A maker of high-tech land drilling rigs for oil and gas companies, H&P runs one of the largest fleets of automated "super-spec" FlexRig® rigs in the Western Hemisphere, plus offshore and Middle East operations. It was born in 1920 when a Chicago aviator and an Oklahoma microbiologist met on a Texas rig and sealed their partnership with a handshake, later basing itself in Tulsa. In 2025 it grew dramatically by buying drilling contractor KCA Deutag, whose BENTEC™ workshop builds its rigs.
H&P returns to net income of $75.7M on a $114.8M property sale gain, while operating revenue stays flat at $1.0B.
A $114.8 million gain on the sale of the Utica Square property returned H&P to profitability this quarter. Operating was flat at $1.0 billion as declines in North America and International Solutions offset growth in Offshore Solutions, and reached $75.7 million after a $162.8 million loss a year ago. The sale masked an underlying quarter where drilling activity and pricing continued to soften, but the grew to $9.1 billion on extended offshore contracts.
Key takeaways
reached $75.7 million, or $0.74 per diluted share, compared to a net loss of $162.8 million a year ago, driven almost entirely by a $114.8 million gain on the sale of the Utica Square property.
Consolidated operating was flat at $1,034.9 million, as a 7.8% increase in Offshore Solutions revenue to $174.4 million was offset by a 4.9% decline in North America Solutions and a 5.9% decline in International Solutions.
North America Solutions fell to $562.9 million as the average active rig count declined 3.4% and pricing softened, pushing the 's down 9.4% to $241.2 million.
Section summaries
Management's Discussion and Analysis
H&P swung to Q3 net income of $75.7M driven by a $114.8M gain on Utica Square sale and lower impairments, while operating revenue was flat at $1.0B.
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Consolidated Q3 operating was flat at $1.0B, as declines in North America Solutions (-4.9%) and International Solutions (-5.9%) were offset by growth in Offshore Solutions (+7.8%).
North America Solutions fell to $562.9M on lower activity (average rigs down 3.4%) and pricing; decreased 9.4% to $241.2M.
International Solutions narrowed its operating loss to $54.4 million from $166.5 million a year ago, largely because the prior-year quarter included a $128.4 million non-cash that did not repeat.
The total contract drilling rose to $9.1 billion from $7.0 billion at fiscal year-end, primarily from extensions of two offshore operations and maintenance contracts.
improved 4.7 points sequentially to 33.8%, and swung to positive 18.2% from negative 12.3% a year ago, driven by the property sale gain and the absence of the prior-year .
What changed
The North America active rig count fell to 136 in Q2 FY2026 and the Q3 filing reports a further 3.4% decline in average rigs, confirming the downward trend flagged in prior quarters has continued.
The $0.5 billion in tied to suspended Saudi Arabia rigs, flagged as a watch item last quarter, remains unresolved; the Q3 filing does not report any return to service, and International Solutions declined 5.9% .
The $50 million in expected annualized cost savings from the KCA Deutag integration, flagged repeatedly, has yet to appear in a meaningful way: International Solutions still posted a $54.4 million operating loss, though it narrowed from the prior year due to the absence of charges rather than operational improvement.
turned positive at $83.9 million, up from $24.6 million a year ago, as rose 26.4% to $153.7 million, a reversal from the negative free cash flow reported in Q2 FY2026.
What to watch
Whether the $0.5 billion in tied to suspended Saudi Arabia rigs is converted to or written off, and whether any of those rigs return to active service.
Whether the International Solutions can reach operating profitability on an operational basis, excluding one-time gains and charges, as the $50 million in expected annualized cost savings begin to appear.
The trajectory of the North America active rig count and average dayrates, given the 3.4% decline in average rigs and lower pricing reported this quarter.
Whether the $9.1 billion , now heavily weighted toward offshore operations and maintenance contracts, translates into growth at margins that offset the decline in North America drilling.
International Solutions decreased to $250.1M due to lower activity, though operating loss narrowed sharply to $54.4M from $166.5M a year ago due to the absence of a prior-year $128.4M .
Offshore Solutions rose to $174.4M on increased management contract activity, and grew 28.3% to $29.2M.
Total contract drilling increased to $9.1B from $7.0B, primarily from extensions of two offshore operations and maintenance contracts.
Liquidity remained strong with $204.4M in cash and full availability under the $950M Amended after repaying the remaining $200M on the Term Loan Credit Agreement.
Quantitative and Qualitative Disclosures About Market Risk
For a description of our market risks, see the following: •Note 2—Summary of Significant Accounting Policies, Related Risks and Uncertainties to the Unaudited Condensed Consolidated Financial Statements contained in Item 1 of Part I hereof with regard to foreign currency exchang…
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For a description of our market risks, see the following:
•Note 2—Summary of Significant Accounting Policies, Related Risks and Uncertainties to the Unaudited Condensed Consolidated Financial Statements contained in Item 1 of Part I hereof with regard to foreign currency exchange rate risk which is incorporated herein by reference;
•Note 5—Debt to the Unaudited Condensed Consolidated Financial Statements contained in Item 1 of Part I hereof with regard to interest rate risk which is incorporated herein by reference;
•Note 10—Fair Value Measurement of Financial Instruments to the Unaudited Condensed Consolidated Financial Statements contained in Item 1 of Part I hereof with regard to equity price risk which is incorporated herein by reference; and
•“Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in our 2025 Annual Report on Form 10-K filed with the SEC on November 21, 2025.
See Note 11—Commitments and Contingencies to the Unaudited Condensed Consolidated Financial Statements for information regarding our legal proceedings.
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See Note 11—Commitments and Contingencies to the Unaudited Condensed Consolidated Financial Statements for information regarding our legal proceedings.
There have been no material changes in the risk factors previously disclosed in Part I, Item 1A— “Risk Factors” in our 2025 Annual Report on Form 10-K.
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There have been no material changes in the risk factors previously disclosed in Part I, Item 1A— “Risk Factors” in our 2025 Annual Report on Form 10-K.