Helmerich & Payne, Inc. announced that the Company and Saudi Aramco have finalized the contractual terms related to a recent 7-rig tender award.
The seven super-spec rigs were awarded 5-year contracts, with 1-year options, and are expected to commence operations shortly after delivery, which for a majority of these rigs is scheduled during the fourth calendar quarter of 2024.
Similar to the one-rig award with Saudi Aramco in August 2023, these rigs will be sourced from H&P’s idle super-spec FlexRigs® in the U.S. and, during fiscal 2024, the Company plans to convert the rigs to walking configurations and further equip them to suit Saudi Aramco’s unconventional gas drilling rig specifications.
The bulk of capex required to prepare these rigs for this award was included as part of the Company’s fiscal 2024 capex budget with the remainder to be spent early in fiscal 2025. In total, expectations are for capital expenditures related to these rigs to be approximately $175 to $196 million, of which $30 to $35 million is expected to be spent in fiscal 2025. Additionally, the Company expects this contract award to contribute more than $25 million to its International Solutions segment direct margin(1) on an annualized basis.
President and CEO John Lindsay commented, “We are extremely pleased to be working with Saudi Aramco and supporting their unconventional gas drilling campaign. With the additional capital invested, we believe these highly-mobile, pad-capable super-spec rigs will be some of the most capable rigs in the world to be used for unconventional drilling. After these initial investments, we expect to create a diversified revenue source that is able to generate a stable source of cash flows with a relatively low level of additional annual maintenance capex.”
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