Helmerich & Payne, Inc., a company specializing in drilling oil and gas wells, has announced today that it will be selling its shares in ADNOC Drilling Company P.J.S.C. for approximately $197 million. This transaction involves the sale of 159.7 million shares and is expected to close by mid-October.
The Tulsa-based company, which operates under the organizational name 01 Energy & Transportation and is incorporated in Delaware, originally made a cornerstone investment of $100 million in ADNOC Drilling. The sale represents a significant return on this investment.
Helmerich & Payne plans to use the net proceeds from the sale to reduce the commitments under its bridge loan facility. This move is in connection with the company's pending acquisition of KCA Deutag International Limited, which was previously announced.
The company’s business address is 222 N. Detroit Ave., Tulsa, OK 74120, and it is listed on the New York Stock Exchange under the ticker symbol NYSE:HP (NYSE:HPQ).
The information disclosed in this transaction is based on a press release statement.
In other recent news, drilling company Helmerich & Payne has seen a flurry of activity. Citi reaffirmed its Neutral rating on the company, keeping its fourth-quarter EBITDA forecast at $206 million, aligning with the consensus estimate of $208 million. The company also received suspension notices for eight Saudi rigs operated by KCA Deutag, leading to a revision of its capital expenditure forecast for the fiscal year 2025 to approximately $450 million.
Helmerich & Payne's Board of Directors adopted amendments to the bylaws, declared a quarterly cash dividend of $0.25 per share, and announced a private placement of senior unsecured notes to finance the acquisition of KCA Deutag International Limited. J. Kevin Vann was appointed as the new Chief Financial Officer, succeeding Mark W. Smith.
Analyst firms RBC Capital Markets and CFRA responded to these developments with upgrades and adjustments, while an unnamed firm reduced the company's stock target due to a revised EBITDA forecast for 2025.
The company plans to reorganize its operations into North America Solutions, International Solutions, and Offshore Solutions post-acquisition and anticipates realizing approximately $25 million in synergies by 2026, primarily through overhead reductions and procurement savings.
These are the recent developments at Helmerich & Payne.
InvestingPro Insights
Helmerich & Payne's strategic move to sell its ADNOC Drilling shares aligns well with its financial profile, as revealed by recent InvestingPro data. The company's market capitalization stands at $3.4 billion, with a price-to-earnings ratio of 10.03, indicating a potentially undervalued stock relative to its earnings.
InvestingPro Tips highlight H&P's financial stability and shareholder-friendly policies. The company has maintained dividend payments for an impressive 54 consecutive years, demonstrating a strong commitment to returning value to shareholders. This is further supported by a current dividend yield of 4.38%, which is particularly attractive in the current market environment.
Moreover, H&P's financial health appears robust. The company operates with a moderate level of debt, and its liquid assets exceed short-term obligations. This financial flexibility could prove crucial as H&P navigates its pending acquisition of KCA Deutag International Limited and manages the proceeds from the ADNOC Drilling share sale.
Despite a slight revenue decline of 4.28% over the last twelve months, H&P maintains a healthy gross profit margin of 40.1% and an operating income margin of 15.4%. These figures suggest that the company is managing its costs effectively even in a challenging market environment.
For investors seeking more comprehensive analysis, InvestingPro offers additional tips and insights on Helmerich & Payne's financial performance and outlook. The platform currently lists 6 additional tips for HP, providing a deeper understanding of the company's position in the oil and gas drilling industry.
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