Service & Supply | Oilfield Services | Capital Expenditure - 2020

Helmerich & Payne Gives Peek at 2020 Budget; Down Nearly 40% YOY

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Helmerich & Payne, Inc. detailed its preliminary 2020 capital budget as well as an update on operations.

Capex for Fiscal 2020

The Company is proposing a preliminary capital expenditure budget for fiscal 2020 of approximately $300 million, which is down 39% from 2019 planned spending (adjusted to $490MM at the midpoint from previously planned $515MM).

The budget includes $35 million related to adding additional super-spec walking capabilities in U.S. Land and select international super-spec upgrades should demand for such rigs develop in fiscal 2020.

U.S. Land - Rig Decline at Estimate

Quarter-to-date, the Company’s average U.S. Land rig count is approximately 206 with 200 active as of September 4, 2019. This level of activity is consistent with H&P’s previously provided guidance, which stated the Company expects quarterly revenue days to decrease by approximately 5%-6% sequentially representing a roughly 6%-7% decrease in the average number of active rigs.

H&P expects to exit the quarter at the low end of its previously guided range of 193-203 rigs.

Argentina Update

The Company is currently in the process of determining the impacts, if any, on its business and financial position in Argentina related to two recent governmental decrees that impact both the exchange rate and currency controls. During the most recent quarter ended June 30, 2019, approximately 8% of the Company’s consolidated revenue was generated from its international operations of which approximately 88% was from the Company’s Argentine operations. H&P currently has 16 rigs operating in Argentina, of which eight are under term contract with YPF S.A.