Helmerich & Payne (HP) risk factors, FY2025 10-K

BUSINESS AND OPERATING RISKS

1. 01Our business depends on the level of activity in the oil and natural gas industry, which is significantly impacted by the current and expected price of oil and natural gas as well as the volatility in those prices and other factors
2. 02Global economic conditions and volatility in oil and gas prices may adversely affect our business
3. 03The drilling services and solutions business is highly competitive, and a surplus of available drilling rigs may adversely affect our rig utilization and profit margins21% rewritten
4. 04Consolidation in our industry may impact our results of operations
5. 05Our drilling and technology related operations are subject to a number of operational risks, including environmental and weather risks, which could expose us to significant losses and damage claims. We are not fully insured against all of these risks and our contractual indemnity provisions may not fully protect us
6. 06Our business is subject to cybersecurity and information technology system disruption risks
7. 07Our acquisitions, dispositions and investments may not result in anticipated benefits and may present risks not originally contemplated, which may have a material adverse effect on our liquidity, consolidated results of operations and consolidated financial condition
8. 08While we generally seek to obtain indemnities for liabilities arising from events occurring before such acquisitions, we may be unable to do so, and any indemnities we do obtain will be limited in amount and duration, may be held to be unenforceable or the seller may not be able to indemnify us31% rewritten
9. 09We may be unable to successfully integrate KCA Deutag’s business or achieve the anticipated benefits of the acquisition, or the anticipated benefits attributable to the acquisition may vary from our expectations57% rewritten
10. 10Technology disputes and limitations on our ability to protect or enforce our intellectual property rights could negatively impact our costs, revenues, and any competitive advantage we hold
11. 11Unexpected events could disrupt our business and adversely affect our results of operations
12. 12Reliance on management and competition for experienced personnel may negatively impact our operations or financial results
13. 13The loss of one or a number of our large customers could have a material adverse effect on our business, financial condition and results of operations42% rewritten
14. 14Our current backlog of drilling services and solutions revenue may decline and may not be fully realized as fixed‑term contracts and, in certain instances, these contracts can be terminated without an early termination payment or suspended without standby or force majeure compensation69% rewritten
15. 15Our contracts with NOCs may expose us to greater risks than we normally assume in contracts with non-governmental customers
16. 16Control of oil and natural gas reserves by NOCs may affect the demand for our services and products and create additional risks in our operations
17. 17Our drilling services operating expense includes fixed costs that may not decline in proportion to decreases in rig utilization and dayrates
18. 18Shortages of drilling equipment, supplies or other key materials could adversely affect our operations
19. 19Continuing inflation and cost increases may impact our sales margins and profitability
20. 20Unionization efforts and labor regulations in certain countries in which we operate could materially increase our costs or limit our flexibility
21. 21The impact and effects of public health crises, pandemics and epidemics could have a material adverse effect on our business, financial condition and results of operations59% rewritten
22. 22Improvements in or new discoveries of alternative energy technologies could have a material adverse effect on our financial condition and results of operations
23. 23Our business and results of operations may be adversely affected by foreign political, economic and social instability risks, foreign currency restrictions and devaluation, and various local laws associated with doing business in certain foreign countries30% rewritten

FINANCIAL RISKS

1. 24Covenants in our debt agreements restrict our ability to engage in certain activities
2. 25We may be required to record impairment charges with respect to our drilling rigs and other assets
3. 26A downgrade in our credit ratings could negatively impact our cost of and ability to access capital
4. 27Our ability to access capital markets could be limited
5. 28Our marketable securities may lose significant value due to credit, market and interest rate risks
6. 29We may not be able to generate cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations

LEGAL AND REGULATORY RISKS

1. 30The physical effects of climate change and the regulation of greenhouse gases and climate change could have a negative impact on our business41% rewritten
2. 31New legislation and regulatory initiatives relating to hydraulic fracturing or other aspects of the oil and gas industry could negatively impact the drilling programs of our customers and, consequently, delay, limit or reduce the services we provide
3. 32Our aspirations, goals and initiatives related to sustainability and emissions reduction, and our public statements and disclosures regarding them, expose us to numerous risks
4. 33Failure to comply with the U.S. Foreign Corrupt Practices Act or foreign anti‑bribery legislation could adversely affect our business
5. 34Our business is subject to complex and evolving laws and regulations regarding privacy, data security and consumer protection20% rewritten
6. 35Government policies, mandates, and regulations specifically affecting the energy sector and related industries, regulatory policies or matters that affect a variety of businesses, taxation polices, and political instability could adversely affect our financial condition and results of operations
7. 36Legal claims and litigation could have a negative impact on our business
8. 37Additional tax liabilities, limitations on our use of net operating losses and tax credits and/or our significant net deferred tax liability could affect our financial condition, income tax provision, net income, and cash flows31% rewritten
9. 38Failure to comply with or changes to governmental and environmental laws could adversely affect our business

RISKS RELATED TO OUR COMMON STOCK AND CORPORATE STRUCTURE

1. 39We may reduce or suspend our dividend in the future
2. 40The market price of our common stock may be highly volatile, and investors may not be able to resell shares at or above the price paid
3. 41Certain provisions of our corporate governing documents could make an acquisition of our company more difficult
4. 42The choice of forum provision in our bylaws could limit our stockholders’ ability to obtain what such stockholders’ believe to be a favorable judicial forum for disputes with us or our directors, officers, or employees
5. 43Public and investor sentiment towards climate change, fossil fuels and other ESG matters could adversely affect our cost of capital and the price of our common stock21% rewritten