Helmerich & Payne, Inc. (NYSE: HP), a leading drilling contractor, reported its first-quarter fiscal 2025 results, shedding light on steady U.S. rig activity despite broader industry uncertainties. While the company’s net income and revenue declined slightly from the previous quarter, its North America Solutions (NAS) segment remained resilient, showcasing consistent performance and efficiency gains.

Stable Rig Count Despite Market Challenges

H&P exited Q1 fiscal 2025 with 148 active rigs in its NAS segment, maintaining its industry-leading position in U.S. land drilling. Despite market fluctuations, the company expects to exit Q2 fiscal 2025 with a rig count between 146 and 152, signaling stability in its operations.

CEO John Lindsay acknowledged that while crude oil prices and industry rig counts have remained steady, broader economic and geopolitical uncertainties have led to cautious market sentiment. One challenge the company continues to face is “contractual churn”, where rigs frequently transition in and out of contracts. However, H&P has effectively managed this volatility by consistently delivering high drilling performance and efficiency for its customers.

Key U.S. Performance Metrics

Revenue per day: $38,600
Direct margin per day: $19,400
Operating income: $152 million (down $3.7 million from Q4 2024)
Direct margin: $265.5 million (down $9.1 million sequentially)
Total NAS segment revenue: $598 million

The company expects Q2 fiscal 2025 direct margins for its NAS segment to range between $240 million and $260 million.

Navigating Market Sentiment & Future Outlook

The stability of H&P’s U.S. operations is notable given the challenges facing the broader drilling industry, including concerns over oil price volatility and global economic uncertainty. However, the company has successfully positioned itself to maintain steady activity levels through its focus on operational efficiency and customer-centric service.

Lindsay reinforced H&P’s confidence in the U.S. market, stating:

“Crude oil prices and industry rig counts were relatively steady during the quarter, but market sentiment remained cautious in the face of a multitude of economic and geopolitical uncertainties. Contractual churn in our NAS rig count continues to characterize the market, yet we have been successful in managing that volatility by consistently delivering drilling performance and efficiencies for our customers.”

Looking ahead, H&P expects its cash flow from U.S. operations to remain strong, allowing the company to reduce debt, sustain its dividend, and maintain its leadership in high-performance drilling solutions. While international expansion—especially following its recent KCA Deutag acquisition—will drive future growth, its U.S. rig activity remains a crucial pillar of its overall performance.

Final Thoughts

H&P’s steady U.S. rig activity amidst market uncertainties underscores its operational resilience and strong customer relationships. The company’s ability to manage rig turnover, maintain efficiency, and sustain financial performance will be key as it moves forward in 2025. As the industry navigates changing conditions, H&P remains well-positioned to continue delivering value and stability to its customers and stakeholders alike.