Good day, everyone, and welcome to today's program. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. Please note this call may be recorded. I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Mr. Juan Pablo Tardio, Vice President and CFO. Please go ahead, sir.

Thank you and welcome, everyone, to Helmerich & Payne's conference call and webcast corresponding to the fourth quarter and fiscal year-end of 2015. The speakers today will be John Lindsay, President and CEO; and me, Juan Pablo Tardio. Also with us today is Dave Hardie, Manager of Investor Relations. As usual, and as defined by the U.S. Private Securities Litigation Reform Act of 1995, all forward-looking statements made during this call are based on current expectations and assumptions that are subject to risks and uncertainties, as discussed in the company's annual report on Form 10-K and quarterly reports on Form 10-Q. The company's actual results may differ materially from those indicated or implied by such forward-looking statements. We will also be making reference to certain non-GAAP financial measures, such as segment operating income and operating statistics. You may find the GAAP reconciliation comments and calculations on the last page of today's press release. I will now turn the call over to John Lindsay. John W. Lindsay - President, Chief Executive Officer & Director: Thank you, Juan Pablo, and good morning, everyone, and thank you for joining us on the call this morning. At the time of our last call in July, the industry rig count was nearing the low levels reached during the 2009 recession and we were witnessing a second round of declining oil prices and increased volatility. The question on everyone's mind then was are things going to get worse from here. We know that the fundamentals had continued to deteriorate. And today, U.S. land drilling activity is at the lowest level since January of 2003. For many, the major theme across the industry is survival. Service pricing continues to decline and this has led to sharp reductions in personnel, expenses and investments across the board. While no…

Thank you, John. The company reported $422 million in net income for fiscal 2015 compared to $709 million for fiscal 2014. The average annual level of drilling activity for the company declined by over 20%, but the decline is closer to 50% when we compare this fourth fiscal quarter, for fiscal 2015 that is, with last year's fourth fiscal quarter. This, of course, is the result of a market environment that, as John mentioned, presents serious challenges in terms of generating earnings for our shareholders as reflected in our fourth fiscal quarter results. Following are some comments on each of our drilling segments. Our U.S. land drilling operations generated approximately $64 million in segment operating income during the fourth fiscal quarter, excluding abandonment charges related to old SCR rigs. The number of quarterly revenue days declined by a little over 5% as compared to the prior quarter, resulting in an average of approximately 147 rigs generating revenue days during the fourth fiscal quarter. On average, approximately 118 of these rigs were under term contracts and approximately 29 rigs worked in the spot market. Excluding the impact of early termination revenues, the average rig revenue per day slightly decreased to $26,218 in the fourth fiscal quarter, and the average rig expense per day decreased to $13,823, resulting in an average rig margin per day of $12,395 in the fourth fiscal quarter. The decline in average rig revenue per day was again attributable to softer market conditions. The decrease in the average rig expense per day was primarily a result of a reducing volume of rigs becoming idle and requiring attention as compared to the prior quarter. During the quarter, the segment generated approximately $33 million in revenues corresponding to early termination of long-term contract. Given existing notifications for early terminations, we…

Thank you. And we'll take our first question from Dan Boyd with BMO Capital Markets. Please go ahead. Your line is open.

Hi. Thanks. Your margins are actually holding in quite nicely. The one thing I wanted to ask about is in the spot market where there just seems to be a lot of confusion on where rigs are being priced. But if I'm doing the math correctly, you did 25 rigs that you have in the spot market. Is it correct that they're working at just under $20,000 a day?

Dan, this is Juan Pablo. I think that's a fair assumption.

Okay. And just so I understand...

High teens in general would be our description.

Okay. So despite these tough market conditions, you're actually still able to reprice in this current market at that rate. Correct? John W. Lindsay - President, Chief Executive Officer & Director: Dan, this is John. That's where our spot market pricing has been averaging. But clearly, as this market has moved forward, I mean, they are higher – high teens, but they're in a range, $17,000 to $18,000. I mean, it's job-specific, area-specific. But clearly, with oil pricing and the range that it's been, there's not any – number one, there's not much of a spot market out there to compete in, but that's kind of the average pricing that we've been seeing.

Okay. Thanks. And can you just give us some – you still have a number of rigs on term contracts internationally and I believe a bunch of those are in Argentina where you had some nice contract awards, I think, about a year ago. Can you just give us some color on the roll-off schedule over the next fiscal year and how margins might progress? Because I believe those contracts were also at pretty attractive margins? John W. Lindsay - President, Chief Executive Officer & Director: Yeah. I will mention that the Argentina contracts were – those 10 rigs were five-year term contracts. I think Juan Pablo has more details on the overall international fleet.

Sure. Dan, if you take a look at the next four years for international and determine what is the average number of rigs that we already have under term contract for those following years, the numbers would be respectively beginning from fiscal 2016 through fiscal 2019, 14 rigs, 13.2 rigs, 11.8 rigs, and 10 rigs. Of course, as John mentioned, the base of that represents the rigs that we have active in Argentina.

Yeah. Thanks. And then just last one, just how low are you willing to take the cash balance to maintain the current dividend?

Dan, this is Juan Paulo. We fortunately don't have to be worried about that at this point. As you can see, our level of liquidity is very high. We would prefer to have a high level of liquidity over downturns, as we've mentioned in the past. We will just continue to monitor the cycle and make decisions as we go. But at this point, as we've said, we do believe that we are in position to sustain the current dividend levels.

Okay. Thank you. John W. Lindsay - President, Chief Executive Officer & Director: Thanks, Dan.

Thank you. We'll go ahead and take our next question from Scott Gruber with Citigroup. Please go ahead. Your line is open.

Yes. Good morning, gentlemen. John W. Lindsay - President, Chief Executive Officer & Director: Good morning.

My back of the envelope math points to somewhere around $150 million in CapEx associated with upgrades. Is that in the ballpark?

This is Juan Pablo. Scott, we're not providing that level of detail. I think that we provided a broad range of $300 million to $400 million. A lot of that will be determined by market conditions and opportunities as they emerge. So a lot of moving parts and we can't you give a specific number on that.

That's fair. Is the upgrade portion, though, a primary driver of the delta between the low end and the high end? John W. Lindsay - President, Chief Executive Officer & Director: Scott, this is John. There is a portion of that, there is also a portion related to just maintenance CapEx in general. As Juan Pablo said, there is a wide range of potential outcomes in terms of activity for 2016. And so that's the reason for the broad range in the CapEx.

Got it. And how much of the planned upgrade spending is on active rigs versus idle rigs? John W. Lindsay - President, Chief Executive Officer & Director: Well, that's a hard one to nail. Obviously, that's going to be a function of the type of environment that we see. I mean, the fact is we have very capable rigs that are sidelined right now that don't require any sort of an upgrade. But again, there's 7,500 psi, there's third mud pump. There's just other upgrade opportunities that we have as customers begin to exploit some of these unconventional resources maybe in a little bit different way. So not a lot more color we can add to that, but it would probably be a little bit of an all of the above. I think we would probably have some upgrades for the rigs that were working, and then assuming that we were able to continue to take market share going forward, it would also be some rigs that would be coming out of idle condition.

And one last one. Earlier in the year, you're performing some maintenance on the idle rigs in order to keep them ready for reactivation and this was leading to a bit of a rise in your daily OpEx. You guided for $13,600, which is down quarter-on-quarter. What are you seeing with this strategy in terms of spending some money to keep the rigs ready to try to take some share as when we see an inflection in demand? John W. Lindsay - President, Chief Executive Officer & Director: Well, your description of maintaining, I mean it was – mostly, it was a preservation. I think historically, the industry hasn't done a great job related to when you idle a rig in performing some of the preservation that needs to happen and actually idling the rig in the proper fashion in a lot of cases because, a lot of the expectation would be, will the rigs going to go to work in the next month or so? So there is some additional cost upfront on that. Clearly, there's some ongoing cost associated. Some of it is a fixed cost that we really don't have much control over. That's most of the cost that you see today. I think we're in a really good position with the fleet status, and that we're ready to go back to work at a moment's notice and we could put rigs back to work very quickly and, I think, at a fairly, fairly low cost.

Got it. Appreciate the color. John W. Lindsay - President, Chief Executive Officer & Director: All right, Scott. Thank you.

Thank you. And we'll go ahead and take our next question from Waqar Syed with Goldman Sachs. Please go ahead. Your line is open. Waqar Mustafa Syed - Goldman Sachs & Co.: Thank you. If I heard you correctly, there's about 128 rigs that's generating revenue days currently? John W. Lindsay - President, Chief Executive Officer & Director: In the U.S. land segment, yes, Waqar. Waqar Mustafa Syed - Goldman Sachs & Co.: In the U.S. land segment, yeah. Okay. And you're guiding to about 126 rigs for the fourth – for the December quarter. So, the exit rate in the December quarter, you think is, what, 124 rigs, 125 rigs, in that kind of range? John W. Lindsay - President, Chief Executive Officer & Director: I'm not sure what your assumption was to come up with 126 rigs. We provided a wide range of 11% to 14% decline. You may have taken the highest number there. I'm not sure how you got to that number. But, I think in general terms, it's probably fair to assume that the number of rigs that we have active or generating revenue days, as you described it, 128 rigs, that's probably going to be flat to slightly down through the remainder of the quarter. Waqar Mustafa Syed - Goldman Sachs & Co.: Okay. That's good. That's interesting. Now, we hear a lot about industry just dropping rigs post-Thanksgiving and then sharp decline in the December timeframe. You'd certainly get the first indication of the plans. Do you hear – what are your clients telling you about post-Thanksgiving activity for them? John W. Lindsay - President, Chief Executive Officer & Director: Yeah. Waqar, this is John. We don't have that indication. I've heard and read some of the same that you've described. At this…

Well, I'm not sure if I followed your question, but let me give it a try in terms of answering at least part of it. We have over 180 rigs in the U.S. land segment that are pad capable, and about 88 of those are active or contracted. So that represents close to a 50% utilization. As it relates to rigs equipped with 7,500 psi systems, several of those, or a good number of those, do have those systems. I can't give you a number right now. I don't have that. John W. Lindsay - President, Chief Executive Officer & Director: Does that answer your question, Waqar? Waqar Mustafa Syed - Goldman Sachs & Co.: Yeah. No, I was interested in the utilization of such rigs that have 7,500 psi systems on them. John W. Lindsay - President, Chief Executive Officer & Director: Yeah. We have – I think there's a few 7,500 psi systems on rigs that are idle. I think the majority of the 7,500 systems are active today. And we continue to high grade rigs to 7,500 psi systems where needed. I mean, the fact is not all basins need 7,500. Not all customers within the same basin require 7,500. It's a little bit of a mixed bag. But as I've described in my comments, that's one of the significant advantages that we have is this ability to add upgrade kits, if you will, to FlexRigs, both rigs that are working as well as rigs that are idle that could respond to needs. I mean, we're still seeing examples of high grading where we're putting rigs to work for customers and that rig is high grading or replacing a competitor's older rig or underperforming rig. So that continues to be an opportunity for us. Waqar Mustafa Syed - Goldman Sachs & Co.: In your international business, you guided to about $8,000 a day margin. I suspect some of that margin decline has to do with extra cost that you're carrying as you maybe stack some equipment. Can we go back to kind of more normal kind of margins even if the rig count doesn't go up internationally, and when can that happen, and what is that kind of nominal kind of margin?

Waqar, this is Juan Pablo. Yeah. You make a good point. When you have that number of idled rigs, it does represent a burden, but in addition to that, we're down to, I believe, five countries where we're active and three of those only have one rig that is active. And the basic cost of maintaining an operation in a particular country is something that does impact the average rig revenue and average rig expense – pardon me, the average rig expense per day, not the rig revenue per day and, of course, the margin per day. So having a significant impact on that, while we can't spread those fixed costs, so to speak, among a larger number of rigs, is challenging. We are certainly looking at ways to try to be more cost effective internationally as you can imagine. Waqar Mustafa Syed - Goldman Sachs & Co.: So is $8,000 a day margin, is that a good run rate then or where can we go up to like – or is it still there's potential to still come down as we go into the March and June quarters?

Well, as always, Waqar, that will depend on market conditions. If market conditions remain the same, I think that is a fair assumption. But as we know, we are in very volatile times and, hopefully, we'll have much better news in the following quarters if we see a recovery. But it's tough to tell at this point. John W. Lindsay - President, Chief Executive Officer & Director: Waqar, we're obviously spending a lot of time and effort on this and, as Juan Pablo just said, we'll have more to report and we'll be more clear here in the coming month or so into the next quarter. Waqar Mustafa Syed - Goldman Sachs & Co.: Great. And then just one last quick question. Do you expect working capital to be a source of funds going forward as well in the next, let's say, next fiscal year as well like it's been this year? John W. Lindsay - President, Chief Executive Officer & Director: It certainly has been a very significant source of funds over the downturn. Going forward, it all depends on what happens in the market. It's going to be interesting to see that. But nonetheless, we don't expect that to be a driver in terms of liquidity for us and our ability to remain very strong in that regard going forward. And, of course, as we mentioned before, the ability of the company to sustain the dividend, we believe, is very strong at least for the foreseeable future. Waqar Mustafa Syed - Goldman Sachs & Co.: Okay. Thank you very much. John W. Lindsay - President, Chief Executive Officer & Director: Thank you, Waqar.

Thank you.

And we can go ahead and take our next question from Rob MacKenzie with IBERIA Capital. Please go ahead. Your line is open.

Thank you. John, I wanted to come back to some of your prepared remarks on – and good at that on your historical propensity to innovate during cyclical downturns and being rewarded for that. Your CapEx budget doesn't seem to include anything along those lines for this quarter. Can you give us some idea as to what you're thinking about and where that might take H&P? John W. Lindsay - President, Chief Executive Officer & Director: Well, Rob, it's really – it's an ongoing effort at the company and it's a big part of our culture. We continue to work on a lot of things, most of which we're not going to go into any great detail and talk about it. But I can tell you, there's a lot of things related to the organization, related to rig, equipment and upgrades and just generally working on continuing this value proposition for customers. So we're obviously working with customers on various things and trying to figure out how we're going to continue to provide the greatest performance possible in the safest way possible for our customers. So we obviously are spending a lot of time and effort on that. If you think about what has really driven our CapEx over time is when we're building a lot of newbuilds. And, of course, last year we've built – we were building four rigs per month. And so that was really what drove that initial, what, $1.3 billion CapEx. So you shouldn't see that CapEx range being something that's messaging that we're not investing in the business and we're not innovating.

Great. Thank you. I'll turn it back. John W. Lindsay - President, Chief Executive Officer & Director: Okay. Thank you.

Thank you. And our next question comes from Robin Shoemaker with KeyBanc Capital Markets. Please go ahead. Your line is open.

Thank you. So, Juan Pablo and John, I think you mentioned at the early part of your remarks that the AC drive now accounts for 58% of active rigs. And given how much the rates for Tier 1 rigs have come down, AC drive rigs have come down, and I'm sure that the differential – pricing differential with Tier 2, 3 and 4 rigs has narrowed very substantially. It's a little surprising that there's really still some lower tier rigs in the market. And I just wonder from your perspective kind of what would account for that since – or am I correct that the pricing differential has narrowed significantly from a year ago?

No, Robin, I think your sense is right. There's no doubt that the pricing differential has narrowed. I think a portion of the legacy fleet that's working, of course, we don't have any rigs in that category, so we don't know the contractual situation. But our assumption is there's a portion of those rigs that are under term contract. And so I think, over time, we can probably expect to see some of those rigs roll off. And so I think our expectation would be, going forward, is you're going to continue to see the legacy fleet being replaced by AC drive rigs and, obviously, our vote would be FlexRigs. And we're going to see that happen over time. You've heard us say this over and over for several years and that is these rigs are working harder than they ever have; they're delivering at a higher level of performance than rigs ever have, the cycle times are increasing dramatically. And that puts a lot of pressure on that older legacy fleet design. And so, again, I think, over time, that'll happen. The question will be: what about the pricing? But we've heard this for years. You can't reduce the day rate low enough on that older legacy fleet, in many cases, to be able to save money for the customer. I mean, at the end of the day, it ends up costing the customer to go with that older rig fleet. So I think, over time, we're going to continue to see the replacement cycle play out kind of like what we've described. And if you look back over the last five years, you can see it happening.

Yeah. I'd agree. Okay. Thank you. So just one other question, and this relates to Juan Pablo's mention that there are a few cases where you have agreed to lower the day rate on a term contract in exchange for an extension of the contract, sort of like the blend-and-extend deals we hear more frequently on offshore contractors. But then I thought I heard you say that some of those deals then reverted back to the original contract. And, I guess, my question is, is that kind of deal common because it seems that by far the majority of cases were the E&P companies just want to buy out the remaining term of the contract.

I think – Robin, let me make a couple of comments and John may wish to add to that, of course. But what you referred to as blend-and-extend type contracts, what that typically implies is that the contractor reduces the day rate or the pricing in exchange of increasing the duration of the contract. That is not the case in terms of what we refer to. What happens in the type of deals that we refer to is that there is a period of time for which a customer can get a slightly lower day rate. But then after that, the day rate goes back to the original day rate contemplated in the contract, and the duration once again begins to take into account. In other words, if you have a two-year term remaining or two years out of three years remaining and you have a six-month period where you have lower day rates, then the two years that remain move to the right. And once you get to the point where a customer is ready to go back to a higher day rate – which is in a short period – in the short term in general, then the day rate goes back to the original price, at the higher price. So we thought that that was a mutually beneficial type of arrangement. It's not necessarily very common, but we do all that we can to work with our customers.

Right. I see. Okay. Well, thanks for clarifying that.

Yes, sir. John W. Lindsay - President, Chief Executive Officer & Director: Robin, thank you.

Thank you. And our next question will come from Kurt Hallead with RBC Capital Markets. Please go ahead. Your line is open.

Thank you. Hey, good morning. John W. Lindsay - President, Chief Executive Officer & Director: Good morning, Kurt.

So I was just real curious about when you look forward into next year, difficult market conditions, et cetera. How do you think about the dynamic? Will you be able to fund CapEx and dividends and basically come out in a cash breakeven position, free cash breakeven position in 2016, or is your gating factor CapEx, if you kind of see what I'm saying? Are you going to reduce CapEx to maintain a positive free cash flow position, or are you going to need to tap a debt market or whatever to keep paying out your dividend? How are you guys thinking about that tactically?

Kurt, this is Juan Pablo. I guess the last part of your question, I'd like to address first. We would not expect to borrow money in order to pay dividends. If we were to borrow money in the future, it probably would be to pursue opportunities or expand the business. It would probably be business-related. But to the first part of your question, the amount of cash flow that we will be able to generate will depend on market conditions. And of course, we don't provide guidance in that regard. So, we can't provide you a reference there. What we do have, of course, is a significant number of long-term contracts that ensure that we will get a very strong base in terms of cash from operations. And then from that, we think that we'll be able to fund the CapEx level that we commented on and the current dividend level. We also have, of course, as you know, a very high level of cash and liquidity. In general, if there were to be a negative cash flow position in any of the following years, we would certainly look at that existing cash at the beginning of the year to fund whatever may be pending or may be the difference there. So, hopefully, that helps to answer your question.

Yes. Yes. That's very helpful. Now, listening to the entire commentary and having a variety of discussions, you are heading into this fourth quarter period, it's still not quite clear to me whether or not there is going to be or continue to be incremental pricing pressures above and beyond what we've seen? And just wondering if you might have some general perspectives on that and maybe provide a little bit of color to where there is no color right now. John W. Lindsay - President, Chief Executive Officer & Director: Well, Kurt, this is John. I said earlier there really isn't much of a spot market out there. So, there is not a lot of active bidding for work. I think generally that's when you see a lot of pressure on pricing per se. I don't get the sense that operators, at least, our customers in general, there's not this continual request for a reduction in day rate because I think, number one, because we're working together very well. We're delivering a lot of value. The cost of their wells continue to come down. I mean, you just look across the board in the E&P space, and that's a pretty common theme that well costs are coming down. So, I just think it's not something that's out there being talked about because we're really not out there bidding much in the spot market. I don't have – I don't get a sense that there's going to be this huge push to continue to reduce pricing, but that – we're making an assumption that the market looks like it is now and that oil prices are in the $40 range. And if something crazy doesn't happen and prices go lower, I'm not expecting that, but in that event, maybe you would see some additional pricing pressure. But that's about as clear as we can make it right now, Kurt. We just really don't have any more visibility on that based on what we see right now.

All right. And if I may kind of sneak one follow-up in the comment you mentioned about some newbuilds. Now, I wasn't quite clear on whether those newbuild deliveries were being canceled or were putting on hold as your potential customers are deciding when they're going to be ready to take those new rigs. Can you help clarify that for me? John W. Lindsay - President, Chief Executive Officer & Director: Yes, Kurt. In some cases, over the last several months, we have had some customers that have requested a delay in terms of the delivery of the newbuild in exchange for compensation to H&P. And again, we try to work with the customers as best we can and we've accommodated in a few cases and I think those are the four newbuilds that we made a comment on that you're probably making reference to.

So they're not cancellations, they're just delays in delivery? John W. Lindsay - President, Chief Executive Officer & Director: Correct.

Okay. Great. Thank you. John W. Lindsay - President, Chief Executive Officer & Director: Let me – I think we have time for one more question please, operator.

Okay. Perfect. We'll go ahead and take our last question from Byron Pope with Tudor, Pickering, Holt. Please go ahead. Your line is open. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc.: Good morning, guys. John W. Lindsay - President, Chief Executive Officer & Director: Good morning, Byron.

Hi, Byron. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc.: John, you touched on the indiscriminate laying down of rigs irrespective of rig quality and we've certainly seen an overall rig count. Your Flex5s have held up remarkably well from a utilization point of view. My gut would suggest that part of that is a function of when newbuilds came onto long-term contracts. But I was just wondering if you could comment on that. John W. Lindsay - President, Chief Executive Officer & Director: Well, no, that's exactly right, Byron. I mean, they are a great rig and the reality is most of the Flex5s had a – they have a large amount of term contract remaining on that, so the early termination fee is significantly higher. You look at the Flex3s, we've been building new Flex3s, but the majority of the Flex3s that were on term contract, a lot of them weren't still on their original newbuild term contract, if that makes sense. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc.: Sure. Okay. And then second quick question. It's – despite the decimation to the overall U.S. land rig count, you guys still have the most rigs working in two key areas, the Eagle Ford and the Permian. So could you speak to, at a high level, what you're seeing in terms of footage per day, just trying to think through the order of magnitude of drilling efficiencies that we still might be seeing? John W. Lindsay - President, Chief Executive Officer & Director: Yeah. That's a great question, Byron. As we look back all the way to 2010-2011, we've had double-digit improvements in productivity footage per day year-over-year, maybe with one exception, and that was going from 2013 to 2014, I think, because of the level of activity that the industry experienced. But we're obviously seeing a lot of performance improvement this year. Obviously, you would expect that with having all of your people – you have a lot of experience on rigs. But we're continuing to see 15% to 20% performance improvement year-over-year in 2015 versus 2014. And when you, like I said earlier, these rigs are performing at the highest levels ever. There is still some opportunities ahead, but clearly, when you start looking at, as an example, a 7- or an 8-day well compared to a 25-day well, the opportunity set obviously gets a little smaller every year. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc.: Sure. Okay. Thanks, guys. I appreciate it. John W. Lindsay - President, Chief Executive Officer & Director: All right. Thanks, Byron.

And before we finish the call, we have a couple more comments to make, please. John W. Lindsay - President, Chief Executive Officer & Director: Yes. I just wanted to thank you all again. I want to leave you with one last thought and that is, we continue to work very hard to improve the capabilities of the company. HP has a solid track record of coming out of these downturns as a stronger company. Our management team has experienced many downturns. And each time, H&P emerges on the other side and better shape. Our efforts will remain focused on adding shareholder value. And we appreciate each of you for joining us this morning and thank you again for your support.

Thank you, everybody. Have a good day.