share) from operating revenues of $255,388,000 for its
first fiscal quarter ended December 31, 2005, compared with net
income of $39,310,000 ($0.77 per diluted share) from operating
revenues of $174,679,000 during last year's first fiscal quarter
ended December 31, 2004. Included in this year's first quarter net
income are gains from the sale of portfolio securities of
$1,721,000 ($0.03 per diluted share). Last year's first quarter net
income included $16,060,000 of gains from the sale of portfolio
securities and $5,500,000 net income from the sale of two drilling
rigs, or a total of $21,560,000 ($0.42 per diluted share). Income
from the Company's U.S. land rig operations continued to rise
significantly, with cash margins per rig day increasing by 18% over
the previous quarter. Pre-tax operating income for this year's
first quarter in the U.S. land rig operations was $70,991,000,
compared with $25,588,000 for last year's first quarter, and
$56,028,000 for last year's fourth quarter. Average revenue per rig
day rose to $20,198 and cash margins per rig day to $11,019 for
this year's first quarter, compared with $13,363 revenue per rig
day and $5,563 cash margin per rig day for the first quarter of
last year. During the fourth quarter of fiscal 2005, average rig
revenue per day was $18,563 and average rig margin per day was
$9,317. Average U.S. land rig utilization during the first quarter
of FY 2006 was 97%, compared with 92% during last year's first
quarter, and 95% during last year's fourth quarter. U.S. offshore
platform operating income increased to $5,111,000, compared with
$4,168,000 for last year's first quarter, and $4,720,000 for last
year's fourth fiscal quarter. Although active during the fourth
quarter of 2005, three rigs that were at various stages of
mobilization during that quarter began regular drilling operations
at higher revenue and margins per day during the first quarter of
fiscal 2006. The more profitable activity helped offset the loss of
activity and income of Rig 201 which was damaged by Hurricane
Katrina. Utilization for the first quarter of fiscal year 2006 was
64%, compared with 56% during last year's first quarter, and 65%
for last year's fourth quarter. International operating income rose
to $9,302,000 for the first quarter of 2006, compared with
$6,197,000 for the first quarter of fiscal year 2005, and
$3,910,000 during the fourth quarter of fiscal 2005. Most of the
sequential improvement in operating income is a result of improved
profitability in Ecuador and Venezuela during the first quarter,
and lower fourth quarter income resulting from a $1.9 million
non-recurring accounting adjustment. Utilization for the first
quarter of fiscal year 2006 was 83%, compared with 71% during last
year's first quarter, and 85% for last year's fourth quarter. The
first quarter of fiscal 2006 is the first period that the Company
is required, according to FAS 123(R), to include stock-based
compensation expense in its financial statements. As a result,
general and administrative expense for the first quarter included
$2.7 million of pre-tax stock-based compensation expense. Pre-tax
stock-based compensation expense for the second, third, and fourth
quarters of 2006 is expected to total approximately $3.9 million,
$1.6 million, and $1.6 million, respectively. The first two
quarters of fiscal 2006 include expense amortization acceleration
brought about by the previously announced retirement of a Company
executive on March 1, 2006. The Company also announced today that
the number of customer commitments for the construction of
additional FlexRigs(R) continues to increase. A total of 14
exploration and production companies have now committed to 54 new
FlexRigs. These include ten new FlexRig3s and 44 new FlexRig4s, all
of which will be built as a result of contracts executed with
durations of at least three years. The total investment required
for the construction of the 54 new rigs is estimated at $609
million. The first of the 54 new rigs commenced operations earlier
this month in western Colorado. Approximately 30 new FlexRigs are
expected to be completed by September 30, 2006, the end of the
Company's fiscal year. At that time, the Company expects to be
delivering new FlexRigs at the rate of four per month. Company
President and C.E.O., Hans Helmerich commented, "The Company
experienced solid increases in operating income across the board in
its three business segments. We are very upbeat about Helmerich
& Payne's position in this strong up cycle. Including the
newest FlexRig4 that recently commenced operations in Colorado, the
54 announced new builds will provide a 42% increase in total units
to our entire drilling fleet over the next 18 months. Market
leadership in new build technology and the resulting orders for new
rigs provide exciting shareholder growth prospects and outstanding
investment returns with attractive, fixed contract terms."
Helmerich & Payne, Inc. is a contract drilling company that
owns 91 U.S. land rigs, 11 U.S. platform rigs located in the Gulf
of Mexico, and 27 international rigs, for a total of 129 rigs.
Included in the total fleet of 129 rigs are 51 H&P-designed and
operated FlexRigs. Helmerich & Payne, Inc.'s conference
call/webcast is scheduled for this morning and can be accessed at
http://www.hpinc.com/ under Investors and will begin at 11:00 a.m.
ET (10:00 a.m. CT). If you are unable to participate during the
live webcast, the call will be archived for a year on H&P's
website indicated above. The information to be disclosed in the
conference call and webcast shall include forward-looking
statements within the meaning of the Securities Act of 1933 and the
Securities Exchange Act of 1934. Such forward-looking statements
are subject to certain risks and uncertainties, as disclosed by
Helmerich & Payne, Inc. from time to time in its filings with
the Securities and Exchange Commission. As a result of these
factors, Helmerich & Payne, Inc.'s actual results may differ
materially from those indicated or implied by such forward- looking
statements. *FlexRig(R) is a registered trademark of Helmerich
& Payne, Inc. HELMERICH & PAYNE, INC. Unaudited (in
thousands, except per share data) Three Months Ended September 30
December 31 CONSOLIDATED STATEMENTS OF INCOME 2005 2005 2004
Operating revenues: Drilling - U.S. Land $157,335 $172,754 $109,188
Drilling - U.S. Offshore 26,011 29,520 20,356 Drilling -
International 47,180 50,257 42,471 Real Estate 2,684 2,857 2,664
233,210 255,388 174,679 Operating costs and expenses: Operating
costs 137,188 140,596 111,252 Depreciation 25,643 22,923 23,262
General and administrative 10,496 11,938 9,246 173,327 175,457
143,760 Operating income 59,883 79,931 30,919 Other income
(expense): Interest and dividend income 1,984 2,530 961 Interest
expense (2,960) (2,580) (3,309) Gain on sale of investment
securities 656 2,720 26,349 Income from asset sales 1,160 973
10,816 Other (610) (513) (2) 230 3,130 34,815 Income before income
taxes and equity in income of affiliates 60,113 83,061 65,734
Income tax provision 24,553 32,802 27,130 Equity in income of
affiliates net of income taxes 561 555 706 NET INCOME $ 36,121 $
50,814 $ 39,310 Earnings per common share: Basic $ 0.70 $ 0.98 $
0.78 Diluted $ 0.68 $ 0.96 $ 0.77 Average common shares
outstanding: Basic 51,616 51,993 50,543 Diluted 52,748 53,087
51,256 HELMERICH & PAYNE, INC. Unaudited (in thousands)
CONSOLIDATED CONDENSED BALANCE SHEETS 12/31/05 9/30/05 ASSETS Cash
and cash equivalents $ 301,578 $ 288,752 Other current assets
245,673 211,045 Total current assets 547,251 499,797 Investments
192,166 178,452 Net property, plant, and equipment 1,018,971
981,965 Other assets 3,387 3,136 TOTAL ASSETS $1,761,775 $1,663,350
LIABILITIES AND SHAREHOLDERS' EQUITY Total current liabilities $
116,227 $ 89,481 Total noncurrent liabilities 303,076 294,631
Long-term notes payable 200,000 200,000 Total shareholders' equity
1,142,472 1,079,238 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$1,761,775 $1,663,350 HELMERICH & PAYNE, INC. Unaudited (in
thousands) Three Months Ended December 31 CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS 2005 2004 OPERATING ACTIVITIES: Net income
$ 50,814 $ 39,310 Depreciation 22,923 23,262 Changes in assets and
liabilities (11,529) 10,546 Gain on sale of assets (3,557) (37,165)
Other 1,823 (1,140) Net cash provided by operating activities
60,474 34,813 INVESTING ACTIVITIES: Capital expenditures (53,654)
(10,507) Proceeds from sale of assets 4,528 87,553 Net cash
provided by (used in) investing activities (49,126) 77,046
FINANCING ACTIVITIES: Dividends paid (4,291) (4,166) Proceeds from
exercise of stock options 3,718 4,535 Excess tax benefit from
stock-based compensation 2,051 --- Net cash provided by financing
activities 1,478 369 Net increase in cash and cash equivalents
12,826 112,228 Cash and cash equivalents, beginning of period
288,752 65,296 Cash and cash equivalents, end of period $301,578
$177,524 SEGMENT REPORTING Three Months Ended September 30,
December 31, 2005 2005 2004 (in thousands except days and per day
amounts) U.S. LAND OPERATIONS Revenues $157,335 $172,754 $109,188
Direct operating expenses 82,852 84,215 66,978 General and
administrative expense 2,543 3,082 1,866 Depreciation 15,912 14,466
14,756 Operating income $ 56,028 $ 70,991 $ 25,588 Activity days
7,994 8,035 7,588 Average rig revenue per day $ 18,563 $ 20,198 $
13,363 Average rig expense per day $ 9,246 $ 9,179 $ 7,800 Average
rig margin per day $ 9,317 $ 11,019 $ 5,563 Rig utilization 95% 97%
92% U.S. OFFSHORE OPERATIONS Revenues $ 26,011 $ 29,520 $ 20,356
Direct operating expenses 17,443 20,308 12,847 General and
administrative expense 1,103 1,437 834 Depreciation 2,745 2,664
2,507 Operating Income $ 4,720 $ 5,111 $ 4,168 Activity days 654
644 563 Average rig revenue per day $ 29,782 $ 36,339 $ 25,793
Average rig expense per day $ 17,838 $ 22,986 $ 14,251 Average rig
margin per day $ 11,944 $ 13,353 $ 11,542 Rig utilization 65% 64%
56% SEGMENT REPORTING Three Months Ended September 30, December 31,
2005 2005 2004 (in thousands except days and per day amounts)
INTERNATIONAL OPERATIONS Revenues $ 47,180 $ 50,257 $ 42,471 Direct
operating expenses 36,870 35,693 30,855 General and administrative
expense 794 606 653 Depreciation 5,606 4,656 4,766 Operating income
$ 3,910 $ 9,302 $ 6,197 Activity days 2,024 2,028 1,823 Average rig
revenue per day $ 19,168 20,285 $ 19,208 Average rig expense per
day $ 14,416 13,512 $ 13,346 Average rig margin per day $ 4,752
6,773 $ 5,862 Rig utilization 85% 83% 71% Per day calculations for
international operations exclude gains and losses from translation
of foreign currency transactions. Operating statistics exclude the
effects of offshore platform and international management
contracts, and do not include reimbursement of "out-of-pocket"
expenses in revenue per day, expense per day and margin
calculations. Reimbursed amounts were as follows: U.S. Land
Operations $ 8,943 $ 10,463 $ 7,789 U.S. Offshore Operations $
4,213 $ 3,753 $ 1,471 International Operations $ 4,207 $ 5,125 $
3,099 REAL ESTATE Revenues $ 2,684 $ 2,857 $ 2,664 Direct operating
expenses 583 801 1,027 Depreciation 589 603 562 Operating income $
1,512 $ 1,453 $ 1,075 The following table reconciles operating
income per the information above to income before income taxes and
equity in income of affiliates as reported on the Consolidated
Statements of Income (in thousands). Three Months Ended September
30, December 31, 2005 2005 2004 Operating income U.S. Land $ 56,028
$ 70,991 $ 25,588 U.S. Offshore 4,720 5,111 4,168 International
3,910 9,302 6,197 Real Estate 1,512 1,453 1,075 Segment operating
income $ 66,170 $ 86,857 $ 37,028 Corporate general &
administrative (6,056) (6,813) (5,893) Other depreciation (791)
(534) (671) Inter-segment elimination 560 421 455 Operating income
$ 59,883 $ 79,931 $ 30,919 Other income (expense): Interest and
dividend income 1,984 2,530 961 Interest expense (2,960) (2,580)
(3,309) Gain on sale of investment securities 656 2,720 26,349
Income from asset sales 1,160 973 10,816 Other (610) (513) (2)
Total other income (expense) 230 3,130 34,815 Income before income
taxes and equity in income of affiliates $ 60,113 $ 83,061 $ 65,734
FCMN Contact: Marilyn.Hyatt@hpinc.com DATASOURCE: Helmerich &
Payne, Inc. CONTACT: Doug Fears, +1-918-588-5208, or Juan Pablo
Tardio, +1-918-588-5383, both of Helmerich & Payne, Inc. Web
site: http://www.hpinc.com/
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