TULSA, Okla. - Helmerich & Payne , Inc. (NYSE: NYSE:HP (NYSE:HPQ)), a global drilling contractor, has finalized contracts with Saudi Aramco (TADAWUL:2222) for the provision of seven high-performance drilling rigs, the company announced today. These rigs are slated to begin operations after delivery in the fourth quarter of 2024, with each rig carrying a five-year contract and an additional one-year option.
The rigs, part of H&P's fleet of idle super-spec FlexRigs in the U.S., will undergo modifications to meet the specific requirements of Saudi Aramco's unconventional gas drilling operations. The company has allocated a significant portion of its fiscal 2024 capital expenditure budget to this project, with additional spending expected in early fiscal 2025. The total capital expenditures associated with preparing these rigs are estimated to be between $175 and $196 million.
Helmerich & Payne's President and CEO, John Lindsay (NYSE:LNN), expressed enthusiasm for the partnership with Saudi Aramco and the opportunity to support their unconventional gas drilling campaign. Lindsay anticipates that the investment in these super-spec rigs will establish a stable source of cash flow with minimal annual maintenance capital expenditures required post-investment.
The contract is expected to contribute over $25 million annually to Helmerich & Payne's International Solutions segment direct margin, a non-GAAP financial measure that the company uses to assess operational performance.
Founded in 1920, Helmerich & Payne is known for its commitment to leading drilling productivity and reliability. The company operates a fleet of high-performance drilling rigs and is active in developing advanced drilling technologies.
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