H&P announces orders for eight FlexRigs

Paula Dittrick
OGJ Senior Staff Writer

HOUSTON, Jan. 27 -- Helmerich & Payne Inc. announced Jan. 27 that it has received orders to build and operate eight H&P-design FlexRigs in the US under multiyear contracts, and H&P executives attributed demand for the newbuilds upon industry’s focus on shale plays.

Most of these newbuild rigs will go to work in the south Texas Eagle Ford shale play and the Cana-Woodford shale play in western Oklahoma, H&P executives said. The orders came from “three or four” long-term customers, although H&P executives declined to elaborate beyond that.

“As the industry continues to shifts its focus to oil and liquids-rich targets that require increasingly complex well designs, modern AC-driven rigs remain in high demand,” Hans Helmerich, president and chief executive officer, said during an earnings conference call.

Older conventional equipment is becoming increasing less suitable to many operators, he said.

H&P announced first-quarter net income of $104.1 million, or 98¢/share, compared with $63.2 million, or 60¢/share for the same period last year. The company’s reported its US land rig utilization was 84% with 193 rigs contracted and 37 idle. H&P reported a 62% rig utilization for its 2010 first quarter.

The company started its FlexRig development program during the late 1990s. FlexRigs represent over 80% of the company’s US land fleet. Since March 2010, H&P has announced contracts to construct 31 FlexRigs, 17 of which have been completed. The remaining 14 rigs are expected to be delivered this year.

Regarding its international business, H&P executives said five of six H&P rigs working in Mexico have returned to the US, and the sixth rig is expected to return.

“Longer-term, Mexico is an attractive market for us,” but Helmerich said he did not expect to do business there this year and maybe not do much business there during 2012.

Contact Paula Dittrick at paulad@ogjonline.com.

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