HELMERICH & PAYNE INC earnings calls

What drove Q4 guide and momentum

Q (Derek Podhaizer · Piper Sandler): Analyst asked what factors drove the fiscal Q4 guide and how momentum can be sustained into fiscal 2027, asking about North America, international, and offshore.

A: Management said sequential improvement is driven by activity growth across North America solutions, international solutions (LatAm and Middle East), and a stable offshore segment. Customer conversations are constructive and they are confident in Q4 and into FY 2027.

"All 3 of the segments together are what is guiding us up as we look through Q3 into Q4." — Raymond John Adams (CEO)

NAS margins and bonuses

Q (Scott Gruber · Citi): Analyst asked why Q4 margins guide down after Q3 beat, how reactivation and activation costs and performance bonuses affected margins, and where margins could go if rigs stabilize.

A: Management said Q3 margin improvement reflects successful reactivations and that bonuses are lumpy because many rigs are on performance contracts. They noted rig reactivations were a small component of margin change and highlighted demand for high-spec and robotic rigs.

"A lot of it is due to the lumpiness in our bonuses, and some of it is conservatism that is in there, but, >50% of our rigs are on performance based contracts." — Michael Lennox

North America market drivers

Q (Arun Jayaram · JPMorgan): Analyst asked about the company's financial framework and capital plans beyond 2026 and maintaining CapEx as international activity grows (Argentina noted).

A: Management described market tightening in the U.S. Lower 48 with rig additions underwritten by private E&Ps using hedges, and said public E&Ps remain disciplined but budget backdrops are better for 2027. They emphasized being 95% utilized on super-spec rigs and turning to Mike for pricing detail.

Saudi and Middle East operations

Q (Saurabh Pant · BofA): Analyst asked about current operations and opportunities in the Middle East, the timeline for the remaining 2 Saudi rigs, and whether more rigs could come beyond the 7 being reactivated.

A: Management said reactivating 5 of 7 Saudi rigs during conflict shows team strength and customer stability; they are at 22 rigs now and are not adding the other 2 into the Q4 guide. They are focused on getting international solutions to $45 million per quarter and will update timelines for rigs 6 and 7 as they materialize.

"We are at 22 rigs and 22 rigs we have. Obviously, the other 2 rigs, we are not adding to our forecast or our guide into Q4." — Raymond John Adams (CEO)

Argentina rig timeline and margins

Q (Keith MacKey · RBC): Analyst asked about competitive landscape in Vaca Muerta, plans to expand from 9 to 15 rigs, timelines for sending rigs from the U.S., and margin economics versus international average.

A: Management said the Vaca Muerta assets match their U.S. super-spec fleet and that there is strong opportunity as infrastructure comes online. They said rigs to Argentina will be sent within the next 6 to 8 months and margins there are very much in line with current operations, with added transport and packing costs.

"As far as the timeline, you know, within the next 6 to 8 months, those rigs will be, sent down there." — Michael Lennox

Geothermal rigs and margins

Q (Eddie Kim · Barclays): Analyst asked how many geothermal rigs the company will have after 3 new U.S. deals, whether they can reach double digits next year, and how geothermal returns compare to oil and gas.

A: Management said enhanced geothermal is growing in the U.S. and Europe and that the rig technology and efficiencies transfer from their Lower 48 fleet. They expect about 6 U.S. geothermal rigs in their plan, margins in geothermal are in line with Lower 48 margins, and double digits are a target but not guided today.

"Maybe to layer in just 6 rigs, in The US operations is kinda what we are we are thinking." — Michael Lennox