Helmerich & Payne, Inc. (NYSE:HP) Q4 2022 Earnings Call Transcript

John Lindsay: I think it’s really hard to say at this point. We feel like that there’ll be modest growth, obviously, from our rig count, and we would consider that to be modest. As we’ve said, probably, maybe too many times, but we’re really focused on capital discipline, and making sure than that, we don’t put a rig in the market that is an excess rig, if you will, just based on the demand criteria. We can utilize a rig that’s hot that’s rolling off from somebody else, and then we can do that. But it’s really hard to say, I mean, obviously, if you just use the math on our market share, adding 40 to 50 rigs back over the next €“ what 13, 14 months, I think is reasonable. But it’s just really hard €“ as you know, it’s really hard to call from this point.

Luke Lemoine: Okay, very helpful. Thanks so much.

John Lindsay: Thank you.

Operator: And we’ll take our next question from Arun Jayaram with JPMorgan. Please go ahead.

Arun Jayaram: Good morning. You guys mentioned that about two-thirds of the 16 rigs that you plan to reactivate have been contracted. John, you mentioned that you’re looking for a minimum of 2 years in terms of commitment to put those into the field. Wondering if you could give us a sense of where pricing is for term contracts relative to the leading edge that you pegged in the low-40s.

John Lindsay: On the term contracts, the majority of those rigs are in some sort of a performance based contract in the 2-year term contract. And our expectation would be that, again, assuming performance and that’s what we’re focused on with our customers. We’re going to be closer to that leading edge pricing with those term contracts. Again, they’re performance based, but we’ve been able to deliver on those, so we feel good about the pricing. So, in other words, we’re not putting €“ we’re not taking and really it’s not just with those rigs, but all rigs. We’re not entering into term contract at a discount or entering into term contract at leading-edge or close to leading-edge with the opportunity to get some additional revenue and margin based on performance and sharing in those savings.

Arun Jayaram: Great. Just to follow-up, John, on the company’s international growth strategy, I think, a quarter, your CapEx this year, or fiscal year will be focused on the international side of the business. As we look forward to fiscal year 2024, can you give us €“ maybe frame some ranges of potential rigs that you could see deployed internationally? And as you think about participating in tender, are you participating with other service companies or talking those about the bidding dynamics particularly as we think about the Middle East?

John Lindsay: Well, Arun, you know the market very well in the Middle East, and these are long €“ these are long plays. And so, thinking about 2024, I think, really makes a lot of sense. We were recently in Abu Dhabi here a few week €“ 2, 3 weeks ago with ADIPEC conference and a lot of excitement there. And, of course, we’re excited about opportunities in Abu Dhabi and Saudi, Oman, other countries that that have shown some interest, and the majority of that is for unconventional resource play development. And, of course, nobody’s drilled more horizontal wells than H&P. So, I think, we have a lot to add there. So, these tenders are take a long time, you have to have a lot of patience. But again, it’s a long game, and that’s what we’re focused on. Mark, do you have anything, you would?