What changed in this filing

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Item 1. Business

2023-11-08 compared with 2022-11-17 · 60 added, 60 removed, 371 unchanged (24% of the section changed)

6 unchanged sentences

North America Solutions, Offshore Gulf of Mexico and International Solutions.

Our North America Solutions operations are primarily located in Texas, but traditionally also operate in other states, depending on demand.

Our North America Solutions operations are primarily located in Texas, but also traditionally operate in other states, depending on demand.

Such states include:

1 unchanged sentence

Additionally, Offshore Gulf of Mexico operations are conducted in Louisiana and in U.S.

federal waters in the Gulf of Mexico and our International Solutions operations have rigs and/or services primarily located in four international locations:

Argentina, Bahrain, Colombia and United Arab Emirates.

federal waters in the Gulf of Mexico and our International Solutions operations have rigs and/or services primarily located in five international locations:

Argentina, Bahrain, Colombia, the United Arab Emirates ("U.A.E."), and Australia.

Our operations in Australia commenced in the fourth fiscal quarter of 2023.

We also own and operate a limited number of commercial real estate properties located in Tulsa, Oklahoma.

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OK 17 — — — 17 —

LA 11 9 — — 11 9

ND 9 6 — — 9 6

LA 6 4 — — 6 4

UT 6 6 — — 6 6

OH 5 3 — — 5 3

PA 3 1 — — 3 1

1 unchanged sentence

WV 2 2 — — 2 2

UT 3 3 — — 3 3

OH 2 — — — 2 —

WY 3 3 — — 3 3

22 unchanged sentences

Bahrain — — 3 2 — — — — 3 2

Australia 1 1 — — — — — — 1 1

United Arab Emirates 1 — — — — — — — 1 —

Totals 16 10 3 2 1 1 2 — 22 13

(1) Other than four super–spec rigs in Argentina, the FlexRig ® 3 is equipped with an AC drive, 1,500 horsepower drawworks, and a 750,000 lb.

(1) The FlexRig ® 3 is equipped with an AC drive, 1,500 horsepower drawworks, and a 750,000 lb.

hookload rating.

It can be equipped with an optional skid or walking system, third mud pump, and 7,500 psi high pressure mud system.

Nine rigs in Argentina are equipped with skid systems, a third mud pump and 7,500 psi high pressure mud systems.

(2) The FlexRig ® 4 model has a small footprint and is designed to be highly mobile.

4 unchanged sentences

(3) A silicon-controlled-rectifier (“SCR”) system converts alternate current (“AC”) produced by one or more AC generator sets into direct current (“DC”).

Of the six SCR rigs, one is equipped with 2,100 horsepower drawworks and the remaining five are equipped with 3,000 horsepower drawworks to drill deep conventional wells.

The SCR rigs are equipped with 3,000 horsepower drawworks to drill deep conventional wells.

Drilling Services and Solutions

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shale and unconventional basins.

We have the leading market share in at least three of the most active oil basins, which include the Permian Basin, Eagle Ford Shale, and Woodford Shale.

Nearly all of our active rigs are capable of drilling horizontal or directional wells.

We have the leading market share in at least two of the most active oil basins, which include the Permian Basin and Eagle Ford Shale.

All of our active rigs are capable of drilling horizontal or directional wells.

As of September 30, 2023, we had approximately 23.6 percent of the total market share in U.S.

1 unchanged sentence

land drilling.

In the United States, we have the industry's largest super-spec fleet wit h 230 rigs, of which 174 were under contract at September 30, 2022.

In the United States, we have the industry's largest super-spec fleet with 231 rigs, of which 145 were under contract at September 30, 2023.

In total, 147 of our 233 marketed rigs were active under contract, 85 were under fixed‑term contracts, and 62 were working well-to-well as of September 30, 2023.

14 unchanged sentences

International Solutions Segment

Our International Solutions segment primarily conducts operations in Argentina, Colombia, Bahrain and U.A.E.

As of September 30, 2022, we had twelve land rigs contracted for work in locations outside of the United States.

Our International Solutions segment conducts operations in Argentina, Colombia, Bahrain, U.A.E., and Australia.

As of September 30, 2023, we had thirteen land rigs contracted for work in locations outside of the United States.

Our International Solutions operations contributed approximately 7.4 percent ($212.6 million) of our consolidated operating revenues during fiscal year 2023, compared to approximately 6.6 percent ($136.1 million) and 4.8 percent ($57.9 million) of our consolidated operating revenues during fiscal years 2022 and 2021, respectively.

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All of our revenues in Bahrain are from a partner of the local national oil company.

United Arab Emirates During the year ended September 30, 2022, our operations in U.A.E.

United Arab Emirates During the years ended September 30, 2023 and 2022, our operations in U.A.E.

consisted of services provided to ADNOC Drilling Company P.J.S.C.

1 unchanged sentence

H&P's alliance with ADNOC Drilling includes several accretive projects, in addition to general consulting services, that leverage H&P's expertise and technologies to help deliver more competitive well completion times, greater drilling efficiencies, and improved well economics.

Currently, H&P does not own any drilling rigs within U.A.E.

As of September 30, 2023, we had one available rig in the U.A.E.

Australia During the year ended September 30, 2023, we commenced drilling operations in Australia.

All of our revenue in Australia is from one customer Tamboran, a publicly traded company.

As of September 30, 2023, we had one available rig in Australia.

Other Operations

1 unchanged sentence

Our real estate investments include a shopping center and undeveloped real estate.

On October 1, 2019, we elected to utilize the Captives to insure the deductibles for our workers’ compensation, general liability and automobile liability insurance programs.

Casualty claims occurring prior to October 1, 2019 will remain recorded within each of the operating segments and future adjustments to these claims will continue to be reflected within the operating segments.

Reserves for legacy claims occurring prior to October 1, 2019, will remain as liabilities in our operating segments until they have been resolved.

Changes in those reserves will be reflected in segment earnings as they occur.

We will continue to utilize the Captives to finance the risk of loss to equipment and rig property assets.

The Company and the Captives maintain excess property and casualty reinsurance programs with third-party insurers in an effort to limit the financial impact of significant events covered under these programs.

Our operating subsidiaries are paying premiums to the Captives, typically on a monthly basis, for the estimated losses based on the external actuarial analysis.

These premiums are currently held in a restricted cash account, resulting in a transfer of risk from our operating subsidiaries to the Captives.

The Company self-insures employee health plan exposures in excess of employee deductibles.

Starting in the second quarter of fiscal year 2020, the Captives' insurer issued a stop-loss program that will reimburse the Company's health plan for claims that exceed $50,000.

This program is reviewed at the end of each policy year by an outside actuary.

The Company's incubator program includes the activity related to new research and development projects.

Our real estate operations, our incubator program for new research and development projects, and our wholly-owned captive insurance companies are included in "Other" within our segment disclosures.

2022 FORM 10-K | 10

We continue to use our captive insurance subsidiaries ("the Captives") to insure the deductibles for our domestic workers’ compensation, general liability, automobile liability claims programs, and medical stop-loss program and to insure the deductibles from the Company's international casualty and rig property programs.

The Company's incubator program includes activity related to investments in emerging technology companies.

Our real estate operations, our incubator program, and our wholly-owned captive insurance companies are included in "Other" within our segment disclosures.

Rigs, Equipment, R&D, and Facilities

3 unchanged sentences

These rigs found immediate success by delivering higher value wells to the customer and marked the beginning of the AC land rig revolution.

2023 FORM 10-K | 10

We also changed our pricing and contracting strategy, and beginning in 2005, predominantly all new FlexRig ® drilling rigs were built, supported by a firm contract, and generated attractive returns.

10 unchanged sentences

Additionally, our competency in design and construction as well as our financial strength enabled us to efficiently upgrade our other existing rigs to super-spec, resulting in what we believe to be the largest fleet of super-spec rigs in the world.

As a result of these investments, today the vast majority of our current domestic fleet is comprised of super spec rigs.

As a result of these investments, today the vast majority of our current domestic fleet is comprised of super-spec rigs and half the rigs in our international fleet are super-spec rigs.

As of September 30, 2023, we had a total of 242 super-spec rigs.

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In addition, our fleet has greater scale than any other competitor, which enables us to upgrade our existing FlexRig ® drilling rigs to super-spec in a capital efficient way.

High levels of uniformity in crew training and rotation and our ability to control and remove safety exposures across a more standard fleet allow us to deliver higher performance in a safer and more reliable manner for the customer.

High levels of uniformity in crew training and rotation and our ability to identify and remove safety exposures across a more standard fleet allow us to deliver higher performance in a safer and more reliable manner for the customer.

Further, our fleet is supported by a cost-effective Company-owned supply chain that provides standardized materials directly to the rigs from our regional warehouses.

7 unchanged sentences

We currently have two facilities that provide vertically integrated solutions for drilling rig manufacturing, upgrades, retrofits and modifications, as well as overhauling, recertification, and repairs as it relates to our rigs and equipment.

These facilities utilize lean manufacturing processes to enhance quality and efficiency as well as provide important insights in the maintenance and wear of equipment on our rigs.

These facilities utilize lean manufacturing processes to enhance quality and efficiency as well as provide important insights into the maintenance and wear of equipment on our rigs.

Our facility located in Galena Park, Texas is primarily utilized for overall rig assembly, overhaul, recommissioning and recertification while our facility near Tulsa, Oklahoma is primarily utilized for modular rig component overhauls and repairs.

2022 FORM 10-K | 11

We continue to see adoption and growth with our technologically enabled automation solutions.

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All of our technologies play an important role in developing our strategy as we head towards autonomous drilling.

2023 FORM 10-K | 11

We have historically offered ancillary services, which are now referred to as FlexServices ® .

These services include trucking, surface equipment, casing running services and pipe rental.

Currently, these services include surface equipment rental, pipe rental and additional rig crew.

During the first quarter of fiscal year 2022, we sold the assets associated with two lower margin service offerings, trucking and casing running services, which contributed approximately 2.8 percent to our consolidated revenues during fiscal year 2021, in two separate transactions.

The sale of our trucking services assets was completed on November 3, 2021, while the sale of our casing running services assets was completed on November 15, 2021, for total consideration less costs to sell of $6.0 million, in addition to the possibility of future earnout proceeds, resulting in a loss of $3.4 million.

During the year ended September 30, 2022 we recognized $1.1 million in earnout proceeds associated with the sale of our trucking services assets within Other (Gain) Loss on Sale of Assets on the Consolidated Statements of Operations.

We recognized earnout proceeds associated with the sale of our trucking and casing running assets of $1.6 million and $1.1 million during the fiscal year ended September 30, 2023 and 2022, respectively, within Other (gain) loss on sale of assets on the Consolidated Statements of Operations.

Markets and Competition

13 unchanged sentences

and Blake International Rigs, LLC.

For further information concerning risks associated with competition in our industry, see Item 1A—Risk Factors—Business and Operating Risks.

Drilling Contracts

10 unchanged sentences

Each drilling rig operates under a separate drilling contract and, in some instances, these contracts are part of an over-arching term agreement known as a FlexPool.

These agreements are with a limited number of customers that operate multiple rigs, often times across multiple basins in the U.S.

These agreements are with a limited number of customers that operate multiple rigs, oftentimes across multiple basins in the U.S.

Under the FlexPool agreements, customers enter into a fixed term contract covering a minimum amount of drilling days, utilizing a minimum number of drilling rigs and have the flexibility to employ more or fewer rigs as long as the minimum number of rigs (outlined in the agreement) is maintained.

If any provisions are violated, as in a customer operating below the minimum number of rigs, early termination payments may apply.

2022 FORM 10-K | 12

Daywork Contracts

1 unchanged sentence

During fiscal year 2023, a majority of our drilling services were performed on a “daywork” contract basis.

2023 FORM 10-K | 12

Performance-based Contracts

Performance-based contracts are contracts pursuant to which we are compensated based upon our performance against a mutually agreed upon set of predetermined targets.

Performance-based contracts are contracts pursuant to which we are compensated partly based upon our performance against a mutually agreed upon set of predetermined targets.

These contract types are relatively new to the industry and typically have a lower base dayrate, but give us the opportunity to receive additional compensation by meeting or exceeding certain performance targets agreed to by our customers.

2 unchanged sentences

The risks associated with these contracts relate to the failure to reach the agreed upon performance targets.

If we do not meet these targets, we will not receive additional compensation above what we have received utilizing a "daywork" contract.

If we do not meet these targets, we will not receive additional compensation above the base dayrate.

Based on our operational track record throughout fiscal year 2023 and drilling expertise, our performance-based contracts have produced a positive risk-reward outcome.

We are seeing a growing adoption of performance contracts by our customers and we expect this trend to continue.

Refer to Note 9—Revenue from Contracts with Customers for additional information related to performance-based contracts.

Contract Backlog

39 unchanged sentences

In addition to career and safety training efforts, the team creates, manages and implements enhancements to development and succession plans, change management initiatives and diversity, equity and inclusion ("DE&I") programs.

The three training programs include:

• Introduction to Diversity, Equity, and Inclusion and Traits of Inclusive Teams;

• Unconscious Bias and Microaggressions;

• Allyship and Privilege.

These three courses take employees through an exploratory and educational journey to discover how unique perspectives and curiosity can create an environment to understand, welcome, respect, and value one another.

H&P offers a variety of training programs ranging from job specific programs to leadership development.

2 unchanged sentences

The purpose of the program is to prepare employees to work safely on our rigs and provide necessary certifications to do so;

including all Occupational Safety and Health Administration ("OSHA") and IADC training, as well as Company culture education.

• Short Service Employee Training - specialized training program that is a continuation of New Employment Introduction basics and is intended to provide the technical on-the-job training guided by a mentor.

including all Occupational Safety and Health Administration ("OSHA") and International Association of Drilling Contractors ("IADC") training, as well as Company culture education.

• Short Service Employee Training - specialized training program that is a continuation of New Employment Introduction basics and is intended to provide technical on-the-job training guided by a mentor.

• Ethics and Compliance Training – comprised of several specific training programs, including Code of Conduct, Insider Trading, Anti-Discrimination & Harassment, Data Privacy, Trade Compliance, and Anti-Corruption.

12 unchanged sentences

For more than 20 years, H&P measured safety success the same way other companies in our industry did – the absence of OSHA recordable injuries and declining total recordable injury rates ("TRIR").

We now believe that measuring safety in this manner can be destructive to management’s efforts to build trust with field employees.

We have redefined safety success as the Control and Removal of Exposures (C.A.R.E.) for self and others and encourage employees to report near miss incidents with serious, life-altering or fatal injury potential, identifying and reporting serious injury exposures for which employees are personally recognized and rewarded monetarily for exemplifying our Actively C.A.R.E culture.

We now believe it is more important to take a more holistic and proactive approach to identify safety issues which supports management's efforts to build trust with field employees.

Starting in 2015, we have redefined safety success as the Control and Removal of Exposures (C.A.R.E.) for self and others and encourage employees to report near miss incidents with serious, life-altering or fatal injury potential, identifying and reporting serious injury exposures for which employees are personally recognized and rewarded monetarily for exemplifying our Actively C.A.R.E culture.

We believe trust is key to organizational health, as well as safety and operational success.

2022 FORM 10-K | 14

We are committed to controlling and removing SIF exposures at any H&P rig or facility.

2 unchanged sentences

Incidents that do not result in an injury, but have the potential for a serious injury or fatality provide many more learning opportunities for preventing future serious injuries or fatalities.

Based on this data we have a proportionate response approach to incident investigations and corrective actions.

Priority is given to those incidents that have the potential to cause a serious injury or fatality.

Based on this data we have a guided approach to incident investigations and corrective actions.

Incidents that have the potential to cause a serious injury or fatality are escalated.

Our safety success at H&P will be based on key performance indicators related to the removal of SIF exposures, such as SIF Potential and SIF Mitigated rates.

Our vision for the future of safety at H&P will be guided by these principles.

2023 FORM 10-K | 14

Diversity, Equity & Inclusion

We believe that creating an environment where our employees feel valued and respected drives engagement, better leverages the unique talents and perspectives of our people to innovate and enhances our ability to attract and retain a diverse workforce.

H&P has employed a DE&I specialist, implemented a thriving Women of H&P Employee Resource Group, and established a DE&I Advisory Council with global employee representation.

H&P has employed a DE&I Principal Specialist, implemented a thriving Women of H&P Employee Resource Group, and established a DE&I Advisory Council with global employee representation.

Our commitments are evidenced by formalized policies regarding equal opportunity and a discrimination-free workplace.

1 unchanged sentence

Employee Benefits, Health and Wellness

H&P values its employees and believes benefit packages are essential to prioritizing the well-being of its staff and offering competitive compensation.

H&P values its employees and believes competitive compensation and benefit packages are essential to prioritizing the well-being of its staff.

Select highlights of our benefits programs include:

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Our customers and other third parties may also dispute these indemnification provisions, or we may be unable to transfer these risks to our drilling customers or other third parties by contract or indemnification agreements.

We insure working land rigs and related equipment at values that approximate the current replacement costs on the inception date of the policies.

We insure working land rigs and related property and equipment at values that approximate the current replacement costs on the inception date of the policies.

However, we self-insure large deductibles under these policies.

We also carry insurance with varying deductibles and coverage limits with respect to stacked rigs, offshore platform rigs, and “named wind storm” risk in the Gulf of Mexico.

2022 FORM 10-K | 15

We have insurance coverage for comprehensive general liability, automobile liability, workers’ compensation and employer’s liability, and certain other specific risks.

3 unchanged sentences

We are unable to obtain significant amounts of insurance to cover risks of underground reservoir damage.

2023 FORM 10-K | 15

Our insurance may not in all situations provide sufficient funds to protect us from all liabilities that could result from our operations.

3 unchanged sentences

Further, we may experience difficulties in collecting from our insurers or our insurers may deny all or a portion of our claims for insurance coverage.

For further information see Item 1A—Risk Factors—Business and Operating Risks—Our drilling and technology related operations are subject to a number of operational risks, including environmental and weather risks, which could expose us to significant losses and damage claims.

We are not fully insured against all of these risks and our contractual indemnity provisions may not fully protect us.

Government Regulations

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Environmental laws can have a material adverse effect on the drilling industry, including our operations, and compliance with such laws may require us to make significant capital expenditures, such as the installation of costly equipment or operational changes, and may affect the resale values or useful lives of our drilling rigs.

The Occupational Health and Safety Act (“OSHSA”) and other similar laws and regulations govern the protection of the health and safety of employees.

The OHSA hazard communication standard, the Environmental Protection Agency community right-to-know regulations under Title III of CERCLA, the Emergency Planning and Community Right-to-Know Act and similar state statutes and local regulations require that information be maintained about hazardous materials used in our operations and that this information be provided to employees, state and local governments, emergency responders and citizens.

The Occupational Safety and Health Act and other similar laws and regulations govern the protection of the health and safety of employees.

The OSHA hazard communication standard, the Environmental Protection Agency community right-to-know regulations under Title III of CERCLA, the Emergency Planning and Community Right-to-Know Act and similar state statutes and local regulations require that information be maintained about hazardous materials used in our operations and that this information be provided to employees, state and local governments, emergency responders and citizens.

A number of countries actively regulate and control the importation and/or exportation of oil and gas and other aspects of the oil and gas industries in their countries.

4 unchanged sentences

and foreign laws and regulations, including, but not limited to, the U.S.

Foreign Corrupt Practices Act and other anti-bribery and anti-corruption laws.

Foreign Corrupt Practices Act, other anti-bribery and anti-corruption laws, and data privacy, data security and consumer protection laws.

Foreign Corrupt Practices Act and similar anti-bribery and anti-corruption laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to non-U.S.

officials for the purpose of obtaining or retaining business.

Data privacy, data security, and consumer protection laws in the U.S.

that apply to our operations include the Critical Infrastructure Act and the CAN-SPAM Act, and at the state level, the California Consumer Privacy Act (“CCPA”) as amended by the California Privacy Rights Act (“CPRA”).

Because we conduct business in France and the UK, we are also subject to the European General Data Protection Regulation (“GDPR”) and the UK Data Protection Act.

Our operations in the Middle East and Colombia are subject to similar data privacy and data protection laws.

Failure to comply with applicable laws or regulations or acts of misconduct could subject us to fines, penalties or other sanctions.

For more information, see Item 1A— “Risk Factors — Failure to comply with the U.S.

Foreign Corrupt Practices Act or foreign anti‑bribery legislation could adversely affect our business.

Foreign Corrupt Practices Act or foreign anti‑bribery legislation could adversely affect our business and Our business is subject to complex and evolving laws and regulations regarding privacy, data security and consumer protection.

We are also subject to the jurisdiction of the U.S.

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Annual reports, quarterly reports, current reports, amendments to those reports, earnings releases, financial statements and our various corporate governance documents are also available free of charge upon written request.

2023 FORM 10-K | 17

Investors and others should note that we announce material financial information to our investors using our investor relations website (https://ir.helmerichpayne.com/websites/helmerichandpayne/English/0/investor-relations.html), SEC filings, press releases, public conference calls and webcasts.

2 unchanged sentences

Therefore, we encourage investors, the media, and others interested in our company to review the information we post on the social media channels listed on our investor relations website.

2022 FORM 10-K | 17

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business