Helmerich & Payne acquires privately held Terravici

TerraVici is developing technology that will improve horizontal drilling.

Helmerich & Payne said the acquisition will result in a research and development write-off of 6 cents to 8 cents per share against fiscal third-quarter income.

In addition, research and development costs will boost total operating costs by $3 million, or 2 cents per share, for every quarter through fiscal 2008 and 2009. Helmerich & Payne expects TerraVici to add to earnings beginning in fiscal 2010, and believed TerraVici's technology developments will enhance the drilling capabilities of its FlexRigs.

Helmerich & Payne also said it signed 12 long-term contracts with two companies to operate 12 of the company's FlexRigs. Most of the contracts will last a minimum of three years, with the remainder running from four to seven years.

The company also revised its capital expenditures estimate for fiscal 2008 to $750 million, funded mainly through cash flow.