Helmerich & Payne FY3Q26 First Take - ALERT

Research evidence excerpt

J P M O R G A N

North America Equity Research

05 August 2026

Helmerich & Payne

FY3Q26 First Take - ALERT

Overweight

HP, HP US

Price (05 Aug 26):$33.28

Oil & Gas Exploration & Production

EBITDA Results. Adj. EBITDA $236mm v. JPMe $217mm/STe $216mm.

JPM View: Stock Reaction – Positive. We expect a positive reaction to HP's

FY3Q26 print, which featured adjusted EBITDA of $236mm that beat both JPMe/

STe of $217mm/$216mm by +9%, with direct margins at or above the high end of the

ranges for each segment. The real standout was NAS, with a strong direct margin of

$241mm, or $18.67k per rig day, landing above management’s ~$18.4k/d implied

margin guide, while deploying 10 additional rigs in response to strong demand from

private operators. What was particularly impressive about the quarter was HP’s ability

to grow daily margins by more than $1,000 q/q despite the cost of reactivating ~10 rigs

in the quarter. While average active rigs were 142 for the quarter, management noted

that NAS activity is currently running at 150 rigs. International Solutions also

delivered a strong quarter, with direct margins improving to $31mm (vs. $11mm in

FY2Q26) as Argentina helped drive results toward the higher end of the range, and the

company continues to add technology to existing rigs. The Vaca Muerta continues to

stand out as a key growth engine, as management described the Argentina shale

opportunity as an extension of HP’s operational footprint in the Lower 48. HP

currently has 9 rigs running (~25% market share) across Argentina, and the company

is on a path to 15 FlexRigs (the 10th and 11th arrive in August, 12th in December, and

3 rigs will be exported from the U.S. in 2027), with the potential to participate in even

more long-duration, higher-margin contracts. Meanwhile, Offshore direct margin

rose to $29mm from $27mm q/q, led by performance-related bonuses, and delivered

strong operational performance, slightly above the high end of the range. The

company also secured a four-year contract renewal in Norway, improving its offshore

backlog to $3.6bn. On reactivation expense, management noted costs came

in significantly below the ~$1mm/rig run rate in FY3Q26, as the first set of

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