Tulsa-based Helmerich & Payne, Inc. says it anticipates lower capital expenditures for the remainder of the year and announced intentions to lower future dividend payments and its remaining 2020 budget.
The company said Wednesday that after reviewing its capital allocation policy decided to reduce the future quarterly dividends to $0.25 per share. The decision was made by the board of directors and is still subject to Helmerich and Payne’s financial condition, results of operations and cash flows.
The company still intends to pay the previously announced $0.71 per share dividend on June 1, 2020, to stockholders of record at the close of business on May 11, 2020.
“H&P recognizes the uncertainties and concerns caused by the COVID-19 pandemic,” said John Lindsay, President and Chief Executive Officer. “Accordingly, H&P has implemented additional policies and procedures to protect the well-being of our stakeholders and to minimize the impact of COVID-19 on our ongoing operations and began working remotely where possible since March 13.”
In light of the uncertainties related to COVID-19 and the significant negative impact that a weakened commodity price environment have had on the outlook for the industry rig count, H&P has preliminarily reassessed certain portions of its cost structure, including SG&A and capital expenditures, for the remaining six months of fiscal year 2020.
A week ago, the company announced it had implemented cost controls and was re-evaluating its capital allocation in order to preserve its financial position. It did not indicate at the time how much it might cut from 2020 capital expenses, only that it felt it was appropriate to withdraw its fiscal guidance for the second quarter.
When the company announced its quarterly earnings in early February, a company spokesman indicated the fiscal 2020 capex budget remained in the range initially set, between $275 and $300 million.
Now the capex range has been lowered to $210 to $230 million for the rest of 2020.
Second half fiscal 2020 capital expenditures are expected to consist primarily of maintenance capital expenditures at an annualized level of approximately $1 million per average active rig. Asset sales include reimbursements for lost and damaged tubulars and sales of other used drilling equipment that offset a portion of gross capital expenditures, and are now expected to be approximately $25 to $35 million for full fiscal 2020.
SG&A costs, excluding any future one-time items, for the full fiscal year 2020 are now expected to be approximately $185 million.
The Company’s fiscal second quarter 2020 conference call will take place on Friday, May 1, 2020, at 11:00 a.m. (ET) with John Lindsay, President and CEO; Mark Smith, Senior Vice President and CFO; and Dave Wilson, Director of Investor Relations.
Source: Business Wire