Helmerich & Payne Q4 2021 Earnings Report
Key Takeaways
Helmerich & Payne reported a net loss of $79 million, or $(0.74) per diluted share, on operating revenues of $344 million for the quarter ended September 30, 2021. The company is optimistic about increased rig activity and pricing improvements heading into 2022, driven by higher commodity prices and capital discipline.
North America Solutions segment exited Q4 2021 with 127 active rigs, up 5% during the quarter.
Q1 2022 North America Solutions rig count is expected to exit between 152-157, up over 20%.
Quarterly North America Solutions operating gross margins decreased $6 million to $69 million sequentially.
Company sold eight FlexRig® land rigs to ADNOC Drilling for $86.5 million and made a $100 million cornerstone investment into ADNOC Drilling's IPO.
Helmerich & Payne
Helmerich & Payne
Helmerich & Payne Revenue by Segment
Helmerich & Payne Revenue by Geographic Location
Forward Guidance
Helmerich & Payne anticipates improved demand for drilling solutions in 2022, with capital discipline and strong commodity prices strengthening the industry. The company expects increased rig activity and pricing, particularly in North America, and is prepared to reactivate long-idled rigs to meet demand. Initial capex budget for fiscal 2022 is set between $250 and $270 million.
Positive Outlook
- North America Solutions operating gross margins are expected to be between $75-$85 million in Q1 2022.
- Exit Q1 2022 with between 152-157 contracted rigs in North America Solutions.
- International activity is expected to improve in the coming quarters.
- Signed agreements with YPF to put four rigs to work in Argentina commencing in fiscal 2022.
- Capital expenditures of approximately $250 to $270 million are expected for fiscal year 2022.
Challenges Ahead
- North America Solutions operating gross margins include approximately $15 million in estimated reactivation costs for Q1 2022.
- International Solutions operating gross margins are expected to be between $(2)-$0 million in Q1 2022, exclusive of any foreign exchange gains or losses.
- Offshore Gulf of Mexico operating gross margins are expected to be between $6-$8 million in Q1 2022.
- Rig churn among customers was realized during the fiscal fourth quarter.
- Costs associated with reactivating rigs adversely impacted operating results during the quarter.
Revenue & Expenses
Visualization of income flow from segment revenue to net income