Helmerich & Payne Optimistic on U.S. Drilling Despite Gas Prices

Tulsa-based drilling contractor Helmerich & Payne remains bullish on the U.S. land drilling market despite weakness in U.S. natural gas prices, the company reported Tuesday.

The company reported strong first quarter earnings, including an all-time record level from income from continuing operations, and reached best ever levels for revenue and rig activity during the recent quarter, President and CEO Hans Helmerich noted.

"While we expect some moderation in this record breaking pace in the upcoming March quarter, we are gratified for the strong start for our 2012 fiscal year," Helmerich commented.

"Even with uncertainty surrounding slumping natural gas prices and the anticipated softening in dry gas directed drilling in the U.S., we remain upbeat that our business model of providing premium drilling services will continue to prosper in 2012."

Helmerich & Payne reported income from continuing operations of $144.2 million from operating revenues of $732.5 million for the first quarter of fiscal 2012, compared to income from continuing operations of $104.3 million from operating revenues of $594.6 million during the first fiscal quarter of 2011 and income from continuing operations of $121.5 million from operating revenues of $700.7 million during the fourth fiscal quarter of 2011.

The company also has entered agreements with two exploration and production companies to build and operate three additional FlexRigs in the U.S. Helmerich & Payne will have 287 FlexRigs once these newbuild rigs are completed.

Continued weakness in U.S. gas prices has prompted several U.S.-based producers, including Chesapeake Energy and Comstock Resources, to refocus their drilling efforts away from gas towards oil.