Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Natural Gas | Oil

Helmerich & Payne sees 10% reduction in producer capex spending in 2020

LNG | Natural Gas | Natural Gas (North American) | Oil | Crude Oil | Oil Risk

A national climate policy or US energy dominance?

LNG | Natural Gas | NGL

Platts LNG Alert

Capital Markets | Commodities | Oil | Crude Oil | Refined Products | Fuel Oil | Gasoline | Jet Fuel | Naphtha | Marine Fuels | Equities | Financial Services | Banking | Non-banks | Private Markets

North American Crude Oil Summit, 3rd annual

Oil | Crude Oil

Libya's oil output down to less than 125,000 b/d amid terminal blockade: NOC

Helmerich & Payne sees 10% reduction in producer capex spending in 2020

Highlights

Expects 14% decline in drilled wells

Grows market share in 2019

Charleston, South Carolina — Oklahoma-based oil and gas driller Helmerich & Payne said Wednesday it was able to grow its market share in the US land markets in 2019 but is preparing for ongoing challenges in 2020 as producers continue to tighten spending.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

"Customer conversations lead us to believe there will be a decrease of approximately 10% in [producer capital spending] in calendar 2020 compared to calendar 2019 levels," CFO Mark Smith said during an earnings call. "This implies that the number of wells drilled in 2020 would decline by 2,300 from the 16,400 wells drilled during calendar year 2019, an approximately 14% decrease."

Smith noted, however, that industry activity is expected to look similar to the average level experienced during the second half of calendar 2019, which implies a modest increase in the rig count from current levels.

Despite a decline in the US land rig count during 2019, Helmerich & Payne grew its market share from approximately 22% in 2018 to over 24% in 2019 and saw its quarter-end rig count up sequentially from previous quarters, due largely to the added capabilities and efficiencies of super-spec capacity rigs, President and CEO John Lindsay said during the earnings call.

The driller exited its fiscal first quarter on December 31, 2019, with 195 contract rigs, and currently has 197 rigs, Smith said. An average of 129 active rigs, or 65%, were under term contracts during the fiscal first quarter and an increasing number of contracts are performance based.

The company expects to exit the fiscal second quarter with between 193 and 203 active rigs. As the market tightens and opportunities to displace legacy rigs arise, the company will initially put 45 idle super-spec rigs back to work.

An additional 44 flex rigs are upgradable to super-spec status, when and if market conditions warrant that investment, Smith said.

In the second quarter of fiscal 2020, the company expects the adjusted average rig revenue per day to be within a range of $25,000 to $25,500, while the average rig expense per day is likely to be in the range of $14,600 and $15,150. This compares to average fiscal first-quarter rig revenue per day, excluding early termination revenue and Flexapp offerings, of $25,397, with an average adjusted rig expense per day of $14,987.

While the overall rig count has stabilized, Helmerich & Payne will continue to incur costs to recommission idle rigs, stack-out active rigs and maintain the idle portion of its fleet.