Helmerich & Payne, Inc.
August 6, 2010 by staff
Helmerich & Payne, Inc., Helmerich & Payne, Inc. (H & P) is a survivor in the volatile world of oil and gas exploration, contract drilling and production, and when the company celebrated its 75 years in 1995, is believed to be the oldest contract driller in the United States. Part of P & H success is due to its long-term commitment to the operations of diversification: the company owns more than 1.6 million square feet of commercial and industrial real estate in Tulsa, Oklahoma Utica Square Shopping Center landmark. The company has also long held a strong investment portfolio, which contributed over 10 million and earnings before taxes in 1995. Until that year, H & P also operated Odorizing Natural Gas, Inc., world leader in natural gas mercaptan odorizing based agents, the sale of this subsidiary in 1996 and add 24 million to the company and 72.6 million net income for the year to September 30, 1996.
Business & H. P is central in oil and natural gas. The company is dedicated to the exploration and development and acquisition of oil and natural gas in his home state of Oklahoma, and Louisiana, Kansas and Texas. 1995 H & P reserves of about 280 million cubic feet of natural gas and more than six million barrels of oil caused the 52nd largest oil company in the world. H & P subsidiary drilling contract, Helmerich & Payne International Drilling Co., which owns and operates drilling equipment over 30 land and 11 offshore drilling platforms in the United States. Internationally, H & P owns and operates 35 platforms from another land, mostly in South America, with a primary focus in Venezuela and Colombia. Utilization rates of the platforms of the company is around 90 percent both nationally and internationally. H & P is headed by President and CEO Hans Helmerich, grandson of company founder Walt Helmerich. In 1996 the company recorded revenues of 393.2 million y.
H & P was founded in 1920 by Walt Helmerich and Payne William. Helmerich was born in 1895 in Chicago. In 1914, bored with academic life at the University of Chicago, Helmerich left school to work in New Orleans and Beaumont, Texas, and, finally, the Western Electric Company in Chicago. When America entered the First World War in 1917, Helmerich enlisted in the Army Signal Corps and became a pioneer member of the country’s newly formed Air Force, where he quickly rose to become a test pilot and flight instructor for the famous Curtis JN-4 “Flying Jenny”, and a member of the military first “stunt” flying teams. After the war, took his Helmerich piloting skills on the road, the purchase of three aircraft and the formation of a flight maneuver barnstorming team with two friends. Shortly before the primary function of the company in 1919, Helmerich of members killed in a test flight. By then, he was married to Helmerich Cadijah Colcord, daughter of Oklahoma oil pioneer Charles F. Colcord. Offered a job with the brother-in-law Ray Colcord, Helmerich went to work supervising the drilling of a well in Ossawatomie, Kansas, and then helped relocate to South Bend platform Colcord, Texas.
The couple quickly found Colcord oil platform, pumping 300 barrels per day; Helmerich buy a piece of the platform – and benefits – and for 9000. In 1920 Helmerich raised enough money, partly by selling scrap its aircraft, to purchase his own rig. Helmerich was accompanied by William Payne, who had worked as a scout for oil by Charles Colcord. Payne’s background was in bacteriology and chemistry, with a degree of AM & Oklahoma, and graduate in microbiology at the Massachusetts AM & and Amherst. Payne gained practical experience working for a pharmaceutical company in Detroit and later as a bacteriologist for the city, during the First World War, Payne joined the Army Medical Corps and helped to isolate the influenza virus that caused an outbreak in 1918. After the war, Payne went to work for North American Oil Colcord and refineries, and then helped form in 1920 Helmerich & Payne.
The partners originally plied the oil fields of South Bend and took his line to New Mexico. In 1923 Helmerich sent his wife and newborn son, Walt Helmerich III, to live with his family in Tulsa, Oklahoma. H & P then owner of three teams, and in 1926 the partners moved two of its teams to Oklahoma in order to seize the oil-rich Osage County field. His first hit, a wild cat feet 2350 to produce 5,000 barrels per day in Braman, Oklahoma, led the partners to formally incorporate as Helmerich & Payne, Inc. Payne supervised the activities of the drilling company, while he took Helmerich funding.
The young company soon faced the Depression and an excess of oil that saw the price of oil fall to 1.43 per barrel to just ten cents per barrel in the depths of depression. H & P began to sell their oil concessions, without ceasing to operate drilling rigs under contract. At the same time, oil well location was based on luck as on science, with rates of around a producing well per 50 holes. Finally, the company focused its operations in the drilling contract. The company, however, continued his own exploration and drilling efforts, and in 1936 & PH made a big strike in the natural gas fields in southeastern Kansas Hugoton. Starting from four wells, H & P Hugoton strike would be an axis of growth of the company, sixty years later, the Hugoton field still accounted for two thirds of the natural reserves of P & H gas. The company established a new milestone in 1936, the construction of a working platform on the lawn in front of the building of the Oklahoma State Capital. Let it continue to produce until it was finally plugged in 1976.
William Payne left H & P in 1936, founding the Big Chief Drilling Company in Oklahoma City, and in 1965 Payne’s success in industry led to him being called “Oklahoma Oil Man of the Year.” Meanwhile, Helmerich struggled to get funding for H & P during the Depression. In 1939, H & P due to one and one million in debt, and the company verged on bankruptcy. Helmerich refused to declare bankruptcy and managed to secure loans to rescue the company. As part of the financing agreement, the company was reorganized as a Delaware corporation, and Helmerich was forced to cede partial control of H & P.
The oil and gas demand had plummeted during the depression, while overproduction kept prices low. With the outbreak of World War II, demand grew again. However, the drilling contract rates were low, especially for the highly competitive market for surface drilling, and H & P stepped up its own exploration efforts, turning now to the deep drilling projects. Towards the end of the war, the company achieved success with three deep exploration wells in the Panhandle of Texas, and several other wells were producing 5,000 feet also in the range of 300-500 barrels per day. In order to make the company more attractive to lenders, H & P reorganized in 1944 as the White Eagle Oil Company, mainly engaged in the exploration and production. H & P was organized as a subsidiary of the drilling contract. The following year, the company made its first acquisition, Cardinal Oil Company, which had more than 240 production wells and an average daily production of over 5,000 barrels. In 1949, the company was posting revenues and 6.7 million.
The company prospered in the postwar years. car use is increasing, generating a huge demand for petroleum products. In 1952, the company operated 17 deep drilling platforms in six states. At the same time, the increased demand resulting from increased competition, and by the 1950s the oil industry was entering a new fall. drilling contracts fell, and H & P saw their profits at risk. In the mid-1950s H & P was ripe for a new management and the company did not have to look far. In 1954 Helmerich’s son, Walt Helmerich III, was named executive vice president. The younger Helmerich, a graduate of Harvard Business School – and one of the graduates of the company’s first university – quick assembly and a new management team set to work to improve the operational efficiency of the company. The company also began to hire their engineers drilling first, which introduced a new technology for the company’s exploration and drilling operations, particularly in secondary recovery techniques to extend the production of each production well. secondary recovery output reached 80,000 barrels per year in 1954 and rose to 250,000 per year for 1958. Meanwhile, the company was expanding its operations, entering the international market with leasing associations in Venezuela in 1957. The company soon entered in Argentina, Bolivia and Cuba. H & P also acquired the Engineering Construction Company (ECCO), a pipeline construction company. In 1959 the company reorganized again, dropping the name of White Eagle and go public. The P & H revenues were 14.2 million then y. The following year, Walt Helmerich III replaced his father as company president.
With a fresh drop in the oil industry in the early 1960s, & PH started a new program of diversification to enable traditionally better weather cyclical nature of the industry. The company acquired Odorizing Natural Gas, Inc., (NGOs) in Houston in 1960. NGOs made chemicals that smell and taste added to natural gas, which were necessary to detect the presence of volatile matter. Over the years, become an NGO leader in the industry, both as the capture of a 50 percent share of gas smell. In 1962 it acquired H & P Horton Company, a specialist in cabling for the telephone industry. Horton patented cable-laying plow adapted early to the work of pipes ECCO. The acquisition of Houston-based company in 1964 brought FH Maloney H & P in manufacturing, the production of molded rubber, metal machining and other petroleum products and pipeline companies. That same year saw H & P to enter the commercial real estate market by buying the Utica Square shopping center in Tulsa.
Throughout this period of diversification, H & P continued to expand its presence in the oil industry. land drilling continued to decline during the 1960s, forcing the company to seek a new direction. Preparations for entering the market began booming off-shore drilling in 1964 with the construction of the company off-shore drilling equipment. Launched in 1968, the rig was severely damaged during a storm the following year, and the contract drilling company was canceled. In response, H & P changed the rig offshore driller Atwood Oceanics, Inc., in exchange for an interest rate of 28 percent of that company. Then H & P, with sales passing and 27 million in 1965, tried a new acquisition, this time from a company bigger than itself. In 1968, H & P had purchased enough stock to become the largest individual investor in Sunray DX, an oil and gas company. Sunray H & P and started merger talks, but before these were completed, Sun Oil stepped in with an offer to buy Sunray. H & P tried to block the acquisition, but failed. However, H & P retained a significant part of the Sun / Sunray stock and realized a good profit through the merger. The company maintains that investment, helping to increase revenue and 38 million by the end of the decade, while continuing to expand its equity portfolio with investments in other public companies.
With drilling contracts continue to suffer in the 1970s, H & P accelerated its exploration activity, but the company had not kept pace with advances in the technology of large oil companies to hire geologists and engineers other aggressively. This effort soon paid off with the opening of three wells in Buffalo enjoy field in Texas, which combined for a potential production of 75 million cubic feet of natural gas. In late 1970, production of the gas company topped its oil production for the first time. The company – along with the entire oil industry – was given a new impetus by the 1973 oil crisis. With oil prices, and intensified the search for alternative sources of oil reserves, F & P international operation grew. At the end of the decade, H & P was operating 12 of its own rigs in Venezuela alone, while drilling under contract for another nine teams. platforms, the company also drilled wells in Colombia, Ecuador, Peru, Belize, Guatemala and Bolivia. P & H income rose to $ 77.5 million in 1976 and approached and 150 million in 1979. In the decade closed, the total number of H & P-50 exceeded platforms property, with utilization rates of 99 percent. The deregulation of the oil industry stimulated a boom in oil exploration. Meanwhile, oil prices were soaring, and reaching as high as 50 per barrel. As more and more sources of oil have been developed, OPEC, noting their participation in the oil market are reduced 70-30 percent, reacted with panic. Quickly, the market was flooded with oil.
In the late 1980s, almost 80 percent of the oil industry had gone bankrupt. For H & P, which saw its revenues climb to 1982 and 338 million and net profits rise to 75.6 million, the tide began to change in 1983. Revenues began to fall, and 208 million in 1984 to 160.5 million in 1988. The company struggled to maintain profits: net income fell to 48 million in 1983 and 7 million in 1986. But in 1989, with revenues and 171 million, & PH was the only drilling company in the world to post a profit, and 22.7 million.
The company might credit their survival to a conservative fiscal policy launched in late 1970. When other companies tried to cash in drilling the oil boom, with rapid expansion, Helmerich focused instead on increasing its production of natural gas. Meanwhile, the equity portfolio of the company, its real estate investments, and non-governmental organizations and other affiliates, helped cushion the bottom line of the company and allowed it to continue investing in the improvement and creation of platforms for state drilling technology, and strengthen its presence in offshore drilling. In 1991, the company had spent some 112 million in improving and expanding its team, while still managing to pay their new platforms to ensure long-term contracts with major oil companies. By then, the third generation of Helmerichs assumed leadership of the company with the appointment of Hans Helmerich as president and CEO. Walt Helmerich III became president of the company.
With so many competitors out of business, H & P can now compete for some of the contracts of the largest drilling industry, including a contract with BP Exploration for the vast majority of Cusiana field discovered in Colombia in the early . H & P has become a leading international drilling, particularly in South America. During the first half of the 1990s the company continued its expansion, bringing its total number of rigs operating at more than 75 in 1996. The revenues of the company also made a strong statement, reaching 239 million in 1992, rising to 329 million in 1994, and jump to 393 million in 1996. The sale of its subsidiary NGOs helped increase profits for the company to nearly 73 million in that year. Introduction of the remaining years of the century, not long-term debt, and with new drilling contracts in the long term for advanced technology, H & P was ready to continue his legacy as a barnstormer industry.
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