Helmerich & Payne, Inc. reported net income of $107,830,000 ($1.02 per diluted share) from operating revenues of $456,663,000 for its first fiscal quarter ended December 31, 2007, compared with net income of $110,786,000 ($1.06 per diluted share) from operating revenues of $386,399,000 during last year's first fiscal quarter ended December 31, 2006. Included in this year's first quarter net income are after-tax gains from insurance proceeds and the sale of drilling equipment of $3,614,000 ($.03 per diluted share). Last year's first quarter net income included $16,490,000 ($.16 per diluted share) of gains from the sale of portfolio securities and drilling equipment.
The Company's operating income for the quarter reached a new record level. The continued growth was driven by the Company's U.S. land segment, where revenue days and average daily rig revenue and margins were up again sequentially. Strong results in the U.S. land segment more than offset operating income reductions in the Company's offshore and international land segments.
Company President and C.E.O. Hans Helmerich commented, "We are pleased with the Company's steady progress in this softer and uncertain market. While spot market dayrates remain under pressure, we continue to receive interest in newly constructed FlexRigs as reports of their performance in the field prove their value to our customers. We're proud of the accomplishments of our people throughout the Company who have helped manage the significant growth we've experienced over the past two years. We believe this organizational strength uniquely positions us to capture additional market share opportunities in an industry that continues to retool in pursuit of further efficiencies in both domestic and international markets."
Segment operating income for U.S. land operations was $143,841,000 for this year's first quarter, compared with $118,408,000 for last year's first quarter and $124,191,000 for last year's fourth quarter. As the Company deployed more newly constructed rigs, revenue days increased by 614 days, or 4.6% from the fourth fiscal quarter of 2007 to the first fiscal quarter of 2008. Additionally, rig margins per day rose by $890 (7.3%), from $12,221 during the fourth quarter of fiscal 2007, to $13,111 during the first quarter of fiscal 2008. The sequential margin improvement was a result of an increase in average rig revenue per day of $340 and a reduction in average rig expense per day of $550. U.S. land rig utilization was 95% in both the first quarter of 2008 and fourth quarter of 2007, compared with 98% during last year's first quarter.
Segment operating income for the Company's offshore operations was $4,114,000 for this year's first quarter, compared with $7,380,000 for last year's first quarter and $6,343,000 for last year's fourth quarter. Rig utilization in the offshore segment decreased sequentially from 59% to 56% during the quarter ending December 31, 2007, and is expected to slightly increase during the current second fiscal quarter. Five of nine platform rigs in the Company's offshore segment are currently active and three additional platform rigs are being mobilized and are expected to be active within the next few months. As a result, the Company expects offshore segment operating income to be flat from the first to the second fiscal quarter, but increase during the third quarter. The ninth rig is currently undergoing capital improvement and is expected to return to work with a contract in the second quarter of fiscal 2009.
Segment operating income for the Company's international land operations was $21,156,000 for this year's first quarter, compared with $24,074,000 for last year's first quarter and $32,358,000 for last year's fourth quarter. Although this year's first quarter rig activity was relatively flat compared to the previous quarter, average revenue per rig day was down by $3,325. Much of the sequential revenue decline was attributable to a non-recurring early-termination fee earned during the fourth quarter of 2007 that favorably impacted revenue per day by approximately $3,000 during that quarter. This year's first quarter average daily rig operating cost rose by $2,103 per rig day, compared to last year's fourth quarter, primarily as a result of increases in labor and supply costs in Venezuela, and high well-to-well moving activity in Argentina. Average international rig utilization remained flat at 81% during the first quarter ending December 31, 2007, and is now expected to decline by approximately 10% during the second fiscal quarter. As a result, it is anticipated that second quarter international land segment operating income will be slightly down from the first quarter.
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