Helmerich & Payne Inc. (H&P) has entered into agreements to build and operate seven of its trademark FlexRigs, which would be built for U.S. onshore use by four producers under multi-year contracts.
The first of the seven rigs initially would operate in the Eagle Ford Shale and the other six rigs are scheduled for delivery at a rate of one a month through January. The names of the customers and the contract terms were not disclosed.
“We are encouraged by the renewed level of interest our customers are showing in signing multi-year term contracts to build and operate new FlexRigs at attractive dayrates and terms,” said CEO Hans Helmerich.
H&P doesn’t expect the new contracts to “significantly” impact its previously announced fiscal 2010 capital expenditures, which were estimated at $350 million. Since March 2005 the Tulsa-based company has committed to build 150 new FlexRigs at a total cost of about $2.4 billion.
H&P was forced to exit from Venezuela late last month, an issue that has plagued several U.S.-based producers.
“Our future is better reflected in [Tuesday’s] announcement of additional new builds for paying customers under long-term contract,” said the CEO.
At the end of June H&P’s U.S. land segment had 170 active rigs out of a total fleet of 215 rigs. Of the 45 idle rigs, only 10 were FlexRigs, of which nine already had signed contracts and should return to work over the next two months. The 170 active rigs include 116 rigs under term contracts, four of which were new rigs waiting on customers that requested delivery delays.
H&P’s existing fleet as of Tuesday included 215 U.S. land rigs, 28 international land rigs (excludes 11 nationalized rigs in Venezuela) and nine offshore platform rigs. Once the new builds are completed in January, H&P’s global land fleet would include 200 FlexRigs.
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