Helmerich & Payne, Inc. (NYSE:HP) Q3 2023 Earnings Conference Call July 27, 2023 11:00 AM ET

Company Participants

Dave Wilson - Vice President-Investor Relations

John Lindsay - President & Chief Executive Officer

Mark Smith - Senior Vice President & Chief Financial Officer

Conference Call Participants

Derek Podhaizer – Barclays

David Smith - Pickering Energy

Keith Mackey - RBC Capital Markets

Saurabh Pant - Bank of America

Arun Jayaram - JPMorgan

Kurt Hallead - Benchmark

Doug Becker - Capital One

Operator

Good day, everyone, and welcome to today's Helmerich & Payne Fiscal Third Quarter Earnings Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer period. [Operator Instructions]

It is now my pleasure to turn today's call over to Vice President of Investor Relations, Dave Wilson, please go ahead.

Dave Wilson

Thank you, Ashley, and welcome, everyone, to Helmerich & Payne conference call and webcast for the third quarter of fiscal year 2023. With us today are John Lindsay, President and CEO; and Mark Smith, Senior Vice President and CFO. Both John and Mark will be sharing some comments with us, after which we'll open the call for questions.

Before we begin our prepared remarks, I remind everyone that this call will include forward-looking statements as defined under the Securities Laws. Such statements are based on current information and management’s expectations as of this date and are not guarantees of future performance. Forward-looking statements involve certain risks, uncertainties, and assumptions that are difficult to predict. As such, our actual outcomes and results could differ materially. You can learn more about these risks in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, and our other SEC filings. You should not place undue reliance on forward-looking statements, and we undertake no obligation to publicly update these forward-looking statements.

We’ll also make reference to certain non-GAAP financial measures such as segment operating income, direct margin, and other operating statistics. You’ll find the GAAP reconciliation comments and calculations in yesterday’s press release.

With that said, I’ll turn the call over to John Lindsay.

John Lindsay

Thank you, Dave, and good morning, everyone. H&P delivered another outstanding quarter, driven by service quality, technology and reliable execution, enabling us to deliver quality outcomes for our customers.

H&P's financial results for the third fiscal quarter were significant for a few reasons. First, they demonstrate that we are achieving economic returns in the low to mid-teens, which are just above our cost of capital. Second, these financial results were achieved during a slow period when rig activity was declining primarily due to weak natural gas prices. This demonstrates that contract economics rather than market share drove the company's financial performance this quarter. Finally, these results highlight the behavioral change that has transpired within the energy industry, one that reflects fiscal prudence and capital allocation.