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| Statement |
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| So hopefully more to come in the upcoming quarters, we're announcing some success |
| I wanted to acknowledge the impressive leadership and success on the pricing discipline, the strong shareholder returns generated |
| The long-term energy fundamentals are strong and as such H&P remains ready and we'll continue to take actions to ensure future success for the company |
| We generated healthy margins and a reasonable rate of return for stakeholders |
| We believe the outlook over the next several years is encouraging for our industry |
| As we said earlier, we remain optimistic about the long-term energy fundamentals |
| I'm proud of the H&P's team service attitude and strategic achievements this fiscal year and we'll remain vigilant as we navigate through 2024 |
| So we're encouraged by the opportunity |
| Those incremental super-spec rigs adds will most likely tighten effective super-spec market utilization well above the 80% level, which historically has been favorable for us from a pricing perspective |
| First and foremost, we prioritize the Company's longstanding posture of a strong financial position and fiscal prudence |
| Notwithstanding the drag created by the sidelining of higher priced spot market rigs during the past couple of quarters, we were able to maintain and slightly improve our revenue per day during the quarter |
| Our strategic alliances with Fervo and our other innovative companies have put us firmly on the path to participate in next-generation geothermal opportunities and grow our unconventional geothermal drilling expertise to a larger scale |
| A recent highlight is the encouraging progress in the field with one of our geothermal investees, Fervo Energy |
| So I feel really good about where we are and what we have and the team that we have |
| These contracts deploy H&P's suite of technology solutions that help to drive strong performance and greater reliability |
| Identifying, measuring and then consistently delivering solutions and technologies to improve efficiency and drilling outcomes creates a win-win for both H&P and our customers, improving the financial returns for both as well |
| Our sales force is doing a great job with that and that leads into the pricing |
| We're also thankful for celebrating 50 years in Colombia, 25 years in Argentina and the consistent contribution from our Offshore Gulf of Mexico operation and we're excited about the potential contribution from these segments in the years to come |
| I feel really good about it |
| I'm pleased with the early signs of success here, particularly with our recent tender award with Saudi Aramco and the operations of our first super-spec rig in the Beetaloo Basin in Australia |
| We've been very fortunate to retain a lot of that brainpower from the acquisitions that we made |
| So it's been pretty in line with what your expectations were going in? John Lindsay Waqar, you know, we're pleased with where we are |
| A lot of this goes, Kurt, goes back to the capital discipline that the industry is showing, E&Ps, our customers are showing, which again I think is healthy for the industry |
| In the last 10 years, average lateral length has doubled to over 10,000 feet, and at the same time, the well cycle times have improved by 22% |
| H&P's super-spec FlexRig-3 along with our technology suite has surpassed our customers anticipated performance targets |
| Earnings per share were positively impacted by a net $0.08 gain per share of select items, which was primarily made up of gains on investment securities and settlements of outstanding claims, partially offset by a blue chip swap transaction |
| customer demand at attractive rates and terms |
| Our strategy is to maintain our strong balance sheet together with investment-grade credit metrics, to invest in maintaining our market leading North America Solutions fleet and to deploy capital to support growth and diversification opportunities internationally with prudent investments in our rig fleet |
| Second, we look to invest in organic projects with attractive returns so that we can continue to lead the industry in the U.S |
| Despite the adversity, H&P delivered differentiated commercial value to its customers in return for compelling contract economics |
| Statement |
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| Turning to the details of fiscal 2023, rig demand was negatively impacted by geopolitical and economic uncertainties that influenced the global oil market, as well as warmer than expected winter weather which suppressed pricing in the U.S |
| Revenues were sequentially lower by $66 million due to the expected sequential decrease in the number of working rigs |
| As we look towards the first quarter of fiscal 2024 for the Offshore Gulf of Mexico segment, we expect that it will generate between $3 million to $7 million in direct margin, which is down sequentially primarily due to the stacking of the aforementioned rig |
| The decrease in revenue was primarily due to the expected reduction in active rig count for the North America Solutions fleet |
| Our bucket of North America Solutions includes maintenance CapEx costs, which are anticipated to push above the high end of the fiscal 2023 range due in part to fiscal year 2023 supply chain delays in capital spending for component equipment refurbishment and recertification that has rolled into fiscal year 2024 |
| rig counts have come down, day rates came off of the, you know, leading edge peak that we saw late last year, early this year |
| In fiscal 2023, the challenges were different as the rig count was only declined much of the year |
| A less visible but growing variable is the cost acceleration in equipment related to running H&P's FlexRig fleet harder than ever before to achieve the well designs, lateral lengths and the drilling efficiencies for our customers |
| Separately, we experienced a $12 million investment loss related to accessing the blue chip swap effective parallel exchange mechanism in Argentina |
| The sequential decrease was driven by the aforementioned reduction in activity |
| And I know there's probably more, but we also know firsthand that growth internationally tends to be pretty slow |
| Further, we experienced a 4.6 million foreign exchange loss on Argentina pesos in country based on the devaluation of the official exchange rate in this segment, which is in the segment results |
| Yet we still maintained our economic focus and did not revert back to the historical habits of cutting price to maintain market share |
| Like most businesses, we are also experiencing inflationary pressures in our non-operational expenses, particularly around labor and third-party services which are key drivers behind our projected increase in selling, general and administrative expenses |
| And if the countries hold flat, that's the level of margin we would anticipate throughout the year, notwithstanding the successful outcomes of any of these bidding processes, which would cause us to incur expenses for final re-commissioning and shipping charges |
| And then you mentioned some tenders ongoing and I understand the color might be difficult there |
| Further cost drivers include rig churn and decrease in labor and overhead absorption |
| Turning to our three segments, beginning with the North America Solutions segment, we averaged 149 contracted rigs during the fourth quarter, down from an average of 166 rigs in fiscal Q3 |
| During this trough period, we retained crew personnel and regional specialty positions and rig fabrication and maintenance facility staff, resulting in a lower scale absorption during the quarter |
| I think the oil side of the equation is probably a little - maybe a little bit more surprising, but it goes back to that theme that we mentioned related to churn |
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