HELMERICH & PAYNE TO IDLE 37 RIG AND LAY OFF 2,800 PEOPLE – MORE TO COME

May 05, 2020

Tulsa-based drilling contractor Helmerich & Payne said it has decommissioned 37 rigs and laid off up to 2,800 people during the first quarter of 2020 in response to the dramatic effects of the COVID-19 pandemic and the ongoing oil price war.
Helmerich & Payne’s closed its fiscal second quarter, January to March, with a loss of $420.5 million, a large swing from the $60.9 million the company reported one year earlier. Revenue of $633 million declined 12 percent from $720.9 million year-on-year.
The company reported a loss of $563 million in assets impairment, which includes the decommissioning of 37 drilling rigs across the United States. The company’s chief financial officer Mark Smith said removing those rigs from service also meant laying off 2,800 people and that more might be coming.
“We’ve seen 115 rig release notifications since early March,” Smith said. “We expected to end the third quarter below 70 rigs.”
U.S. Land Operations segment had an operating loss of $309.1 million compared to operating income of $56.7 million during the previous quarter. Adjusted average rig revenue per day increased by $270 to $25,667 largely due to an increase in rig demobilization revenues during the quarter partially offset by lower average dayrates.
President and CEO John Lindsay commented, “Throughout our history the Company has sought to be in a position of strength both operationally and financially to face the inherent cyclicality and uncertainties in the energy industry. We have taken swift actions to maintain the health and safety of our employees and customers and have made difficult, but necessary, measured decisions to uphold the Company’s longstanding financial strength. H&P has responded to many downturns and we believe that our consistent long-term perspective and our financial strength enables us to further the strategic objectives of the Company. In this regard, we will remain focused on new commercial models, expanding our digital technology offerings to the market, increasing our international presence and cost management.”
With Nabors, Precision Drilling, Pioneer Energy and Patterson-UTI, Helmerich & Payne is part of the top 5 companies providing land drilling services in the USA.
(Source: Helmerich & Payne – Image: Helmerich & Payne FlexRig)