HELMERICH & PAYNE INC, 10-K, 1996-12-27

HELMERICH & PAYNE INC
10-K, 1996-12-27
DRILLING OIL & GAS WELLS

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1996

OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 1-4221

HELMERICH & PAYNE, INC.
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C>
DELAWARE 73-0679879
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
UTICA AT TWENTY-FIRST STREET, 74114
TULSA, OKLAHOMA (Zip code)
(Address of principal executive offices)
</TABLE>

Registrant's telephone number, including area code (918) 742-5531
Securities registered pursuant to Section 12(b) of the Act:

<TABLE>
<CAPTION>
NAME OF EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
- ------------------------------------------ ---------------------------
<S> <C>
Common Stock ($0.10 par value) New York Stock Exchange
Common Stock Purchase Rights New York Stock Exchange
</TABLE>

Securities registered pursuant to Section 12(g) of the Act: NONE
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO ____
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM
405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF THE REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION
STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY
AMENDMENT TO THIS FORM 10-K. [ ]
At December 16, 1996, the aggregate market value of the voting stock held
by non-affiliates was $1,215,990,753.
Number of shares of common stock outstanding at December 16, 1996:
24,914,891.

DOCUMENTS INCORPORATED BY REFERENCE

(1) Annual Report to Shareholders for the fiscal year ended September 30,
1996 -- Parts I, II, and IV.

(2) Proxy Statement for Annual Meeting of Security Holders to be held March 5,
1997 -- Part III.

Annual Report Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

For the Fiscal Year Ended September 30, 1996

PART I

Item 1. BUSINESS

Helmerich & Payne, Inc. (the "Registrant"), incorporated under the laws
of the State of Delaware on February 3, 1940, and successor to a business
originally organized in 1920, is engaged primarily in the exploration,
production, and sale of crude oil and natural gas and in contract drilling of
oil and gas wells for others.

These activities account for the major portion of its operating
revenues. The Registrant is also engaged in the ownership, development, and
operation of commercial real estate and was until August 30, 1996, engaged in
the manufacture and distribution of odorants for use in the gas transmission
and distribution industry.

The Registrant is organized into three separate autonomous operating
divisions being contract drilling; oil and gas exploration, production and
natural gas marketing; and real estate. While there is a limited amount of
intercompany activity, each division operates essentially independently of the
others. Each of the divisions, except exploration and production, conduct
their respective business through wholly owned subsidiaries. Operating
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decentralization is balanced by a centralized finance division, which handles
all accounting, data processing, budgeting, insurance, cash management, and
related activities.

Most of the Registrant's current exploration efforts are concentrated in
Louisiana, Oklahoma, Texas, and the Hugoton Field of western Kansas. The
Registrant also explores from time to time in the Rocky Mountain area, New
Mexico, Alabama, Florida, Michigan, and Mississippi. Substantially all of the
Registrant's gas production is sold to and resold by its marketing subsidiary.
This subsidiary also purchases gas from unaffiliated third parties for resale.

The Registrant's domestic contract drilling is conducted primarily in
Alabama, Oklahoma, Texas, Mississippi, and Louisiana, and offshore from
platforms in the Gulf of Mexico and offshore California. The Registrant has
also operated during fiscal 1996 in five international locations: Venezuela,
Ecuador, Colombia, Trinidad and Tobago, and Bolivia.

The Registrant's real estate investments are located in Tulsa, Oklahoma,
where the Registrant has its executive offices.

CONTRACT DRILLING

The Registrant believes that it is one of the major land and offshore
platform drilling contractors in the western hemisphere. Operating
principally in North and South America, the Registrant specializes in deep
drilling in major gas producing basins of the United States and in drilling for
oil and gas in remote international areas. For its international operations,
the Registrant also constructs and operates rigs which are transportable by
helicopter. In the United States, the Registrant draws its customers primarily
from the major oil companies and the larger independents. The Registrant also
drills for its own

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oil and gas division. In South America, the Registrant's current customers
include the Venezuelan state petroleum companies and major international oil
companies.

British Petroleum Company, P.L.C., including its affiliates, ("BP") is
the Registrant's largest single customer. The Registrant performs drilling
services for BP, both domestically and internationally. Each drilling rig
operates under a separate contract. The Registrant believes that its
relationship with BP is good. Revenues from drilling services performed for BP
in fiscal 1996 accounted for approximately 19% of the Registrant's consolidated
revenues for the same period.

The Registrant provides drilling equipment, personnel, and camps for
others on a contract basis for exploration and development of onshore areas and
for development from fixed platforms in offshore areas. Each of the drilling
rigs consists of engines, drawworks, a mast, pumps to circulate the drilling
fluid, blowout preventers, a drillstring, and related equipment. The intended
well depth and the drilling site conditions are the principal factors that
determine the size and type of rig most suitable for a particular drilling job.
A land drilling rig may be moved from location to location without modification
to the rig. Conversely, a platform rig is specifically designed to perform
drilling operations upon a particular platform. While a platform rig may be
moved from its original platform, significant expense is incurred to modify a
platform rig to each subsequent platform. A helicopter rig is one that can be
disassembled into component part loads of 4,000 pounds and transported to
remote locations by helicopter, cargo plane, or other means.

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The Registrant's workover rigs are equipped with engines, drawworks, a
mast, pumps, and blowout preventers. A workover rig is used to complete a new
well after the hole has been drilled by a drilling rig, and to remedy various
downhole problems that occur in producing wells.

The Registrant's contracts for drilling are obtained through competitive
bidding or as a result of negotiations with customers, and sometimes cover
multi-well and multi-year projects. Most of the contracts are performed on a
"daywork" basis, under which the Registrant charges a fixed rate per day, with
the price determined by the location, depth, and complexity of the well to be
drilled, operating conditions, the duration of the contract, and the
competitive forces of the market. Current market conditions involve an
oversupply of drilling rigs for the work available. As a consequence, the
Registrant is and will be performing and bidding for contracts on a combination
"footage" and "daywork" basis, under which the Registrant charges a fixed rate
per foot of hole drilled to a stated depth, usually no deeper than 15,000 feet,
and a fixed rate per day for the remainder of the hole. Contracts performed on
a "footage" basis involve a greater element of risk to the contractor than do
contracts performed on a "daywork" basis. Market conditions have also led the
Registrant to accept "turnkey" contracts under which the Registrant charges a
fixed sum to deliver a hole to a stated depth and agrees to furnish services
such as testing, coring, and casing the hole which are not normally done on a
"footage" basis. "Turnkey" contracts entail varying degrees of risk greater
than the usual "footage" contract. The Registrant believes that under current
market conditions "daywork" basis contract rates are too low to adequately
compensate contractors and that "footage" and "turnkey" basis contract rates do
not

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adequately compensate contractors for the added risks. Contracts for use of
the Registrant's drilling equipment are "well-to-well" or for a fixed term.
"Well-to-well" contracts are cancelable at the option of either party upon the
completion of drilling at any one site. Fixed-term contracts customarily
provide for termination at the election of the customer, with an "early
termination payment" to be paid to the contractor if a contract is terminated
prior to the expiration of the fixed term.

While current fixed term contracts are for one to three year periods,
some fixed term and well-to-well contracts are expected to be continued for
longer periods than the original terms, although the contracting parties have
no legal obligation to do so. Contracts generally contain renewal or
extension provisions exercisable at the option of the customer at prices
mutually agreeable to the Registrant and the customer, and in most instances
provide for additional payments for mobilization and demobilization. Contracts
for work in foreign countries generally provide for payment in United States
dollars, except for amounts required to meet local expenses; however,
increasingly government owned petroleum companies are requesting that a greater
proportion of these payments be made in local currencies. See Regulations and
Hazards, page I-9.

Domestic Drilling

The Registrant believes it is a major land and offshore platform
drilling contractor in the domestic market. At the end of September, 1996, the
Registrant had 33 (27 land rigs and 6 platform rigs) of a total of 41 available
rigs operating in the United States and had management contracts for three
operator owned rigs in offshore California.

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The Registrant believes that it is competitively strongest in deep
drilling rigs. Twenty-four of its existing rigs are capable of drilling to
depths in excess of 20,000 feet.

In March of 1995, the Registrant was awarded a three-year term drilling
contract by a major oil company to construct and operate a new generation rig
upon a tension leg platform ("TLP") located in the Gulf of Mexico. This is the
first rig that the Registrant has operated on a TLP. The TLP concept allows
drilling operations to be conducted in water depths of up to approximately
5,000 feet using current technology. Drilling operations on traditional fixed
platforms have been limited to depths of no more than approximately 1,400 feet.
Registrant commenced drilling operations on the TLP in May of 1996.

During fiscal 1996 the same major oil company awarded the Registrant
three additional term contracts for construction and operation of a self-moving
minimum space fixed platform rig and two TLP rigs. These rigs are to be
located in the Gulf of Mexico.

The self-moving minimum space rig is designed to be moved without the
use of expensive derrick barges. This rig is expected to commence drilling
operations in March, 1997, under an 18-month term drilling contract.

The second TLP rig is expected to commence drilling in May of 1997,
under a three-year term drilling contract. The third TLP rig is scheduled to
commence drilling in September of 1998, and it, too, will be under a three-year
term drilling contract.

International Drilling

The Registrant's international drilling operations began in 1958 with
the acquisition of the Sinclair Oil Company's drilling rigs in Venezuela.
Helmerich

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& Payne de Venezuela, C.A., a wholly owned subsidiary of the Registrant, is one
of the leading drilling contractors in Venezuela. Beginning in 1972, with the
introduction of its first helicopter rig, the Registrant expanded into other
Latin American countries.

Venezuelan operations continue to be a significant part of the
Registrant's operations. The Registrant presently owns and operates 21
drilling rigs in Venezuela. The Registrant had a utilization rate of 94% for
these rigs during fiscal 1996. The Registrant worked for all three government
owned producing companies in Venezuela (Corpoven, Maraven and Lagoven) during
the fiscal year ended September 30, 1996. Collectively, revenues from the
three producing companies accounted for approximately 13% of the Registrant's
consolidated revenues during fiscal 1996. Although the Registrant believes its
relationship with such producing companies is good, the loss of this business
could have an adverse effect on Registrant.

During the mid-1970s, the Venezuelan government nationalized the
exploration and production business. At the present time it appears the
Venezuelan government will not nationalize the contract drilling business. Any
such nationalization could result in Registrant's loss of all or a portion of
its assets and business in Venezuela.

The Registrant presently owns and operates ten drilling rigs in
Colombia. The Registrant's utilization rate for such rigs was 90% during
fiscal 1996. During fiscal 1996 the revenue generated by Colombian drilling
operations contributed approximately 17% of the Registrant's consolidated
revenues.

In addition to its operations in Venezuela and Colombia, the Registrant
in fiscal 1996 owned and operated four rigs in Ecuador, one rig in Trinidad and

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Tobago, and two rigs in Bolivia. During 1996, the rig located in Trinidad and
Tobago was moved to Venezuela and one rig operated in Ecuador was retired. In
Ecuador, Trinidad and Tobago, and Bolivia, the contracts are with large
international oil companies.

In August of 1994, a venture owned 50% by the Registrant and 50% by
Atwood Oceanics, Inc., was awarded a term contract in Australia for the design,
construction and operation of a new generation offshore platform rig. The rig,
which incorporates some of the latest technology in instrumentation and remote
control mechanization of drilling equipment, has been shipped to Australia and
is in the process of being mobilized to its location. It is expected that
drilling operations will commence in January of 1997.

Competition

The contract drilling business is highly competitive. Competition in
contract drilling involves such factors as price, rig availability, efficiency,
condition of equipment, reputation, and customer relations. Competition is
primarily on a regional basis and may vary significantly by region at any
particular time. Land drilling rigs can be readily moved from one region to
another in response to changes in levels of activity, and an oversupply of rigs
in any region may result.

Although many contracts for drilling services are awarded based solely
on price, the Registrant has been successful in establishing long-term
relationships with certain customers which have allowed the Registrant to
secure drilling work even though the Registrant may not have been the lowest
bidder for such work. The Registrant has continued to attempt to differentiate
its

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services based upon its engineering design expertise, operational efficiency,
safety and environmental awareness.

The Registrant specializes in deep drilling for natural gas. During the
past several years, it appears that the demand for deep drilling for gas has
decreased.

Regulations and Hazards

The drilling operations of the Registrant are subject to the many
hazards inherent in the business, including blowouts and well fires, which
could cause personal injury, suspend drilling operations, seriously damage or
destroy the equipment involved, and cause substantial damage to producing
formations and the surrounding areas.

The Registrant believes that it has adequate insurance coverage for
comprehensive general liability, public liability, property damage (including
insurance against loss by fire and storm, blowout, and cratering risks),
workers compensation and employer's liability. No insurance is carried
against loss of earnings or business interruption. The Registrant is unable to
obtain significant amounts of insurance to cover risks of underground reservoir
damage; however, the Registrant is generally indemnified under its drilling
contracts from this risk. The Registrant's present insurance coverage has
been contracted through fiscal 1997. However, in view of conditions generally
in the liability insurance industry, no assurance can be given that the
Registrant's present coverage will not be cancelled during fiscal 1997 nor that
insurance coverage will continue to be available at rates considered
reasonable.

International operations are subject to certain political, economic, and
other uncertainties not encountered in domestic operations, including risks of

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expropriation of equipment as well as expropriation of a particular oil company
operator's property and drilling rights, taxation policies, foreign exchange
restrictions, currency rate fluctuations, and general hazards associated with
foreign sovereignty over certain areas in which operations are conducted.
There can be no assurance that there will not be changes in local laws,
regulations, and administrative requirements or the interpretation thereof, any
of which changes could have a material adverse effect on the profitability of
the Registrant's operations or on the ability of the Registrant to continue
operations in certain areas. Because of the impact of local laws, in certain
areas the Registrant's operations may, in the future, be conducted through
entities in which local citizens own interests and through entities (including
joint ventures) in which the Registrant holds only a minority interest, or
pursuant to arrangements under which the Registrant conducts operations under
contract to local entities. While the Registrant believes that neither
operating through such entities or pursuant to such arrangements nor the
restructuring of existing operations along such lines would have a material
adverse effect on the Registrant's operations or revenues, there can be no
assurance that the Registrant will in all cases be able to structure or
restructure its operations to conform to local law (or the administration
thereof) on terms acceptable to the Registrant. The Registrant further
attempts to minimize the potential impact of such risks by operating in more
than one geographical area and by attempting to obtain indemnification from
operators against expropriation, nationalization, and deprivation.

During fiscal 1996, approximately 34% of the Registrant's consolidated
revenues were generated from international contract drilling operations. Over

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95% of the international revenues were from Venezuela, Colombia, and Ecuador.
Exposure to potential losses from currency devaluation is minimal in the
countries of Colombia and Ecuador. In those countries, all receivables and
payments are currently in U.S. dollars. Cash balances are kept at a minimum
which assists in reducing exposure.

In Venezuela, approximately 65% of the Registrant's invoice billings are
in U.S. dollars and the other 35% are in the local currency, the bolivar. The
Registrant is exposed to risks of currency devaluation in Venezuela as a result
of bolivar receivable balances and necessary bolivar cash balances. In 1994,
the Venezuelan government established a fixed exchange rate in hopes of
stemming economic problems caused by a high rate of inflation. During the
first week of December, 1995, the government established a new exchange rate,
resulting in further devaluation of the bolivar. In April of 1996, the bolivar
was again devalued when the government decided to abolish its fixed rate policy
and to allow a floating market exchange rate. During fiscal 1996, the
Registrant experienced losses of approximately US$2 million as a result of the
devaluation of the bolivar. These losses were more than offset by gains
realized from the purchase of local currency through a government approved
mechanism ("Brady Bonds") which permitted the Registrant to purchase local
currency at favorable market exchange rates. The exchange rate has only
increased by approximately 2% from April of 1996 to November of 1996, and the
Registrant is unable to predict future devaluation. If the bolivar is devalued
significantly during the balance of fiscal 1997, the Registrant could
experience material devaluation losses.

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Many aspects of the Registrant's operations are subject to government
regulation, including those relating to drilling practices and methods and the
level of taxation. In addition, various countries (including the United
States) have environmental regulations which affect drilling operations.
Drilling contractors may be liable for damages resulting from pollution. Under
United States regulations, drilling contractors must establish financial
responsibility to cover potential liability for pollution of offshore waters.
Generally, the Registrant is indemnified under drilling contracts from
environmental damages, except in certain cases of surface pollution, but the
enforceability of indemnification provisions in foreign countries may be
questionable.

The Registrant believes that it is in substantial compliance with all
legislation and regulations affecting its operations in the drilling of oil and
gas wells and in controlling the discharge of wastes. To date, compliance has
not materially affected the capital expenditures, earnings, or competitive
position of the Registrant, although these measures may add to the costs of
operating drilling equipment in some instances. Further legislation or
regulation may reasonably be anticipated, and the effect thereof on operations
cannot be predicted.

OIL AND GAS DIVISION

The Registrant engages in the origination of prospects; the
identification, acquisition, exploration, and development of prospective and
proved oil and gas properties; the production and sale of crude oil,
condensate, and natural gas; and the marketing of natural gas. The Registrant
considers itself a medium-sized independent producer. All of the Registrant's
oil and gas operations are conducted in the United States.

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Most of the Registrant's current exploration and drilling effort is
concentrated in Oklahoma, Kansas, Texas, and Louisiana. The Registrant also
explores from time to time in New Mexico, Alabama, Florida, Michigan,
Mississippi, and the Rocky Mountain area.

The Registrant's exploration and production division includes
geographical exploitation teams comprised of geological, engineering, and land
personnel who primarily develop in-house oil and gas prospects as well as
review a limited number of outside prospects and acquisitions for their
respective geographical areas. The Registrant believes that this structure
allows each team to gain greater expertise in its respective geographical area
and reduces risk in the development of prospects. Registrant has recently
hired two geologists and two geophysicists to supplement its exploration
activities.

The Registrant's Rocky East prospect located in Washita County,
Oklahoma, contained the Registrant's most significant wildcat discovery during
fiscal 1996. The Registrant owns a 100% working interest in the discovery well
and possesses a working interest ranging from 81% to 100% in each of the five
development wells that have been drilled in this prospect. During fiscal 1996
the Rocky East prospect produced approximately 3.3 bcf (gross) of gas with
current daily natural gas production of approximately 20,000 mcf.

During fiscal 1996 the Registrant owned an interest in several wells
drilled in the Masters Creek area of the Austin Chalk in Louisiana. The
Registrant possessed an overriding royalty interest in three wells drilled by a
major oil company, and possessed a carried working interest in one well drilled
by the same major oil company and one well drilled by a large independent.
Positive outcomes have resulted in the participation by the

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Registrant with a 16% working interest in two additional wells in the Masters
Creek area. The Registrant will evaluate the results of these wells and
determine the amount of its participation, if any, in additional drilling in
the area and the extent of its continued payment of annual rentals covering its
approximate 2,300-acre net leasehold interest in the Masters Creek area. Just
west of this area, the Registrant owns 13,000 acres in the Artillery Range
prospect. The Registrant possesses a carried working interest in two wells
drilled in this prospect during fiscal 1996. A third well has been proposed,
and if such well is drilled, the Registrant intends to participate with a
carried working interest. During fiscal 1996, the Registrant spent $1,182,000
in drilling and completion costs in the Austin Chalk area. Depending on the
Registrant's continued analysis of the Austin Chalk area, fiscal year 1997
exploration expenditures could range from $6 to $11 million.

The Registrant's exploration and development program has covered a range
of prospects, from shallow "bread and butter" programs to deep expensive, high
risk/high return wells. During fiscal 1996, the Registrant participated in 41
development and/or wildcat wells, which resulted in new discoveries of
approximately 21.3 bcf of gas and 298,986 barrels of oil and condensate. The
Registrant participated in 22 additional development wells, which resulted in
the development of approximately 5.7 bcf of gas and 12,370 barrels of oil and
condensate which was previously classified as proved undeveloped or proved
developed nonproducing reserves. A total of $24,005,000 was spent in the
Registrant's exploration and development program during fiscal 1996. This
figure is exclusive of expenditures for acreage and acquisitions of proved oil

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and gas reserves. The Registrant's total company-wide acquisition cost for
acreage in fiscal 1996 was $3,178,214.

The Registrant spent $255,598 for the acquisition of proved oil and gas
reserves during fiscal 1996. Reserves from such acquisitions totaled
approximately 0.6 bcf of natural gas and 21,912 barrels of crude oil and
condensate. In addition, the Registrant sold 10 properties for $403,198. The
reserves associated with these sales were approximately 266,000 mcf of natural
gas and 1,477 barrels of crude oil.

The Registrant's fiscal 1997 exploration and production budget of
approximately $32,800,000 is 38% greater than its actual exploration and
production expenditures in fiscal 1996.

Market for Oil and Gas

The Registrant does not refine any of its production. The availability
of a ready market for such production depends upon a number of factors,
including the availability of other domestic production, crude oil imports, the
proximity and capacity of oil and gas pipelines, and general fluctuations in
supply and demand. The Registrant does not anticipate any unusual difficulty
in contracting to sell its production of crude oil and natural gas to
purchasers and end-users at prevailing market prices and under arrangements
that are usual and customary in the industry. The Registrant and its wholly
owned subsidiary, Helmerich & Payne Energy Services, Inc., have successfully
developed markets with end-users, local distribution companies, and natural gas
brokers for gas produced from successful wildcat wells or development wells.
Although the market for natural gas has been in a state of over-supply for the
past several years, the Registrant is of the opinion that the supply/demand for
natural gas

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is moving towards a state of equilibrium. As demonstrated by the winter of
1995-1996, winter demand and its effect on gas storage has a significant effect
on natural gas pricing. The stability of short-term prices for natural gas
will largely depend upon the demand during the heating season and the
utilization of storage throughout the United States. Other causes affecting
supply/demand imbalances may be federal regulation of the market; large
quantities of developed gas reserves in Canada (and subsequent pipeline
expansions) and Mexico available for export by pipelines to the United States;
fuel switching between fuel oil and natural gas; development of coalbed
methane; and development of large quantities of liquefied natural gas in
Trinidad and Tobago and Africa available for export to the United States.

Historically, the Registrant has had no long-term sales contracts for
its crude oil and condensate production. The Registrant continues its recent
practice of contracting for the sale of its Kansas and Oklahoma and portions of
its west Texas crude oil for terms of six to twelve months in an attempt to
assure itself of higher than posted prices for such crude oil production.

Competition

The Registrant competes with numerous other companies and individuals in
the acquisition of oil and gas properties and the marketing of oil and gas.
The Registrant believes that it should prepare for increased exploration
activity without committing to a definite drilling timetable involving large
expenditures. The Registrant also believes that the competition for the
acquisition of gas producing properties will continue. Due to the recent
increase in oil and gas prices and considering the Registrant's conservative
acquisition strategy, the Registrant believes that it may be unable to acquire

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significant proved developed producing reserves. However, the Registrant
intends to continue its review of properties in areas where the Registrant has
expertise. The Registrant's competitors include major oil companies, other
independent oil companies, and individuals, many of whom have financial
resources, staffs, and facilities substantially larger than those of the
Registrant. The effect of these competitive factors on the Registrant cannot
be predicted with certainty.

The Registrant intends to continue to pursue the purchase of proven
producing properties and to avail itself of the opportunities for drilling and
development.

Title to Oil and Gas Properties

The Registrant undertakes title examination and performs curative work
at the time properties are acquired. The Registrant believes that title to its
oil and gas properties is generally good and defensible in accordance with
standards acceptable in the industry.

Oil and gas properties in general are subject to customary royalty
interests contracted for in connection with the acquisitions of title, liens
incident to operating agreements, liens for current taxes, and other burdens
and minor encumbrances, easements, and restrictions. The Registrant believes
that the existence of such burdens will not materially detract from the general
value of its leasehold interests.

Governmental Regulation in the Oil and Gas Industry

The Registrant's domestic operations are affected from time to time in
varying degrees by political developments and federal and state laws and
regulations. In particular, oil and gas production operations and economics
are

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affected by price control, tax, and other laws relating to the petroleum
industry; by changes in such laws; and by constantly changing administrative
regulations. Most states in which the Registrant conducts or may conduct oil
and gas activities regulate the production and sale of oil and natural gas,
including regulation of the size of drilling and spacing units or proration
units, the density of wells which may be drilled, and the unitization or
pooling of oil and gas properties. In addition, state conservation laws
establish maximum rates of production from oil and natural gas wells, generally
prohibit the venting or flaring of natural gas, and impose certain requirements
regarding the ratability of production. The effect of these regulations is to
limit the amounts of oil and natural gas the Registrant can produce from its
wells, and to limit the number of wells or locations at which the Registrant
can drill. In addition, legislation affecting the natural gas and oil industry
is under constant review. Inasmuch as such laws and regulations are frequently
expanded, amended, or reinterpreted, the Registrant is unable to predict the
future cost or impact of complying with such regulations. The Registrant
believes that compliance with existing federal, state and local laws, rules and
regulations will not have a material adverse effect upon its capital
expenditures, earnings or competitive position.

Regulatory Controls

The Registrant is subject to regulation by the Federal Energy Regulatory
Commission ("FERC") with respect to various aspects of its domestic natural gas
operations under the Natural Gas Act ("NGA") and the Natural Gas Policy Act of
1978.

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The Natural Gas Wellhead Decontrol Act of 1989 amended both the price
and non-price decontrol provisions of the Natural Gas Policy Act of 1978 for
the purpose of providing complete decontrol of first sales of natural gas by
January 1, 1993. The Registrant believes that substantially all of its gas is
decontrolled.

On April 8, 1992; August 3, 1992; and November 27, 1992, the FERC issued
Order 636, Order 636-A, and Order 636-B (collectively, "Order 636"),
respectively, which requires interstate pipelines to provide transportation
unbundled from their sales of gas. Also, such pipelines must provide open-
access transportation on a basis that is equal for all gas supplies. Order 636
has been implemented through individual interstate pipeline restructuring
proceedings. Although Order 636 has provided the Registrant with additional
market access and more fairly applied transportation service rates, it has also
subjected the Registrant to more restrictive pipeline imbalance tolerances and
greater penalties for violation of those tolerances. Order No. 636 and certain
related proceedings were the subject of an appeal to the United States Court of
Appeals for the District of Columbia Circuit. That court recently issued its
decision in the appeal of Order No. 636 and largely upheld the fundamental
tenets of the order. Rehearing has since been denied, however, the court's
decision is still subject to potential applications for a writ of certiorari to
the United States Supreme Court. In addition, several appeals in individual
pipeline proceedings and related dockets remain pending. It is therefore not
possible for the Registrant to predict what effect, if any, the ultimate
outcome of these regulatory and judicial review proceedings will have on the
FERC's open-access regulations or the Registrant's operations. Assuming that
Order 636

I - 19
<PAGE> 21
is upheld in its entirety, the Registrant believes that it will benefit from
the provisions of such Order.

The FERC has announced its intention to re-examine certain of its
transportation-related policies, including the manner in which interstate
pipelines release transportation capacity under Order 636 and the use of
market-based rates for interstate gas transportation. While any resulting FERC
action would affect the Registrant only indirectly, these inquiries are
intended to further enhance competition in the natural gas markets. In
addition, the FERC issued a policy statement on how interstate natural gas
pipelines can recover the cost of new pipeline facilities. While this policy
statement in its present form affects the Registrant only indirectly, the new
policy should enhance competition in natural gas markets and facilitate
construction of gas supply laterals.

Under the NGA, natural gas gathering facilities are exempt from FERC
jurisdiction. The Registrant believes that its gathering systems meet the
traditional tests that the FERC has used to establish a pipeline's status as a
gatherer. Commencing in May 1994, the FERC has issued a series of orders in
individual cases that delineate its gathering policy. Among other matters, the
FERC slightly narrowed its statutory tests for establishing gathering status
and reaffirmed that it does not have jurisdiction over natural gas gathering
facilities and services and that such facilities and services are properly
regulated by state authorities. A number of states have either enacted new
laws or are considering the adequacy of existing laws affecting gathering rates
and/or services. Thus, natural gas gathering may receive greater regulatory
scrutiny by state agencies. In addition, the FERC has approved several

I - 20
<PAGE> 22
transfers by interstate pipelines of gathering facilities to unregulated
gathering companies, including affiliates. This could allow such companies to
compete more effectively with independent gatherers. An appellate court
recently upheld, in large part, several of the initial FERC orders delineating
its gathering policy. It is not possible at this time to predict the ultimate
effect of the policy, although it could affect access to and rates charged for
interstate gathering services. However, the Registrant does not presently
believe the status of its facilities would be affected by modification to the
statutory criteria.

The Registrant's natural gas gathering operations may become subject to
additional safety and operational regulations relating to the design,
installation, testing, construction, operation, replacement, and management of
facilities. Pipeline safety issues have recently become the subject of
increasing focus in various political and administrative arenas at both the
state and federal levels. For example, at the federal level, in October of
1996, the President signed the Accountable Pipeline Safety and Partnership Act
of 1996, which, among other things, gives the public an opportunity to comment
on pipeline risk management programs, promotes communication regarding safety
issues to residents along pipeline right-of-ways, and encourages the
examination of remote control valves along pipelines. The Registrant believes
that the adoption of additional pipeline safety legislation will not materially
affect the Registrant in light of its relatively minor gathering operations.

On February 2, 1994, the Kansas Corporation Commission ("KCC") issued an
order which modified allowables applicable to wells within the Hugoton Gas
Field so that those proration units upon which infill wells had been drilled
would be

I - 21
<PAGE> 23
assigned a larger allowable than those units without infill wells. As a
consequence of this order, the Registrant has drilled 80 infill wells and
believes that it will be necessary in the next two fiscal years to drill an
additional 58 wells with the total costs to the Registrant ranging from $5 to
$6 million. Several of these wells will be drilled to a depth of 5,500 feet in
search of additional reserve-bearing formations.

Additional proposals and proceedings that might affect the oil and gas
industry are pending before the Congress, the FERC, and the courts. The
Registrant cannot predict when or whether any such proposals may become
effective. In the past, the natural gas industry has been very heavily
regulated. There is no assurance that the current regulatory approach pursued
by the FERC will continue. Notwithstanding the foregoing, it is anticipated
that compliance with existing federal, state and local laws, rules and
regulations will not have a material adverse effect upon the capital
expenditures, earnings or competitive position of the Registrant.

Federal Income Taxation

The Registrant's oil and gas operations, and the petroleum industry in
general, are affected by certain federal income tax laws, in particular the Tax
Reform Act of 1986, which was amended by the Energy Policy Act of 1992 and the
Revenue Reconciliation Act of 1993. The Registrant has considered the effects
of such federal income tax laws on its operations and does not anticipate that
there will be no material impact on its liquidity, capital expenditures, or
international operations.

I - 22
<PAGE> 24
Environmental Laws

The Registrant's activities are subject to existing federal and state
laws and regulations governing environmental quality and pollution control.
Such laws and regulations may substantially increase the costs of exploring,
developing, or producing oil and gas and may prevent or delay the commencement
or continuation of a given operation. In the opinion of the Registrant's
management, its operations substantially comply with applicable environmental
legislation and regulations. The Registrant believes that compliance with
existing federal, state, and local laws, rules, and regulations regulating the
discharge of materials into the environment or otherwise relating to the
protection of the environment will not have any material effect upon the
capital expenditures, earnings, or competitive position of the Registrant.

Natural Gas Marketing

Helmerich & Payne Energy Services, Inc., ("HPESI") continues into its
eighth year of business with emphasis on the purchase and marketing of the
Registrant's natural gas production. In addition, HPESI purchases third-party
gas for resale and provides compression and gathering services for a fee.
During fiscal year 1996, HPESI's sales of third-party gas constituted
approximately 14.9% of the Registrant's consolidated revenues.

HPESI sells natural gas to markets in the Midwest and Rocky Mountain
areas. Term gas sales contracts are for varied periods ranging from four
months to seven years. However, recent contracts have tended toward shorter
terms. The remainder of the Registrant's gas is sold under spot market
contracts having a duration of 30 days or less. For fiscal 1997, HPESI's term
gas sales contracts provide for the sale of approximately 6 bcf of gas. HPESI
presently

I - 23
<PAGE> 25
intends to fulfill such term sales contracts with a portion of the gas reserves
purchased from the Registrant as well as from its purchases of third-party gas.
See pages I-15 through I-24 regarding the market, competition, and regulation
of natural gas.

CHEMICAL OPERATIONS

On August 23, 1996, the Registrant and its wholly-owned subsidiary,
Natural Gas Odorizing, Inc. ("NGO"), together with Occidental Petroleum
Corporation ("Buyer"), and its wholly-owned subsidiary, OPC Acquisition Corp.
("OPC"), entered into an Agreement and Plan of Merger pursuant to which Buyer
agreed to purchase all of the Registrant's chemical business located in
Baytown, Texas (the "Business") pursuant to a tax-free merger between NGO and
OPC. On August 30, 1996 ("Closing"), the sale of the Business was consummated
such that OPC was merged with and into NGO with NGO being the surviving
corporation. In consideration of such disposition, the Registrant received
2,018,928 shares of Buyer's common stock which equaled approximately $48
million as of Closing.

REAL ESTATE OPERATIONS

The Registrant's real estate operations are conducted exclusively within
the metropolitan area of Tulsa, Oklahoma. Its major holding is Utica Square
Shopping Center, consisting of fifteen separate buildings, with parking and
other common facilities covering an area of approximately 30 acres. Fourteen
of these buildings provide approximately 405,709 square feet of net leasable
retail sales and storage space (98% of which is currently leased) and
approximately 18,590 square feet of net leasable general office space (99% of
which is currently leased). Approximately 24% of the general office space is
occupied by the Registrant's real estate operations. The fifteenth building is

I - 24
<PAGE> 26
an eight-story medical office building which provides approximately 76,379
square feet of net leasable medical office space (77% of which is currently
leased). The Registrant has a two-level parking garage located in the
southwest corner of Utica Square that can accommodate approximately 250 cars.

At the end of the 1996 fiscal year the Registrant owned 18 of a total of
73 units in The Yorktown, a 16-story luxury residential condominium with
approximately 150,940 square feet of living area located on a six-acre tract
adjacent to Utica Square Shopping Center. Fourteen of the Registrant's units
are currently leased.

The Registrant owns an eight-story office building located diagonally
across the street from Utica Square Shopping Center, containing approximately
87,000 square feet of net leasable general office and retail space. This
building houses the Registrant's principal executive offices. Approximately
11% of this building was leased to third parties during fiscal 1996.

The Registrant is also engaged in the business of leasing multi-tenant
warehouse space. Three warehouses known as Space Center, each containing
approximately 165,000 square feet of net leasable space, are situated in the
southeast part of Tulsa at the intersection of two major limited-access
highways. Present occupancy is 95%. The Registrant also owns approximately
1 1/2 acres of undeveloped land lying adjacent to such warehouses.

The Registrant also owns a 270 acre tract known as Southpark located in
the high-growth area of southeast Tulsa and consisting of approximately 257
acres of undeveloped real estate and approximately 13 acres of multi-tenant
warehouse area. The warehouse area is known as Space Center East and consists
of two warehouses, one containing approximately 90,000 square feet and the
other

I - 25
<PAGE> 27
containing approximately 112,500 square feet. Occupancy has remained at 100%.
The Registrant believes that a high quality office park, with peripheral
commercial, office/warehouse, and hotel sites, is the best development use for
the remaining land.

The Registrant also owns a five-building complex called Tandem Business
Park. The project is located adjacent to and east of the Space Center East
facility and contains approximately six acres, with approximately 88,084 square
feet of office/warehouse space. Occupancy has increased from 68% to 79% during
fiscal 1996 due primarily to the addition of several new tenants. The
Registrant also owns a twelve-building complex, consisting of approximately
204,600 square feet of office/warehouse space, called Tulsa Business Park. The
project is located south of the Space Center facility, separated by a city
street, and contains approximately 12 acres. Occupancy is currently at 92%.

The Registrant also owns two service center properties located adjacent
to arterial streets in south central Tulsa. The first, called Maxim Center,
consists of one office/warehouse building containing approximately 40,800
square feet and located on approximately 2.5 acres. During fiscal 1996,
occupancy increased from 65% to 88% primarily due to the addition of one new
tenant. The second, called Maxim Place, consists of one office/warehouse
building containing approximately 33,750 square feet and located on
approximately 2.25 acres. During fiscal 1996, occupancy remained at 81%.

FINANCIAL

Information relating to Revenue and Income by Business Segments may be
found on page 10 of the Registrant's Annual Report to Shareholders for fiscal
1996, which is incorporated herein by reference.

I - 26
<PAGE> 28
EMPLOYEES

The Registrant had 1,697 employees within the United States (6 of which
were part-time employees) and 1,612 employees in international operations as of
September 30, 1996.

Item 2. PROPERTIES

CONTRACT DRILLING

The following table sets forth certain information concerning the
Registrant's domestic drilling rigs as of September 30, 1996:

I - 27
<PAGE> 29
<TABLE>
<CAPTION>
Rig Registrant's Optimum Working Present
Designation Classification Depth in Feet Location
- ----------- -------------- --------------- --------
<S> <C> <C> <C>
110 Medium Depth 12,000 Texas
141 Medium Depth 14,000 Texas
142 Medium Depth 14,000 Texas
143 Medium Depth 14,000 Texas
145 Medium Depth 14,000 Texas
157 Medium Depth 14,000 Texas
95 Medium Depth 16,000 Texas
96 Medium Depth 16,000 Oklahoma
118 Medium Depth 16,000 Texas
119 Medium Depth 16,000 Texas
120 Medium Depth 16,000 Texas
147 Medium Depth 16,000 Texas
154 Medium Depth 16,000 Texas
79 Deep 20,000 Louisiana
80 Deep 20,000 Oklahoma
89 Deep 20,000 Alabama
92 Deep 20,000 Oklahoma
94 Deep 20,000 Texas
98 Deep 20,000 Oklahoma
122 Deep 26,000 Louisiana
97 Deep 26,000 Texas
99 Deep 26,000 Texas
137 Deep 26,000 Texas
149 Deep 26,000 Texas
72 Very Deep 30,000 Louisiana
73 Very Deep 30,000 Louisiana
101 Medium Depth 16,000 * Gulf of Mexico
104 Medium Depth 16,000 * Offshore California
108 Medium Depth 16,000 * Gulf of Mexico
91 Deep 20,000 * Gulf of Mexico
102 Deep 20,000 * Offshore California
103 Deep 20,000 * Offshore California
105 Deep 20,000 * Gulf of Mexico
100 Deep 26,000 * Gulf of Mexico
106 Deep 26,000 * Gulf of Mexico
107 Deep 26,000 * Gulf of Mexico
201 Deep 26,000 * Gulf of Mexico
155 Medium Depth 14,000 Texas
161 Very Deep 30,000 Louisiana
162 Deep 20,000 Texas
163 Very Deep 30,000 Oklahoma
</TABLE>

* Offshore platform rig

I - 28
<PAGE> 30
The following table sets forth information with respect to the
utilization of the Registrant's domestic drilling rigs for the periods
indicated:

<TABLE>
<CAPTION>
Years ended September 30,
-------------------------
1992 1993 1994 1995 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Number of rigs owned at end of
period 39 42 47 41 41
Average rig utilization rate
during period (1) 42% 53% 69% 71% 82%
</TABLE>

(1) A rig is considered to be utilized when it is operated or being moved,
assembled, or dismantled under contract.

The following table sets forth certain information concerning the
Registrant's international drilling rigs as of September 30, 1996:

<TABLE>
<CAPTION>
Rig Registrant's Optimum Working Present
Designation Classification Depth in Feet Location
- ----------- -------------- --------------- --------
<S> <C> <C> <C>
14 Workover/drilling 6,000 Venezuela
18 Workover/drilling 6,000 Venezuela
19 Workover/drilling 6,000 Venezuela
20 Workover/drilling 6,000 Venezuela
140 Medium Depth 10,000 Venezuela
158 Medium Depth 10,000 Venezuela
159 Medium Depth 12,000 Venezuela
132 Medium Depth 16,000 Ecuador
22 Deep (helicopter rig) 18,000 Bolivia
23 Deep (helicopter rig) 18,000 Ecuador
121 Deep 20,000 Colombia
45 Deep 26,000 Venezuela
82 Deep 26,000 Venezuela
83 Deep 26,000 Venezuela
117 Deep 26,000 Venezuela
123 Deep 26,000 Bolivia
138 Deep 26,000 Ecuador
148 Deep 26,000 Venezuela
160 Deep 26,000 Venezuela
115 Very Deep 30,000 Venezuela
116 Very Deep 30,000 Venezuela
125 Very Deep 30,000 Colombia
113 Very Deep 30,000 Venezuela
128 Very Deep 30,000 Venezuela
129 Very Deep 30,000 Venezuela
133 Very Deep 30,000 Colombia
134 Very Deep 30,000 Colombia
127 Very Deep 30,000 Venezuela
</TABLE>

I - 29
<PAGE> 31
<TABLE>
<CAPTION>
Rig Registrant's Optimum Working Present
Designation Classification Depth in Feet Location
- ----------- -------------- --------------- --------
<S> <C> <C> <C>
156 Medium Depth 14,000 Venezuela
135 Very Deep 30,000 Colombia
136 Very Deep 30,000 Colombia
150 Very Deep 30,000 Venezuela
151 Very Deep 30,000 Colombia
152 Super Deep 30,000+ Colombia
153 Super Deep 30,000+ Colombia
139 Super Deep 30,000+ Colombia
</TABLE>

The following table sets forth information with respect to the
utilization of the Registrant's international drilling rigs for the periods
indicated:

<TABLE>
<CAPTION>
Years ended September 30,
-------------------------
1992 1993 1994 1995 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Number of rigs owned at end of
period 30 29 29 35 36
Average rig utilization rate
during period (1) 69% 68% 88% 84% 85%
</TABLE>

(1) A rig is considered to be utilized when it is operated or being moved,
assembled, or dismantled under contract.

OIL AND GAS DIVISION

All of the Registrant's oil and gas operations and holdings are
domestic.

Crude Oil Sales

The Registrant's net sales of crude oil and condensate for the fiscal
years 1994 through 1996 are shown below:

<TABLE>
<CAPTION>
Average Sales Average Lifting
Year Net Barrels Price per barrel Cost per Barrel
---- ----------- ---------------- ---------------
<S> <C> <C> <C>
1994 887,455 $14.83 $7.74
1995 808,058 $16.37 $7.86
1996 809,571 $19.00 $7.90
</TABLE>

I - 30
<PAGE> 32
Natural Gas Sales

The Registrant's net sales of natural and casinghead gas for the three
fiscal years 1994 through 1996 are as follows:

<TABLE>
<CAPTION>
Average Sales Average Lifting
Year Net Mcf Price per Mcf Cost per Mcf
---- ------- ------------- ---------------
<S> <C> <C> <C>
1994 26,627,776 $1.72 $0.3760
1995 26,421,434 $1.27 $0.3640
1996 34,535,184 $1.75 $0.3292
</TABLE>

Following is a summary of the net wells drilled by the Registrant for
the fiscal years ended September 30, 1994, 1995, and 1996:

<TABLE>
<CAPTION>
Exploratory Wells Development Wells
----------------- -----------------
1994 1995 1996 1994 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Productive 1.021 0.7 4.448 12.334 20.7695 23.625
Dry 1.436 2.596 5.250 0.233 3.2867 2.000
</TABLE>

On September 30, 1996, the Registrant was in the process of drilling or
completing six gross or 1.778 net wells.

I - 31
<PAGE> 33
Acreage Holdings

The Registrant's holdings of acreage under oil and gas leases, as of
September 30, 1996, were as follows:

<TABLE>
<CAPTION>
Developed Acreage Undeveloped Acreage
----------------- -------------------
Gross Net Gross Net
----- --- ----- ---
<S> <C> <C> <C> <C>
Alabama 480.00 112.21 146.00 18.12
Arkansas 3,068.23 1,725.11 -0- -0-
Kansas 122,861.88 85,446.35 15,561.60 12,407.10
Louisiana 10,046.29 2,898.34 162,888.10 88,301.46
Michigan -0- -0- 14,915.93 14,862.32
Mississippi -0- -0- 0.83 0.10
Montana 2,037.19 381.54 4,668.95 1,476.17
Nebraska 480.00 168.00 -0- -0-
Nevada -0- -0- 38,665.68 29,987.71
New Mexico 960.00 54.86 161.88 38.85
North Dakota 279.96 11.52 178.16 61.60
Oklahoma 138,424.27 51,114.65 40,948.55 22,952.43
Texas 88,443.43 41,874.04 10,220.43 5,143.51
Wyoming -0- -0- 1,667.94 316.43
---------- ---------- ---------- ----------
Total 367,081.25 183,786.62 290,024.05 175,565.80
</TABLE>

Acreage is held under leases which expire in the absence of production
at the end of a prescribed primary term, and is, therefore, subject to
fluctuation from year to year as new leases are acquired, old leases expire,
and other leases are allowed to terminate by failure to pay annual delay
rentals.

Productive Wells

The Registrant's total gross and net productive wells as of September
30, 1996, were as follows:

<TABLE>
<CAPTION>
Oil Wells Gas Wells
--------- ---------
Gross Net Gross Net
----- --- ----- ---
<S> <C> <C> <C>
3,340 241 860 378
</TABLE>

Additional information required by this item with respect to the
Registrant's oil and gas operations may be found on pages I-12 through I-24 of

I - 32
<PAGE> 34
Item 1. BUSINESS, and pages 28 through 30 of the Registrant's Annual Report to
Shareholders for fiscal 1996, "Notes to Consolidated Financial Statements" and
"Note 12 Supplementary Financial Information for Oil and Gas Producing
Activities."

Estimates of oil and gas reserves, future net revenues, and present
value of future net revenues were audited by Southmayd & Associates, Inc.,
independent consultants, 6450 South Lewis Avenue, Suite 220, Tulsa, Oklahoma,
74136. Total oil and gas reserve estimates do not differ by more than 5% from
the total reserve estimates filed with any other federal authority or agency.

REAL ESTATE OPERATIONS

See Item 1. BUSINESS, pages I-24 through I-26.

STOCK

At the end of fiscal 1996:

The Registrant owned 466,451 shares of the common stock of Sun Company,
Inc., and 329,053 shares of the Sun Company, Inc. preferred series "A". The
Registrant owned 625,000 shares of Oryx Energy Company, Inc.

The Registrant owned 1,600,000 shares of the common stock of Atwood
Oceanics, Inc., a Houston, Texas based company engaged in offshore contract
drilling. The Registrant's ownership of Atwood is approximately 24%.

The Registrant owned 740,000 shares of the common stock of Schlumberger,
Ltd.

The Registrant owned 240,000 shares of the common stock of Phillips
Petroleum Company, Inc.

The Registrant owned 2,018,928 shares of the common stock of Occidental
Petroleum Corporation, Inc.

I - 33
<PAGE> 35
The Registrant owned 225,000 shares of the common stock of ONEOK.

The Registrant owned 395,000 shares of the common stock of Liberty
Bancorp, Inc., formerly Banks of Mid-America, Inc. Liberty Bancorp, Inc., is a
bank holding company which owns Liberty Bank and Trust Company of Tulsa, N.A.,
and Liberty Bank and Trust Company of Oklahoma City, N.A. The Registrant's
ownership of Liberty Bancorp, Inc., is approximately 4%.

The Registrant also owned lesser holdings in several other publicly
traded corporations.

Item 3. LEGAL PROCEEDINGS

There are no material legal proceedings pending against the Registrant.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth the names and ages of the Registrant's
executive officers, together with all positions and offices held with the
Registrant by such executive officers. Officers are elected to serve until the
meeting of the Board of Directors following the next Annual Meeting of
Stockholders and until their successors have been elected and have qualified or
until their earlier resignation or removal.

I - 34
<PAGE> 36
<TABLE>
<S> <C>
W. H. Helmerich, III, 73 Director since 1949; Chairman of the Board
Chairman of the Board since December 1, 1960

Hans Helmerich, 38 Director since March 4, 1987; President
President and Chief Executive Officer since December
6, 1989

George S. Dotson, 55 Director since March 7, 1990; Vice
Vice President President, Drilling, since February 14, 1977
and President and Chief Operating Officer of
Helmerich & Payne International Drilling Co.
since February 14, 1977

Douglas E. Fears, 47 Vice President, Finance, since March 11,
Vice President 1988

Steven R. Mackey, 45 Secretary since March 7, 1990; Vice
Vice President and President and General Counsel since March
Secretary 11, 1988

Steven R. Shaw, 45 Vice President, Production, since
Vice President July 8, 1985; Vice President, Exploration
and Production since March 6, 1996

Gordon K. Helm, 43 Chief Accounting Officer of the Registrant;
Controller appointed Controller effective December 10,
1993; and Manager of Internal Audit from
September 13, 1991
</TABLE>

I - 35
<PAGE> 37
PART II

Item 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS

The principal market on which the Registrant's common stock is traded is
the New York Stock Exchange. The high and low sale prices per share for the
common stock for each quarterly period during the past two fiscal years as
reported in the NYSE - Composite Transaction quotations follow:

<TABLE>
<CAPTION>
1995 1996
---- ----
Quarter High Low High Low
------- ---- --- ---- ---
<S> <C> <C> <C> <C>
First 31 1/4 25 5/8 30 1/8 24 1/2
Second 27 1/2 24 1/2 34 1/2 27
Third 31 26 5/8 38 1/4 33
Fourth 30 27 5/8 43 5/8 34 3/4
</TABLE>

The Registrant paid quarterly cash dividends during the past two years
as shown in the following table:

<TABLE>
<CAPTION>
Paid per Share Total Payment
-------------- -------------

Fiscal Fiscal
------ ------
Quarter 1995 1996 1995 1996
------- ---- ---- ---- ----
<S> <C> <C> <C> <C>
First $0.125 $0.125 $3,089,758 $3,095,578
Second 0.125 0.125 3,087,958 3,100,568
Third 0.125 0.125 3,092,973 3,104,724
Fourth 0.125 0.130 3,094,813 3,229,596
</TABLE>

The Registrant paid a cash dividend of $0.13 per share on December 2,
1996, to shareholders of record on November 15, 1996. Payment of future
dividends will depend on earnings and other factors.

As of December 16, 1996, there were 1,514 record holders of the
Registrant's common stock as listed by the transfer agent's records.

II - 1
<PAGE> 38
Item 6. SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
Five-year Summary of Selected Financial Data
--------------------------------------------
1992 1993 1994 1995 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Sales, operating,
and other revenues $226,219 $300,723 $310,152 $306,721 $393,255

Income from con-
tinuing operations 8,973 22,158 17,108 5,788 45,426

Income from con-
tinuing operations
per common share 0.37 0.91 0.70 0.24 1.84

Total assets 585,504 610,935 624,827 707,061 821,914

Long-term debt 8,339 3,600 -0- -0- -0-

Cash dividends
declared per
common share 0.47 0.48 0.49 0.50 0.51
</TABLE>

The Five-year Summary of Selected Financial Data described above
excludes results of NGO operations. See page I-24 "CHEMICAL OPERATIONS" for a
discussion of the NGO transaction.

II - 2
<PAGE> 39
The following Five-year Summary of Selected Financial Data includes only
the results of NGO operations.

<TABLE>
<CAPTION>
Five-year Summary of Selected Financial Data for NGO
----------------------------------------------------
1992 1993 1994 1995 1996
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Sales, operating,
and other revenues $13,481 $14,374 $18,849 $19,055 $19,540

Income from con-
tinuing operations 1,876 2,392 3,863 3,963 3,090

Income from con-
tinuing operations
per common share 0.08 0.10 0.16 0.16 0.13
</TABLE>

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Information required by this item may be found on pages 11 through 16,
Management's Discussion & Analysis of Results of Operations and Financial
Condition, in the Registrant's Annual Report to Shareholders for fiscal 1996,
which is incorporated herein by reference.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Information required by this item may be found on pages 17 through 30 in
the Registrant's Annual Report to Shareholders for fiscal 1996, which is
incorporated herein by reference.

Item 9. CHANGES IN AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

None.

II - 3
<PAGE> 40

PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information required under this item with respect to Directors and with
respect to delinquent filers pursuant to Item 405 of Regulation S-K is
incorporated by reference from the Registrant's definitive Proxy Statement for
the Annual Meeting of Stockholders to be held March 5, 1997, to be filed with
the Commission not later than 120 days after September 30, 1996. See pages
I-34 through I-35 for information covering the Registrant's Executive Officers.

Item 11. EXECUTIVE COMPENSATION

This information is incorporated by reference from the Registrant's
definitive Proxy Statement for the Annual Meeting of Stockholders to be held
March 5, 1997, to be filed with the Commission not later than 120 days after
September 30, 1996.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

III - 1
<PAGE> 41
PART IV

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K

(a) Document List

1. The financial statements called for by Item 8 are incorporated
herein by reference from the Registrant's Annual Report to
Shareholders for fiscal 1996.

2. Exhibits required by Item 601 of Regulation S-K:

Exhibit Number:

<TABLE>
<S> <C>
3.1 Restated Certificate of Incorporation and Amendment to
Restated Certificate of Incorporation of the Registrant.

3.2 By-Laws of the Registrant.

4.1 Rights Agreement dated as of January 8, 1996, between the
Registrant and The Liberty National Bank and Trust Company
of Oklahoma City, N.A. is incorporated herein by reference
to the Registrant's Form 8-A, dated January 17, 1996.

* 10.1 Incentive Stock Option Plan is incorporated herein by
reference to Exhibit 4.2 to the Registrant's Registration
Statement No. 33-16771 on Form S-8.

* 10.2 Form of Incentive Stock Option Plan Stock Option Contract
for the Incentive Stock Option Plan.

* 10.3 Consulting Services Agreement between W. H. Helmerich,
III, and the Registrant effective January 1, 1990, as
amended.

* 10.4 Restricted Stock Plan for Senior Executives of Helmerich &
Payne, Inc.

* 10.5 Form of Restricted Stock Award Agreement for the
Restricted Stock Plan for Senior Executives of Helmerich &
Payne, Inc., together with all amendments thereto.
</TABLE>

- ---------------
* Compensatory Plan or Arrangement.

IV-1
<PAGE> 42
<TABLE>
<S> <C>
* 10.6 Supplemental Retirement Income Plan for Salaried Employees
of Helmerich & Payne, Inc.

* 10.7 Helmerich & Payne, Inc. 1990 Stock Option Plan.

* 10.8 Form of Nonqualified Stock Option Agreement for the 1990
Stock Option Plan is incorporated by reference to Exhibit
99.2 to the Registrant's Registration Statement No. 33-
55239 on Form S-8, dated August 24, 1994.

* 10.9 Supplemental Savings Plan for Salaried Employees of
Helmerich and Payne, Inc., is incorporated herein by
reference from Registrant's Annual Report on Form 10-K to
the Securities and Exchange Commission for fiscal 1993.

* 10.10 Agreement and Plan of Merger is incorporated herein by
reference from Registrant's Report on Form 8-K filed with
the Securities and Exchange Commission on September 12,
1996.

13. The Registrant's Annual Report to Shareholders for fiscal
1996.

22. Subsidiaries of the Registrant.

23.1 Consent of Independent Auditors.

27. Financial Data Schedule.
</TABLE>

(b) Report on Form 8-K

Form 8-K with attached Agreement and Plan of Merger and Proforma
Financial Information covering the NGO transaction was filed with the
Securities and Exchange Commission on September 12, 1996.

- ---------------
* Compensatory Plan or Arrangement.

IV-2
<PAGE> 43
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned, thereunto duly authorized:

HELMERICH & PAYNE, INC.

By Hans Helmerich
------------------------------
Hans Helmerich, President
(Chief Executive Officer)
Date: December 18, 1996

Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:

<TABLE>
<S> <C>
By William L. Armstrong By Glenn A. Cox
-------------------------------- --------------------------------
William L. Armstrong, Director Glenn A. Cox, Director
Date: December 18, 1996 Date: December 18, 1996

By George S. Dotson By Hans Helmerich
-------------------------------- --------------------------------
George S. Dotson, Director Hans Helmerich, Director and CEO
Date: December 18, 1996 Date: December 18, 1996

By W. H. Helmerich, III By L. F. Rooney, III
-------------------------------- --------------------------------
W. H. Helmerich, III, Director L. F. Rooney, III, Director
Date: December 18, 1996 Date: December 18, 1996

By George A. Schaefer By John D. Zeglis
-------------------------------- --------------------------------
George A. Schaefer, Director John D. Zeglis, Director
Date: December 18, 1996 Date: December 18, 1996

By Douglas E. Fears By Gordon K. Helm
-------------------------------- --------------------------------
Douglas E. Fears Gordon K. Helm, Controller
(Principal Financial Officer) (Principal Accounting Officer)
Date: December 18, 1996 Date: December 18, 1996
</TABLE>

<PAGE> 44
INDEX TO EXHIBITS NOT INCORPORATED BY REFERENCE

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
------- ----------- ----
<S> <C> <C>
3.1 Restated Certificate of Incorporation and Amendment to
Restated Certificate of Incorporation of the Registrant.

3.2 By-Laws of the Registrant.

* 10.2 Form of Incentive Stock Option Plan Stock Option Contract
for the Incentive Stock Option Plan.

* 10.3 Consulting Services Agreement between W. H. Helmerich,
III, and the Registrant effective January 1, 1990, as
amended.

* 10.4 Restricted Stock Plan for Senior Executives of Helmerich &
Payne, Inc.

* 10.5 Form of Restricted Stock Award Agreement for the
Restricted Stock Plan for Senior Executives of Helmerich &
Payne, Inc., together with all amendments thereto.

* 10.6 Supplemental Retirement Income Plan for Salaried Employees
of Helmerich & Payne, Inc.

* 10.7 Helmerich & Payne, Inc. 1990 Stock Option Plan.

13. The Registrant's Annual Report to Shareholders for fiscal
1996.

22. Subsidiaries of the Registrant.

23.1 Consent of Independent Auditors.

27. Financial Data Schedule.
</TABLE>

- ---------------
* Compensatory Plan or Arrangement.

<PAGE> 1

Exhibit 3.1
(Part 1/2)

RESTATED
CERTIFICATE OF INCORPORATION
OF
HELMERICH & PAYNE, INC.

HELMERICH & PAYNE, INC. (hereinafter called the "Corporation"), a
corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware, by Certificate of Incorporation
issued on February 3, 1940, DOES HEREBY CERTIFY THAT:

ONE: By action of the Board of Directors of the Corporation at a
Regular Meeting of the Board of Directors, held on December 11, 1987, a
resolution was adopted setting forth a Restated Certificate of Incorporation
and declaring that said Restated Certificate of Incorporation is advisable and
that it only restates and integrates and does not further amend the provisions
of the Corporation's Restated Certificate of Incorporation of March 7, 1979, as
theretofore amended or supplemented, and that there is no discrepancy between
those provisions and the provisions of this newly Restated Certificate. The
newly Restated certificate of Incorporation is as follows:

RESTATED
CERTIFICATE OF INCORPORATION
of
HELMERICH & PAYNE, INC.

FIRST. The name of the corporation is HELMERICH & PAYNE, INC.

SECOND. Its registered off ice in the State of Delaware is
located at No. 1209 Orange Street, in the City of Wilmington, County
of New Castle. The name and address of its registered agent is The
Corporation Trust Company, No. 1209 Orange Street, Wilmington,
Delaware.

THIRD. The nature of the business, or objects or purposes to
be transacted, promoted or carried on are:
<PAGE> 2
(a) To carry on the business of producing,
procuring, acquiring, buying, selling and otherwise disposing
of and turning to account, and dealing in petroleum, crude oil
and gas of all grades, asphalt, paraffin, bitumen and
bituminous substances of all kinds, coal, natural gas, carbon
and hydrocarbon products of all kinds, together with any other
substances or by-products, and in general subsoil products and
surface products of every nature and description; and to
acquire, hold, and use any and all leases, licenses,
easements, rights, grants, concessions and real and personal
property necessary or required for such purposes;

(b) To prospect, explore and drill for, discover,
produce, extract, mine, mill, separate, convert, smelt,
refine, dissolve, reduce, treat, manufacture, store or
otherwise turn to account, sell, exploit, transfer and
otherwise dispose of petroleum, oil and gas and each and every
of the substances specified in the foregoing clause (a),
either in its natural form or in any altered or manufactured
form, or subdivided or by-product form;

(c) To build, construct, purchase or otherwise
acquire and to conduct, operate and maintain any plant or
plants, machinery, devices, appliances and equipment for the
extraction or manufacture of gasoline, naphtha or other
substance or by-products from natural gas, casinghead gas or
crude oil, and to purchase or otherwise acquire, hold, own and
use or dispose of any inventions, devices, formulae, processes
for the manufacture or extraction of gasoline, naphtha, or
other substances or products from gas, casinghead gas or crude
oil, together with any letters patent thereon and any and all
improvements thereon; and to purchase or otherwise acquire any
and all natural gas and casinghead gas and crude oil necessary
to the use and operation of said plant or plants, and to vend,
sell or otherwise dispose of any and all of the products of
such plant or plants, and to purchase, lease or otherwise
acquire, hold and use any and all real estate and lands
necessary for the sites and locations of said plant or plants
and the use and operation thereof;

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<PAGE> 3
(d) To purchase, buy, or otherwise acquire, hold,
or prospect, develop, sell, assign and deal in or otherwise
dispose of oil, gas and mineral leases and oil, gas and
mineral rights, grants, royalties and privileges, together
with all personal property and equipment used in connection
therewith; and to purchase, buy, or otherwise acquire, and to
hold, use, sell or otherwise dispose of, any and all real
estate and lands which may be necessary or required for the
uses and purposes of this corporation subject to the laws of
the jurisdiction where said lands and real estate are located;

(e) To apply for, obtain, register, purchase,
devise, adopt, lease or otherwise acquire, hold, own, use,
operate, develop, introduce, lease, assign, pledge or
otherwise dispose of and contract with reference to any and
all letters patent, copyrights and trademarks, and any and all
registrations or applications for registration thereof, and
any and all inventions, improvements, apparatus, appliances,
processes, formulae, designs, trade names or similar rights,
whether used in connection with or secured under letters
patent of the United States of America or of any other
government or country, or otherwise; and to use, exercise,
develop, exploit or grant licenses with respect to or
otherwise turn to account any of the same, and to carry on any
business (manufacturing, merchandising or otherwise), which
may be deemed to aid, effectuate or develop the same, or any
of them directly or indirectly;

(f) To acquire by lease, purchase, contract,
concession or otherwise, and to own, develop, explore,
exploit, improve, operate, lease, enjoy, control, manage or
otherwise turn to account, mortgage, grant, sell, exchange,
convey or otherwise dispose of, either within or without the
State of Delaware and in any country, domestic or foreign, any
and all real estate,

A-3
<PAGE> 4
lands, options, concessions, grants, land patents, franchises,
deposits, mines, mining rights, quarries, locations, claims,
rights, privileges, easements, tenements, estates,
hereditaments, interests and properties of every description
and nature whatsoever which the corporation may deem wise and
proper in connection with the conduct of any business or
businesses enumerated in any of the clauses of this Article
THIRD:

(g) To construct, build, purchase, lease, equip
or otherwise acquire, and to hold, own, improve, develop,
manage, maintain, control, lease, mortgage, create liens upon,
sell, convey or otherwise dispose of and turn to account:

(1) any and all plants, machinery,
works, refineries, implements and things or property,
real or personal, of every kind and descriptions
incidental to, connected with or suitable or
convenient for any of the purposes enumerated in any
of the clauses of this Article THIRD;

(2) any and all pipe lines, transmission
lines, pumping stations, terminals, storage tanks or
reservoirs and all appurtenances relative thereto and
necessary or convenient in connection with any of the
businesses enumerated in any of the clauses of this
Article THIRD;

(3) any and all tracks, locomotives,
railroad cars, tank cars, motor cars, motor trucks
and vehicles of any and every description necessary
or convenient in connection with any of the
businesses enumerated in any of the clauses of this
Article THIRD;

(4) any and all ships, docks, boats,
floats, barges and vessels (whether operated by
steam, electric, oil, gasoline or any other power),
docks, wharves, dry docks, repair shops, elevators,
piers, terminals, warehouses and storage plants,
facilities, connections and installations necessary

A-4
<PAGE> 5
or convenient for any of the businesses enumerated in
any of the clauses of this Article THIRD;

(h) To manufacture, purchase or otherwise
acquire, own, mortgage, pledge, sell, assign and transfer, or
otherwise dispose of, to invest, trade, deal in and deal with
goods, wares and merchandise and personal property of every
class and description;

(i) To acquire, and pay for in cash, stock or
bonds of this corporation or otherwise, all or any part of the
goodwill, rights, assets and property of any person, firm,
association or corporation; to undertake or assume the whole
or any part of the obligations or liabilities of any person,
firm, association or corporation; to hold or in any manner
dispose of the whole or any part of the rights and property so
acquired; to conduct in any lawful manner the whole or any
part of any business so acquired, and to exercise all the
powers necessary or convenient and about the conduct and
management of such business;

(j) To guarantee, purchase, hold, sell, assign,
transfer, mortgage, pledge or otherwise dispose of shares of
the capital stock, bonds, debentures, notes, obligations or
evidences of indebtedness or other securities created, issued
or incurred by any other corporation or corporations organized
under the laws of this state or any other state, country,
nation or government, or by joint stock companies, trustees or
other business organizations or entities, or by any domestic
or foreign state, government or governmental authority, or by
any political or administrative subdivision or department
thereof, and to issue in payment or exchange therefor, in
whole or in part, its own shares, bonds, debentures, notes or
other obligations, or to make payment therefor by any other
lawful means, and, while the owner thereof, to exercise all
the rights, powers and privileges of ownership, including the
right to vote thereon;

(k) To enter into, make and perform contracts of
every kind and description with any person, firm, association,
corporation, municipality, county, state,

A-5
<PAGE> 6
body politic or government or colony or dependency thereof;

(l) To borrow or raise moneys for any of the
purposes of the corporation, and, from time to time, without
limit as to amount, to draw, make, accept, endorse, execute
and issue promissory notes, drafts, bills of exchange,
warrants, bonds, debentures and other negotiable or non-
negotiable instruments and evidences of indebtedness, and to
secure the payment of any thereof and of the interest thereon
by mortgage upon or pledge, conveyance or assignment in trust
of the whole or any part of the property of the corporation,
whether at the time owned or thereafter acquired and to sell,
pledge or otherwise dispose of such bonds or other obligations
of the corporation for its corporate purposes.

(m) To buy, sell or otherwise deal in notes, open
accounts, and other similar evidences of debt, or to loan
money and take notes, open accounts, and other similar
evidences of debt as collateral security therefor;

(n) To purchase, hold, sell and transfer the
shares of its own capital stock; provided it shall not use its
funds or property for the purchase of its own shares of
capital stock when such use would cause any impairment of its
capital except as otherwise permitted by law, and provided
further that shares of its own capital stock belonging to it
shall not be voted upon directly or indirectly;

(o) To have one or more offices, to carry on all
or any of its operations and business and without restriction
or limit as to amount to purchase or otherwise acquire, hold,
own, mortgage, sell, convoy, or otherwise dispose of real and
personal property of every class and description in any of the
States, Districts, Territories or Colonies of the United
States, and in any and all foreign countries, subject to the
laws of such State, District, Territory, Colony or Country;

(p) To do and perform any or all of the above
enumerated functions, purposes and acts, either as

A-6
<PAGE> 7
principal or as agent, broker, contractor, independent
contractor, representative or otherwise, specifically
including (without limiting the generality of the foregoing)
the right to carry on a general drilling contracting business;

(q) To investigate, develop, consummate,
undertake and carry on any enterprise, business, transactions,
or operation, commonly carried on or undertaken by
contractors, syndicates, merchants, importers, exporters,
manufacturers, printers, publishers, warehousers, brokers, or
transporters, and generally, to institute, enter into, carry
on, assist, promote and participate in financial, commercial,
mercantile, and other business, works, contracts, undertakings
and operations, but only to the extent permitted by law.

(r) To carry on, and license others to carry on,
all or any part of the several businesses enumerated in this
paragraph, to-wit: The business of: manufacturers, merchants,
traders, importers, exporters, contractors, printers,
publishers, warehousers, and dealers in and with goods, wares,
and merchandise of every kind and description; of
establishing, developing, operating and carrying on
industrial, commercial, trading, manufacturing, mechanical,
metallurgical, engineering, building, construction,
contracting, mining, smelting, quarrying, refining, chemical,
ice, real estate, logging, lumbering, agricultural,
plantation, dairying, advertising, automotive, aviation,
supply, cold storage, drug (both ethical and proprietary) ,
cleaning, electrical, electronic, management, food, food
products, foundry, appliance, furniture, laundry, machinery,
machine shop, restaurant, equipment, instrument,
instrumentation, baking, brewing, distilling, apparel,
packing, textile, amusement, entertainment, undertakings,
propositions, concessions or franchises; of constructing,
developing, equipping and improving, public, quasi-public, and
private works and conveniences; and, also, so far as necessary
or incidental to, or connected with any one or more or all of
the corporate purposes herein enumerated, to undertake any
lawful business transaction or operation undertaken or carried
on by merchants,

A-7
<PAGE> 8

traders, manufacturers, contractors, importers, exporters,
entertainers, printers, publishers, warehousers, commission
men and agents.

(s) In general, to carry on any other business in
connection with the foregoing, and to have and exercise all
the powers conferred by the laws of Delaware upon corporations
formed under the General Corporation Law of the State of
Delaware, and to do any or all of the things hereinbefore set
forth to the same extent as natural persons might or could do.

The objects and purposes specified in the foregoing
clauses shall, except where otherwise expressed, be in no wise
limited or restricted by reference to, or inference from, the
terms of any other clause in this certificate of
incorporation, but the objects and purposes specified in each
of the foregoing clauses of this article shall be regarded as
independent objects and purposes.

FOURTH. The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 81,000,000 of which 1,000,000
shares shall be Preferred Stock without par value, and the remaining 80,000,000
shares shall be Common Stock of the par value of ten cents (.10) per share.

The following is a statement of the designations, powers, preferences,
and rights and the qualifications, limitations or restrictions thereof, of the
classes of stock of the Corporation and the authority of the Board of Directors
to fix the same.

I .

(1) Shares of Preferred Stock may be issued from time to time in
one or more series as may be determined from time to time by the Board of
Directors, each such series to be distinctly designated. All shares of any one
series of Preferred Stock so designated by the Board of Directors shall be
alike in every particular. The voting rights, if any, of each such series,
dividend rates, and preferences and relative, participating, optional and other
special rights of each such series and the qualifications, limitations or
restrictions thereof, if any, may differ from those of any and all other series
at any time outstanding; and, subject to the

A-8
<PAGE> 9
provisions of Paragraphs (4) through (8) of this Part I, the Board of Directors
of the Corporation is hereby expressly granted authority to fix, by resolutions
duly adopted prior to the issuance of any shares of a particular series of
Preferred Stock so designated by the Board of Directors, the voting powers of
stock of such series, if any, and the designations, preferences and relative,
participating, optional and other special rights, and the qualifications,
limitations and restrictions of such series, including, but without limiting
the generality of the foregoing, the following:

(a) The rate and times at which, and the terms and
conditions on which, dividends on Preferred Stock of such series will
be paid;

(b) The right, if any, of the holders of Preferred Stock
of such series to convert the same into, or exchange the same for,
shares of other classes or series of stock of the Corporation and the
terms and conditions of such conversion or exchange;

(c) The redemption price or prices and the time or time
at which, and the terms and conditions on which, Preferred Stock of
such series may be redeemed;

(d) The rights of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, dissolution, or
winding-up, or merger, consolidation, distribution or sale of assets,
of the Corporation;

(e) The terms of the sinking fund or redemption or
purchase account, if any, to be provided for the Preferred Stock of
such series; and

(f) Provisions, if any, for the vote or consent of the
holders of a stated percentage of the outstanding shares of Preferred
Stock of such series with respect to changes in the rights,
preferences or limitations of the shares of such series, or the
designation or issuance of series of the Preferred Stock by the Board
of Directors, or the authorization or issuance of other classes or
series of Preferred Stock;

A-9
<PAGE> 10
provided, however, that the holders of shares of Preferred Stock shall have no
right to participate with the holders of Common Stock in any distribution of
dividends in excess of the preferential dividend fixed for such Preferred Stock
or in the assets of the Corporation available for distribution to stockholders
in excess of the preferential amount fixed for such Preferred Stock.

(2) Until requirements that have matured with respect to
preferential dividends on the Preferred Stock (fixed in accordance with the
provisions of Paragraph (1) of this Part I) shall have been met and until the
Corporation shall have complied with all such requirements, if any, with
respect to the setting aside of sums as sinking funds or redemption or purchase
accounts with respect to the Preferred Stock (fixed in accordance with the
provisions of Paragraph (1) of this Part I) , no dividend or distribution shall
be paid or declared upon or in respect of any Common Stock.

(3) Until distribution in full of the preferential amount to be
distributed to the holders of Preferred Stock (fixed in accordance with the
provisions of Paragraph (1) of this Part I) in the event of voluntary or
involuntary liquidation, dissolution or winding-up of the Corporation, no such
distribution shall be made to the holders of Common Stock.

(4) No holder of Preferred Stock of the Corporation shall have any
preemptive or preferential right of subscription to any shares of any stock of
the Corporation of any class, now or hereafter authorized, or to any
obligations convertible into stock of the Corporation, issued or sold, nor any
right of subscription to any thereof other than such, if any, as the Board of
Directors of the Corporation in its discretion from time to time may determine,
and at such price as the Board of Directors from time to time may fix, pursuant
to the authority hereby conferred by the Certificate of Incorporation, and the
Board of Directors may issue stock of the Corporation, or obligations
convertible into stock, without offering such issue of stock or such
obligations either in whole or in part, to the holders of Preferred Stock of
the Corporation.

(5) The powers and rights of the holders of Common Stock shall be
subordinated to the powers, preferences and rights of the holders of Preferred
Stock. The relative powers, preferences and

A-10
<PAGE> 11
rights of each series of Preferred Stock in relation to the powers, preferences
and rights of each other series of Preferred Stock shall, in each case, be as
fixed from time to time by the Board of Directors pursuant to authority granted
in the Certificate of Incorporation; provided, however, that except as may be
provided by law and except as set forth in Paragraph (6) and Paragraph (7) of
this Part I, no holder of shares of Preferred Stock of any series shall be
entitled to more than one vote in respect of each share of such stock held by
him on any matter voted on by stockholders other than elections of directors,
in which case the Board of Directors may accord cumulative voting rights to
holders of shares of any Preferred Stock.

(6) Notwithstanding the provisions of Paragraph (5) of this Part
I, the Board of Directors, acting pursuant to authority granted in this
Certificate of Incorporation in respect of any series of Preferred Stock, may
provide that if this Corporation shall have defaulted in the payment of
dividends on any such series of Preferred Stock in an amount equivalent to or
exceeding six full quarterly dividends (whether or not consecutive) or the
Corporation shall have defaulted in making any two mandatory sinking fund
payments on any such series of Preferred Stock, the holders of one or more or
all of such series of Preferred Stock in respect of which any such default
shall have occurred (voting as a single class) shall be entitled to elect, in
the aggregate, not more than two directors.

(7) The issuance of shares of any series of Preferred Stock by the
Board of Directors of the Corporation shall be subject to such limitations and
restrictions as may be provided for in the Certificate of Incorporation or by
the Board of Directors, pursuant to authority granted in the Certificate of
Incorporation, including provision for the consent, by class vote, of the
holders of a stated percentage of the outstanding shares of any series of
Preferred Stock.

(8) Subject to the provisions of Paragraph (7) of this Part I,
shares of any series of Preferred Stock may be authorized or issued, in
aggregate amounts not exceeding the total number of shares of Preferred Stock
authorized by the Certificate of Incorporation, from time to time as the Board
of Directors of the Corporation shall determine and for such consideration as
shall be fixed by the Board of Directors.

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<PAGE> 12
II.

Subject to the prior and superior rights of the Preferred Stock, and
on the conditions set forth in the foregoing Part I or in any resolution of the
Board of Directors providing for the issuance of any particular series of
Preferred Stock, and not otherwise, such dividends (payable in cash, stock or
otherwise) as may be determined by the Board of Directors may be declared and
paid on the Common Stock from time to time of any funds legally available
therefor.

The holders of the Common Stock shall be entitled to one vote for each
share held at all meetings of the stockholders of the Corporation.

After payment shall have been made in full to the holders of the
Preferred Stock in the event of any liquidation, dissolution or winding up of
the affairs of the Corporation, the remaining assets and funds of the
Corporation shall be distributed among the holders of the Common Stock
according to their respective shares.

III.

Ownership of shares of any class of the capital stock of the
Corporation shall not entitle the holders thereof to any preemptive right to
subscribe for or purchase any additional shares of capital stock of any class
of the Corporation or any securities convertible into any class of capital
stock of the Corporation, however acquired, issued or sold by the corporation,
it being the purpose and intent that the Board of Directors shall have full
right, power and authority to offer for subscription or sell or to make any
disposal of any or all unissued shares of the capital stock of the corporation
or any securities convertible into stock of any or all shares of stock or
convertible securities issued and thereafter acquired by the corporation, for
such consideration, not less than the par value thereof, in money or property,
as the Board of Directors shall determine.

IV.

The Corporation shall be entitled to treat the person in whose name
any share, right or option is registered as the owner thereof, for all
purposes, and shall not be bound to recognize any equitable

A-12
<PAGE> 13
or other claim to, or interest in, such share, right or option on the part of
any other person, whether or not the corporation shall have notice thereof,
save as may be expressly provided by laws of the State of Delaware.

FIFTH. The Corporation is to have perpetual existence.

SIXTH. The private property of the stockholders shall not be subject
to the payment of corporate debts to any extent whatever.

SEVENTH. In furtherance and not in limitation of the powers conferred
by statute, and in addition to the powers which may be conferred by the By-
Laws, the Board of Directors of the Corporation shall have the following
expressly stipulated powers and authority, to-wit:

To make, alter or repeal the By-Laws of the Corporation.

To authorize and cause to be executed mortgages and liens upon
the real and personal property of the Corporation.

To set apart out of any of the funds of the Corporation
available for dividends a reserve or reserves for any proper purpose
and to abolish any such reserve in the manner in which it was created.

By resolution or resolutions, passed by a majority of the
whole board to designate one or more committees, each committee to
consist of two or more of the directors of the Corporation, which, to
the extent provided in said resolution or resolutions or in the
By-Laws of the Corporation, shall have and may exercise the powers of
the Board of Directors in the management of the business and affairs
of the Corporation, and may have power to authorize the seal of the
Corporation to be affixed to all papers which may require it. Such
committee or committees shall have such name or names as may be stated
in the By-Laws of the Corporation or as may be determined from time to
time by resolution adopted by the Board of Directors.

When and as authorized by the affirmative vote of the holders
of a majority of the stock issued and outstanding having voting power
given at a stockholders meeting duly called for that purpose, or when
authorized by the written

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<PAGE> 14
consent of the holders of a majority of the voting stock issued and
outstanding, to sell, lease or exchange all of the property and assets
of the corporation, including its good will and its corporate
franchises, upon such terms and conditions and for such consideration,
which may be in whole or in part shares of stock in, and/or other
securities of, any other corporation or corporations, as its Board of
Directors shall deem expedient and for the best interests of the
corporation.

Also, the corporation may in its By-Laws confer powers upon its Board of
Directors in addition to the foregoing, and in addition to the powers and
authorities expressly conferred upon it by statute.

EIGHTH. The corporation shall be entitled to treat the person in
whose name any share is registered as the owner thereof for all purposes, and
shall not be bound to recognized any equitable or other claims to, or interest
in, such share on the part of any other person, whether or not the corporation
shall have notice thereof, except as otherwise expressly provided by the
statutes of the State of Delaware.

NINTH. The number of Directors which constitute the whole Board of
Directors of the Corporation shall be such as from time to time shall be fixed
by or in the manner provided in the By-Laws, but in no case shall the number be
less than three. Vacancies in the Board of Directors, whether created by
increase in the number of Directors or otherwise, shall be filled in the manner
provided in the By-Laws. The Directors shall be divided into three classes.
At the Annual Meeting of Stockholders in 1970, one class of Directors, composed
of three Directors to be known as the "first class", shall be elected for a
one-year term; one class composed of two directors to be known as the "second
class" shall be elected for a two-year term; and one class, composed of two
directors, to be known as the "third class", shall be elected for a three-year
term. At each succeeding Annual Meeting of Stockholders, successors to the
class of Directors, whose term expires in that year, will be elected for a
three-year term. Vacancies in any class that occur prior to the expiration of
the then current term of such class, if filled by the Board of Directors, shall
be filled for the remainder of the full term of such class. If the number of
Directors is hereafter changed, any increase or decrease in Directors shall be
apportioned among the classes so as to establish

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<PAGE> 15
or maintain equality in number among the classes and any additional Director
elected to any class shall hold office for a term which shall coincide with the
term of such class. Where the number of Directors constituting the whole board
is such that it is impossible to establish or maintain complete equality in
number among the classes, the increase or decrease in Directors shall be
apportioned among the classes so as to maintain all classes as nearly equal in
number as possible and so that the third class does not have more members than
either the first or second class, and the second class does not have more
members than the first class.

TENTH. Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof, or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 3883 of the Revised Code of 1915 of said State, or on
the application of trustees in dissolution or of any receiver or receivers
appointed for this Corporation under the provisions of Section 43 of the
General Corporation Law of the State Delaware, order a meeting of the creditors
or class of creditors, and/or of the stockholders or class of stockholders of
this Corporation, as the case may be, to be summoned in such manner as the said
Court directs. If a majority in number representing three-fourths in value of
the creditors or class of creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, agree to any compromise
or arrangement, and to any reorganization of this Corporation as consequence of
such compromise or arrangement, the said arrangement and the said
reorganization shall, if sanctioned by the Court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or on
all the stockholders or class of stockholders, of this Corporation, as the case
may be, and also on this Corporation.

ELEVENTH. No contract or other transaction of the Corporation with
any other corporation or with any association, partnership, firm, trustee,
syndicate or individual shall be affected or invalidated by reason of the fact
that any of the directors of the Corporation is or are parties to or interested
in such contract or transaction or such other corporation or such association,

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<PAGE> 16
partnership, firm, trustee, syndicate or individual; any director of the
Corporation may be a party to any contract or transaction with the Corporation,
or may be pecuniarily or otherwise interested in any contract or other
transaction of the Corporation with any other corporation or with any
association, partnership, firm, trustee, syndicate or individual, provided that
the fact that he shall be a party to such contract or transaction or shall be
so interested shall have been disclosed or shall have been known to the Board
of Directors of the Corporation, or to the approving majority thereof; and any
director of the Corporation who is a party to or is pecuniarily or otherwise
interested in such contract or transaction may be included in determining the
existence of a quorum at any meeting of the Board of Directors which shall
authorize, ratify or approve any such contract or transaction, and may vote
thereat to authorize, ratify or approve such contract or transaction, with like
force and effect as if he were not a party to or so interested in such contract
or transaction.

TWELFTH. Meetings of stockholders may be held without the State of
Delaware, if the By-Laws so provide. The books of the Corporation may be kept
(subject to any provision contained in the statutes) outside of the State of
Delaware at such place or places as may be from time to time designated by the
Board of Directors.

THIRTEENTH. The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this certificate of incorporation,
in the manner now or hereafter prescribed by statute, and all rights conferred
upon stockholders herein are granted subject to this reservation.

FOURTEENTH:

1. Elimination of Certain Liability of Directors. A
director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach
of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the Delaware General Corporation Law, or (iv) for
any transaction from which the director derived an improper personal
benefit.

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<PAGE> 17
2. Indemnification and Insurance.

(a) Right to Indemnification. Each person who was or is
made a party or is threatened to be made a party to or is involved in
any action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she, or a person of whom he or she is
the legal representative, is or was a director or officer, of the
Corporation or is or was serving at the request of the Corporation as
a director, officer, employee or agent of another corporation or a
partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, whether the basis of
such proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity while
serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists
or may hereafter be amended (but, in the case of any such amendment,
only to the extent that such amendment permits the Corporation to
provide broader indemnification rights than said law permitted the
Corporation to provide prior to such amendment), against all expense,
liability and loss (including attorneys' fees, judgments, fines, ERISA
excise taxes or penalties and amounts paid or to be paid in
settlement) reasonably incurred or suffered by such person in
connection therewith and such indemnification shall continue as to a
person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of his or her heirs, executors and
administrators: PROVIDED, HOWEVER, that, except as provided in
paragraph (b) hereof, the Corporation shall indemnify any such person
seeking indemnification in connection with a proceeding (or part
thereof) initiated by such person only if such proceeding (or part
thereof) was authorized by the board of directors of the Corporation.
The right to indemnification conferred in this Section shall be a
contract right and shall include the right to be paid by the
Corporation the expenses incurred in defending any such proceeding in
advance of its final disposition: PROVIDED, HOWEVER, that, if the
Delaware General Corporation Law requires, the payment of such
expenses incurred by a director or officer in his or her capacity as a
director or officer (and not in any other capacity in which

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<PAGE> 18
service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in
advance of the final disposition of a proceeding, shall be made only
upon delivery to the Corporation of an undertaking, by or on behalf of
such director or officer, to repay all amounts so advanced if it shall
ultimately be determined that such director or officer is not entitled
to be indemnified under this Section or otherwise. The Corporation
may, by action of its Board of Directors, provide indemnification to
employees and agents of the Corporation with the same scope and effect
as the foregoing indemnification of directors and officers.

(b) Right of Claimant to Bring Suit. If a claim under
paragraph (1) of this Section is not paid in full by the Corporation
within thirty (30) days after a written claim has been received by the
Corporation, the claimant may at any time thereafter bring suit
against the Corporation to recover the said amount of the claim and,
if successful in whole or in part, the claimant shall be entitled to
be paid also the expense of prosecuting such claim. It shall be a
defense to any such action (other than an action brought to enforce a
claim for expenses incurred in defending any proceeding in advance of
its final disposition where the required undertaking, if any is
required, has been tendered to the Corporation) that the claimant has
not met the standards of conduct which make it permissible under the
Delaware General Corporation Law for the Corporation to indemnify the
claimant for the amount claimed, but the burden of proving such
defense shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors, independent legal
counsel, or its stockholders) to have made a determination prior to
the commencement of such action that indemnification of the claimant
is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Delaware General
Corporation Law, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) that the claimant has not met such applicable standard
or conduct, shall be a defense to the action or create a presumption
that the claimant has not met the applicable standard of conduct.

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<PAGE> 19
(c) Non-Exclusivity of Rights. The right to
indemnification and the payment of expense incurred in defending a
proceeding in advance of its final disposition conferred in this
Section shall not be exclusive of any other right which any person may
have or hereafter acquire under any statute, provision of the
Certificate of Incorporation, by- law, agreement, vote of stockholders
or disinterested directors or otherwise.

(d) Insurance. The Corporation may maintain insurance, at
its expense, to protect itself and any director, officer, employee or
agent of the Corporation or another corporation, partnership, joint
venture, trust or other enterprise against any such expense, liability
or loss, whether or not the Corporation would have the power to
indemnify such person against such expense, liability or loss under
the Delaware General Corporation Law.

FIFTEENTH. The affirmative vote of at least two-thirds of the total
outstanding stock of the Corporation entitled to vote thereon shall be required
in order for the Corporation to:

(a) Merge, and/or consolidate with any other corporation
except in those cases where at least 90% of the outstanding shares of
each class of stock of such other corporation is owned by this
Corporation; or

(b) Sell, lease, exchange, transfer or otherwise dispose
of all or substantially all of its assets or business.

The affirmative vote of at least three-fourths of the total
outstanding stock of the Corporation entitled to vote thereon shall be required
in order for the Corporation to:

(a) Sell, lease, exchange, transfer or otherwise dispose
of all or substantially all of its assets or business to a related
corporation or an affiliate of a related corporation; or

(b) Merge with a related corporation or an affiliate of a
related corporation; or

A-19
<PAGE> 20
(c) Enter into a combination or majority share
acquisition in which this Corporation is the acquiring corporation and
its voting shares are issued or transferred to a related corporation
or an affiliate of a related corporation or to stockholders of a
related corporation or an affiliate of a related corporation.

For the purpose of this Article FIFTEENTH, (i) a "related corporation" in
respect of a given transaction shall be any corporation which, together with
its affiliates and associated persons, owns of record or beneficially, directly
or indirectly, more than 5% of the shares of any outstanding class of stock of
this Corporation entitled to vote upon such transaction, as of the record date
used to determine the stockholders of the Corporation entitled to vote upon
such transaction; (ii) an "affiliate" of a related corporation shall be any
individual, joint venturer, trust, partnership or corporation which directly or
indirectly, through one or more intermediaries, controls or is controlled by,
or is under common control with the related corporation; (iii) an "associated
person" of a related corporation shall be any officer or director or any
beneficial owner, directly or indirectly, of 10% or more of any class of equity
security, of such related corporation or any of its affiliates. The
determination of the Board of Directors of this Corporation and made in good
faith shall be conclusive as to whether any corporation is a related
corporation as defined in this Article FIFTEENTH.

TWO: Said amendment was duly adopted in accordance with the provisions
of Section 245 of the General Corporation Law of the State of Delaware, as
amended, and said amendment does not affect a change in the issued shares of
the Corporation, and the capital of the Corporation will not be reduced under
or by reason thereof, and henceforth the provisions of the Certificate of
Incorporation shall be as provided in the newly Restated Certificate of
Incorporation set forth hereinabove.

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<PAGE> 21
IN WITNESS WHEREOF, said HELMERICH & PAYNE, INC. has caused its
corporate seal to be hereto affixed and this Certificate to be signed by W. H.
Helmerich, III, its President, and Leon C. Gavras, its Secretary, this 11th day
of December, 1987.

HELMERICH & PAYNE, INC.

/S/ W. H. Helmerich, III
-----------------------------
W. H. HELMERICH, III,
Chairman and C.E.O.
ATTEST:

/S/ Leon C. Gavras
- --------------------------------
LEON C. GAVRAS, Secretary

STATE OF OKLAHOMA )
) ss.
COUNTY OF TULSA )

Be it remembered, that on this 11th day of December, 1987, personally
came before me, the undersigned, a Notary Public in and for said County and
State, W. H. HELMERICH, III, Chairman and C.E.O. of Helmerich & Payne, Inc., a
corporation of the State of Delaware, party to the foregoing Certificate, known
to me personally to be such, and acknowledged the said Certificate to be his
own act and deed, and the act and deed of said corporation; that the signature
of the Chairman and C.E.O. is in his own proper handwriting; that the seal
affixed is the corporate seal of said Helmerich & Payne, Inc.; and that his act
of sealing, executing and delivering said Certificate was duly authorized by
resolution of the directors of said Helmerich & Payne, Inc.

Given under my hand and seal of office the day and year aforesaid.

/s/
-----------------------------
Notary Public
My Commission Expires:

- ---------------------

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<PAGE> 22

Exhibit 3.1
(Part 2/2)

CERTIFICATE OF DESIGNATION, PREFERENCES
AND RIGHTS OF SERIES A JUNIOR
PARTICIPATING PREFERRED STOCK

HELMERICH & PAYNE, INC.

Pursuant to Section 151 of the General Corporation Law
of the State of Delaware

The undersigned officer of Helmerich & Payne, Inc., a corpo-
ration organized and existing under the General Corporation Law of the State of
Delaware, in accordance with the provisions of Section 103 thereof, DOES HEREBY
CERTIFY:

That pursuant to the authority conferred upon the Board of
Directors by the Restated Certificate of Incorporation of the said Corporation,
the said Board of Directors on January 8, 1996 adopted the following resolution
creating a series of 60,000 shares of Preferred Stock designated as Series A
Junior Participating Preferred Stock:

RESOLVED, that pursuant to the authority vested in the Board
of Directors of this Corporation in accordance with the provisions of its
Restated Certificate of Incorporation, a series of Preferred Stock of the
Corporation be and it hereby is created, and that the designation and amount
thereof and the voting powers, preferences and relative, participating,
optional and other special rights of the shares of such series, and the
qualifications, limitations or restrictions thereof are as follows:

Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Junior Participating Preferred Stock" and the
number of shares constituting such series shall be 60,000.

Section 2. Dividends and Distributions.

(A) The holders of shares of Series A Junior Participating
Preferred Stock shall be entitled to receive, when, as and
<PAGE> 23
if declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the last day of March, June,
September and December in each year (each such date being referred to herein as
a "Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of a
share of Series A Junior Participating Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $125 or (b) subject
to the provision for adjustment hereinafter set forth, 1,000 times the
aggregate per share amount of all cash dividends, and 1,000 times the aggregate
per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock, par value $0.10 per share, of the
Corporation (the "Common Stock") since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of Series A
Junior Participating Preferred Stock. In the event the Corporation shall at
any time after January 8, 1996 (the "Rights Declaration Date") (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount to which holders of
shares of Series A Junior Participating Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.

(B) The Corporation shall declare a dividend or distribution
on the Series A Junior Participating Preferred Stock as provided in Paragraph
(A) above immediately after it declares a dividend or distribution on the
Common Stock (other than a dividend payable in shares of Common Stock);
provided that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any Quarterly Dividend
Payment Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $125 per share on the Series A Junior Partic-

2
<PAGE> 24

ipating Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.

(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of such shares
of Series A Junior Participating Preferred Stock, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue from
the date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the determination
of holders of shares of Series A Junior Participating Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment
Date, in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A
Junior Participating Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Junior Participating Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days prior to the date
fixed for the payment thereof.

Section 3. Voting Rights. The holders of shares of Series A
Junior Participating Preferred Stock shall have the following voting rights:

(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Junior Participating Preferred Stock shall
entitle the holder thereof to 1,000 votes on all matters submitted to a vote of
the stockholders of the Corporation. In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the number of votes per share to which holders of shares
of

3
<PAGE> 25

Series A Junior Participating Preferred Stock were entitled immediately
prior to such event shall be adjusted by multiplying such number by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

(B) Except as otherwise provided herein or by law, the
holders of shares of Series A Junior Participating Preferred Stock and the
holders of shares of Common Stock shall vote together as one class on all
matters submitted to a vote of stockholders of the Corporation.

(C) (i) If at any time dividends on any Series A Junior
Participating Preferred Stock shall be in arrears in an amount equal
to six (6) quarterly dividends thereon, the occurrence of such
contingency shall mark the beginning of a period (herein called a
"default period") which shall extend until such time when all accrued
and unpaid dividends for all previous quarterly dividend periods and
for the current quarterly dividend period on all shares of Series A
Junior Participating Preferred Stock then outstanding shall have been
declared and paid or set apart for payment. During each default
period, all holders of Preferred Stock (including holders of the
Series A Junior Participating Preferred Stock) with dividends in
arrears in an amount equal to six (6) quarterly dividends thereon,
voting as a class, irrespective of series, shall have the right to
elect two (2) directors.

(ii) During any default period, such voting right of
the holders of Series A Junior Participating Preferred Stock may be
exercised initially at a special meeting called pursuant to
subparagraph (iii) of this Section 3(C) or at any annual meeting of
stockholders, and thereafter at annual meetings of stockholders,
provided that such voting right shall not be exercised unless the
holders of ten percent (10%) in number of shares of Preferred Stock
outstanding shall be present in person or by proxy. The absence of a
quorum of the holders of Common Stock shall not affect the exercise by
the holders of Preferred Stock of such voting right.

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<PAGE> 26
At any meeting at which the holders of Preferred Stock shall exercise
such voting right initially during an existing default period, they
shall have the right, voting as a class, to elect directors to fill
such vacancies, if any, in the Board of Directors as may then exist up
to two (2) directors or, if such right is exercised at an annual
meeting, to elect two (2) directors. If the number which may be so
elected at any special meeting does not amount to the required number,
the holders of the Preferred Stock shall have the right to make such
increase in the number of directors as shall be necessary to permit
the election by them of the required number. After the holders of the
Preferred Stock shall have exercised their right to elect directors in
any default period and during the continuance of such period, the
number of directors shall not be increased or decreased except by vote
of the holders of Preferred Stock as herein provided or pursuant to
the rights of any equity securities ranking senior to or pari passu
with the Series A Junior Participating Preferred Stock.

(iii) Unless the holders of Pre-ferred Stock shall,
during an existing default period, have previously exercised their
right to elect directors, the Board of Directors may order, or any
stockholder or stockholders owning in the aggregate not less than ten
percent (10%) of the total number of shares of Pre-ferred Stock
outstanding, irrespective of series, may request, the calling of
special meeting of the holders of Preferred Stock, which meeting shall
thereupon be called by the President, a Vice-President or the
Secretary of the Corporation. Notice of such meeting and of any
annual meeting at which holders of Preferred Stock are entitled to
vote pursuant to this Paragraph (C)(iii) shall be given to each holder
of record of Preferred Stock by mailing a copy of such notice to him
or her at his or her last address as the same appears on the books of
the Corporation. Such meeting shall be called for a time not earlier
than 20 days and not later than 60 days after such order or request or
in

5
<PAGE> 27
default of the calling of such meeting within 60 days after such order
or request, such meeting may be called on similar notice by any
stockholder or stockholders owning in the aggregate not less than ten
percent (10%) of the total number of shares of Pre-ferred Stock
outstanding. Notwithstanding the provisions of this Paragraph
(C)(iii), no such special meeting shall be called during the period
within 60 days immediately preceding the date fixed for the next
annual meeting of the stockholders.

(iv) In any default period, the holders of Common
Stock, and other classes of stock of the Corporation if applicable,
shall continue to be entitled to elect the whole number of directors
until the holders of Preferred Stock shall have exercised their right
to elect two (2) directors voting as a class, after the exercise of
which right (x) the directors so elected by the holders of Preferred
Stock shall continue in office until their successors shall have been
elected by such holders or until the expiration of the default period,
and (y) any vacancy in the Board of Directors may (except as provided
in Paragraph (C)(ii) of this Section 3) be filled by vote of a
majority of the remaining directors theretofore elected by the holders
of the class of stock which elected the Director whose office shall
have become vacant. References in this Paragraph (C) to directors
elected by the holders of a particular class of stock shall include
directors elected by such directors to fill vacancies as provided in
clause (y) of the foregoing sentence.

(v) Immediately upon the expiration of a default
period, (x) the right of the holders of Preferred Stock as a class to
elect directors shall cease, (y) the term of any directors elected by
the holders of Preferred Stock as a class shall terminate, and (z) the
number of directors shall be such number as may be provided for in the
certificate of incorporation or by-laws irrespective of any increase
made pursuant to

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<PAGE> 28
the provisions of Paragraph (C)(ii) of this Section 3 (such number
being subject, however, to change thereafter in any manner provided by
law or in the certificate of incorporation or by-laws). Any vacancies
in the Board of Directors effected by the provisions of clauses (y)
and (z) in the preceding sentence may be filled by a majority of the
remaining directors.

(D) Except as set forth herein, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.

Section 4. Certain Restrictions.

(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of
Series A Junior Participating Preferred Stock outstanding shall have been paid
in full, the Corporation shall not

(i) declare or pay dividends on, make any
other distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preferred Stock;

(ii) declare or pay dividends on or make any
other distributions on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up) with
the Series A Junior Participating Preferred Stock, except dividends
paid ratably on the Series A Junior Participating Preferred Stock and
all such parity stock on which dividends are payable or in arrears in
proportion to

7
<PAGE> 29
the total amounts to which the holders of all such shares are then
entitled;

(iii) redeem or purchase or otherwise
acquire for consideration shares of any stock ranking on a parity
(either as to dividends or upon liquida- tion, dissolution or winding
up) with the Series A Junior Participating Preferred Stock, provided
that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares of any
stock of the Corporation ranking junior (either as to dividends or
upon dissolution, liquidation or winding up) to the Series A Junior
Participating Preferred Stock; or

(iv) purchase or otherwise acquire for
consideration any shares of Series A Junior Participating Preferred
Stock, or any shares of stock ranking on a parity with the Series A
Junior Participating Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.

(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under Paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.

Section 5. Reacquired Shares. Any shares of Series A Junior
Participating Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and cancelled promptly
after the acquisition thereof. All such shares shall upon their cancellation
become authorized

8
<PAGE> 30
but unissued shares of Preferred Stock and may be reissued as part of a new
series of Preferred Stock to be created by resolution or resolutions of the
Board of Directors, subject to the conditions and restrictions on issuance set
forth herein.

Section 6. Liquidation, Dissolution or Winding Up. (A) Upon
any liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Series A Junior Participating Preferred Stock
shall have received $1,000 per share, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, to the
date of such payment (the "Series A Liquidation Preference"). Following the
payment of the full amount of the Series A Liquidation Preference, no
additional distributions shall be made to the holders of shares of Series A
Junior Participating Preferred Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 1,000 (as appropriately adjusted as set forth in
subparagraph (C) below to reflect such events as stock splits, stock dividends
and recapitalizations with respect to the Common Stock) (such number in clause
(ii), the "Adjustment Number"). Following the payment of the full amount of
the Series A Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A Junior Participating Preferred Stock and Common
Stock, respectively, holders of Series A Junior Participating Preferred Stock
and holders of shares of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in the ratio of
the Adjustment Number to 1 with respect to such Preferred Stock and Common
Stock, on a per share basis, respectively.

(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other series of preferred
stock, if any, which rank on a parity

9
<PAGE> 31
with the Series A Junior Participating Preferred Stock, then such remaining
assets shall be distributed ratably to the holders of such parity shares in
proportion to their respective liquidation preferences. In the event, however,
that there are not sufficient assets available to permit payment in full of the
Common Adjustment, then such remaining assets shall be distributed ratably to
the holders of Common Stock.

(C) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then in any
such case the shares of Series A Junior Participating Preferred Stock shall at
the same time be similarly exchanged or changed in an amount per share (subject
to the provision for adjustment hereinafter set forth) equal to 1,000 times the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common
Stock is changed or exchanged. In the event the Corporation shall at any time
after the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series A Junior Participating
Preferred Stock shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of

10
<PAGE> 32
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

Section 8. No Redemption. The shares of Series A Junior
Participating Preferred Stock shall not be redeemable.

Section 9. Amendment. The Restated Certificate of
Incorporation of the Corporation shall not be further amended in any manner
which would materially alter or change the powers, preferences or special
rights of the Series A Junior Participating Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of a majority or
more of the outstanding shares of Series A Junior Participating Preferred
Stock, voting separately as a class.

Section 10. Fractional Shares. Series A Junior Participating
Preferred Stock may be issued in fractions of a share which shall entitle the
holder, in proportion to such holders fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have the benefit
of all other rights of holders of Series A Junior Participating Preferred
Stock.

IN WITNESS WHEREOF, I have executed and subscribed this
Certificate and do affirm the foregoing as true under the penalties of perjury
this 8th day of January, 1996.

HELMERICH & PAYNE, INC.

/S/ Hans Helmerich
-----------------------------
Name: Hans Helmerich
Title: President

<PAGE> 1

Exhibit 3.2

BY-LAWS

HELMERICH & PAYNE, INC.

- - -oOo- - -

OFFICES

1. The principal office shall be in the City of Wilmington,
County of New Castle, State of Delaware, and the name of the resident agent in
charge thereof is The Corporation Trust Company.

2. The corporation may also have offices at Tulsa, Oklahoma, and
at such other places as the Board of Directors may from time to time appoint or
the business of the corporation may require.

SEAL

3. The corporate seal shall have inscribed thereon the name of
the corporation, the year of its organization and the words "Corporate Seal,
Delaware". Said seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
<PAGE> 2
STOCKHOLDERS' MEETINGS

4. All meetings of the stockholders for the election of Directors
shall be held at the principal office of the corporation in Tulsa, Oklahoma.
Special meetings of stockholders for any other purpose may be held at such
place and time as shall be stated in the notice of the meeting.

5. An annual meeting of stockholders, after the year 1940, shall
be held on the first Wednesday of March in each year if not a legal holiday,
and if a legal holiday, then on the next secular day following, at 12:00
o'clock noon, when they shall elect by a plurality vote, by ballot, a Board of
Directors, and transact such other business as may properly be brought before
the meeting.

6. The holders of a majority of the stock issued and outstanding,
and entitled to vote thereat, present in person, or represented by proxy, shall
be requisite and shall constitute a quorum at all meetings of the stockholders
for the transaction of business except as otherwise provided by statute, by the
Certificate of Incorporation or by these By-laws. If, however, such quorum
shall not be present or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, present in person, or by proxy, shall
have power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented.
At
<PAGE> 3
such adjourned meeting at which a quorum shall be present, or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified. Unless otherwise provided by statute, a plurality of the
votes cast at any meeting of the stockholders at which a quorum is present
shall be necessary for the authorization of any action or the transaction of
any business at such meeting and, except as provided in Section 5 above for the
election of Directors, the vote need not be by ballot unless a vote by ballot
is demanded by a stockholder present at the meeting.

7. At any meeting of the stockholders every stockholder having
the right to vote shall be entitled to vote in person, or by proxy appointed by
an instrument in writing subscribed by such stockholder and bearing a date not
more than three years prior to said meeting, unless said instrument provides
for a longer period. Each stockholder shall have one vote for each share of
stock having voting power, registered in his name on the books of the
corporation, and except where the transfer books of the corporation shall have
been closed or a date shall have been fixed as a record date for the
determination of its stockholders entitled to vote, no share of stock shall be
voted on at any election of Directors which shall have been transferred on the
books of the corporation within twenty days next preceding such election of
Directors.
<PAGE> 4
8. Written notice of the annual meeting shall be served upon or
mailed to each stockholder entitled to vote thereat at such address as appears
on the stock books of the corporation, at least ten (10) days prior to the
meeting.

9. A complete list of the stockholders entitled to vote at the
ensuing election, arranged in alphabetical order, with the residence of each
and the number of voting shares held by each, shall be prepared by the
Secretary and filed in the office where the election is to be held, at least
ten days before every election, and shall at all times during the usual hours
for business and during the whole time of said election, be open to the
examination of any stockholder.

10. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute, may be called by the
President and shall be called by the President or Secretary at the request in
writing of a majority of the Board of Directors. Such request shall state the
purpose or purposes of the proposed meeting.

11. Business transacted at all special meetings shall be confined
to the objects stated in the call.

12. Written notice of a special meeting of stockholders, stating
the time and place and object thereof, shall be served upon or mailed at least
ten (10) days before such meeting to each
<PAGE> 5
stockholder entitled to vote thereat at such address as appears on the books of
the corporation.

12.1 Without limiting any other notice requirements imposed by law,
the Certificate of Incorporation or these By-laws, any nomination for election
to the Board of Directors or other proposal to be presented by any stockholder
at a stockholder meeting will be properly presented only if written notice of
such stockholder's intent to make such nomination or proposal has been
delivered or mailed to and received by the Secretary, not later than (i) for an
annual meeting to be held on the first Wednesday in March or an annual meeting
to be held on any other date for which the corporation gives at least 90 days
prior notice of such date to stockholders, not less than 50 nor more than 75
days prior to such meeting, or (ii) for any other annual meeting or a special
meeting, the close of business on the tenth day after notice of such meeting is
first given to stockholders. Such notice by the stockholder to the corporation
shall set forth in reasonable detail information concerning the nominee (in the
case of a nomination for election to the Board of Directors) or the substance
of the proposal (in the case of any other stockholder proposal), and shall
include, without limiting the foregoing: (a) the name and address of the
stockholder who intends to present the nomination or other proposal and of the
person or persons, if any, to be nominated; (b) a
<PAGE> 6
representation that the stockholder is a holder of record of stock of the
corporation entitled to vote at such meeting and intends to appear in person or
by proxy at the meeting to present the nomination or other proposal specified
in the notice; (c) a description of all arrangements or understandings between
the stockholder and any other person or persons (naming such person or persons)
pursuant to which the nomination or other proposal is to be made by the
stockholder; (d) such other information regarding each proposal and each
nominee as would have been required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission had the
nomination or other proposal been made by the Board of Directors; and (e) the
consent of each nominee, if any, to serve as a Director of the corporation if
elected. The chairman of the meeting may, in his sole discretion, refuse to
acknowledge a nomination or other proposal presented by any person that does
not comply with the foregoing procedure.

13. A. Whenever the vote of stockholders at a meeting
thereof is required or permitted to be taken in connection with any corporate
action, the meeting and vote of stockholders may be dispensed with to the
extent permitted by law, if all the stockholders who would have been entitled
to vote upon the action if such meeting were held shall consent in writing to
such
<PAGE> 7
corporate action being taken. A minute of any such corporate action consented
to in writing by all the stockholders shall be inserted in the records of the
corporation as of the date such action was taken. The minute shall state that
such action was taken in lieu of an annual or a special meeting or other action
required to be taken by the stockholders, and the written consent of all the
stockholders shall either appear at the foot of such minute or be filed with
the records of the corporation with such minute.

B. The record date for determining stockholders entitled
to express consent to corporate action in writing without a meeting shall be
fixed by the Board of Directors. Any stockholder seeking to have the
stockholders authorize or take corporate action by written consent without a
meeting shall, by written notice, request the Board of Directors to fix a
record date. Within ten days after receiving such a notice, the Board of
Directors shall fix as a record date for such proposed action by written
consent such date as the Board shall consider appropriate in the circumstances.

DIRECTORS

14. A. The number of Directors which shall constitute the
entire Board shall be ten, which number may from time to time be increased and
if increased may be decreased by a majority of the
<PAGE> 8
entire Board of Directors, but shall in no event be less than three. If the
number of Directors be increased, as hereinabove provided or otherwise pursuant
to law, such increase shall be deemed to create vacancies to be filled as
hereinafter prescribed. Directors need not be stockholders. No person shall
be eligible to be nominated to be a Director who will have attained the age of
72 years on or before the Annual Meeting of Stockholders at which he or she is
to be elected nor shall any Director be eligible to be appointed by the Board
of Directors to fill a vacancy if he or she has or shall have attained the age
of 72 years at the time of appointment. None of the foregoing age restrictions
shall be applicable to Messrs. William L. Naumann and Roger S. Randolph,
members of the First Class of Directors, each of whom shall be eligible to be
elected a Director without limitation as to his age at the Annual Meeting of
Stockholders to be held March 1, 1989. No Officer of the Company, other than a
person who is or has been Chairman of the Board or President, shall become nor
may remain a Member of the Board of Directors after ceasing to be an officer.

B. The Board of Directors shall be divided into three classes:
one class of Directors composed of three Directors and known as the First Class
shall be those Directors elected for a three-year term at the Annual Meeting of
Stockholders held March 5, 1980; another class of Directors composed of three
Directors and
<PAGE> 9
known as the Second Class shall be those Directors elected for a three-year
term at the Annual Meeting of Stockholders held March 1, 1978; and another
class of Directors composed of three Directors and known as the Third Class
shall be those Directors elected for a three-year term at the Annual Meeting of
Stockholders held March 7, 1979, and one additional Director elected at the
Special Meeting of the Board of Directors held May 13, 1980, as the third
member of the Third Class. At each succeeding Annual Meeting of Stockholders
successors to the class of Directors whose term expires in that year will be
elected for a three-year term. Vacancies in any class that occur prior to the
expiration of the then current term of such class if filled by the Board of
Directors shall be filled for the remainder of the full term of such class. If
the number of Directors is changed, any increase or decrease of Directors shall
be apportioned among the classes so as to establish or maintain equality in
number among the classes and any additional Director elected to any class shall
hold office for a term which shall coincide with the term of such class. Where
the number of Directors constituting the whole Board is such that it is
impossible to establish or maintain complete equality in number among the
classes, the increase or decrease in Directors shall be apportioned among the
classes so as to maintain all classes as nearly equal in number as possible,
and so that the Third Class
<PAGE> 10
does not have more members than either the First or Second Class and the Second
Class does not have more members than the First Class. Except as otherwise
provided for filling vacancies, the Directors of the Company shall be elected
by class at the Annual Meeting of Stockholders to serve until their successors
are elected and qualified.

15. The Directors may hold their meetings and keep the books of
the corporation, except the original or duplicate stock ledger, outside of
Delaware at such places as they may from time to time determine.

16. If the office of any Director or Directors becomes vacant by
reason of death, resignation, retirement, disqualification, removal from
office, or otherwise, a majority of the remaining Directors, though less than a
quorum, shall choose a successor or successors, who shall hold office for the
unexpired term in respect to which such vacancy occurred or until the next
election of Directors.

17. The property and business of the corporation shall be managed
by its Board of Directors which may exercise all such powers of the corporation
and do all such lawful acts and things as are not by statute or by the
Certificate of Incorporation or by these By-laws directed or required to be
exercised or done by the stockholders.
<PAGE> 11
COMMITTEES OF DIRECTORS

18. The Board of Directors may, by resolution or resolutions
passed by a majority of the whole Board, designate one or more committees, each
committee to consist of two or more of the Directors of the corporation, which,
to the extent provided in said resolutions or resolutions, shall have and may
exercise the powers of the Board of Directors in the management of the business
and affairs of the corporation, and may have power to authorize the seal of the
corporation to be affixed to all papers which may require it. Such committee
or committees shall have such name or names as may be determined from time to
time by resolution adopted by the Board of Directors.

19. The committees shall keep regular minutes of their proceedings
and report the same to the Board when required.

COMPENSATION OF DIRECTORS

20. Directors, as such, shall not receive any stated salary for
their services, but by resolution of the Board, a fixed sum and expenses of
attendance, if any, may be allowed for attendance at each regular or special
meeting of the Board; provided that nothing herein contained shall be construed
to preclude any Director from serving the corporation in any other capacity and
receiving compensation therefor.
<PAGE> 12
21. Members of special or standing committees may be allowed like
compensation for attending committee meetings.

MEETINGS OF THE BOARD

22. The first meeting of each newly elected Board shall be held at
such time and place either within or without the State of Delaware as shall be
fixed by the vote of the stockholders at the annual meeting, and no notice of
such meeting shall be necessary to the newly elected Directors in order legally
to constitute the meeting; provided a majority of the whole Board shall be
present; or they may meet at such place and time as shall be fixed by the
consent in writing of all the Directors.

23. Regular meetings of the Board may be held without notice at
such time and place either within or without the State of Delaware as shall
from time to time be determined by the Board.

24. Special meetings of the Board may be called by the President
on no less than twenty-four (24) hours notice to each Director, either
personally or by mail or by telegram; special meetings shall be called by the
President or Secretary in like manner and on like notice on the written request
of a majority of the Board of Directors.
<PAGE> 13
25. At all meetings of the Board four (4) Directors shall
constitute a quorum for the transaction of business, and the act of a majority
of the Directors present at any meeting at which there is a quorum shall be the
act of the Board of Directors, expect as may be otherwise specifically provided
by statute or by the Certificate of Incorporation, or by these By-laws.

OFFICERS

26. The officers of the corporation shall be chosen by the
Directors, who at any time, may elect a Chairman of the Board, a Chief
Executive Officer, a Chief Operating Officer, a President, one or more Vice-
Presidents, a Secretary, and a Treasurer. The Directors may also designate any
one or more Vice-Presidents, as Executive Vice-Presidents, Senior Vice-
Presidents, Financial Vice-President or otherwise and may elect or appoint such
additional officers, including Assistant Secretaries and Assistant Treasurers,
and agents as the Directors may deem advisable. Any two or more offices may be
held by the same person, except the offices of Chairman of the Board and
Secretary and the offices of President and Secretary.

27. The Board of Directors, at its first meeting after each annual
meeting of stockholders, or as soon as conveniently possible, shall choose the
principal officers, none of whom,
<PAGE> 14
except the Chairman of the Board, need be a member of the Board.

28. The salaries of all officers and agents of the corporation
shall be fixed by the Board of Directors. No officer or agent shall be
ineligible to receive such salary by reason of the fact that he is also a
Director of the corporation and receiving compensation therefor.

29. The officers of the corporation shall hold office until their
successors are chosen and qualify in their stead. Any officer elected or
appointed by the Board of Directors may be removed at any time by the
affirmative vote of a majority of the whole Board of Directors.

30. If the office of any officer becomes vacant for any reason,
the vacancy shall be filled by the Board of Directors.

CHAIRMAN OF THE BOARD

31. The Chairman of the Board shall preside at all meetings of the
stockholders and the Board of Directors. Except where, by law, the signature
of the President is required, the Chairman shall possess the same power as the
President to sign all certificates, contracts, and other instruments of the
corporation which may be authorized by the Board of Directors. He shall have
such other powers and
<PAGE> 15
perform such other duties as the Board of Directors or its Executive Committee
may from time to time prescribe.

CHIEF EXECUTIVE OFFICER

32. The Chief Executive Officer shall have general active
management of the business of the corporation, and in the absence of the
Chairman of the Board, shall preside at all meetings of the shareholders and
the Board of Directors; and shall see that all orders and resolutions of the
Board of Directors are carried into effect. He shall have such other powers
and perform such other duties as the Board of Directors or its Executive
Committee may from time to time prescribe.

CHIEF OPERATING OFFICER

33. In the event that the Board of Directors shall have chosen a
Chief Executive Officer, they may choose a Chief Operating Officer. The Chief
Operating Officer, shall have general direction of the supervision over the
ordinary details relating to the corporation's production and exploration,
drilling, chemicals, real estate, and administrative departments; he shall
always proceed, however, pursuant to the instructions of the Chief Executive
Officer. It shall be the duty of the Chief Operating Officer to report to the
Chief Executive Officer daily the exact nature, extent, terms and conditions of
all business, contracts and commitments; to
<PAGE> 16
render promptly such statements and reports touching upon the business of the
corporation in his charge as may be called for from time to time by the Chief
Executive Officer or by the Board of Directors; and to perform such other
duties as may be prescribed from time to time by the Board of Directors.

THE PRESIDENT

34. The President, in the absence of the Chairman of the Board and
the Chief Executive Officer, shall preside at all meetings of the stockholders
and the Board of Directors. He shall have, subject to the authority of the
Chairman of the Board and/or the Chief Executive Officer, general supervision
of the affairs of the corporation, shall sign or countersign all certificates,
contracts, or other instruments of the corporation as authorized by the Board
of Directors or as required by law, shall make reports to the Board of
Directors and stockholders, and shall perform any and all other duties as are
incident to his office or are properly required of him by the Board of
Directors.

VICE-PRESIDENTS

35. The Vice-Presidents, in the order designated by the Board of
Directors, shall, in the absence or disability of the President, or at his
request, perform the duties and exercise
<PAGE> 17
the powers of the President and shall perform such other duties as from time to
time the Board of Directors shall prescribe.

THE SECRETARY AND THE TREASURER

36. The Secretary and the Treasurer shall perform those duties as
are incident to their offices, or are properly required of them by the Board of
Directors, or are assigned to them by the Certificate of Incorporation or these
By-Laws. The Assistant Secretaries, in the order of their seniority, shall, in
the absence of the Secretary perform the duties and exercise the powers of the
Secretary, and shall perform any other duties as may be assigned by the Board
of Directors, Chairman of the Board, Chief Executive Officer, President, or the
Secretary. The Assistant Treasurers, in the order of their seniority, shall,
in the absence of the Treasurer perform the duties and exercise the powers of
the Treasurer, and shall perform any other duties as may be assigned by the
Board of Directors, Chairman of the Board, Chief Executive Officer, President,
or the Treasurer.

OTHER SUBORDINATE OFFICERS

37. Other subordinate officers appointed by the Board of Directors
shall exercise any powers and perform any duties as may be delegated to them by
the resolutions appointing them, or by subsequent resolutions adopted from time
to time.
<PAGE> 18
ABSENCE OR DISABILITY

38. In case of the absence or disability of any officer of the
corporation and of any person authorized to act in his or her place during such
period of absence or disability, the Board of Directors may from time to time
delegate the powers and duties of that officer to any other officer, or any
director, or any other person whom it may select.

VOTING CORPORATION'S SECURITIES

39. Unless otherwise ordered by the Board of Directors, the
Chairman of the Board, the Chief Executive Officer, or the President, in that
order, or in the event of their inability to act, the Vice-President designated
by the Board of Directors to act in the absence of the Chairman of the Board,
the Chief Executive Officer or the President, shall have full power and
authority on behalf of the corporation to attend and to act and to vote at any
meetings of security holders of corporations in which the corporation may hold
securities, and at such meetings shall possess and may exercise any and all
rights and powers incident to the ownership of such securities, and which as
the owner thereof the corporation might have possessed and exercised, if
present. The Board of Directors by resolution from time to time may confer
like powers upon any other person or persons.
<PAGE> 19
CERTIFICATES OF STOCK

40. The certificates of stock of the corporation shall be numbered
and shall be entered in the books of the corporation as they are issued. They
shall exhibit the holder's name and number of shares and shall be signed by the
chairman or vice-chairman of the board of directors or the president or vice-
president, and by the treasurer or an assistant treasurer, or the secretary or
an assistant secretary. If the corporation has a transfer agent or an
assistant transfer agent or a transfer clerk acting on its behalf and a
registrar, the signature of any such officer may be a facsimile.

TRANSFERS OF STOCK
41. Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.

CLOSING OF TRANSFER BOOKS

42. The board of Directors shall have power to close the stock
transfer books of the corporation for a period not exceeding fifty days
preceding the date of any meeting of
<PAGE> 20
stockholders or the date for payment of any dividend or the date for the
allotment of rights or the date when any change or conversion or exchange of
capital stock shall go into effect or for a period of not exceeding fifty days
in connection with obtaining the consent of stockholders for any purpose;
provided, however, that in lieu of closing the stock transfer books as
aforesaid, the Board of Directors may fix in advance a date, not exceeding
fifty days preceding the date of any meeting of stockholders or the date for
the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent, as a record date
for the determination of the stockholders entitled to notice of, and to vote
at, any such meeting, and any adjournment thereof, or entitled to receive
payment of any such dividend, or to any such allotment of rights, or to
exercise the rights in respect of any such change, conversion or exchange of
capital stock, or to give such consent, and in such case such stockholders, and
only such stockholders as shall be stockholders of record on the date so fixed,
shall be entitled to such notice of, and to vote at, such meeting and any
adjournment thereof, or to receive payment of such dividend, or to receive such
allotment of rights, or to
<PAGE> 21
exercise such rights, or to give such consent, as the case may be,
notwithstanding any transfer of any stock on the books of the corporation after
any such record date fixed as aforesaid.

REGISTERED STOCKHOLDERS

43. The corporation shall be entitled to treat the holder of
record of any share or shares of stock as the holder in fact thereof and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such share on the part of any other person, whether or not it shall
have express or other notice thereof, except as otherwise provided by the laws
of Delaware.

LOST CERTIFICATE

44. The Board of Directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost or destroyed,
upon the making of an affidavit of that fact by the person claiming the
certificate of stock to be lost. When authorizing such issue of a new
certificate or certificates, the Board of Directors may, in its discretion and
as a condition precedent to the issuance thereof, require the owner of such
lost or destroyed certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require and/or give the
corporation a bond in such
<PAGE> 22
sum as it may direct as indemnity against any claim that may be made against
the corporation with respect to the certificate alleged to have been lost or
destroyed. The Board of Directors need not act specifically upon the
replacement of each lost or destroyed certificate, but may delegate to the
officers of the corporation the power to authorize, in writing, without further
authority of the Board of Directors, the transfer agent of the corporation to
issue a new certificate or certificates of stock in replacement of certificates
alleged to have been lost, stolen, or destroyed; provided, however, that no
replacement certificates shall be issued unless there shall first have been
furnished to the corporation or its transfer agent satisfactory proof of such
loss, theft, or destruction, and adequate protection to the corporation and its
transfer agent under an appropriate bond of indemnity under which they shall be
named as Obligee, and which bond shall be in an amount and form satisfactory to
the officer of the corporation issuing the written authorization.

CHECKS

45. All checks or demands for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons as
the Board of Directors may from time to time designate.
<PAGE> 23
FISCAL YEAR

46. The fiscal year shall begin the first day of October in each
year.

DIVIDENDS

47. Dividends upon the capital stock of the corporation subject to
the provisions of the Certificate of Incorporation, if any, may be declared by
the Board of Directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property, or in shares of the capital stock.

48. Before payment of any dividend there may be set aside out of
any funds of the corporation available for dividends such sum or sums as the
Directors from time to time, in their absolute discretion, think proper as a
reserve fund to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the Directors shall think conducive to the interest of the
corporation, and the Directors may abolish any such reserve in the manner in
which it was created.

DIRECTORS' ANNUAL STATEMENT

49. The Board of Directors shall present at each annual meeting
and when called for by vote of the stockholders at any special meeting of the
stockholders, a full and clear statement of the business and condition of the
corporation.
<PAGE> 24
NOTICES

50. Whenever under the provisions of these By-laws notice is
required to be given to any Director or stockholder, it shall not be construed
to mean personal notice, but such notice may be given in writing, by mail, by
depositing the same in the post office or letter box, in a post-paid sealed
wrapper, addressed to such Director or stockholder at such address as appears
on the books of the corporation, or, in default of other address, to such
Director or stockholder at the General Post Office in the City of Wilmington,
Delaware, and such notice shall be deemed to be given at the time when the same
shall be thus mailed.

51. Any notice required to be given under these By-laws may be
waived in writing, signed by the person or persons entitled to said notice,
whether before or after the time stated therein. Consent in writing to any
action by all of the stockholders pursuant to By-law 13 shall be deemed a
waiver by such stockholder of all notice in respect to such action.

AMENDMENTS

52. These By-laws may be altered or repealed at any regular
meeting of the stockholders or at any special meeting of the stockholders at
which a quorum is present or represented, provided notice of the proposed
alteration or
<PAGE> 25
repeal be contained in the notice of such special meeting, by the affirmative
vote of a majority of the stock entitled to vote at such meeting and present or
represented thereat, or by the affirmative vote of a majority of the Board of
Directors at any regular meeting of the Board or at any special meeting of the
Board if notice of the proposed alteration or repeal be contained in the notice
of such special meeting; provided, however, that no change of the time or place
for the election of Directors shall be made within sixty days next before the
day on which such election is to be held, and that in case of any change of
such time or place, notice thereof shall be given to each stockholder in person
or by letter mailed to his last known post office address at least twenty days
before the election is held.

<PAGE> 1

Exhibit 10.2
HELMERICH & PAYNE, INC.

INCENTIVE STOCK OPTION PLAN

STOCK OPTION CONTRACT

THIS CONTRACT made and entered into this _____ day of _________, 19__,
by and between HELMERICH & PAYNE, INC., a Delaware corporation with its
principal office at Utica at 21st, Tulsa, Oklahoma, hereinafter called the
"Company", and _________________, an individual of ________, Oklahoma,
hereinafter called "Employee", an employee of the Company or one of its
subsidiaries.

At a meeting held _________________, the Board of Directors authorized
the grant to the Employee, on _________________, pursuant to the Incentive
Stock Option Plan (the "Plan") of the Company, of the right to purchase shares
of common stock of the Company, as hereinafter set forth, and authorized the
execution and delivery of this Contract.

Accordingly, the parties hereto agree as follows:

1. The Employee, as a matter of separate inducement and agreement
in connection with his employment by the Company or one of its subsidiaries,
and not in lieu of any salary or other compensation for his services, is
granted the right to purchase from the Company, pursuant to said Incentive
Stock Option Plan, upon the terms and conditions set forth in this Contract,
all or any part of _____ shares of common stock of the Company at
_____________________________________ Dollars ($_____) per share.

2. The _____ shares subject to this right shall become
purchasable in installments over a period of ten (10) years from the date of
this Contract. No shares shall be purchasable hereunder prior to
_________________, nor subsequent to _________________. The date upon which
each installment shall mature and become purchasable and the number of shares
comprising such installment are as follows:

<TABLE>
<CAPTION>
Date Number of Shares
---- ----------------
<S> <C>
----------------- ---

----------------- ---

----------------- ---
</TABLE>

The shares comprising each installment may be purchased by the Employee at his
option, in whole or in part, at any time after such installment matures and
becomes purchasable until the termination

1
<PAGE> 2
of this right. This right shall terminate on _________________, and any shares
not purchased on or before such date may not thereafter be purchased hereunder.

3. Upon each exercise of this right, the Employee shall give
written notice to the Company specifying the number of shares to be purchased
and accompanied by payment in cash or a certified check of the aggregate
purchase price thereof. The Employee, with the written consent of the Board of
Directors of the Company or the Committee referred to in Section 3(b) of the
Plan, may pay for the shares by tendering stock of the company already owned by
the Employee, with such stock to be valued on the date of the exercise by
application of the method set out in Section 5 of the Plan. Such exercise
shall be effective upon receipt by the Company of such notice and payment.

No holder of this right shall be entitled to any rights of a
stockholder of the Company in respect to any shares covered by this right until
such shares have been paid for in full and issued to him.

4.(a) This Contract shall not affect in any way the right or power
of the Company or its shareholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or
any issue of bonds, debentures, preferred or prior preference stocks ahead of
or affecting the common stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceedings, whether of a
similar character or otherwise.

(b) The shares with respect to which options are granted hereunder
are shares of the common stock of the Company as presently constituted, but if,
and whenever, prior to the delivery by the Company of all of the shares of the
common stock which are subject to this Contract, the Company shall effect a
subdivision or consolidation of shares or other capital readjustment, the
payment of a stock dividend or other increase or reduction of the number of
shares of the common stock outstanding without receiving compensation therefor
in money, services, or property, the number of shares of common stock with
respect to which options granted hereunder may thereafter be exercised shall
(i) in the event of an increase in the number of shares, be proportionately
increased, and the cash consideration payable per share shall be
proportionately reduced; and (ii) in the event of a reduction in the number of
shares, be proportionately reduced, and the cash consideration payable per
share shall be proportionately increased.

(c) If the Company is reorganized, or merged or consolidated with,
or sells or otherwise disposes of substantially all its assets to another
corporation or if at least 80% of the outstanding common stock of the Company
is acquired by another corporation (in exchange for stock or other securities
of such other corporation), while unexercised options remain outstanding under
this Contract, there shall be substituted for the shares subject to the
unexercised portions hereof an appropriate number of shares, if any, of each
class of stock or other securities of the reorganized, merged, consolidated or
acquiring corporation which were distributed or issued to the shareholders

2
<PAGE> 3
of the Company in respect of such shares and, in the case of any
reorganization, merger, or consolidation wherein the Company is not the
surviving corporation, or any sale or disposition of substantially all of the
assets of the Company to another corporation or the acquisition of at least 80%
of the outstanding common stock of the Company by another corporation (in
exchange for stock or other securities of such other corporation), the Board
may accelerate the unmatured installments of such options to the end that such
options shall be exercisable in full during a specified period prior to the
effective date of such reorganization, merger, consolidation, sale,
disposition, or acquisition of stock (and thereafter, upon assumption of such
options by the reorganized, merged, consolidated or acquiring corporation as
herein contemplated) without regard to the installment provisions set forth in
Section 2 hereof; provided, however, that all such options may be cancelled by
the Board as of the effective date of any such reorganization, merger,
consolidation, sale, or other disposition of assets, or of any such acquisition
of stock, by giving notice to the Employee or his legal representative of its
intention to do so and by permitting the purchase during the thirty-day period
next preceding such effective date of all of the shares subject hereto, without
regard to the installment provisions set forth in such Section 2.

(d) Except as hereinabove expressly provided in this Section 4,
the issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, for cash or property, or for
labor or services, either upon direct sale or upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or obligations of
the Company convertible into such shares or other securities, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number
of shares of common stock subject to options granted hereunder.

5. This right is granted on the condition that the purchases of
shares subject hereto shall be for investment purposes only and not with a view
to resale or distribution, except that in the event the shares subject to this
right are registered under the Securities Act of 1933, as amended, (which the
Company intends to do) or in the event a resale of such shares without such
registration would otherwise be permissible, this condition shall be
inoperative if in the opinion of counsel for the Company this condition is not
required under the Securities Act of 1933, as amended, or any other applicable
law, regulation, or rule of any governmental agency. To the extent that
aforesaid investment covenant is necessary, each payment by the Employee to the
Company of the purchase price for shares hereunder shall constitute a
representation by the Employee to the Company that his purchase of such shares
is for investment and not with a view to or for sale in connection with any
distribution thereof.

6. This right may be exercised solely by the Employee except as
hereinafter provided in the case of his death. During the lifetime of the
Employee, this right shall not be transferred, assigned, pledged, or
hypothecated by him in any way whether by operation of law or otherwise and
shall not be subject to execution, attachment, or similar processes.

7. This option shall terminate if the Employee, for any reason
whatsoever, including discharge by the Company, ceases to be a full-time
employee of the Company or of a subsidiary, except that:

3
<PAGE> 4
(a) if the employee dies while in the employ of the
Company or of a subsidiary and after ___________, and he shall have
been in continuous employment on a full-time basis since
_____________, then the option as to all installments that matured
prior to the death of the Employee shall be exercisable, but only
within one year after the date of death and in any event not after
_____________, by the estate of the Employee or by such person or
persons as shall have acquired the Employee's rights under the option
by bequest, inheritance, or operation of law;

(b) if he retires under the provisions of the pension
plan of the Company or of any subsidiary after _____________, and he
shall have been in continuous employment on a full-time basis since
_____________, the option, as to all installments that matured prior
to such retirement, shall be exercisable by him or his legal
representative only within three months after such retirement, but not
after _____________; and

(c) if he terminates his employment after _____________,
and he shall have been in continuous employment on a full-time basis
since _____________, the option, as to all installments that matured
prior to such termination, shall be exercisable by him or his legal
representative but only within three months after such termination,
but not after _____________.

8. The Board of Directors, with the consent of the Employee, may
amend or modify this Contract at any time for the purpose of meeting any
changes in pertinent law or governmental regulations or for any other purpose
permitted by law. In no event, however, shall any such action of the Board
result in (a) any increase except as provided in Section 4 in the number of
shares which may be purchased hereunder, nor (b) any change in the price at
which shares may be purchased except as provided in Section 4.

Notwithstanding any provision hereof, the obligation of the
Company to sell and deliver shares hereunder shall be subject to all applicable
laws, rules and regulations and to such approvals by any governmental agencies
or national securities exchange as may be required, and the Employee agrees
that he will not exercise any option granted hereunder, and that the Company
will not be obligated to issue any shares hereunder if the exercise thereof or
if the issuance of such shares shall constitute a violation by the Employee or
the Company of any applicable law or regulation.

9. All notices hereunder shall be in writing and if to the
Company shall be delivered personally to the Secretary of the Company or mailed
to its principal office, Utica at 21st, Tulsa, Oklahoma 74114, addressed to
the attention of the Secretary, and if to the Employee shall be delivered
personally or mailed to the Employee at

Helmerich & Payne, Inc.
Utica at 21st
Tulsa, Oklahoma 74114

4
<PAGE> 5
Such addresses may be changed at any time by notice from one party to the
other.

10. Nothing herein contained shall affect the right of the Company
or any of its subsidiaries to terminate the Employee's services,
responsibilities, duties, and authority to represent the Company or any of its
subsidiaries at any time for any reason whatsoever.

11. This right may not be exercised by the Employee, or in the
event of his death by his estate or by such person or persons as shall have
acquired his rights hereunder by bequest or inheritance or by reason of his
death, while there is outstanding (within the meaning of Sections 422(b)(7) and
422 A(c)(7) of the Internal Revenue Code) to the Employee any incentive stock
option granted previous to the date of this option to purchase the common stock
of the Company or in a corporation which is a parent or subsidiary of the
Company.

12. The Board of Directors of the Company shall determine any
questions of interpretations of this Contract, and such determinations shall be
final and binding on the Company and the Employee. The Board of Directors of
the Company and the Committee referred to in Section 3(b) of the Plan reserves
the right to amend this Contract and the Plan pursuant to which it was issued
to permit and continue qualification of the Contract and the Plan as "incentive
stock options" within the meaning of the Economic Recovery Tax Act of 1981, as
the same may from time to time be amended.

13. This Contract shall bind and inure to the benefit of the
parties hereto and the successors and assigns of the Company and to the extent
provided in Section 7, the executors, administrators, legatees, and heirs of
the Employee.

IN WITNESS WHEREOF, the parties hereto have executed this Contract as
of the day and year first above written.

HELMERICH & PAYNE, INC.

By
------------------------------
President

---------------------------------
"Employee"

<PAGE> 1
Exhibit 10.3
(Part 1/2)

CONSULTING SERVICES AGREEMENT

THIS AGREEMENT is made and entered into this _____ day of March, 1990,
by and between HELMERICH & PAYNE, INC., ("H&P") and WALTER H. HELMERICH, III,
("WHH").

WHEREAS H&P is a diversified energy company which, among other things,
is engaged in the acquisition and management of real estate and the management
of cash and equity investments;

WHEREAS WHH has the requisite expertise and experience to provide
consulting services to H&P; and

WHEREAS H&P desires to retain WHH's services as described herein,

NOW, THEREFORE, in consideration of the premises and mutual covenants,
agreements, and obligations herein, the parties hereto agree as follows:

1. WHH hereby accepts H&P's offer to render such consulting
services as may be reasonably requested by H&P. It is recognized that WHH
shall consult primarily in the areas of real estate acquisition and management
and portfolio investment and management, and that such consulting will be in
addition to WHH's serving as Chairman of H&P's Board of Directors. WHH agrees
to prepare such written or oral reports as H&P may deem necessary and to submit
the
<PAGE> 2
same to H&P's president. The foregoing may be referred to hereafter as
"Services."

2. As consideration for Services, H&P shall, during the term
hereof, (i) pay WHH the annual sum of One Hundred Fifty-four Thousand Eight
Hundred Dollars ($154,800), payable in monthly installments of Twelve Thousand
Nine Hundred Dollars ($12,900) on the first day of each month; (ii) allow WHH
the use of H&P aircraft as necessary for the performance of Services hereunder;
(iii) pay or reimburse WHH for all of his monthly membership fees in the Summit
Club, Tulsa Club, and Southern Hills Country Club; and (iv) reimburse WHH for
all reasonable and necessary direct out-of-pocket expenses incurred in the
performance of Services hereunder.

3. This Agreement shall be effective as of January 1, 1990, and
shall expire at midnight on December 31, 1990, unless renewed by the parties
prior to such date. Notwithstanding the foregoing in this paragraph 3, in the
event of death, disability, or other occurrence which renders WHH incapable of
performing his duties hereunder, H&P shall have the right to terminate this
Agreement by giving thirty (30) days' notice to WHH, his heirs, or his personal
representative.

4. The parties hereto agree that WHH is an independent contractor
and not an agent of H&P, and that WHH at all times shall
<PAGE> 3
maintain control of the manner and means by which services are performed. The
rights, obligations, and liabilities of the parties shall be several and not
joint or collective. No party shall have the right to act for or obligate the
other party except as expressly otherwise provided herein or by written consent
and authorization of the specific act by the other party. It is not the
intention of the parties to create, nor shall this Agreement be construed as
creating, any agency, joint venture, partnership, or association which would
effectively render said parties liable as partners.

5. All data and information obtained by WHH by virtue of the
performance of Services hereunder are deemed confidential and shall remain the
sole and exclusive property of H&P. All such data and information, in whatever
form, shall be delivered to H&P upon its request, or in any event at the
termination of this Agreement. WHH shall not disclose any proprietary or
confidential data or information, or the results of any Services performed
hereunder, to any person, firm, corporation, or other entity without the prior
written consent of H&P, unless compelled to do so pursuant to court order.

6. WHH represents and warrants that his performance of Services
hereunder will not constitute a conflict of interest or

3
<PAGE> 4
breach of contract between WHH or any of his agents or employees and any third
party and that, to the best of his knowledge and belief, no information he or
his agents or employees provide H&P hereunder involves any subject matter which
is the proprietary property of any third party.

7. This Agreement shall not prohibit WHH from pursuing such other
business opportunities as may arise during the term hereof which are not in
conflict with this Agreement.

8. This Agreement is deemed personal in nature. WHH shall
neither assign this Agreement, in whole or in part, nor delegate any of the
duties or obligations hereunder without the prior written consent of H&P.

9. Subject to the provisions hereof limiting WHH's rights to
assign or delegate this Agreement and any rights, duties, and obligations
hereunder, this Agreement shall be binding upon and inure to the benefit of
both of the parties hereunder and their assigns and other successors in
interest.

10. This Agreement contains the entire agreement between WHH and
H&P relating to the subject matter hereof.

11. This Agreement shall be governed by the laws of the State of
Oklahoma.

4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
in duplicate on the date first above written.

"H&P"
HELMERICH & PAYNE, INC.

By: /S/ Hans Helmerich
--------------------------

Hans Helmerich
President

"WHH"

/S/ W. H. Helmerich, III
-----------------------------
WALTER H. HELMERICH, III

STATE OF OKLAHOMA )
) SS.
COUNTY OF TULSA )

Before me, the undersigned, a Notary Public in and for said County
and State, personally appeared Hans Helmerich, to me known to be the identical
person who subscribed his name to the foregoing Consulting Services Agreement
as President of Helmerich & Payne, Inc., and he acknowledged to me that he
executed the same as his f free and voluntary act and deed and as the free and
voluntary act and deed of said corporation for the uses and purposes therein
set forth.

Subscribed and sworn to before me this 30th day of March, 1990.

/S/ Roberta A. Montgomery
-----------------------------
Notary Public
My commission expires:

January 20, 1993
- ---------------------

5
<PAGE> 6
STATE OF OKLAHOMA )
) SS.
COUNTY OF TULSA )

Before me, the undersigned, a Notary Public in and for said County
and State, personally appeared Walter H. Helmerich, III, to me known to be the
identical person who subscribed his name to the foregoing Consulting Services
Agreement, and he acknowledged to me that he executed the same as his free and
voluntary act and deed for the uses and purposes therein set forth.

Subscribed and sworn to before me this 30th day of March, 1990.

/S/ Roberta A. Montgomery
-----------------------------
Notary Public
My commission expires:

January 20, 1993
- ---------------------

6
<PAGE> 7
Exhibit 10.3
(Part 2/2)

AMENDMENT TO CONSULTING SERVICES AGREEMENT

THIS AMENDMENT TO CONSULTING SERVICES AGREEMENT ("Amendment") is made
and entered into this 26th day of December, 1990, and effective as of January
1, 1991, by and between Helmerich & Payne, Inc., ("H&P") and Walter H.
Helmerich, III, ("WHH").

Paragraph 3 of the Consulting Services Agreement dated December 30,
1990, is hereby deleted, with the following to be substituted therefor:

"3. This Agreement shall be effective as of January 1, 1991,
and shall be automatically renewed for subsequent one-year terms
unless H&P or WHH shall terminate the same upon thirty (30) days'
prior written notice."

Except as amended hereby, all the terms, conditions, and provisions
of the Consulting Services Agreement shall remain valid and binding.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment
in duplicate on the date first written above.

"H&P"
HELMERICH & PAYNE, INC.

By: /s/ Steven R. Mackey
------------------------------
Steven R. Mackey
Vice President

"WHH"

/s/ Walter H. Helmerich, III
------------------------------
WALTER H. HELMERICH, III

<PAGE> 1
Exhibit 10.4

RESTRICTED STOCK PLAN FOR SENIOR EXECUTIVES
OF HELMERICH & PAYNE, INC.

I. CERTAIN DEFINITIONS

"Award" means an award of shares of Common Stock as provided in
Paragraph V.

"Award Agreement" means a written agreement or agreements as described
in Paragraph X hereof between the Company and a Participant evidencing an
Award.

"Award Date" means for a Participant the date on which an Award is
granted to the Participant.

"Board of Directors" means the Board of Directors of the Company, a
majority of the Directors of which acting in the matter are not Participants or
eligible to participate in the Plan.

"Committee" means the Human Resources Committee of the Board of
Directors described in Paragraph III hereof, or any other Committee of the
Board authorized by the Board of Directors to act hereunder and meeting the
requirements of Paragraph III hereof.

"Common Stock" means shares of the Company's presently authorized
common stock, except as this definition may be modified as provided in
Paragraph IX.

"Company" means Helmerich & Payne, Inc., a Delaware corporation.

"Disability" means a medically determined physical or mental
impairment which renders a Participant unable to function effectively as an
elected officer of the Company or a senior executive Employee.

"Employees" means persons (including officers, whether or not they are
also directors) employed by the Company, or a subsidiary thereof, on a full
time basis and who are compensated for such employment by a regular salary.

"Participant" means an individual who satisfies the conditions of
eligibility set forth in Paragraph IV and who accepts an Award or, upon the
Participant's death or incapacity, his estate, personal representative or
beneficiary.

"Plan" means this Restricted Stock Plan for Senior Executives of
Helmerich & Payne, Inc.

II. PURPOSE

The purposes of the Plan are to attract and retain selected senior
executives and to increase their proprietary interest in the Company by
awarding them shares of the Common Stock subject to the terms and conditions
set forth below.

III. ADMINISTRATION

The Plan shall be administered by the Human Resources Committee of the
Board of Directors which shall consist of not fewer than three members, and
which shall consist only of directors who

A-1
<PAGE> 2
are ineligible to participate in the Plan. The interpretation and construction
by the Committee of any provision of the Plan or of any Award Agreement shall
be final and conclusive unless otherwise determined by the Board of Directors,
and in any such event such determination by the Board of Directors shall be
final and conclusive. If, for any reason, the Human Resources Committee shall
be unable to act or shall cease to qualify hereunder, or if the Board of
Directors shall, for any reason, deem it desirable, the Board of Directors may
constitute and authorize a further committee of directors as the Committee,
provided that such committee meets the qualifications set forth in the first
sentence of this Paragraph III. Further, the Board of Directors reserves the
right to take any and all action hereunder where it may deem such action
advisable, including where the Committee may be unable to act.

IV. ELIGIBILITY

The individuals who shall be Participants shall be such elected
officers of the Company and other senior executive Employees who are approved
as Participants by the Committee from time to time.

V. AWARDS

Subject to the provisions of Paragraph VIII hereof, Participants shall
be granted Awards of such number of shares of Common Stock as may be approved
by the Committee. Such shares shall be awarded subject to the restrictions
provided for herein and, except for such restrictions, for no additional
consideration.

VI. TERMS AND CONDITIONS OF AWARDS

A. Restrictions

All Awards of shares of Common Stock (the "Restricted Shares") shall
be subject to the restrictions provided for in this Paragraph VI. Certificates
for Restricted Shares shall be registered in the Participant's name but shall
be held in custody by the Company for the Participant's account. While held by
the Company, the Participant shall have the right to receive dividends on and
the right to vote the Restricted Shares, but shall not have any other rights
and privileges of a stockholder and, without limitation, shall not have the
right to sell, transfer, assign, pledge or otherwise encumber or dispose of the
Restricted Shares.

B. Expiration of Restrictions

The restrictions set forth in subparagraph A with respect to each
Award of Restricted Shares to a Participant (the "Restrictions") shall expire
on the earlier of the following:

(i) If the Participant shall have been continuously in the employment
of the Corporation or one of its subsidiaries for a period of three years from
the date of grant of a Restricted Stock Award, the Corporation shall deliver to
the Participant on or about the third anniversary thereof a certificate,
registered in the name of the Participant and free of restrictions hereunder,
representing 20% of the total number of shares granted to the Participant
pursuant to this Agreement. Similarly, if the Participant shall be so
continuously employed on each of the fourth, fifth, sixth and seventh
anniversaries thereof, the Corporation on or about each such anniversary shall
deliver additional certificates representing 20% of the total number of such
shares. No payment shall be required from the Participant in connection with
any delivery to the Participant of shares hereunder.

A-2
<PAGE> 3
C. Forfeiture of Restricted Shares

Except as next provided, at the time a Participant ceases to be an
Employee for any reason, whether due to resignation, termination, retirement,
disability, death or otherwise, all Restricted Shares held by the Company for
such Participant's account and as to which the Restrictions have not expired in
accordance with subparagraph B, shall be forfeited to the Company (the
"forfeited Shares"). In the event of a Participant's disability, death or
retirement from the Company or a subsidiary and, in each instance, at or after
having attained age 62 and having continued as an Employee for at least one
year from his Award Date, the Restricted Shares for which the Restrictions have
not then expired shall continue to be held in accordance with subparagraphs A
and B until the Restrictions expire. In the event of death, the Restricted
Shares may be re-registered in the name of the deceased Participant's
designated beneficiary or successor by will or law.

D. Delivery of Restricted or Forfeited Shares

As promptly as is reasonable following such time as the Restrictions
shall expire, the Company will deliver to the Participant (including a
beneficiary, estate or designated representative, if appropriate a certificate
or certificates for the shares of Common Stock for which the Restrictions have
expired. Such shares delivered to the Participant (or beneficiary, estate or
designated representative) shall no longer be subject to any restrictions and
he shall enjoy all rights and privileges of a stockholder as to such shares.
At such time as the Restricted Shares shall be forfeited, the Forfeited Shares
shall be returned to the Company to be held as treasury shares or to be
canceled as the Company shall at any time determine. The Participant shall
have no rights and privileges as a stockholder or otherwise as to the Forfeited
Shares.

E. Restrictions upon Additional Awards

No Participant shall be entitled to be granted additional Awards until
the Restrictions upon all shares of Common Stock with respect to his previous
Award have expired in full.

F. Right to Remove Restrictions

The Committee, in its sole discretion, may authorize the acceleration
of the expiration of the Restrictions as to any or all Participants but in no
event as to any Participant earlier than six months from the Award Date.

VII. STOCK AND NUMBER OF SHARES AVAILABLE

The shares of Common Stock available for awards shall be either shares
of authorized but unissued Common Stock or shares of Common Stock reacquired by
the Company. Subject to the provisions of Paragraph IX, the number of shares
of Common Stock available for Awards shall not exceed 400,000 shares of the
presently authorized Common Stock. In the event that any Restricted Shares
become Forfeited Shares, such shares of Common Stock may again be subject to an
Award.

VIII. REGULATORY COMPLIANCE AND LISTING

The issuance or delivery of any Restricted Shares or of any shares as
to which the Restrictions have expired, may be postponed by the Company for
such periods as may be required to comply with any applicable requirements
under the federal securities laws, any applicable listing requirements of any
national securities exchange and requirements under any other law or regulation
applicable to the

A-3
<PAGE> 4
issuance or delivery of such shares, and the Company shall not be obligated to
issue or deliver any Restricted Shares if the issuance or delivery of such
shares shall constitute a violation of any provision of any law or of any
regulation of any governmental authority or any national securities exchange.

IX. ADJUSTMENT IN EVENT OF CHANGES IN CAPITALIZATION

In the event of recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation, rights offering,
separation, reorganization or liquidation, or any other change in the corporate
structure or shares of Common Stock, the Committee or the Board of Directors
may make such equitable adjustments, to prevent dilution or enlargement of
rights, as may be deemed appropriate in the number and class of shares
authorized to be granted as Restricted Shares.

X. TERMS AND CONDITIONS OF AWARD AGREEMENTS

Award Agreements shall be in such form as the Committee, from time to
time, shall approve, including provisions as to

(a) the prohibitions upon transfer and assignment of Restricted
Shares,

(b) the transfer to the Company of all Forfeited Shares, including
provision for stock powers,

(c) the agreement of the Participant to remain in the employ of and to
render to the Company or a subsidiary his services for a period of at least one
year from the Award Date,

(d) the designation of a beneficiary, and

(e) such other matters as the Committee may deem advisable.

XI. EXCULPATION

Each member of the Board of Directors or of the Committee, and each
officer and employee of the Company shall be fully justified in relying or
acting upon any information furnished in connection with the administration of
the Plan by an person or persons other than himself. In no event shall any
person who is or shall have been a member of the Board of Directors or of the
Committee, or an officer or employee of the Company be liable for any
determination made or other action taken or any omission to act in reliance
upon any such information or for any action (including the furnishing of
information) taken or any failure to act, if in good faith.

XII. TERMINATION OR AMENDMENT OF THE PLAN

The Committee or the Board of Directors may at any time terminate the
plan and may from time to time alter or amend the Plan or any part thereof
(including any amendment deemed necessary to ensure that the Company may comply
with any regulatory requirement referred to in Paragraph VIII), provided that,
unless otherwise required by law, the rights of a Participant with respect to
Restricted Shares awarded prior to such termination, alteration or amendment
may not be impaired without the consent of such Participant and further,
provided that any amendment that would (i) materially increase the benefits
accruing to Participants under the Plan, (ii) materially increase the
securities of the Company which may be issued under the Plan or (iii)
materially modify the requirements as to eligibility for participation in the
Plan, shall be subject to the requisite approval of the Company's stockholders,
except that any Plan amendment resulting from or implementing any

A-4
<PAGE> 5
increase or modification that may result from adjustments authorized by
Paragraph IX shall not require such approval.

XIII. MISCELLANEOUS

A. Right to Dismiss Employees

Neither the establishment of the Plan, the designation of any
Participant, the taking of any action hereunder, nor any provisions of the plan
shall be construed as giving a Participant the right to be retained in the
employ of the Company or a subsidiary or in any particular capacity with the
Company or a subsidiary.

B. Taxes

The Company shall have the right to require, prior to the issuance or
delivery of any Restricted Shares or of any shares for which the Restrictions
have expired, payment by the Participant of any taxes required by law with
respect to the issuance or delivery of such shares.

C. Applicable Law

The Plan shall be interpreted and construed in accordance with the
laws of the State of Delaware.

D. No Assignment

No right under the Plan, including the right to receive Restricted
Shares and dividends in accordance with the terms hereof, shall be assignable
or transferable except by will or by the laws of descent and distribution.

E. Gender

Wherever any words are used herein in the masculine gender they shall
be construed as though they were also used in the feminine gender in all cases
where they would so apply, and wherever any words are used herein in the
singular form they shall be construed as though they were also used in the
plural form in all cases where they would so apply.

XIV. EFFECTIVE DATE OF THE PLAN

The Plan shall become effective on January 2, 1990, subject to the
adoption of the plan by the Company's stockholders.

A-5

<PAGE> 1

Exhibit 10.5
(Part 1/3)

RESTRICTED STOCK AWARD AGREEMENT FOR
THE RESTRICTED STOCK PLAN FOR SENIOR EXECUTIVES OF
HELMERICH & PAYNE, INC.

THIS RESTRICTED STOCK AWARD AGREEMENT (the "Agreement") is entered
into as of the 1st day of December, 1993, by and between Helmerich & Payne,
Inc., (the "Company") and ______________, an individual, (the "Participant");

W I T N E S S E T H :

WHEREAS, the Participant is a senior executive employed by the
Company,

WHEREAS, the Company desires to encourage the Participant to remain in
the employ of the Company in the future, and

WHEREAS, in consideration of future services to be rendered by the
Participant to the Company, the Company desires to provide the Participant the
opportunity to acquire additional shares of Common Stock of the Company in
exchange for the Participant performing future services for the Company,

NOW, THEREFORE, BE IT RESOLVED that the Participant and the Company
agree as follows:

1. The Plan. The Restricted Stock Plan for Senior Executives of
Helmerich & Payne, Inc., (the "Plan"), a copy of which is attached hereto as
Exhibit "A," is hereby incorporated herein by reference and made a part hereof
for all purposes, and when taken with this Agreement shall govern the rights of
the Participant and the Company with respect to the Award, as hereinafter
defined. All capitalized terms shall have the same meanings as contained in
the Plan unless stated to the contrary herein.

2. Grant of Award. The Company hereby grants to the Participant
an award (the "Award") of TEN THOUSAND (10,000) shares of Company Common Stock
(the "Restricted Shares") on the terms and conditions set forth herein and in
the Plan.

<PAGE> 2

3. Terms of Award.

(a) Vesting and Release of Restricted Shares.
Certificates representing the Restricted Shares subject to the Award
will be issued in the name of the Participant and will be delivered to
the Secretary of the Company as escrow agent (the "Agent"). Subject
to the terms of this Agreement, the Plan, and any agreement entered
into with the Agent, the Participant shall be deemed vested and
entitled to receive the number of the Restricted Shares within the
Award within a reasonable length of time after the expiration of the
vesting dates (the "Vesting Dates") described in Subsection (b) below.

(b) Vesting Dates. If the Participant shall have been
continuously in the employment of the Company or one of its
Subsidiaries for a period of three years from the date of grant of the
Award, the Company shall deliver to the Participant on or about the
third anniversary thereof a certificate, registered in the name of the
Participant and free of Restrictions hereunder, representing 20% of
the total number of Restricted Shares granted to the Participant
pursuant to this Agreement. Similarly, if the Participant shall be so
continuously employed on each of the fourth, fifth, sixth, and seventh
anniversaries thereof, the Company on or about each such anniversary
shall deliver additional certificates representing 20% of the total
number of such Restricted Shares.

The following sets forth the vesting schedule described
hereinabove:

<TABLE>
<CAPTION>
Percentage of Shares of
Stock within an Award
Vesting Date To Be Distributed
------------ -----------------
<S> <C>
December 1, 1996 20%
December 1, 1997 20%
December 1, 1998 20%
December 1, 1999 20%
December 1, 2000 20%
----

Total 100%
====
</TABLE>

- 2 -

<PAGE> 3

No payment shall be required from the Participant in
connection with any delivery to the Participant of Restricted Shares
hereunder other than the payment of income tax withholding and other
employment taxes that may be due with respect to the issuance or
delivery of such shares.

(c) Delivery of Restricted or Forfeited Shares. As
promptly as is reasonable following such time as the Restrictions
shall expire, the Company will deliver to the Participant (including a
beneficiary, estate, or designated representative, if appropriate) a
certificate or certificates for the Restricted Shares for which the
Restrictions have expired, and such Restricted Shares delivered to the
Participant (or beneficiary, estate, or designated representative)
shall no longer be subject to any restrictions and he shall enjoy all
rights and privileges of a stockholder as to such shares. At such
time as the Restricted Shares shall be forfeited, the forfeited shares
shall be returned to the Company to be held as treasury shares or to
be canceled as the Company shall at any time determine. The
Participant shall have no rights and privileges as a stockholder or
otherwise as to the forfeited shares.

(d) Additional Restrictions. In addition to the
restrictions imposed under the foregoing Subsection 3(a), no
Participant shall be entitled to be granted additional Awards until
the Restrictions upon all shares of Common Stock with respect to his
previous Award have expired in full.

4. Delivery by the Agent. As promptly as is practicable after
the expiration of the appropriate Vesting Dates specified in Subsection 3(b)
above, the Agent will deliver to the Participant a certificate evidencing the
number of Restricted Shares to which he is entitled. Such certificate shall be
issued in the Participant's name.

5. Nontransferability of Award. With respect to unvested
Restricted Shares held by the Agent, the Participant for whose benefit such
shares are held shall not have the right to sell, assign, transfer, convey,
dispose of, pledge, hypothecate, burden, encumber, or charge such unvested
Restricted Shares or any interest therein in any manner whatsoever.

- 3 -

<PAGE> 4

6. Notices. All notices or other communications relating to the
Plan and this Agreement as it relates to the Participant shall be in writing
and shall be mailed (U.S. Mail) by the Company to the Participant at the
following address:

___________________
______________________
Tulsa, Oklahoma 740___

or such other address as the Participant may advise the Company in writing.

7. Restrictive Legend. The Participant acknowledges that the
certificate representing the Restricted Shares shall bear the following legend:

"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
RESTRICTED STOCK, HAVE BEEN ISSUED PURSUANT TO
THE RESTRICTED STOCK PLAN FOR SENIOR EXECUTIVES
OF HELMERICH & PAYNE, INC. (THE 'PLAN'), ARE
SUBJECT TO THE TERMS AND PROVISIONS OF THE PLAN
ADOPTED BY THE COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS ON MARCH 7, 1990, AND BEAR
THE RESTRICTIONS ON ALIENATION SET FORTH IN THE
PLAN. COPIES OF THE PLAN MAY BE OBTAINED FROM
THE OFFICE OF THE SECRETARY OF THE COMPANY."

The Participant acknowledges and agrees that violation of the foregoing
restrictive legend shall result in immediate forfeiture of all Restricted
Shares.

8. Other Restrictions on Transferability. The Participant
acknowledges that the holding and transfer of all Restricted Shares received by
the Participant will be subject to all applicable state and federal securities
laws.

9. Stock Powers and the Beneficiary. The Participant hereby
agrees to execute and deliver to the Secretary of the Company a stock power
(endorsed in blank) covering his Award and authorizes the Secretary of the
Company to deliver to the Company any and all Restricted Shares that are
forfeited under the provisions of the Plan. The Participant designates his
spouse as the beneficiary

- 4 -

<PAGE> 5

under this Agreement, and if the Participant has no spouse, then the
Participant's estate shall be the designated beneficiary of the
Participant.

10. Further Assurances. The Participant hereby agrees to execute
and deliver all such instruments and take all such action as the Company may
from time to time reasonably request, including, but not limited to,
acknowledging the forfeiture of the Restricted Shares in accordance with the
Plan, in order to fully effectuate the purposes of this Agreement.

11. Binding Effect and Governing Law. This Agreement shall be (i)
binding upon and inure to the benefit of the parties hereto and their
respective heirs, successors, and assigns except as may be limited by the Plan,
and (ii) governed and construed under the laws of the State of Oklahoma.

12. Acceleration of Vesting upon Change of Control.
Notwithstanding anything to the contrary herein, in the event that a Change of
Control (as hereinafter defined) has occurred with respect to the Company at
least six months after the Award Date, any and all Restricted Shares will
become automatically fully vested and the Restrictions shall immediately expire
with respect to the Restricted Shares without the requirement of any further
act by either the Company or the Participant. For the purposes of this Section
12, the term "Change of Control" shall mean:

(a) The acquisition by an individual, entity, or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended, (the "Exchange Act")) (a "Person")
of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 15% or more of either (i) the then
outstanding shares of common stock of the Company (the "Outstanding
Company Common Stock") or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company
Voting Securities"), provided, however, that the following
acquisitions shall not constitute a Change of Control: (i) any
acquisition directly from the Company but excluding for this purpose
any acquisition which occurs within six months after a threatened
Change of Control which is in direct response to such threatened
Change of Control, (ii) any

- 5 -

<PAGE> 6

acquisition by the Company, or (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company, or

(b) When individuals who, as of the date hereof,
constitute the Board of Directors (the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board of
Directors, provided, however, that any individual becoming a director
subsequent to the date hereof whose election or nomination for
election by the Company's shareholders was approved by a vote of at
least a majority of the Board of Directors then comprising the
Incumbent Board shall be considered to have been a member of the
Incumbent Board, but excluding for this purpose any such individual
whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than members of the Board
of Directors.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

"COMPANY" HELMERICH & PAYNE, INC.,
a Delaware corporation

By
------------------------------------
Hans Helmerich
President

"PARTICIPANT"
------------------------------------

- 6 -
<PAGE> 7

Exhibit 10.5
(Part 2/3)

FIRST AMENDMENT TO THE RESTRICTED STOCK AWARD AGREEMENT
FOR THE RESTRICTED STOCK PLAN FOR
SENIOR EXECUTIVES OF HELMERICH & PAYNE, INC.

THIS FIRST AMENDMENT TO THE RESTRICTED STOCK AWARD AGREEMENT FOR THE
RESTRICTED STOCK PLAN FOR SENIOR EXECUTIVES OF HELMERICH & PAYNE, INC., (the
"First Amendment") is entered into as of the 7th day of June, 1990, by and
between Helmerich & Payne, Inc., (the "Company") and ________________________,
an individual, (the "Participant").

W I T N E S S E T H:

WHEREAS, the parties have entered into a Restricted Stock Award
Agreement for the Restricted Stock Plan for Senior Executives of Helmerich &
Payne, Inc., (the "Restricted Agreement") dated March 7, 1990, (the "Award
Date") in accordance with that certain Restricted Stock Plan for Senior
Executives of Helmerich & Payne, Inc., (the "Plan");

WHEREAS, in accordance with Article VI, Section F, of the Plan, the
Committee has authorized the acceleration of the expiration of the Restrictions
with respect to the Participant in the event of a "change of control" of the
Company, as hereinafter provided;

WHEREAS, the parties desire to amend the Restricted Agreement in order
to reflect such acceleration of the expiration of the Restrictions in the event
of a "change in control"; and

WHEREAS, all capitalized terms used herein shall have the same
meanings as in the Plan, unless stated to the contrary herein,

NOW, THEREFORE, in consideration of the premises, covenants, and
agreements set forth in the Restricted Agreement, the parties hereto agree that
the Restricted Agreement is hereby amended to add a new Section 12, to read as
follows:

12. Acceleration of Vesting upon Change of
Control. Notwithstanding anything to the contrary herein, in
the event that a Change of Control (as hereinafter defined)
has occurred with respect to the Company at least six months
after the Award Date, any and all Restricted Shares will
become automatically fully vested and the Restrictions shall
immediately expire with respect to the Restricted Shares
without the requirement of any further act by either the
Company or the Participant. For the purposes of this Section
12, the term "Change of Control" shall mean

<PAGE> 8

directors (the "Outstanding Company Voting Securities"),
provided however, that the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly
from the Company but excluding for this purpose any
acquisition which occurs within six months after a threatened
Change of Control which is in direct response to such
threatened Change of Control, (ii) any acquisition by the
Company, or (iii) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or
any corporation controlled by the Company, or

(b) When individuals who, as of the date
hereof, constitute the Board of Directors (the "Incumbent
Board") cease for any reason to constitute at least a majority
of the Board of Directors, provided, however, that any
individual becoming a director subsequent to the date hereof
whose election or nomination for election by the Company's
shareholders was approved by a vote of at least a majority of
the Board of Directors then comprising the Incumbent Board
shall be considered to have been a member of the Incumbent
Board, but excluding for this purpose any such individual
whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a
Person other than members of the Board of Directors.

IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment as of the day and year first above written.

"Company"

HELMERICH & PAYNE, INC.,
A Delaware Corporation

By:
-----------------------------------
Steven R. Mackey

-----------------------------------
(Print Name)
Vice President

"Participant"

-----------------------------------

-----------------------------------
(Print Name)
<PAGE> 9

Exhibit 10.5
(Part 3/3)

SECOND AMENDMENT TO THE RESTRICTED STOCK AWARD AGREEMENT
FOR THE RESTRICTED STOCK PLAN FOR
SENIOR EXECUTIVES OF HELMERICH & PAYNE, INC.

THIS SECOND AMENDMENT TO THE RESTRICTED STOCK AWARD AGREEMENT FOR THE
RESTRICTED STOCK PLAN FOR SENIOR EXECUTIVES OF HELMERICH & PAYNE, INC., (the
"Second Amendment") is entered into as of the 15th day of January, 1991, by and
between Helmerich & Payne, Inc., (the "Company") and ________________________,
an individual, (the "Participant").

All capitalized terms used herein shall have the same meanings as in
that certain Restricted Stock Plan for Senior Executives of Helmerich & Payne,
Inc., ("the Plan") unless stated to the contrary herein.

W I T N E S S E T H:

WHEREAS, in accordance with Article VI, Section F, of the Plan, the
Committee has previously authorized the acceleration of the expiration of the
Restrictions with respect to the Participant in the event of a "change of
control" of the Company, as hereinafter provided;

WHEREAS, the parties amended the Restricted Agreement on June 7, 1990,
to accelerate the expiration of the Restrictions in the event of a "change in
control";

WHEREAS, the Company's Board of Directors on December 5, 1990, amended
its Rights Agreement ("Amended Agreement") to provide, among other things, for
a single trigger mechanism by which an acquiring shareholder becomes an
"Acquiring Person" once such person has acquired 15% of the Company's
outstanding shares; and

WHEREAS, the Board of Directors on December 5, 1990, authorized all of
the Company's benefit and compensation plans to

<PAGE> 10

be amended so as to be consistent with the terms, conditions, and provisions of
the Amended Agreement,

NOW, THEREFORE, in consideration of the foregoing, the parties hereto
agree that paragraph 12 of the Restricted Agreement is hereby amended as
follows:

The reference to "20%" in the eighth line of Section 12(a)
shall be deleted, and "15%" shall be substituted therefor.

IN WITNESS WHEREOF, the parties hereto have executed this Second
Amendment as of the day and year first above written.

"Company"

HELMERICH & PAYNE, INC.,
A Delaware Corporation

By:
-----------------------------------
Steven R. Mackey
Vice President

"Participant"

-----------------------------------

<PAGE> 1

Exhibit 10.6

SUPPLEMENTAL RETIREMENT INCOME PLAN
FOR SALARIED EMPLOYEES OF
HELMERICH & PAYNE, INC.

THE SUPPLEMENTAL RETIREMENT INCOME PLAN FOR SALARIED EMPLOYEES OF
HELMERICH & PAYNE, INC. is hereby adopted under the following terms and
conditions.

NOW, THEREFORE, in consideration of the terms and provisions hereafter
set forth, the Company hereby adopts the Plan pursuant to the terms and
provisions set forth below:

ARTICLE I

NAME AND PURPOSE OF PLAN

1.1 Name of Plan. This Plan shall be hereafter known as THE
SUPPLEMENTAL RETIREMENT INCOME PLAN FOR SALARIED EMPLOYEES OF HELMERICH & PAYNE,
INC.

1.2 Purpose. The Plan is established and maintained by Helmerich
& Payne, Inc. solely for the purpose of providing benefits for certain of its
salaried employees who participate in the Helmerich & Payne, Inc. Employees
Retirement Plan in excess of the limitations on benefits imposed by Sections
415 and 401(a)(17) of the Internal Revenue Code of 1986, as amended, on
qualified plans to which those Sections are applicable.

ARTICLE II

DEFINITIONS

2.1 Definitions. Where the following capitalized words and phrases
appear in this instrument, they shall have the respective meanings set forth
below unless a different context is clearly expressed herein.

(a) "Board" means the Board of Directors of the Company.

(b) "Code" means the Internal Revenue Code of 1986, as
amended from time to time, and any regulations relating thereto.

<PAGE> 2

(c) "Company" means Helmerich & Payne, Inc., a Delaware
corporation, or, to the extent provided in Section 8.8 below, any successor
corporation or other entity resulting from a merger or consolidation into or
with the Company or a transfer or sale of substantially all of the assets of
the Company.

(d) "Limitations on Benefits" means the limitations
imposed by Sections 415 and 401(a)(17) of the Code on the accrual of the
Qualified Plan Retirement Benefits under the Qualified Plan.

(e) "Normal Retirement Date" means the first day of the
month coinciding with or next following a Participant's 65th birthday.

(f) "Participant" means (i) a key management salaried
employee of the Company who is a participant under the Qualified Plan (or any
successor or replacement retirement plan qualified under Section 401(a) and
501(a) of the Code) and to whom or with respect to whom a benefit is payable
under the Plan and (ii) who has been selected by the Board to participate in
the Plan. The initial participants are listed on Exhibit "A" attached hereto.

(g) "Plan" means this "Supplemental Retirement Income Plan for
Salaried Employees of Helmerich & Payne, Inc."

(h) "Qualified Plan" means the "Helmerich & Payne, Inc.
Employees Retirement Plan" amended and restated effective October 1, 1987, and
each predecessor, successor or replacement employees retirement plan qualified
under Section 401(a) and 501(a) of the Code.

(i) "Qualified Plan Retirement Benefit" means the aggregate
benefit payable at any point in time to a Participant pursuant to the Qualified
Plan and all annuities purchased for or benefits paid to the Participant under
all Qualified Plans (whether or not terminated) by reason of the Participant's
termination of employment with the Company and all Subsidiaries for any reason
other than death.

(j) "Qualified Plan Surviving Spouse Benefit" means the
aggregate benefit payable at any point in time to the

-2-
<PAGE> 3

Surviving Spouse of a Participant pursuant to all Qualified Plans and all
annuities purchased for or benefits paid to the Participant under all Qualified
Plans (whether or not terminated) in the event of the death of the Participant
at any time prior to commencement of payment of his Qualified Plan Retirement
Benefit.

(k) "Subsidiary" means any corporation with 80% or more
of its voting common stock being owned by the Company.

(l) "Supplemental Retirement Benefit" means the benefit
payable to a Participant pursuant to the Plan by reason of such Participant's
termination of employment with the Company and all Subsidiaries for any reason
other than death.

(m) "Supplemental Surviving Spouse Benefit" means the
benefit payable to a Surviving Spouse pursuant to the Plan.

(n) "Surviving Spouse" means a person who is married to a
Participant at the date of his death and for at least one year prior thereto.

2.2 Construction. The masculine gender, where appearing in the
Plan, shall be deemed to include the feminine gender, unless the context
clearly indicates to the contrary. Any word appearing herein in the plural
shall include the singular, where appropriate, and likewise the singular shall
include the plural, unless the context clearly indicates to the contrary.

ARTICLE III

ELIGIBILITY

A Participant who is eligible to receive a Qualified Plan Retirement
Benefit, but the amount of such benefit is reduced by reason of the application
of the Limitations on Benefits, as in effect on the date of commencement of the
Qualified Plan Retirement Benefit, or as in effect at any time thereafter,
shall be eligible to receive a Supplemental Retirement Benefit. The Surviving
Spouse of a Participant described in the preceding sentence who dies prior to
commencement of payment of his Qualified Plan Retirement Benefit shall be
eligible to receive a Supplemental Surviving Spouse Benefit.

-3-
<PAGE> 4
ARTICLE IV

SUPPLEMENTAL RETIREMENT BENEFIT

4.1 Amount. The Supplemental Retirement Benefit payable to an
eligible Participant shall (i) be in the form of a straight life annuity over
the lifetime of the Participant only, (ii) be calculated as of the date of his
termination of employment as if payment was to commence on such Participant's
Normal Retirement Date, and (iii) be a monthly amount equal to the difference
between (a) minus (b) below:

(a) the monthly amount of the Qualified Plan Retirement
Benefit to which the Participant would have been entitled under the Qualified
Plan if such benefit were computed without giving effect to the Limitations on
Benefits;

Less

(b) the monthly amount of the Qualified Plan Retirement
Benefit actually payable to the Participant under the Qualified Plan at the
applicable point in time.

4.2 Form of Benefit. The Supplemental Retirement Benefit payable
to a Participant shall be paid in the same form under which the Qualified Plan
Retirement Benefit is payable to the Participant. The Participant's election
under the Qualified Plan of any optional form of payment of his Qualified Plan
Retirement Benefit (with the valid consent of his Surviving Spouse where
required under the Qualified Plan) shall also be applicable to the payment of
his Supplemental Retirement Benefit.

4.3 Commencement of Benefit. Payment of the Supplemental
Retirement Benefit to a Participant shall commence on the same date as payment
of the Qualified Plan Retirement Benefit to the Participant commences. Any
election under the Qualified Plan made by the Participant with respect to the
commencement of payment of his Qualified Plan Retirement Benefit shall also be
applicable with respect to the commencement of payment of his Supplemental
Retirement Benefit.

4.4 Approval Of Company. Notwithstanding the provisions of
Sections 4.2 and 4.3 above, an election made by the

-4-

<PAGE> 5

Participant under the Qualified Plan with respect to the form of payment of his
Qualified Plan Retirement Benefit (with the valid consent of his Surviving
Spouse where required under the Qualified Plan), or the date for commencement
of payment thereof, shall not be effective with respect to the form of payment
or date for commencement of payment of his Supplemental Retirement Benefit
hereunder unless such election is expressly approved in writing by the Company
with respect to his Supplemental Retirement Benefit. If the Company shall not
approve such election in writing, then, the form of payment or date for
commencement of payment of the Participant's Supplemental Retirement Benefit
shall be selected by the Company in its sole discretion.

4.5 Actuarial Equivalent. A Supplemental Retirement Benefit which
is payable in any form other than straight life annuity over the lifetime of the
Participant, or which commences at any time prior to the Participant's Normal
Retirement Date, shall be the actuarial equivalent of the Supplemental
Retirement Benefit set forth in Section 4.1 above as determined by the same
actuarial adjustments as those specified in the Qualified Plan with respect to
determination of the amount of the Qualified Plan Retirement Benefit on the
date for commencement of payment hereunder.

ARTICLE V

SUPPLEMENTAL SURVIVING SPOUSE BENEFIT

5.1. Amount. If a Participant dies prior to commencement of payment
of his Qualified Plan Retirement Benefit under circumstances in which a
Qualified Plan Surviving Spouse Benefit is payable to his Surviving Spouse,
then, a Supplemental Surviving Spouse Benefit is payable to his Surviving
Spouse as hereinafter provided. The monthly amount of the Supplemental
Surviving Spouse Benefit payable to a Surviving Spouse shall be equal to the
difference between (a) minus (b) below:

(a) the monthly amount of the Qualified Plan Surviving
Spouse Benefit to which the Surviving Spouse would have been entitled under the
Qualified Plan if such Benefit were computed without giving effect to the
Limitations on Benefits;

-5-

<PAGE> 6

Less

(b) the monthly amount of the Qualified Plan Surviving
Spouse Benefit actually payable to the Surviving Spouse under the Qualified
Plan.

5.2. Form and Commencement of Benefit. A Supplemental Surviving
Spouse Benefit shall be payable over the lifetime of the Surviving Spouse only
in monthly installments commencing on the date for commencement of payment of
the Qualified Plan Surviving Spouse Benefit to the Surviving Spouse and
terminating on the date of the last payment of the Qualified Plan Surviving
Spouse Benefit made before the Surviving Spouse's death.

ARTICLE VI

ADMINISTRATION OF THE PLAN

6.1. Administration by the Company. The Company shall be
responsible for the general operation and administration of the Plan and for
carrying out the provisions thereof.

6.2. General Powers of Administration. All provisions set forth in
the Qualified Plan with respect to the administrative powers and duties of the
company, expenses of administration, and procedures for filing claims shall also
be applicable with respect to the Plan. The Company shall be entitled to reply
conclusively upon all tables, valuations, certificates, opinions and reports
furnished by any actuary, accountant, controller, counsel or other person
employed or engaged by the Company with respect to the Plan.

ARTICLE VII

AMENDMENT OR TERMINATION

7.1 Amendment or Termination. The Company intends the Plan to be
permanent but reserves the right to amend or terminate the Plan when, in the
sole opinion of the Company, such amendment or termination is advisable. Any
such amendment or termination shall be made pursuant to a resolution of the
Board and shall be effective as of the date of such resolution.

-6-

<PAGE> 7

7.2 Effect of Amendment or Termination. No amendment to or
termination of the Plan shall directly or indirectly deprive any current or
former Participant or Surviving Spouse of all or any portion of any
Supplemental Retirement Benefit or Supplemental Surviving Spouse Benefit
payment of which has accrued prior to the effective date of such amendment or
termination or which would be payable if the Participant terminated employment
for any reason, including death, on such effective date of amendment or
termination.

ARTICLE VIII

GENERAL PROVISIONS

8.1 Funding. The Plan at all times shall be entirely unfunded and
no provision shall at any time be made with respect to segregating any assets
of the Company for payment of any benefits hereunder. No Participant, Surviving
Spouse or any other person shall have any interest in any particular assets of
the Company by reason of the right to receive a benefit under the Plan and any
such Participant, Surviving Spouse or other person shall have only the rights
of a general unsecured creditor of the Company with respect to any rights under
the Plan. No right or benefit under this Plan shall be subject to anticipation,
alienation, sale, assignment, pledge, encumbrance, or charge, and any attempt
to anticipate, alienate, sell, assign, pledge, encumber, or charge the same
shall be void. No right or benefit hereunder shall in any manner be liable for
or subject to the debts, contracts, liabilities, or torts of the person
entitled to such benefit. If any Participant or Surviving Spouse under this
Plan should become bankrupt or attempt to anticipate, alienate, sell, assign,
pledge, encumber, or charge any right to a benefit hereunder or under the Plan,
then such right or benefit shall, in the discretion of the Company, cease and
determine, and, in such event, the Company may hold or apply the same or any
part thereof for the benefit of such Participant or his Surviving Spouse, and
in such portion as the Company, in its sole and absolute discretion, may deem
proper.

8.2. General Conditions. Except as otherwise expressly provided
herein, all terms and conditions of the Qualified Plan applicable to a Qualified
Plan Retirement Benefit or a Qualified Plan Surviving Spouse Benefit shall also
be applicable to a

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<PAGE> 8

Supplemental Retirement Benefit or a Supplemental Surviving Spouse Benefit
payable hereunder. Any Qualified Plan Retirement Benefit or Qualified Plan
Surviving Spouse Benefit, or any other benefit payable under the Qualified
Plan, shall be paid solely in accordance with the terms and conditions of the
Qualified Plan and nothing in this Plan shall operate or be construed in any
way to modify, amend or affect the terms and provisions of the Qualified Plan.

8.3 No Guaranty of Benefits. Nothing contained in the Plan shall
constitute a guaranty by the Company or any other entity or person that the
assets of the Company will be sufficient to pay any benefit hereunder.

8.4 No Enlargement of Employee Rights. No Participant or Surviving
Spouse shall have any right to a benefit under the Plan except in accordance
with the terms of the Plan. The establishment of the Plan shall not be
construed to give any Participant the right to be retained in the employment
service of the Company.

8.5 Spendthrift Provision. No action under this Plan by the
Company or its Board shall be construed as creating a trust, escrow or other
secured or segregated fund in favor of the Participant, his Surviving Spouse,
or any other persons otherwise entitled to his Supplemental Retirement Benefit.
The status of the Participant and his Surviving Spouse with respect to any
liabilities assumed by the Company hereunder shall be solely those of unsecured
creditors of the Company and its Subsidiaries who employ such Participant. Any
asset acquired or held by the Company and its Subsidiaries in connection with
liabilities assumed by it hereunder, shall not be deemed to be held under any
trust, escrow or other secured or segregated fund for the benefit of the
Participant or his Surviving Spouse or to be security for the performance of
the obligations of the Company or any Subsidiary, but shall be, and remain a
general, unpledged, unrestricted asset of the Company and its Subsidiaries at
all times subject to the claims of general creditors of the Company and its
Subsidiaries.

8.6 Small Benefits. If the actuarial value of any Supplemental
Retirement Benefit or Supplemental Surviving Spouse Benefit is less than $3,500,
the Company may pay the actuarial

-8-

<PAGE> 9

value of such benefit to the Participant or Surviving Spouse in a single lump
sum in lieu of any further benefit payments here-under.

8.7 Incapacity of Recipient. If any person entitled to a benefit
payment under the Plan is deemed by the Company to be incapable of personally
receiving and giving a valid receipt for such payment, then, unless and until
claim therefor shall have been made by a duly appointed guardian or other legal
representative of such person, the Company may provide for such payment or any
part thereof to be made to any other person or institution then contributing
toward or providing for the care and maintenance of such person. Any such
payment shall be a payment for the account of such person and a complete
discharge of any liability of the Company and the Plan therefor.

8.8 Corporate Successors. The Plan shall not be automatically
terminated by a transfer or sale of assets of the Company or by the merger or
consolidation of the Company into or with any other corporation or other entity,
but the Plan shall be continued after such sale, merger or consolidation only
if and to the extent that the transferee, purchaser or successor entity agrees
to continue the Plan. In the event that the Plan is not continued by the
transferee, purchaser or successor entity, then the Plan shall terminate subject
to the provisions of Section 7.2.

8.9 Unclaimed Benefit. Each Participant shall keep the Company
informed of his current address and the current address of his spouse. The
Company shall not be obligated to search for the whereabouts of any person. If
the location of a Participant is not made known to the Company within three
(3) years after the date on which payment of the Participant's Supplemental
Retirement Benefit may first be made, payment may be made as though the
Participant had died at the end of the threeyear period. If, within one
additional year after such three-year period has elapsed, or, within three
years after the actual death of a Participant, the Company is unable to locate
any Surviving Spouse of the Participant, then the Company shall have no further
obligation to pay any benefit hereunder to such Participant or Surviving Spouse
or any other person and such benefit shall be irrevocably forfeited.

-9-
<PAGE> 10
8.10 Limitations on Liability. Notwithstanding any of the
preceding provisions of the Plan, neither the Company nor any individual acting
as an employee or agent of the Company shall be liable to any Participant,
former Participant, Surviving Spouse or any other person for any claim, loss,
liability or expense incurred in connection with the Plan.

8.11 Withholding and other Employment Taxes. The Company shall
comply with all federal and state laws and regulations respecting the
withholding, deposit and payment of any income or other taxes relating to any
payments made under this Plan.

8.12 Applicable Law. The Plan shall be construed and administered
under the laws of the State of Oklahoma.

8.13 Binding Effect. To the extent provided in this Plan, the Plan
shall be binding upon the Company and its successors and assigns.

8.14 Effective Date. The effective date of this Plan shall be
January 1, 1991.

HELMERICH & PAYNE, INC., a
Delaware corporation
ATTEST:

/S/ Steven R. Mackey By /S/ Hans Helmerich
- ------------------------------ ----------------------------
Secretary President
[SEAL]

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<PAGE> 1

Exhibit 10.7
HELMERICH & PAYNE, INC.
1990 STOCK OPTION PLAN

ARTICLE 1

General Provisions

1.1 Purpose. The purpose of the HELMERICH & PAYNE, INC. 1990 STOCK
OPTION PLAN shall be to attract, retain and motivate key employees (the
"Participants") of Helmerich & Payne, Inc. (the "Company") and its subsidiaries
by way of granting (i) nonqualified stock options ("Stock Options") and (ii)
incentive stock options ("ISO Options"). For the purpose of this Plan, Stock
Option and ISO Options are sometimes collectively herein called "Options."
Options may only be granted to Participants. The ISO Options to be granted
under the Plan are intended to be qualified pursuant to Section 422A of the
Internal Revenue Code of 1986 as amended (the "Code"); and, the Stock Options
to be granted are intended to be "nonqualified stock options" as described in
Sections 83 and 421 of the Code. Further, under the Plan, the term "parent"
and "subsidiary" shall have the same meaning as set forth in Subsections (e),
(f) and (g) of Section 425 of the Code unless the context herein clearly
indicates to the contrary.

1.2 General. The terms and provisions of this Article I shall be
applicable to Stock Options and ISO Options unless the context herein clearly
indicates to the contrary.

1.3 Administration of the Plan. The Plan shall be administered by the
Human Resources Committee ("Committee") appointed by the Board of Directors
("Board") of the Company and consisting of not less than three members from the
Board. The members of the Committee shall serve at the pleasure of the Board
and shall be ineligible to participate under the Plan. No Director may become
a member of the Committee who has been eligible, during the year preceding
appointment, to participate under the Plan or any other plan of the Company or
its affiliates entitling Participants therein to acquire stock, stock options
or stock appreciation rights. The Committee shall have the power where
consistent with the general purpose and intent of the Plan to (i) modify the
requirements of the Plan to conform with the law or to meet special
circumstances not anticipated or covered in the Plan, (ii) suspend or
discontinue the

<PAGE> 2

Plan, (iii) establish policies and (iv) adopt rules and regulations and
prescribe forms for carrying out the purposes and provisions of the Plan
including the form of any "stock option agreements" ("Stock Option
Agreements"). Unless otherwise provided in the Plan, the Committee shall have
the authority to interpret and construe the Plan, and determine all questions
arising under the Plan and any agreement made pursuant to the Plan. Any
interpretation, decision or determination made by the Committee shall be final,
binding and conclusive. A majority of the Committee shall constitute a quorum,
and an act of the majority of the members present at any meeting at which a
quorum is present shall be the act of the Committee.

1.4 Shares Subject to the Plan. Shares of stock ("Stock") covered by
Stock Options and ISO Options shall consist of One million (1,000,000) shares
of the voting common stock of the Company. Either authorized and unissued
shares or treasury shares may be delivered pursuant to the Plan. If any Option
for shares of Stock granted to a Participant lapses, or is otherwise
terminated, the Committee may grant Stock Options or ISO Options for such
shares of Stock to other Participants.

1.5 Participation in the Plan. The Committee shall determine from time
to time those Participants who are to be granted Stock Options and ISO Options
and the number of shares of Stock covered thereby. Directors who are not
employees of the Company or of a subsidiary shall not be eligible to
participate in the Plan.

1.6 Determination of Fair Market Value. As used in the Plan, "fair
market value" shall mean the average of the highest and lowest sales prices of
the common stock of the Company as reported by the New York Stock Exchange, or
successor exchange, listing of composite transactions as of the granting date,
exercise date, or other relevant date.

1.7 Adjustments Upon Changes in Capitalization. The aggregate number of
shares of Stock under Stock Options and ISO Options granted under the Plan, the
Option Price and the ISO Price (as such term is defined in Section 3.1(a)) and
the total number of shares of Stock which may be purchased by a Participant on
exercise of a Stock Option and an ISO Option shall be appropriately adjusted by
the Committee to reflect any recapitalization, stock split, stock dividend or
similar transaction involving the Company.

2
<PAGE> 3

1.8 Amendment and Termination of the Plan. The Plan shall terminate at
midnight, December 4, 2000, but prior thereto may be altered, changed,
modified, amended or terminated by written amendment approved by the Board.
Provided, that no action of the Board may, without the approval of the
shareholders, increase the aggregate number of shares of Stock which may be
purchased under Stock Options or ISO Options granted under the Plan; withdraw
the administration of the Plan from the Committee; permit a Director to be a
member of the Committee if he has been eligible for the year preceding his
appointment to participate under the Plan or any similar plan; permit any
person while a member of the Committee to be eligible to receive or hold a
Stock Option or an ISO Option under the Plan; amend or alter the Option Price
(as such term is defined in Section 2.1(b)) or ISO Price, as applicable; or
amend the Plan in any manner which would impair the applicability of Rule 16b-3
as promulgated under the Securities Exchange Act of 1934, as amended, to the
Plan. Except as provided in this Article I, no amendment, modification or
termination of the Plan shall in any manner adversely affect any Stock Option
or ISO Option theretofore granted under the Plan without the consent of the
affected Participant.

1.9 Effective Date. The Plan shall become effective upon approval by
the holders of a majority of the voting common stock of the Company present, or
represented, and entitled to vote at a meeting called for such purpose, and
upon the issuance of either a favorable ruling from the Internal Revenue
Service or a favorable opinion of counsel with respect to certain tax
consequences of the Plan as it affects Stock Options and ISO Options.

1.10 Securities Law Requirements. The Company shall have no liability to
issue any Stock hereunder unless such shares are listed on the applicable stock
exchange(s) on which the Company's shares are listed at the time and the
issuance of such shares would comply with any applicable federal or state
securities laws or any other applicable law or regulations thereunder.

1.11 Separate Certificates. Separate certificates representing the
common stock of the Company to be delivered to a Participant upon the exercise
of any Stock Option or ISO Option will be issued to such Participant.

<PAGE> 4

1.12 Payment for Stock. Payment for shares of Stock purchased under this
Plan shall be made in full and in cash or check made payable to the Company.
Provided, payment for shares of Stock purchased under this Plan may also be
made in common stock of the Company or a combination of cash and common stock
of the Company. In the event that common stock of the Company is utilized in
consideration for the purchase of Stock upon the exercise of a Stock Option or
an ISO Option, then, such common stock shall be valued at the "fair market
value" as defined in Section 1.6 of the Plan. In addition to the foregoing
procedure which may be available for the exercise of any Stock Option or ISO
Option, the Participant may deliver to the Company a notice of exercise
including an irrevocable instruction to the Company to deliver the stock
certificate representing the shares subject to an option to a broker authorized
to trade in the common stock of the Company. Upon receipt of such notice, the
Company will acknowledge receipt of the executed notice of exercise and forward
this notice to the broker. Upon receipt of the copy of the notice which has
been acknowledged by the Company, and without waiting for issuance of the
actual stock certificate with respect to the exercise of the Option, the broker
may sell the Stock (or that portion of the Stock necessary to cover the Option
Price and any withholding taxes due). Upon receipt of the stock certificate
from the Company, the broker will deliver directly to the Company that portion
of the sales proceeds to cover the Option Price and any withholding taxes.
Further, the broker may also facilitate a loan to the Participant upon receipt
of the exercise notice in advance of the receipt for issuance of the actual
stock certificate as an alternative means of financing and facilitating the
exercise of any Option. For all purposes of effecting the exercise of an
Option, the date on which the Participant gives the notice of exercise to the
Company will be the date he becomes bound contractually to take and pay for the
shares of Stock underlying the Option.

1.13 Stock Options and ISO Options Granted Separately. Since the
Committee is authorized to grant Stock Options and ISO Options to Participants,
the grants thereof and Stock Option Agreements relating thereto will be made
separately and totally independently of each other. Except as it relates to
the total number of shares of Stock which may be issued under the Plan, the
grant or exercise of Stock Options shall in no manner affect the grant and
exercise of any ISO Options. Similarly, the grant and exercise of any ISO

<PAGE> 5

Options shall in no manner affect the grant and exercise of any Stock Options.

1.14 Grants of Options and Stock Option Agreement. Each Stock Option and
ISO Option granted under this Plan shall be evidenced by the minutes of a
meeting of the Committee or by the written consent of the Committee and by a
written Stock Option Agreement effective on the date of grant and executed by
the Company and the Participant. Each Option granted hereunder shall contain
such terms, restrictions and conditions as the Committee may determine, which
terms, restrictions and conditions may or may not be the same in each case.
Provided, however, each Option must contain the terms, provisions and language
necessary to maintain the status as an Option as required under the Code.

1.15 Use of Proceeds. The proceeds received by the Company from the sale
of Stock pursuant to the exercise of Options granted under the Plan shall be
added to the Company's general funds and used for general corporate purposes.

1.16 Non-Transferability of Options. Except as otherwise herein
provided, any Option granted shall not be transferable otherwise than by will
or the laws of descent and distribution, and the Option may be exercised,
during the lifetime of the Participant, only by him. More particularly (but
without limiting the generality of the foregoing), the Option may not be
assigned, transferred (except as provided above), pledged or hypothecated in
any way, shall not be assignable by operation of law and shall not be subject
to execution, attachment, or similar process. Any attempted assignment,
transfer, pledge, hypothecation, or other disposition of the Option contrary to
the provisions hereof shall be null and void and without effect.

1.17 Additional Documents on Death of Participant. No transfer of an
Option by the Participant by will or the laws of descent and distribution shall
be effective to bind the Company unless the Company shall have been furnished
with written notice and an unauthenticated copy of the will and/or such other
evidence as the Committee may deem necessary to establish the validity of the
transfer and the acceptance by the successor to the Option of the terms and
conditions of such Option.

<PAGE> 6

1.18 Changes in Employment. So long as the Participant shall continue to
be an employee of the Company or its parent or one of its subsidiaries, any
Option granted to him shall not be affected by any change of duties or
position. Nothing in the Plan or in any Stock Option Agreement which relates
to the Plan shall confer upon any Participant any right to continue in the
employ of the Company or its parent or of any of its subsidiaries, or interfere
in any way with the right of the Company or its parent or of any of its
subsidiaries to terminate his employment at any time.

1.19 Shareholder Rights. No Participant shall have a right as a
shareholder with respect to any shares of Stock subject to an Option prior to
the purchase of such shares of Stock by exercise of the Option.

1.20 Right to Exercise Upon Company Ceasing to Exist. Where dissolution
or liquidation of the Company or any merger, consolidation or combination in
which the Company is not the surviving corporation occurs, the Participant
shall have the right immediately prior to such dissolution, liquidation,
merger, consolidation or combination, as the case may be, to exercise, in whole
or in part, his then remaining Options whether or not then exercisable.
Provided, that for the purposes of this Section 1.20, if any merger,
consolidation or combination occurs in which the Company is not the surviving
corporation and is the result of a mere change in the identity, form, or place
of organization of the Company accomplished in accordance with Section
368(a)(1)(F) of the Code, then, such event will not cause an acceleration of
the exercisability of any such Options granted hereunder.

1.21 Payment of Withholding Taxes. Upon the exercise of any Stock Option
as provided herein, no such exercise shall be permitted, nor shall any Stock be
issued to any Participant until the Company receives full payment for the Stock
purchased which shall include any required state and federal withholding taxes.
Further, upon the exercise of any Stock Option, the Participant may direct the
Company to retain from the shares of Stock to be issued upon exercise of the
Stock Option that number of initial shares of Stock (based on fair market
value) that would be necessary to satisfy the requirements for withholding any
amounts of taxes due upon the exercise of such Stock Option.

<PAGE> 7

1.22 Assumption of Outstanding Options. To the extent permitted by the
then applicable provisions of the Code, any successor to the Company succeeding
to, or assigned the business of, the Company as the result of or in connection
with a corporate merger, consolidation, combination, reorganization,
liquidation or other corporate transaction shall assume Options outstanding
under the Plan or issue new Options in place of outstanding Options under the
Plan with such assumption to be made on a fair and equivalent basis in
accordance with the applicable provisions of Section 425(a) of the Code;
provided, in no event will such assumption result in a modification of any ISO
Option as defined in Section 425(h) of the Code.

ARTICLE II

Terms of Stock Options and Exercise

2.1 General Terms.

(a) Grant and Terms for Stock Options. Stock Options shall be
granted by the Committee on the following terms and conditions: Except as
specifically provided in Subsection 2.1(c) hereof, with regard to the death of
a Participant, no Stock Option shall be exercisable within six months from nor
more than ten years after the date of grant. Subject to such limitation, the
Committee shall have the discretion to fix the period (the "Option Period")
during which any Stock Option may be exercised. Stock Options granted shall
not be transferable except by will or by the laws of descent and distribution.
Stock Options shall be exercisable only by the Participant while actively
employed by the Company or a subsidiary, except that (i) any such Stock Option
granted and which is otherwise exercisable, may be exercised by the personal
representative of a deceased Participant within 12 months after the death of
such Participant and (ii) if a Participant terminates his employment with the
Company or a subsidiary, such Participant may exercise any Stock Option which
is otherwise exercisable at any time within three months of such date of
termination. If a Participant should die during the applicable three month
period following the date of such Participant's termination, the rights of the
personal representative of such deceased Participant as such relate to any
Stock Options granted to such deceased Participant shall be governed in
accordance with Subsection 2.1(a)(i) of this Article II.

<PAGE> 8

(b) Option Price. The option price ("Option Price") for shares
of Stock subject to a Stock Option shall be determined by the Committee, but in
no event shall such Option Price be less than the greater of (a) the "fair
market value" of the Stock on the date of grant or (b) the par value of the
Stock.

(c) Acceleration of Otherwise Unexercisable Stock Option on
Termination of Employment or Death. The Committee, in its sole discretion, may
permit (i) a Participant who terminates employment with the Company or a
subsidiary or (ii) the personal representative of a deceased Participant, to
exercise and purchase (within three months of such date of termination of
employment or 12 months in the case of a deceased Participant) all or any part
of the shares subject to Stock Option on the date of the Participant's death or
termination, notwithstanding that all installments, if any, with respect to
such Stock Option, had not accrued on such date. Provided, such discretionary
authority of the Committee may not be exercised with respect to any Stock
Option (or portion thereof) if the applicable six month waiting period for
exercise had not expired except in the event of the death of the Participant
when the personal representative of the deceased Participant may, with the
consent of the Committee, exercise such Stock Option notwithstanding the fact
that the applicable six month waiting period had not yet expired.

(d) Number of Stock Options Granted. Participants may be
granted more than one Stock Option. In making any such determination, the
Committee shall obtain the advice and recommendation of the officers of the
Company or a subsidiary which have supervisory authority over such
Participants. The granting of a Stock Option under the Plan shall not affect
any outstanding Stock Option previously granted to a Participant under the
Plan.

(e) Notice to Exercise Stock Option. Upon exercise of a Stock
Option, a Participant shall give written notice to the Secretary of the
Company, or other officer designated by the Committee, at the Company's main
office in Tulsa, Oklahoma.

<PAGE> 9

ARTICLE III

Granting of ISO Options

3.1 General. With respect to ISO Options granted on or after the
effective date of the Plan the following provisions in this Article III shall
apply to the exclusion of any inconsistent provision in any other Article in
this Plan since the ISO Options to be granted under the Plan are intended to
qualify as "incentive stock options" as defined in Section 422A of the Code.

3.2 Grant and Terms of ISO Options. No ISO Options shall be granted to
any person who is not eligible to receive "incentive stock options" as provided
in Section 422A of the Code. No ISO Options shall be granted to any key
employee if, immediately before the grant of an ISO Option, such employee owns
more than 10% of the total combined voting power of all classes of stock of the
Company or its subsidiaries (as determined in accordance with the stock
attribution rules contained in Section 422A and Section 425(d) of the Code).
Provided, the preceding sentence shall not apply if, at the time the ISO Option
is granted, the ISO Price is at least 110% of the "fair market value" of the
Stock subject to the ISO Option, and such ISO Option by its terms is not
exercisable after the expiration of five years from the date such ISO Option is
granted.

(a) ISO Option Price. The option price for shares of Stock
subject to an ISO Option ("ISO Price") shall be determined by the Committee,
but in no event shall such ISO Price be less than the greater of (a) the "fair
market value" of the Stock on the date of grant or (b) the par value of the
Stock.

(b) Annual Limitation on Exercise of ISO Options. With respect
to ISO Options granted under the Plan, and notwithstanding any other provision
in this Plan to the contrary, in no event during any calendar year will the
aggregate "fair market value" (determined as of the time the ISO Option is
granted) of the Stock for which any Participant may first have the right to
exercise under an ISO Option (including incentive stock options granted under
all "incentive stock option" plans qualified under Section 422A of the Code
which are sponsored by the Company, its parent and its subsidiary corporations)
exceed $100,000.

<PAGE> 10

(c) Terms of ISO Options. ISO Options shall be granted on the
following terms and conditions: Except as specifically provided in Subsection
3.2(d) hereof, no ISO Option shall be exercisable within six months from nor
more than ten years after the date of grant. Subject to such limitation, the
Committee shall have the discretion to fix the period (the "ISO Period") during
which any ISO Option may be exercised. ISO Options granted shall not be
transferable except by will or by the laws of descent and distribution. ISO
Options shall be exercisable only by the Participant while actively employed by
the Company or a subsidiary, except that (i) any such ISO Option granted and
which is otherwise exercisable, may be exercised by the personal representative
of a deceased Participant within 12 months after the death of such Participant
(but not beyond the expiration date of such ISO Option), and (ii) if a
Participant terminates his employment with the Company or a subsidiary, such
Participant may exercise any ISO Option which is otherwise exercisable at any
time within three months of such date of termination. If a Participant should
die during the applicable three month period following the date of such
Participant's termination, then the rights of the personal representative of
such deceased Participant as such relate to any ISO Options granted to such
deceased Participant shall be governed in accordance with Subsection 3.1(c)(i)
of this Article III.

(d) Acceleration of Otherwise Unexercisable ISO Option on
Termination of Employment or Death. The Committee, in its sole discretion, may
permit (i) a Participant who terminates employment with the Company or a
subsidiary or (ii) the personal representative of a deceased Participant,to
exercise and purchase (within three months of such date of termination of
employment or 12 months in the case of a deceased Participant) all or any part
of the shares subject to ISO Option on the date of the Participant's death or
termination, notwithstanding that all installments, if any, had not accrued on
such date. Provided, such discretionary authority of the Committee may not be
exercised with respect to any ISO Option (or portion thereof) if the applicable
six-month waiting period for exercise had not expired as of such date except in
the event of the death of the Participant when the personal representative of
such deceased Participant, may, with the consent of the Committee, exercise
such ISO Option notwithstanding the fact that the applicable six-month waiting
period had not yet expired. Provided further, in no event will the Committee
permit the acceleration of

<PAGE> 11

all or any portion of an ISO Option pursuant to this Subsection (d) to exceed
the specific limitations as described in Subsection 3.2(b) above which limits
the number of ISO Options which may be first exercisable during any calendar
year; and, any acceleration of the date of exercise of any ISO Option to be
made pursuant to this Subsection 3.2(d) will only be made after the Committee
has determined that such acceleration will not cause a violation of the
limitations contained in Subsection 3.2(b) above.

(e) Number of ISO Options Granted. Subject to the applicable
limitations contained in the Plan with respect to ISO Options, Participants may
be granted more than one ISO Option. In making any such determination, the
Committee shall obtain the advice and recommendation of the officers of the
Company or a subsidiary which have supervisory authority over such
Participants. The granting of an ISO Option under the Plan shall not affect
any outstanding ISO Option previously granted to a Participant under the Plan.

(f) Notice to Exercise ISO Option. Upon exercise of an ISO
Option, a Participant shall give written notice to the Secretary of the
Company, or other officer designated by the Committee, at the Company's main
office in Tulsa, Oklahoma.

ARTICLE IV

Acceleration of Options on Change of Control

4.1 Acceleration of Options Upon Change of Control. In the event that a
Change of Control (as defined herein) has occurred with respect to the Company,
any and all ISO Options and Stock Options will become automatically fully
vested and immediately exercisable with such acceleration to occur without the
requirement of any further act by either the Company or the Participant. For
the purposes of this Section 4.1, the term "Change of Control" shall mean:

(a) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 15% or
more of either (i) the then outstanding shares of common stock of the Company
(the

<PAGE> 12

"Outstanding Company Common Stock") or (ii) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities");
provided, however, that the following acquisitions shall not constitute a
Change of Control: (i) any acquisition directly from the Company, (ii) any
acquisition by the Company; or (iii) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company; or

(b) Individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board.

ARTICLE V

Options Not Qualifying as
Incentive Stock Options

5.1 Nonqualifying Options. With respect to all or any portion of any
option granted under the Plan not qualifying as an "incentive stock option"
under Section 422A of the Code, such option shall be considered as a Stock
Option granted under this Plan for all purposes.

<PAGE> 1
================================================================================
HELMERICH & PAYNE, INC. ANNUAL REPORT FOR 1996
================================================================================

[REVENUE BREAKDOWN FOR 1996 PIE CHART]

International Contract Drilling - 34%
Domestic Contract Drilling - 28%
Oil & Gas Exploration & Production - 19%
Natural Gas Marketing - 15%
Investments and Other Income - 2%
Real Estate - 2%

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Years Ended September 30, 1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Revenues $393,255,000 $306,721,000
- --------------------------------------------------------------------------------
Income from Continuing Operations $ 45,426,000 $ 5,788,000
- --------------------------------------------------------------------------------
Income per Share from
Continuing Operations $ 1.84 $ .24
- --------------------------------------------------------------------------------
Net Income $ 72,566,000 $ 9,751,000
- --------------------------------------------------------------------------------
Earnings Per Share $ 2.94 $ .40
- --------------------------------------------------------------------------------
Dividends Paid Per Share $ .505 $ .50
- --------------------------------------------------------------------------------
Capital Expenditures $109,747,000 $111,776,000
- --------------------------------------------------------------------------------
Total Assets $821,914,000 $707,061,000
- --------------------------------------------------------------------------------
</TABLE>

<PAGE> 2
===============================================================================
President's Letter
===============================================================================

To the Co-owners of Helmerich & Payne, Inc.

The character issue was supposed to play a deciding role in the 1996
presidential election. Yet while nearly two-thirds of the electorate expressed
deep concerns over character flaws and the lack of truthfulness, Bill Clinton
was returned to the White House. With a strong economy at home and relative
peace abroad, our Faustian bargain seemed somewhat offset by the counterforce
of a Republican Congress. But an uneasy feeling lingers as we wonder if we did
the right thing.

Stretching for a positive spin, The New York Times said, "Scandals present an
opportunity in the second term for Bill Clinton to get back in touch with
integrity and honesty." If only it were that easy. Those virtues are
foundational building blocks of strong character, not last minute add-ons. It
is sad that we have come to expect so little from our political leadership.
Neither party was able to win the trust of the voter, and the widespread
cynicism produced the lowest turnout since 1928.

In the real world, character is important. We make careful judgment calls on a
person's character because it is the primary predictor of future performance.

Our own future performance as a Company is invariably linked to the measure of
our character. As we focus on growing the Company, we must continue to win and
retain customers by diligently earning their confidence and trust. That means
making sure we match our words with our actions on a daily basis. If mistakes
are made, they are faced up to and made right, not endlessly rationalized
away. Doing our best to correct problems, working hard to exceed expectations,
and dealing with people honestly wins customer loyalty.

2
<PAGE> 3

New technology and better solutions are transforming the oil patch. The best
companies look hard for innovative ideas and productive alliances. They know
finding a trustworthy partner that can complement their own team's effort
provides the best opportunity to create value. Delivering on that value
requires that we continue to excel at building the right team.

From the very beginning, we interview potential employees knowing how much
character matters. Once on the team, they will play a role in winning our
customers' trust, so first they must win ours. Of course, that works both
ways. Before we can hope to build relationships based on trust with customers,
trust must be shared within the Company. That happens on a daily basis, one
brick at a time.

Like building the house on the rock, we still believe holding one another to
high personal standards of character is the right thing to do.

Sincerely,

Hans Helmerich
December 15, 1996 President

3
<PAGE> 4
================================================================================
DRILLING HELMERICH & PAYNE INTERNATIONAL DRILLING CO.
================================================================================

SUMMARY Helmerich & Payne International Drilling Co., a wholly-owned
subsidiary of Helmerich & Payne, Inc., owns and operates a drilling rig fleet
consisting of 66 land rigs located in the United States and South America, and
11 offshore platform rigs located in the Gulf of Mexico and offshore
California. Revenues and operating profit increased 19 and 46 percent
respectively in 1996, and earnings before interest, taxes, depreciation, and
amortization (EBITDA) increased 29 percent. Over the past decade, the Company
has put over $400 million back into its contract drilling business,
maintaining a modern and technologically advanced fleet of drilling rigs in
each of its key markets. The Company also continues to have a leadership
position in the U.S. offshore platform rig market and has established a
dominant and expanding presence in the active South American land drilling
markets of Venezuela and Colombia.

OFFSHORE OPERATIONS At the close of the year, the Company had 11 offshore
platform rigs, eight in the Gulf of Mexico and three offshore California.
Utilization averaged 70 percent in 1996, compared with 66 percent in 1995. In
addition, the Company has labor contracts on three Exxon-owned platform rigs
offshore California and, with Atwood Oceanics, Inc., is half owner of a newly
constructed and highly automated platform rig scheduled to begin operations in
1997 for Esso in the Bass Straits offshore Australia.

Rig 201, the Company's first rig to be deployed on a tension leg platform
(TLP), began work in May on Shell Offshore Inc.'s (SOI) Mars TLP in 2,933 feet
of water. TLP technology utilizes a hull structure which floats on the surface
of the water and is tied with flexible steel tendons to a foundation which has
been piled into the sea floor. TLP technology opens up several oil and gas
prospects around the world which were previously thought to be undevelopable
because of water depth. The Company is in the design and construction process
for two additional platform

<PAGE> 5
rigs for SOI TLPs in the Gulf of Mexico. The Ram/Powell TLP (rig 202) will
begin work in 1997 in 3,200 feet of water, and the Ursa TLP (rig 204) is
scheduled to begin operations in 1998 in approximately 4,000 feet of water.
Each of the new TLP rigs will be outfitted with the leading drilling
technology including top-drives and automated tubular handling systems.
Additionally, the Company received a third contract in 1996 to design, build,
and operate a minimum area, self-moving rig for an SOI fixed platform which
will be located in the Garden Banks block in the Gulf of Mexico. Rig 203 is
scheduled to deploy in early 1997 and will be used to develop SOI's subsalt
discovery called Enchilada.

UNITED STATES LAND OPERATIONS The U.S. land market remains the largest single
drilling market in the world with over 700 active land rigs. Consequently this
market is very competitive, and while margins are significantly better today
than they were ten years ago, most of the active rigs continue to earn at
levels insufficient to replenish the dwindling asset base. Recent census
figures show that the number of operable land rigs in the U.S. is less than
half that of a decade ago. Equipment wear and tear and migration toward more
profitable international markets will continue to reduce the number of land
rigs in the U.S., but because the market is large and has few barriers to
entry, a quick and sustainable return to high levels of profitability is
unlikely.

An average of 24 of the Company's land rigs worked continuously throughout
1996, and in the last month of the year 27 rigs out of the fleet of 30 were
working. The Company's rig fleet ranks among the newest and most modern in the
United States, and although the market is difficult in terms of profitability,
several operators are demanding the kinds of premium services provided by
Helmerich & Payne International Drilling Co.

5
<PAGE> 6

INTERNATIONAL OPERATIONS The proliferation of drilling activity in South
America, coupled with the Company's long experience in the region, has
provided ample opportunities for expansion over the past ten years. At the
close of 1996, Helmerich & Payne International Drilling Co. had 36 land rigs
in the countries of Venezuela (21), Colombia (10), Ecuador (3), and Bolivia
(2), with an average utilization of 85 percent. Revenues and operating profit
increased 23 percent and 48 percent respectively over the 1995 mark, largely
the result of a full year of service from new rigs sent to Colombia and
Venezuela during 1995.

Approximately 48 percent of international revenues comes from Colombia, where
the Company has ten rigs working on BP Exploration's Cusiana/Cupiagua field
development. Another 42 percent of international revenues comes from
activities in Venezuela where the major customers are Corpoven, S.A., and
Lagoven, S.A., subsidiaries of Petroleos de Venezuela, S.A. A growing number
of customers in Venezuela are international companies who have recently
started operations after the country reopened portions of its prolific reserve
basin to foreign investment. The Company moved three additional rigs to
Venezuela during 1996, two from the U.S. and one from Trinidad. At the close
of the year, helicopter rig 22 was in the process of being relocated from
Bolivia to Peru and is scheduled to begin working in January under a
multi-well contract with Shell Prospecting and Development Peru B.V.

SUMMARY Keeping the focus on the customer and providing the highest quality in
personnel, safety, service, and equipment will remain the Company's major
objective. There have been definite improvements in the industry, but the
environment is still very competitive across all market segments. Sustaining
growth and profitability will continue to require exemplary performance and
the commitment of human and financial resources that our customers have come
to expect from Helmerich & Payne International Drilling Co.

6
<PAGE> 7
================================================================================
EXPLORATION & PRODUCTION HELMERICH & PAYNE, INC.
================================================================================

Helmerich & Payne, Inc. explores for, acquires, and produces oil and natural
gas primarily in the states of Kansas, Louisiana, Oklahoma, and Texas. Higher
oil and natural gas prices combined with a 31 percent increase in natural gas
sales volumes produced a 60 percent increase in exploration and production
revenues in 1996, compared with 1995. Operating profit increased sharply to
$26.3 million in 1996, compared with a loss of $24 million in 1995, which
included an impairment charge of $20 million under Financial Accounting
Standards No. 121 "Accounting for the Impairment of Long-Lived Assets."
Earnings before interest, taxes, depreciation, and impairment charges
increased nearly three-fold to $47 million in 1996, from $16 million in 1995.
The Company also engages in natural gas marketing activities through its
wholly-owned subsidiary Helmerich & Payne Energy Services, Inc., which matches
purchasers of natural gas with production belonging to the Company and other
third party producers. Revenues and operating profit from this Division also
increased sharply in 1996.

EXPLORATION AND DRILLING ACTIVITIES At the close of the year, the Company had
proved reserves of approximately 272.3 billion cubic feet (Bcf) of natural gas
and 6.5 million barrels of oil. The Company participated in the drilling of 63
(35 net) wells in 1996, 55 (28 net) of which were productive and 8 (7 net)
were dry holes. The highlight of the year was the Rocky East prospect which is
located in Washita County, Oklahoma, along a subterranean mountain front known
as the Wichita Uplift. The Company drilled six wells in the prospect with an
average working interest of 93 percent. Cumulative net production from the
Rocky East prospect was 2.6 Bcf of natural gas in 1996, approximately seven
percent of the year's total natural gas production. At the close of the year,
these wells were flowing at a combined gross rate approximating 20,000
thousand cubic feet (Mcf) per day. The Company is in the early stages of
exploring a

7
<PAGE> 8

geologically similar prospect southeast of Rocky East called Oakdale South. An
initial exploration well is being drilled and the Company has a 12.5 percent
working interest. Helmerich & Payne, Inc. has a significant acreage position
in the area with offset working interests ranging from 40 to 100 percent.

The Company continues to hold an acreage position in two Louisiana Austin
Chalk prospect areas. The Company has been involved in five wells in the
Masters Creek prospect located in Rapides Parish, Louisiana. The results from
these wells led the Company to participate in two additional wells with 16
percent working interests. West of Masters Creek is the Artillery Range
prospect where the Company is participating with carried interests in two
wells, and has plans for a third in 1997. The drilling in each of these areas
is deep, complex, and expensive, but the results so far have been encouraging
enough to warrant additional participation in the coming year. The Company has
net undeveloped leasehold interests in 2,300 acres in the Masters Creek
prospect area and 13,000 net undeveloped acres in the Artillery Range.

SUMMARY At the end of 1995, the Company began to restructure its exploration
and production group into geographically focused teams which are responsible
for exploring and developing key regions, primarily in the Mid-continent and
Gulf Coast areas. Although one year is not sufficient time to gauge the
outcome of the new structure, much has been accomplished during this period.
The 1996 exploration and development program led to the addition of more
reserves through drilling than in any other year this past decade. The
Company's strategic focus will continue to be the profitable growth of its
reserve base and production capacity, primarily from exploration and
development drilling.

8
<PAGE> 9
================================================================================
REAL ESTATE AND CHEMICALS
================================================================================

Helmerich & Payne Properties, Inc., a wholly-owned subsidiary of Helmerich &
Payne, Inc., owns, manages, and develops commercial real estate exclusively in
the Tulsa, Oklahoma, area. The Company's properties have approximately 1.7
million square feet of leasable space and include one retail shopping center,
two office buildings, and six industrial warehouse and combination
office-warehouse developments. Overall occupancy improved to an average of 94
percent in 1996, compared with 87 percent in 1995. Revenue increased seven
percent, with most of the improvement coming from the six warehouse
developments where average occupancy jumped to 94 percent from 82 percent the
prior year. Operating profit increased 134 percent to $5.1 million in 1996,
compared with $2.2 million in 1995 which included a $2 million charge related
to Statement of Financial Accounting Standards No. 121.

The key holding in the Company's real estate portfolio is Utica Square
Shopping Center, which has approximately 400,000 square feet of retail space
and is centrally located in midtown Tulsa near Helmerich & Payne, Inc.
headquarters. During the year, Bath & Body Works and Gloria Jean's Gourmet
Coffee joined the many fine merchants in Utica Square which include
Williams-Sonoma, Saks Fifth Avenue, Miss Jackson's, Ann Taylor, and Banana
Republic.

Effective August 30, 1996, Helmerich & Payne, Inc. sold Natural Gas Odorizing,
Inc. (NGO) to a wholly-owned subsidiary of Occidental Petroleum Corporaton in
exchange for 2,018,928 shares of Occidental common stock. The divestiture
coincides with increasing capital demands in the Company's contract drilling
and exploration and production businesses and closes a very productive and
profitable relationship with NGO which spanned almost four decades. The impact
of this transaction is reflected as discontinued operations in the Company's
consolidated financial statements.

9
<PAGE> 10

REVENUES AND INCOME BY BUSINESS SEGMENTS
================================================================================
HELMERICH & PAYNE, INC.

Exploration and Production .................. 76,643 47,986 58,884
Natural Gas Marketing ....................... 58,507 35,301 51,889
--------- --------- ---------
Total Oil and Gas Division ............... 135,150 83,287 110,773
--------- --------- ---------

Real Estate Division ........................ 8,082 7,570 7,803
Investments and Other Income ................ 5,992 11,279 6,944
--------- --------- ---------
Total Revenues ........................... $ 393,255 $ 306,721 $ 310,152
========= ========= =========

OPERATING PROFIT (LOSS):
Contract Drilling - Domestic ................ $ 10,066 $ 7,127 $ 5,874
Contract Drilling - International ........... 31,176 21,110 14,645
--------- --------- ---------
Total Contract Drilling Division ......... 41,242 28,237 20,519
--------- --------- ---------
Exploration and Production .................. 26,333 (23,961) 3,245
Natural Gas Marketing ....................... 3,415 1,892 1,525
--------- --------- ---------
Total Oil and Gas Division ............... 29,748 (22,069) 4,770
--------- --------- ---------

Real Estate Division ........................ 5,055 2,157 4,460
--------- --------- ---------
Total Operating Profit ................... 76,045 8,325 29,749
--------- --------- ---------

OTHER:
Miscellaneous operating ..................... (1,663) (1,624) (1,292)
Income from investments ..................... 5,782 10,846 6,303
General corporate expense ................... (9,083) (8,801) (8,908)
Interest expense ............................ (678) (407) (385)
Corporate depreciation ...................... (860) (851) (1,162)
--------- --------- ---------
Total Other .............................. (6,502) (837) (5,444)
--------- --------- ---------

INCOME FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES, EQUITY IN INCOME OF AFFILIATE
AND CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE ........................ $ 69,543 $ 7,488 $ 24,305
========= ========= =========
- ---------------------------------------------------------------------------------------
</TABLE>

Note: This schedule is an integral part of Note 11 (pages 27-28) of the
financial statements that follow.

10
<PAGE> 11

MANAGEMENT'S DISCUSSION & ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
================================================================================
HELMERICH & PAYNE, INC.

BUSINESS ENVIRONMENT AND RISK FACTORS

The following discussion should be read in conjunction with the consolidated
financial statements and related notes included elsewhere herein. The
Company's future operating results may be affected by various trends and
factors which are beyond the Company's control. These include, among other
factors, changes in general economic conditions, rapid or unexpected changes
in technologies and uncertain business conditions that affect the Company's
businesses. Accordingly, past results and trends should not be used by
investors to anticipate future results or trends.

With the exception of historical information, the matters discussed below
under the headings "Results of Operations" and "Liquidity and Capital
Resources" may include forward-looking statements that involve risks and
uncertainties. The Company wishes to caution readers that a number of
important factors discussed in this report and in the Company's other reports
filed with the Securities and Exchange Commission, could affect the Company's
actual results and cause actual results to differ materially from those in the
forward-looking statements.

RESULTS OF OPERATIONS

Helmerich & Payne, Inc.'s net income for 1996 was $72,566,000 ($2.94 per
share), compared with net income of $9,751,000 ($.40 per share) in 1995, and
$24,971,000 ($1.02 per share) in 1994. Included in 1996 is $24,050,000 ($0.97
per share) of income from the sale of the Company's chemical subsidiary,
Natural Gas Odorizing, Inc. (NGO). Net income in 1995 included a non-cash,
non-recurring charge of $13,600,000 ($0.55 per share) as a result of the
Company's adoption of Statement of Financial Accounting Standards (SFAS) No.
121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of. Results for 1994 included $4 million ($0.16 per
share) of income due to a one-time reduction in the Company's deferred income
taxes from the cumulative effect of adopting SFAS No. 109, Accounting for
Income Taxes.

Included in the Company's net income, but not related to its operations, were
after-tax gains from the sale of investment securities of $346,000 ($0.01 per
share) in 1996, and $3,481,000 ($0.14 per share) in 1995. Also included was
the Company's portion of income of its equity affiliate,

11
<PAGE> 12

Atwood Oceanics, Inc., which was $0.07 per share of income in 1996 and $0.04
per share in both 1995 and 1994.

Company revenues from continuing operations increased to $393,255,000 in 1996,
from $306,721,000 in 1995, and $310,152,000 in 1994. Total revenues increased
by 28 percent from 1995 to 1996 as a result of increases in exploration and
production (60 percent), natural gas marketing (66 percent), international
drilling (23 percent) and domestic drilling (15 percent) segments. Contract
drilling revenues rose by 11 percent from 1994 to 1995. Oil and gas division
revenues declined by almost 25 percent for the same time period due primarily
to lower natural gas prices and production volumes.

Revenues from investments declined to $5,782,000 in 1996, after increasing to
$10,846,000 in 1995, from $6,303,000 in 1994. Gains from the sale of
investment securities were $566,000 in 1996, $5,697,000 in 1995, and $124,000
in 1994. Dividend income was stable during 1996, 1995 and 1994, but interest
income steadily decreased as cash balances and interest rates declined during
these periods.

Costs and expenses from continuing operations in 1996 were $323,712,000, 82
percent of total revenues, compared with 98 percent in 1995, and 92 percent in
1994. Total costs for 1995 were abnormally high due to the adoption of SFAS
No. 121 which resulted in a total pre-tax impairment charge of $22,000,000
recorded as additional depreciation, depletion, and amortization. Operating
costs as a percentage of operating revenues declined to 59 percent in 1996,
compared to 64 percent in 1995, and 66 percent in 1994.

General and administrative expenses increased to $9,083,000 (3 percent) in
1996, from $8,801,000 in 1995, and $8,908,000 in 1994. Income tax expense, as
a percentage of pre-tax income, remained at 37 percent for 1996 and 1995. A
lower effective tax rate of 33 percent in 1994 was caused by the usage of
foreign tax credit carryforwards, tight sands tax credits, and a reduction in
Venezuelan taxes as a result of the monetary correction tax law enacted there.

CONTRACT DRILLING DIVISION revenues increased by 19 percent from 1995 to 1996,
following an 11 percent increase from 1994 to 1995. Domestic drilling
operating profit increased to $10,066,000 in 1996, from $7,127,000 in 1995,
and $5,874,000 in 1994. The Company's total domestic revenues and operating
earnings increased this past year due primarily to the addition of offshore
platform rig 201 (which commenced operations in May for Shell's Mars Tension
Leg Platform (TLP)); increased revenues and earnings from the Company's three
offshore labor contracts; and a slight improvement in revenues and

12
<PAGE> 13

margins from U.S. land rig operations. This year's revenues and earnings
increased in both the offshore platform and lang rig segments as rig
utilizations for 1996 were 70 percent and 88 percent, respectively. From 1994
to 1995, offshore platform rig revenues and earnings declined as utilization
fell from 79 percent in 1994 to 66 percent in 1995. However, U.S. land rig
dayrates and margins improved as utilization for that segment rose from 66
percent in 1994, to 73 percent in 1995.

During the fourth quarter of 1996, three of the Company's platform rigs became
inactive. Another became inactive during the first quarter of fiscal 1997. Due
to the negative impact of those rigs not working, it is anticipated that
domestic contract drilling revenues and operating profit for the first half of
1997 could be the same or lower than that of the last half of 1996.

Revenues and operating profit should improve during the last half of 1997 with
the commencement of work in the spring for H&P rig 203 on Shell's Enchilada
platform and for H&P rig 202 on Shell's Ram/Powell TLP. Additionally, it is
anticipated that operating costs and dayrates for U.S. land rigs will increase
during the year as costs to maintain adquate rig crews will likely increase.
Most, if not all, of these costs will be passed on to customers through
increased dayrates. It is uncertain at this time whether dayrates can be
increased enough to improve land rig profit margins.

International revenues climbed to $135,695,000 in 1996, from $110,695,000 in
1995, and $98,111,000 in 1994. Operating profit for the international contract
drilling sector improved by 48 percent to $31,176,000 for 1996, compared with
$21,110,000 for 1995, and $14,645,000 for 1994. During 1995, six additional
rigs were shipped to Venezuela and three to Colombia. In 1996, three more rigs
were shipped to Venezuela. Revenues and operating profits generated by these
new rigs accounted for a significant portion of the international revenue and
earning increases the past two years. Additionally, H&P offshore platform rig
200, a joint venture with the Company's investment affiliate, Atwood Oceanics,
began receiving a standby rate during the year which helped increase profits.
Although the Company expects international revenues and earnings to continue
to grow, it does not anticipate the level of growth experienced during 1995
and 1996 to occur in 1997 because the Company does not expect to ship as many
rigs to international markets this year.

In Venezuela, approximately 65 percent of the Company's billings are in U.S.
dollars and the other 35 percent are in bolivars, the local currency. As a
result, the Company is exposed to risks of currency devaluation in Venezuela
because of the positive bolivar net working capital balances

13
<PAGE> 14
created by the local currency billings. Over the past three years, total net
devaluation losses in Venezuela have not been material because the Company has
been able to offset such losses through the purchase of Brady Bonds. A Brady
Bond is a dollar-denominated Venezuelan government debt that is guaranteed by
the U.S. government and traded on the world's major stock markets during
periods when Venezuela's currency was set at fixed exchange rates. Gains on
the bonds were realized because, soon after their initial availability, they
were trading at a premium of 30 to 50 percent above the official exchange
rate. Brady Bonds are no longer available and the currency is again allowed,
within a range, to float at market rates. Although devaluation losses will
likely occur, the Company does not presently believe that such losses will
have a material impact on the Company. However, if the country experiences
extreme economic difficulty, accompanied by severe devaluation and/or
inflation, the Company could experience material losses.

OIL AND GAS DIVISION revenues and operating profit increased dramatically this
year as average prices received for the Company's production rose to $19.00
per barrel of oil and $1.75 per Mcf of natural gas, from $16.37 per barrel and
$1.27 per Mcf last year. In 1994, average prices were $14.83 per barrel and
$1.72 per Mcf. Although oil production was flat over the past two years,
average natural gas production increased by 31 percent over last year to 94.4
million cubic feet per day (Mmcf/d) during 1996, compared with 72.4 Mmcf/d in
1995, and 73 Mmcf/d in 1994. The Company's natural gas production grew as a
result of allowing more of its existing reserves to be delivered to the market
and by virtue of discoveries and production of new natural gas reserves. The
most significant discovery was in southwestern Oklahoma in the Rocky East
field where a total of six wells were completed by the end of 1996 which added
a combined average of approximately 15 Mmcf/d of total net production to the
Company. Due to the significant increases in product prices and natural gas
production volume, exploration and production revenues increased by 60 percent
to $76,643,000 in 1996, from $47,986,000 in 1995, and $58,884,000 in 1994.
Exploration and production operating profit increased to $26,333,000 in 1996,
compared with a loss of $23,961,000 in 1995, and a profit of $3,245,000 in
1994.

In 1995, the Company elected to adopt SFAS No. 121, resulting in a pre-tax,
non-cash charge of $19,982,000 to the Oil and Gas Division. Earnings for 1996
were also aided by lower dry hole and abandonment charges, lower geophysical
expense and reduced depletion per production unit than in the previous two
years. During the past three years the Company has not hedged any of its oil
or natural gas production and does not intend to do so during 1997. Therefore,
increases or decreases in its product prices will affect its ongoing results
accordingly.

14
<PAGE> 15

A lawsuit was filed in an Oklahoma state court in November of 1995 against
Helmerich & Payne, Inc., in which five named plaintiffs, on behalf of
themselves and other unnamed plaintiffs, are demanding their royalty share of
a gas contract settlement. The plaintiffs are attempting to certify a class
which would contain certain of the Company's lessors and certain other mineral
owners who own an interest in wells covered by such gas contract settlement.
If a certified class is awarded a royalty share of the gas contract
settlement, then any such award could have a material impact on income from
continuing operations for the applicable quarter. Management believes that any
such award should not exceed approximately $2.7 million.

Natural gas marketing revenues, which are primarily derived from selling
natural gas produced by other companies (third party), increased to
$58,507,000 in 1996, from $35,301,000 in 1995, and $51,889,000 in 1994.
Operating profit was $3,415,000 in 1996, $1,892,000 in 1995, and $1,525,000 in
1994. The Company's approach has been to use the existing capacity of its
personnel and facilities to derive additional profit from matching its
customers with third party producers when the marketing situation is not
conducive to the sale of the Company's own natural gas. Although revenues are
likely to increase during periods of rising natural gas prices, it is expected
that competition will continue to limit fees and premiums for third party
natural gas sales.

REAL ESTATE DIVISION revenues of $8,082,000 for 1996 were up slightly over
1995 and 1994, and operating profit improved to $5,055,000 during 1996 as
occupancy levels increased, particularly in the Company's industrial
properties. Operating profit for 1995 was down from normal levels due to a
$2,000,000 charge to two properties in connection with the adoption of SFAS
No. 121. No major changes are anticipated in the Real Estate Division for
1997.

On August 30 of this year, the Company exchanged all of the stock in its
wholly-owned subsidiary and chemical division, Natural Gas Odorizing, Inc.
(NGO), for 2,018,928 shares of Occidental Petroleum Corporation common stock
in a tax-free transaction valued at $48 million. The sale yielded a gain of
$24.1 million (net of deferred income taxes of approximately $14.8 million)
which is reported as gain on sale of discontinued operations. Prior period
operating results for the division are reported as discontinued operations.

LIQUIDITY AND CAPITAL RESOURCES

The Company has maintained a very strong balance sheet for many years with
current ratios above 1.74 for the last three years. During 1996, the Company
reduced its committed line of credit from $75 million

15
<PAGE> 16

to $50 million. At year-end, the Company had borrowed $5,000,000 under this
line of credit and had letters of credit outstanding in the amount of
$6,991,000. At the end of 1995, the Company had borrowed $21,700,000. The
borrowing in 1995 was the first time the Company had gone to outside sources
for capital funding since the early 1980's.

Capital expenditures for each of the last three years were over $100 million
and exceeded the funds generated internally during 1994 and 1995. Cash
provided by operating activities totaled $124,923,000 for 1996, $88,572,000
for 1995, and $79,909,000 for 1994. It is anticipated that during 1997 capital
expenditures will be approximately $130 million and, although internally
generated cash is projected to be slightly higher in 1997 than in 1996,
additional borrowing may be necessary. Capital expenditures budgeted for 1997
include continued exploration and development drilling activities and major
offshore platform rig construction projects for Gulf of Mexico operations.
Capital expenditure totals could be significantly increased by additional
projects now being considered. Additional borrowings and/or portfolio
liquidations would fund the potential increase in spending.

The Company manages a large portfolio of marketable securities which had a
cost basis of $138,599,000 at September 30, 1996, and a total market value at
that time of $274,994,000, including its investment in Atwood Oceanics, Inc.
During 1995, the Company adopted SFAS No. 115, Accounting for Certain
Investments in Debt and Equity Securities, which resulted in a balance sheet
adjustment to market values for investments in companies owned less than 20
percent. Accordingly, a deferred tax estimate was added to deferred taxes
under the liability section and the net unrealized holding gains were
reflected in the shareholders' equity section of the balance sheet. During
1996, the Company paid a dividend of $.505 per share which represented the
25th consecutive year of dividend increases.

- --------------------------------------------------------------------------------
STOCK PORTFOLIO HELD BY THE COMPANY

- --------------------------------------------------------------------------------
Number of
September 30, 1996 Shares Book Value Market Value
- --------------------------------------------------------------------------------
(in thousands,except share amounts)
<S> <C> <C> <C>
Occidental Petroleum ................... 2,018,928 $ 48,000 $ 47,192
Atwood Oceanics, Inc. .................. 1,600,000 25,215 70,400
Schlumberger, Ltd. ..................... 740,000 23,511 62,530
Sun Company, Inc. ...................... 466,451 5,742 10,728
Sun Company PFD A ...................... 329,053 3,192 7,897
Phillips Petroleum Company ............. 240,000 5,976 10,260
Liberty Bancorp ........................ 395,000 5,743 15,010
Oryx Energy Company .................... 625,000 6,032 11,094
Oneok .................................. 225,000 2,751 6,188
Other .................................. 12,437 33,695
---------- ----------
Total ............................ $ 138,599 $ 274,994
========== ==========
</TABLE>

16
<PAGE> 17

CONSOLIDATED STATEMENTS OF INCOME
================================================================================
HELMERICH & PAYNE, INC.

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Years Ended September 30, 1996 1995 1994
- ------------------------------------------------------------------------------------------
(in thousands,
except per share amounts)
<S> <C> <C> <C>
REVENUES:
Sales and other operating revenues ................... $387,473 $295,875 $303,849
Income from investments .............................. 5,782 10,846 6,303
------------------------------
393,255 306,721 310,152
------------------------------
COSTS AND EXPENSES:
Operating costs ...................................... 229,584 188,497 201,637
Depreciation, depletion and amortization ............. 59,442 76,443 49,414
Dry holes and abandonments ........................... 7,986 10,095 10,369
Taxes, other than income taxes ....................... 16,939 14,990 15,134
General and administrative ........................... 9,083 8,801 8,908
Interest ............................................. 678 407 385
------------------------------
323,712 299,233 285,847
------------------------------

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME
TAXES, EQUITY IN INCOME OF AFFILIATE AND CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE ............. 69,543 7,488 24,305

INCOME TAX EXPENSE ..................................... 25,803 2,786 8,101

EQUITY IN INCOME OF AFFILIATE
net of income taxes .................................. 1,686 1,086 904
------------------------------
INCOME FROM CONTINUING OPERATIONS ...................... 45,426 5,788 17,108
INCOME FROM DISCONTINUED OPERATIONS .................... 3,090 3,963 3,863
GAIN ON SALE OF DISCONTINUED OPERATIONS ................ 24,050 -- --
------------------------------
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE ................................. 72,566 9,751 20,971
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE .... -- -- 4,000
------------------------------

NET INCOME ............................................. $ 72,566 $ 9,751 $ 24,971
==============================

PER COMMON SHARE:
INCOME FROM CONTINUING OPERATIONS ...................... $ 1.84 $ .24 $ .70
INCOME FROM DISCONTINUED OPERATIONS .................... .13 $ .16 $ .16
GAIN ON SALE OF DISCONTINUED OPERATIONS ................ .97 -- --
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE .... -- -- .16
------------------------------
NET INCOME ............................................. $ 2.94 $ .40 $ 1.02
==============================

AVERAGE COMMON SHARES OUTSTANDING ...................... 24,690 24,536 24,416
=========================================================================================
</TABLE>

The accompanying notes are an integral part of these statements.

<PAGE> 18

CONSOLIDATED BALANCE SHEETS
================================================================================
HELMERICH & PAYNE, INC.

ASSETS

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
September 30, 1996 1995
- -------------------------------------------------------------------------------------------------
(in thousands)
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents .......................................... $ 16,892 $ 19,543
Short-term investments ............................................. 1,005 8,989
Accounts receivable, less reserve of $712 and $489 ................. 75,374 57,034
Inventories ........................................................ 16,915 19,329
Prepaid expenses and other ......................................... 4,182 5,628
Net assets of discontinued operations .............................. 6,836
-----------------------
Total current assets ........................................... 114,368 117,359
-----------------------

INVESTMENTS .......................................................... 229,809 156,908
-----------------------

PROPERTY, PLANT AND EQUIPMENT, at cost:

Contract drilling equipment ........................................ 568,110 501,682
Oil and gas properties ............................................. 401,804 392,806
Real estate properties ............................................. 46,970 46,642
Other .............................................................. 53,547 55,655
-----------------------
1,070,431 996,785
Less--Accumulated depreciation, depletion and amortization ......... 606,935 578,492
-----------------------
Net property, plant and equipment .............................. 463,496 418,293
-----------------------

OTHER ASSETS ......................................................... 14,241 14,501
-----------------------

TOTAL ASSETS ......................................................... $ 821,914 $ 707,061
=======================
- -------------------------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of these statements.

18
<PAGE> 19

LIABILITIES AND SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
September 30, 1996 1995
- -----------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C>
CURRENT LIABILITIES:

Accounts payable ...................................................................... $ 25,622 $ 25,462
Accrued liabilities ................................................................... 31,943 20,159
Notes payable ......................................................................... 5,000 21,700
-------------------
Total current liabilities ......................................................... 62,565 67,321
-------------------

NONCURRENT LIABILITIES:

Deferred income taxes ................................................................. 98,335 66,062
Other ................................................................................. 15,044 11,243
-------------------
Total noncurrent liabilities ....................................................... 113,379 77,305
-------------------

SHAREHOLDERS' EQUITY:

Common stock, $.10 par value, 80,000,000 shares authorized,
26,764,476 shares issued ........................................................... 2,677 2,677
Preferred stock, no par value, 1,000,000 shares authorized,
no shares issued
Additional paid-in capital ............................................................ 50,410 48,436
Net unrealized holding gains .......................................................... 56,550 38,004
Retained earnings ..................................................................... 557,543 495,692
-------------------
667,180 584,809
Lesstreasury stock, 1,878,840 shares in 1996 and 1,999,856 shares in 1995, at cost .... 21,210 22,374
-------------------
Total shareholders' equity ...................................................... 645,970 562,435
-------------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ............................................... $821,914 $707,061
===================
- -----------------------------------------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of these statements.

19
<PAGE> 20

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
===============================================================================
HELMERICH & PAYNE, INC.

<TABLE>
<CAPTION>
Net
Common Stock Additional Unrealized Treasury Stock
------------------- Paid-In Holding Retained ----------------
Shares Amount Capital Gains Earnings Shares Amount
- -----------------------------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, September 30, 1993 ............. 26,764 $ 2,677 $ 47,412 $-- $ 482,405 2,127 $ (23,567)
Cash dividends ($.49 per share) ....... -- -- -- -- (12,097) -- --
Exercise of stock options ............. -- -- 549 -- -- (43) 415
Lapse of restrictions on
Restricted Stock Awards ............ -- -- (246) -- -- -- --
Stock issued under Restricted
Stock Award Plan ................... -- -- 481 -- (814) (30) 333
Amortization of deferred
compensation ....................... -- -- -- -- 1,815 -- --
Net income ............................ -- -- -- -- 24,971 -- --
-------------------------------------------------------------------------------------
Balance, September 30, 1994 ............. 26,764 2,677 48,196 -- 496,280 2,054 (22,819)
Adjustment to beginning balance
for change in accounting method,
net of income taxes of $21,106 ..... -- -- -- 34,435 -- -- --
Change in net unrealized holding
gains, net of income taxes
of $2,187 .......................... -- -- -- 3,569 -- -- --
Cash dividends ($.50 per share) ....... -- -- -- -- (12,372) -- --
Exercise of stock options ............. -- -- 859 -- -- (69) 615
Lapse of restrictions on
Restricted Stock Awards ............ -- -- (229) -- -- -- --
Forfeiture of Restricted Stock Award .. -- -- (390) -- 560 15 (170)
Amortization of deferred
compensation ...................... -- -- -- -- 1,473 -- --
Net income ............................ -- -- -- -- 9,751 -- --
-------------------------------------------------------------------------------------

Balance, September 30, 1995 ............. 26,764 2,677 48,436 38,004 495,692 2,000 (22,374)
Change in net unrealized holding
gains, net of income taxes
of $11,367 ........................ -- -- -- 18,546 -- -- --
Cash dividends ($.51 per share) ....... -- -- -- -- (12,670) -- --
Exercise of stock options ............. -- -- 2,197 -- -- (131) 1,274
Lapse of restrictions on
Restricted Stock Awards ........... -- -- (61) -- -- -- --
Forfeiture of Restricted Stock Award .. -- -- (162) -- 272 10 (110)
Amortization of deferred
compensation ...................... -- -- -- -- 1,683 -- --
Net income ............................ -- -- -- -- 72,566 -- --
-------------------------------------------------------------------------------------
Balance, September 30, 1996 ............. 26,764 $ 2,677 $ 50,410 $ 56,550 $ 557,543 1,879 $ (21,210)
=====================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of these statements.

20
<PAGE> 21
CONSOLIDATED STATEMENTS OF CASH FLOWS
================================================================================
HELMERICH & PAYNE, INC.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Years Ended September 30, 1996 1995 1994
- ----------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . . . . $ 72,566 $ 9,751 $ 24,971

Adjustments to reconcile net income to net
cash provided by operating activities-
Discontinued operations . . . . . . . . (27,140) (3,963) (3,863)
Depreciation, depletion and
amortization . . . . . . . . . . . . 59,442 76,443 49,414
Dry holes and abandonments . . . . . . 7,986 10,095 10,369
Cumulative effect of change in
accounting principle . . . . . . . . -- -- (4,000)
Equity in income of affiliate before
income taxes . . . . . . . . . . . . (2,720) (1,752) (1,458)
Amortization of deferred compensation 1,683 1,473 1,815
Gain on sale of securities . . . . . . (566) (5,697) (124)
Loss (gain) on sale of property,
plant and equipment, other . . . . . 776 (1,195) (2,539)
Change in assets and liabilities:
Accounts receivable . . . . . . . . (18,340) 275 (3,864)
Inventories . . . . . . . . . . . . 2,435 86 (3,260)
Prepaid expenses and other . . . . . 1,706 (2,768) 5,047
Accounts payable . . . . . . . . . . (1,115) 3,030 (1,317)
Accrued liabilties . . . . . . . . . 14,237 (2,701) 1,023
Deferred income taxes . . . . . . . 6,668 (1,630) 4,106
Other noncurrent liabilities . . . 3,802 2,563 (1,857)
-----------------------------------------------
Total adjustments . . . . . . . . . 48,854 74,259 49,492
-----------------------------------------------
Net cash provided by continuing
activities . . . . . . . . . . . 121,420 84,010 74,463
Net cash provided by discontinued
operations . . . . . . . . . . . 3,503 4,562 5,446
-----------------------------------------------
Net cash provided by operating
activities . . . . . . . . . . . 124,923 88,572 79,909
-----------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures, including dry hole
costs, from continuing operations . . . . (109,985) (109,901) (102,264)
Proceeds from sale of property, plant and
equipment . . . . . . . . . . . . . . . . 3,987 2,923 5,971
Purchase of investments . . . . . . . . . . (1,196) (12,858) (1,500)
Proceeds from sale of investments . . . . . 619 11,713 373
Discontinued operations . . . . . . . . . . (2,746) (977) (619)
Purchase of short-term investments . . . . -- -- (12)
Proceeds from sale of short-term
investments 7,984 7 124
-----------------------------------------------
Net cash used in investing
activities . . . . . . . . . . . . (101,337) (109,093) (97,927)
-----------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments made on long-term debt . . . . . . -- -- (3,139)
Proceeds from notes payable . . . . . . . . 35,000 37,100 --
Payments made on notes payable . . . . . . (51,700) (15,400) --
Dividends paid . . . . . . . . . . . . . . (12,530) (12,365) (11,965)
Proceeds from exercise of stock options . . 2,993 1,282 913
-----------------------------------------------
Net cash provided by (used in)
financing activities . . . . . . . . (26,237) 10,617 (14,191)
-----------------------------------------------
NET DECREASE IN CASH AND CASH EQUIVALENTS . . (2,651) (9,904) (32,209)
CASH AND CASH EQUIVALENTS, beginning of
period . . . . . . . . . . . . . . . . . . 19,543 29,447 61,656
-----------------------------------------------
CASH AND CASH EQUIVALENTS, end of period . . $ 16,892 $ 19,543 $ 29,447
===============================================

- ----------------------------------------------------------------------------------------------------
</TABLE>

21
<PAGE> 22

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
===============================================================================
HELMERICH & PAYNE, INC. September 30, 1996,1995 and 1994

- -------------------------------------------------------------------------------
NOTE 1 SUMMARY OF ACCOUNTING POLICIES
- -------------------------------------------------------------------------------

CONSOLIDATION -
The consolidated financial statements include the accounts of Helmerich &
Payne, Inc. (the Company), and all of its wholly-owned subsidiaries. Fiscal
years of the Company's foreign consolidated operations end on August 31 to
facilitate reporting of consolidated results.

TRANSLATION OF FOREIGN CURRENCIES -
The Company has determined that the functional currency for its foreign
subsidiaries is the U.S. dollar. Foreign currency transaction gains for 1996
and 1995 were $764,000 and $1,845,000, respectively, with a loss of $2,764,000
for 1994.

USE OF ESTIMATES -
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the consolidated financial statements and
accompanying notes. Actual results could differ from those estimates.

PROPERTY, PLANT AND EQUIPMENT -
The Company follows the successful efforts method of accounting for oil and gas
properties. Under this method, the Company capitalizes all costs to acquire
mineral interests in oil and gas properties, to drill and equip exploratory
wells which find proved reserves and to drill and equip development wells.
Geological and geophysical costs, delay rentals and costs to drill exploratory
wells which do not find proved reserves are expensed. Capitalized costs of
producing oil and gas properties are depreciated and depleted by the
unit-of-production method based on proved developed oil and gas reserves
determined by the Company and reviewed by independent engineers. Undeveloped
leases are amortized based on management's estimate of recoverability. Costs of
surrendered leases are charged to the amortization reserve.

Effective July 1, 1995, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed Of", which requires impairment losses
to be evaluated for long-lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows are not sufficient to
recover the assets carrying amount. Adoption of SFAS No. 121 resulted in a
before-tax impairment charge of $22 million which is included in depreciation,
depletion and amortization expense. After-tax, the impairment charge reduced
1995 net income by $13.6 million, $.55 per share. The before-tax impairment
charges included $20 million for proved Exploration and Production properties
and $2 million for Real Estate properties. The Company evaluates impairment of
exploration and production assets on a field by field basis. Fair values on
all long-lived assets are based on discounted future cash flows or information
provided by sales and purchases of similar assets.

Substantially all property, plant and equipment other than oil and gas
properties is depreciated using the straight-line method based on the
following estimated useful lives:

- ----------------------------------------------------
YEARS
- ----------------------------------------------------
Contract drilling equipment ................. 4-10
Real estate buildings and equipment ......... 10-50
Other ....................................... 3-33
- ----------------------------------------------------

CASH AND CASH EQUIVALENTS -
Cash and cash equivalents consist of cash in banks and investments readily
convertible into cash which mature within three months from the date of
purchase.

INVENTORIES -
Inventories, primarily materials and supplies, are valued at the lower of cost
(moving average or actual) or market.

DRILLING REVENUE -
Substantially all drilling contracts are daywork contracts and drilling
revenues and expenses are recognized as work progresses.

GAS IMBALANCES -
The Company recognizes revenues from gas wells on the sales method, and a
liability is recorded for permanent imbalances.

INVESTMENTS -
The Company adopted SFAS No. 115, "Accounting for Certain Investments in Debt
and Equity Securities", effective October 1, 1994. SFAS No. 115 requires that
available-for-sale securities be carried at their fair value determined based
on quoted market prices. Upon adoption of SFAS No. 115, the Company recorded an
increase to shareholders' equity of $34 million, which was net of income taxes
of $21 million.

The cost of securities used in determining realized gains and losses is based
on average cost of the security sold.

Investments in companies owned from 20 to 50 percent are accounted for using
the equity method with the Company recognizing its proportionate share of the
income or loss of each investee. The Company owned 23.9 percent and 24.14
percent of Atwood Oceanics, Inc. (Atwood) at September 30, 1996 and 1995,
respectively. The quoted market value of the Company's investment was
$70,400,000 and $32,100,000 at September 30, 1996 and 1995, respectively.
Retained earnings at September 30, 1996 include approximately $13,034,000 of
undistributed earnings of Atwood.

- --------------------------------------------------------------------------------

22
<PAGE> 23
Summarized financial information of Atwood is as follows:

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
1996 1995 1994
- ----------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Gross revenues ........................................ $ 84,760 $ 77,315 $ 68,045
Costs and expenses .................................... 73,392 70,255 62,045
-------- -------- --------
Net income ............................................ $ 11,368 $ 7,060 $ 6,000
======== ======== ========
Helmerich & Payne, Inc.'s equity in net income,
net of income taxes ............................. $ 1,686 $ 1,086 $ 904
======== ======== ========
Current assets ........................................ $ 44,170 $ 34,266 $ 37,965
Noncurrent assets ..................................... 115,139 118,587 115,065
Current liabilities ................................... 18,019 20,505 13,752
Noncurrent liabilities ................................ 35,736 37,456 53,000
Shareholders' equity .................................. 105,554 94,892 86,278
======== ======== ========
Helmerich & Payne, Inc.'s investment .................. $ 25,215 $ 22,495 $ 20,743
======== ======== ========
- ----------------------------------------------------------------------------------------
</TABLE>

INCOME TAXES -
Effective October 1, 1993, the Company adopted FASB Statement No. 109,
"Accounting for Income Taxes." Under Statement No. 109, deferred income taxes
are computed using the liability method and are provided on all temporary
differences between the financial basis and the tax basis of the Company's
assets and liabilities.

OTHER POST EMPLOYMENT BENEFITS -
The Company sponsors a health care plan that provides post retirement medical
benefits to retired employees. Employees who retire after November 1, 1992 and
elect the Company's coverage pay the entire estimated cost of such benefits.

The Company has accrued a liability for estimated workers compensation claims
incurred. The liability for other benefits to former or inactive employees
after employment but before retirement is not material.

EARNINGS PER SHARE -
Earnings per share are based on the weighted average number of shares of
common stock outstanding during the year. Common stock equivalents are
insignificant, and therefore, have not been considered in the earnings per
share computation.

- -------------------------------------------------------------------------------
NOTE 2 SHORT-TERM BORROWINGS AND CREDIT ARRANGEMENTS
- -------------------------------------------------------------------------------

The Company maintains a line of credit agreement with certain banks which
provides for maximum borrowing of $50,000,000 at adjustable interest rates.
Under the agreement, $50,000,000 may be borrowed through May 1997, and
$10,000,000 may be borrowed through May 1998. As of September 30, 1996, the
Company had borrowed $5,000,000 at a rate of 8.25% and had letters of credit
outstanding in the amount of $6,991,000, leaving an unused portion of
$38,009,000. Under the line of credit agreement the Company must meet certain
requirements regarding levels of debt, net worth and earnings.

The Company has an additional $14.0 million line of credit with a bank to be
used primarily for letters of credit. As of September 30, 1996, the Company had
letters of credit outstanding in the amount of $2,547,222 leaving an unused
portion of $11,452,778.

- -------------------------------------------------------------------------------
NOTE 3 INCOME TAXES
- -------------------------------------------------------------------------------

Effective October 1, 1993, the Company changed its method of accounting for
income taxes from the deferred method to the liability method required by FASB
Statement No. 109, "Accounting for Income Taxes." The cumulative effect of
adopting Statement No. 109 as of October 1, 1993 was to increase net income by
$4,000,000.

The components of the provision (credit) for income taxes from continuing
operations are as follows:

<PAGE> 24
- --------------------------------------------------------------------------------
The amounts of domestic and foreign income are as follows:
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
Years Ended September 30, 1996 1995 1994
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME
TAXES, EQUITY IN INCOME OF AFFILIATE AND CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE:
Domestic ......................................... $ 41,299 $(11,399) $ 11,885
Foreign .......................................... 28,244 18,887 12,420
-------------------------------
$ 69,543 $ 7,488 $ 24,305
===============================
- ----------------------------------------------------------------------------------------
</TABLE>

Effective income tax rates on income from continuing operations as compared to
the U.S. Federal income tax rate are as follows:

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Years Ended September 30, 1996 1995 1994
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Federal income tax rate ..................... 35% 35% 35%
Dividends received deduction ..................... (1) (8) (3)
Excess statutory depletion ....................... -- (3) (1)
Effect of higher foreign tax rates ............... 2 19 4
Non-conventional fuel source credits utilized .... (1) (8) (2)
Other, net ....................................... 2 2 --
--------------------
Effective income tax rate ........................ 37% 37% 33%
====================
- -------------------------------------------------------------------------------
</TABLE>

The components of the Company's net deferred tax liabilities are as follows:

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
At September 30, 1996 1995
- -------------------------------------------------------------------------------
(in thousands)
<S> <C> <C>
DEFERRED TAX LIABILITIES:
Property, plant and equipment ............. $ 46,706 $ 39,921
Available-for-sale securities ............. 49,889 23,293
Pension provision ......................... 4,720 4,774
Equity investment ......................... 4,840 3,920
Other ..................................... 709 919
-------- --------
Total deferred tax liabilities ......... 106,864 72,827
-------- --------

DEFERRED TAX ASSETS:
Financial accruals ........................ 5,213 4,733
Other ..................................... 3,316 2,032
-------- --------
Total deferred tax assets .............. 8,529 6,765
-------- --------

NET DEFERRED TAX LIABILITIES ................ $ 98,335 $ 66,062
======== ========
- -------------------------------------------------------------------------------
</TABLE>

NOTE 4 STOCK OPTIONS, AWARD PLAN AND RIGHTS
- -------------------------------------------------------------------------------

The Company has reserved 1,179,962 shares of its treasury stock to satisfy the
exercise of stock options issued under the 1982 and 1990 Stock Option Plans.
Options awarded under these plans are granted at prices equal to at least
market price on the date of grant. Options granted under the 1982 plan have a
term of nine years while options granted under the 1990 plan have a term of
seven years. Options granted under both plans become exercisable in increments
as outlined in the plans.

Activity for the incentive stock option plans, was as follows:

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Years Ended September 30, 1996 1995 1994
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Outstanding at October 1, ....................................... 841,271 835,879 780,079
Granted ......................................................... 247,000 107,750 110,250
Exercised ....................................................... (140,015) (78,094) (46,510)
Cancelled ....................................................... (94,146) (24,264) (7,940)
-------- -------- --------
Outstanding at September 30, .................................... 854,110 841,271 835,879
======== ======== ========
Exercisable at September 30, .................................... 74,224 110,399 70,889
======== ======== ========
Weighted average exercise price of options outstanding .......... $ 27.25 $ 26.39 $ 25.65
======== ======== ========
Weighted average exercise price of options exercised ............ $ 23.51 $ 19.68 $ 21.77
======== ======== ========
- ----------------------------------------------------------------------------------------------------
</TABLE>

24
<PAGE> 25
- -------------------------------------------------------------------------------

The Financial Accounting Standards Board has issued a new accounting standard,
FAS No. 123 "Accounting for Stock-Based Compensation", effective for fiscal
years beginning after December 15, 1995. As provided for in the standard, the
Company will not adopt the recognition provisions and will provide the pro
forma net income and earnings-per-share disclosures required by the standard
in its annual financial statements for the year ending September 30, 1997. The
Company currently follows Accounting Principles Board Opinion No. 25
"Accounting for Stock Issued to Employees". Under this standard, because the
exercise price of the Company's fixed plan common stock options equals the
market price of the underlying stock on the date of the grant, no compensation
expense is recognized.

As of September 30, 1996, the Company has issued 360,000 shares of treasury
stock under a Restricted Stock Award Plan (the "Plan"). The Company recognized
deferred compensation totalling $12,832,000, which was the fair market value
of the stock at the time of issuance, as a reduction of retained earnings.
Treasury stock was reduced by the book value of the shares issued, $4,058,000.
The difference was recognized as an increase in paid-in capital. The deferred
compensation is being amortized over a seven-year period as compensation
expense. The unamortized balance at September 30, 1996 and 1995 was $1,235,000
and $3,189,000, respectively. Restrictions lapsed with respect to 68,000
shares, 61,000 shares and 61,000 shares in 1996, 1995 and 1994, respectively,
and the shares were released to Plan participants. There were forfeitures of
10,000 and 15,000 shares in 1996 and 1995, respectively.

On January 8, 1996, the Company extended the benefits afforded by its existing
rights plan by adopting a new stockholder rights plan. On September 30, 1996,
the Company had 24,885,636 outstanding common stock purchase rights
("Rights"). Under the terms of the new plan each Right entitled the holder
thereof to purchase from the Company a unit consisting of one one-thousandth
of a share of Series A Junior Participating Preferred Stock ("Preferred
Stock"), without par value, at a price of $90 per unit. The exercise price and
the number of units of Preferred Stock issuable on exercise of the Rights are
subject to adjustment in certain cases to prevent dilution. The Rights will be
attached to the common stock certificates and are not exercisable or
transferrable apart from the common stock, until 10 business days after a
person acquires 15% or more of the outstanding common stock or 10 business
days following the commencement of a tender offer or exchange offer that would
result in a person owning 15% or more of the outstanding common stock. In the
event the Company is acquired in a merger or certain other business
combination transactions (including one in which the Company is the surviving
corporation), or more than 50% of the Company's assets or earning power is
sold or transferred, each holder of a Right shall have the right to receive,
upon exercise of the Right, common stock of the acquiring company having a
value equal to two times the exercise price of the Right. The Rights are
redeemable under certain circumstances at $.01 per Right and will expire,
unless earlier redeemed, on January 31, 2006. As long as the Rights are not
separately transferrable, the Company will issue one Right with each new share
of common stock issued.

- -------------------------------------------------------------------------------
NOTE 5 FINANCIAL INSTRUMENTS
- -------------------------------------------------------------------------------

Short-term investments consist mainly of U.S. treasury notes carried at cost,
which approximates fair value. Notes payable bear interest at market rates and
are carried at cost which approximates fair value.

The following is a summary of available-for-sale securities, which excludes
those accounted for under the equity method of accounting (see Note 1):

<TABLE>
<CAPTION>
Gross Gross Estimated
Unrealized Unrealized Fair
Cost Gains Losses Value
---------------------------------------------------
(in thousands)
<S> <C> <C> <C> <C>
Equity Securities:
September 30, 1996 $ 113,384 $92,081 $871 $204,594
September 30, 1995 $ 64,804 $61,455 $158 $126,101
</TABLE>

During the years ended September 30, 1996, 1995, and 1994, marketable equity
available-for-sale securities with a fair value at the date of sale of
$619,000, $11,713,000 and $373,000, respectively, were sold. The gross realized
gains on such sales of available-for-sale securities totaled $596,000,
$5,734,000 and $124,000, respectively, and the gross realized losses totaled
$30,000, $37,000 and $0, respectively.

- -------------------------------------------------------------------------------
NOTE 6 DISCONTINUED OPERATIONS
- -------------------------------------------------------------------------------

Effective August 30, 1996, Helmerich & Payne, Inc. exchanged all of the common
stock of its wholly-owned subsidiary, Natural Gas Odorizing, Inc. (NGO), to
Occidental Petroleum Corporation (OPC) for 2,018,928 shares of OPC common
stock with a fair market value of approximately $48 million. The sale yielded
a gain of $24.1 million (net of deferred income taxes of approximately $14.8
million) which is reported as gain on sale of discontinued operations. NGO
comprised the Company's chemical operations. Prior period operating results
for such operations are reported as discontinued operations. Summarized
operating results of discontinued operations are as follows:

The assets and liabilities that were transferred to OPC in the sale are
presented in the Consolidated Balance Sheet on a net basis at September 30,
1995. Net assets consist of current assets ($4.5 million), net property, plant
and equipment ($5.4 million), less current liabilities ($2.3 million) and other
liabilities ($0.8 million).

- -------------------------------------------------------------------------------

25
<PAGE> 26

- -------------------------------------------------------------------------------
NOTE 7 EMPLOYEE BENEFIT PLANS
- -------------------------------------------------------------------------------

DEFINED BENEFIT PLANS:
The Company has noncontributory pension plans covering substantially all of its
employees, including certain employees in foreign countries. The Company makes
annual contributions to the plans equal to the maximum amount allowable for tax
reporting purposes. Future service benefits are determined using a 1.5 percent
career average formula.

The net periodic pension expense (credit) included the following components:

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
Years Ended September 30, 1996 1995 1994
- ----------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Service cost-benefits earned during the year .......... $ 1,979 $ 1,589 $ 1,557
Interest cost on projected benefit obligations ........ 1,553 1,301 1,191
Return on plan assets ................................. (3,214) (2,798) (2,639)
Net amortization and deferral ......................... (304) (301) (302)
------- ------- -------
Net pension expense (credit) .................. $ 14 $ (209) $ (193)
======= ======= =======
</TABLE>

The discount rates used in determining the actuarial value of the projected
benefit obligation for 1996, 1995 and 1994 were 7.75%, 7.25% and 7.5%,
respectively. The average expected rate of return on plan assets was 8.5% for
1996, 1995 and 1994. The assumed rate of increase in compensation was 5.0% for
1996, 1995 and 1994.

The following table sets forth the plans' funded status and amounts recognized
in the balance sheet:

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
At September 30, 1996 1995
- ----------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefit obligation .......................................... $ 17,376 $ 16,199
======== ========
Accumulated benefit obligation ..................................... $ 20,675 $ 19,215
======== ========
Projected benefit obligation ....................................... $ 23,534 $ 21,735
======== ========

Plan assets at fair value, primarily listed stocks, U.S. Government
securities and guaranteed insurance contracts ...................... $ 42,609 $ 38,114
======== ========

Projected benefit obligation less than plan assets .................... $ 19,075 $ 16,379
Unrecognized net gain, including unrecognized
net assets existing at October 1, 1987 ............................. (8,430) (5,959)
Unrecognized prior service cost ....................................... 1,740 1,978
-------- --------
Prepaid pension cost .................................................. $ 12,385 $ 12,398
======== ========
- ----------------------------------------------------------------------------------------------
</TABLE>

DEFINED CONTRIBUTION PLAN:
Substantially all employees on the United States payroll of the Company may
elect to participate in the Company sponsored Thrift/401(K) Plan by
contributing a portion of their earnings. The Company contributes amounts equal
to 100 percent of the first five percent of the participant's compensation
subject to certain limitations. Expensed Company contributions were $1,908,000,
$1,735,000 and $1,588,000 in 1996, 1995 and 1994, respectively.
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
NOTE 8 ACCRUED LIABILITIES
- -------------------------------------------------------------------------------
Accrued liabilities consist of the following:

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
At September 30, 1996 1995
- -------------------------------------------------------------------------------
(in thousands)
<S> <C> <C>
Accrued royalties payable ................... $ 7,709 $ 5,977
Accrued taxes payable - operations .......... 4,645 2,521
Accrued income taxes payable ................ 4,915 388
Accrued workers compensation claims ......... 2,561 1,280
Accrued equipment cost ...................... 2,197 4,017
Other ....................................... 9,916 5,976
------- -------
$31,943 $20,159
======= =======
- -------------------------------------------------------------------------------
</TABLE>

26
<PAGE> 27
- -------------------------------------------------------------------------------
NOTE 9 SUPPLEMENTAL CASH FLOW INFORMATION

- -------------------------------------------------------------------------------
</TABLE>

NOTE 10 RISK FACTORS
- -------------------------------------------------------------------------------

CONCENTRATIONS OF CREDIT -
Financial instruments which potentially subject the Company to concentrations
of credit risk consist primarily of temporary cash investments and trade
receivables. The Company places its temporary cash investments with high
quality financial institutions and limits the amount of credit exposure to any
one financial institution. The Company's trade receivables are primarily with
a variety of companies in the oil and gas industry. Management requires
collateral for certain receivables of customers in its natural gas marketing
operations.

INTERNATIONAL OPERATIONS -
International drilling operations are significant contributors to the
Company's revenues and net profit. It is possible that operating results could
be affected by the risks of such activities, including economic conditions in
the international markets in which the Company operates, political and
economic instability, fluctuations in currency exchange rates, changes in
international regulatory requirements, international employment issues, and
the burden of complying with foreign laws. These risks may adversely affect
the Company's future operating results and financial position.

- -------------------------------------------------------------------------------
NOTE 11 SEGMENT INFORMATION
- -------------------------------------------------------------------------------

The Company operates principally in the contract drilling and oil and gas
industries. The contract drilling operations consist of contracting
Company-owned drilling equipment primarily to major oil and gas exploration
companies. The Company's primary international areas of operation include
Venezuela, Colombia and Ecuador. Oil and gas activities consist of ownership
of mineral interests in productive oil and gas leases and undeveloped leases
located primarily in Oklahoma, Texas, Kansas and Louisiana. Intersegment
sales, which are accounted for in the same manner as sales to unaffiliated
customers, are not material. Operating profit is total revenue less operating
expenses. In computing operating profit, the following items have not been
considered: equity in income of affiliate; income from investments; general
corporate expenses; interest expense; and domestic and foreign income taxes.
Identifiable assets by segment are those assets that are used in the Company's
operations in each segment. Corporate assets are principally cash and cash
equivalents, short-term investments and investments in marketable securities.

Revenues from one company doing business with the contract drilling segment
accounted for approximately 19 percent, 18 percent, and 14 percent of the
total consolidated revenues during the years ended September 30, 1996, 1995
and 1994, respectively. Collectively, revenues from three companies controlled
by the Venezuelan government accounted for approximately 12.8 percent and 13.4
percent of total consolidated revenues for the year ended September 30, 1996
and 1995, respectively.

Summarized revenues and operating profit by industry segment for the years
ended September 30, 1996, 1995 and 1994 are located on page 10. Additional
financial information by industry segment is as follows:

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Years Ended September 30, 1996 1995 1994
- --------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Net Income (loss):
Contract Drilling - Domestic ................... $ 6,796 $ 4,506 $ 3,697
Contract Drilling - International .............. 17,693 12,106 8,459
Exploration and Production ..................... 17,335 (13,906) 2,710
Natural Gas Marketing .......................... 2,247 1,230 869
Real Estate Division ........................... 3,121 1,324 2,751
Other .......................................... (3,452) (558) (2,282)
Equity in income of affiliate .................. 1,686 1,086 904
-------- -------- --------
Net income from Continuing Operations ........ $ 45,426 $ 5,788 $ 17,108
Change in accounting principle ................. -- -- 4,000
Discontinued operations ........................ 27,140 3,963 3,863
-------- -------- --------
Net Income ..................................... $ 72,566 $ 9,751 $ 24,971
======== ======== ========
- --------------------------------------------------------------------------------------
</TABLE>

27
<PAGE> 28

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Years Ended September 30, 1996 1995 1994
- -------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Identifiable assets:
Contract drilling - Domestic ............... $169,363 $138,359 $132,804
Contract drilling - International .......... 213,171 188,587 131,767
Exploration and Production ................. 141,058 142,474 175,003
Natural Gas Marketing ...................... 15,602 10,192 8,846
Real Estate division ....................... 23,628 24,380 26,958
Corporate and other ........................ 259,092 196,233 133,442
Discontinued operations .................... -- 6,836 12,869
-------- -------- --------
$821,914 $707,061 $621,689
======== ======== ========
Depreciation, depletion and amortization:
Contract drilling - Domestic ............... $ 13,879 $ 12,111 $ 10,990
Contract drilling - International .......... 22,120 19,557 15,722
Exploration and Production ................. 20,299 39,895 19,523
Natural Gas Marketing ...................... 725 298 290
Real Estate division ....................... 1,455 3,623 1,624
Corporate and other ........................ 964 959 1,265
-------- -------- --------
Continuing operations .................... 59,442 76,443 49,414
Discontinued operations .................. 754 672 654
-------- -------- --------
$ 60,196 $ 77,115 $ 50,068
======== ======== ========
Capital expenditures:
Contract drilling - Domestic ............... $ 57,004 $ 32,503 $ 31,692
Contract drilling - International .......... 24,801 55,044 25,723
Exploration and Production ................. 24,320 20,956 45,809
Natural Gas Marketing ...................... 435 252 76
Real Estate division ....................... 776 907 916
Corporate and other ........................ 830 1,255 1,048
-------- -------- --------
Continuing operations .................... 108,166 110,917 105,264
Discontinued operations .................. 1,581 859 619
-------- -------- --------
$109,747 $111,776 $105,883
======== ======== ========
- -------------------------------------------------------------------------------
</TABLE>

- -------------------------------------------------------------------------------
NOTE 12 SUPPLEMENTARY FINANCIAL INFORMATION FOR OIL AND GAS PRODUCING
ACTIVITIES
- -------------------------------------------------------------------------------

All of the Company's oil and gas producing activities are located in the United
States.

Results of Operations from Oil and Gas Producing Activities -

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Years Ended September 30, 1996 1995 1994
- -----------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Revenues .............................................. $ 76,643 $ 47,986 $ 58,884
-------- -------- --------
Production costs ...................................... 20,080 18,035 18,854
Exploration expense and valuation provisions .......... 9,931 14,017 17,262
Depreciation, depletion and amortization .............. 20,299 39,895 19,523
Income tax expense (benefit) .......................... 9,187 (7,243) 890
-------- -------- --------
Total cost and expenses ............................. 59,497 64,704 56,529
-------- -------- --------
Results of operations (excluding corporate overhead
and interest costs) ................................. $ 17,146 $(16,718) $ 2,355
======== ======== ========
- -----------------------------------------------------------------------------------------
</TABLE>

Capitalized Costs -

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
At September 30, 1996 1995
- ---------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C>
Properties being amortized:
Proved properties ............................................. $392,562 $384,755
Unproved properties ........................................... 9,242 8,051
-------- --------
Total costs being amortized ................................. 401,804 392,806
Less - Accumulated depreciation, depletion and amortization ..... 269,994 257,988
-------- --------
Net ....................................... $131,810 $134,818
======== ========
- ---------------------------------------------------------------------------------------
</TABLE>

28
<PAGE> 29
- -------------------------------------------------------------------------------
Costs Incurred Relating to Oil and Gas Producing Activities -

Estimated Quantities of Proved Oil and Gas Reserves (Unaudited) -

Proved reserves are estimated quantities of crude oil, natural gas, and
natural gas liquids which geological and engineering data demonstrate with
reasonable certainty to be recoverable in future years from known reservoirs
under existing economic and operating conditions. Proved developed reserves
are those which are expected to be recovered through existing wells with
existing equipment and operating methods. The following is an analysis of
proved oil and gas reserves as estimated by the Company and reviewed by
independent engineers.

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
OIL (Bbls.) GAS (Mmcf)
- -------------------------------------------------------------------------------------
<S> <C> <C>
Proved reserves at September 30, 1993 ................. 6,883,199 289,445
Revisions of previous estimates ....................... 302,200 (819)
Extensions, discoveries and other additions ........... 261,114 8,818
Production ............................................ (887,455) (26,628)
Purchases of reserves-in-place ........................ 159,580 19,900
Sales of reserves-in-place ............................ (8,427) (64)
--------- -------

Proved reserves at September 30, 1994 ................. 6,710,211 290,652
Revisions of previous estimates ....................... 124,361 5,222
Extensions, discoveries and other additions ........... 328,539 8,775
Production ............................................ (808,058) (26,421)
Purchases of reserves-in-place ........................ 310 1,934
Sales of reserves-in-place ............................ (26,251) (116)
--------- -------

Proved reserves at September 30, 1995 ................. 6,329,112 280,046
Revisions of previous estimates ....................... 629,154 5,098
Extensions, discoveries and other additions ........... 298,986 21,311
Production ............................................ (809,571) (34,535)
Purchases of reserves-in-place ........................ 21,912 647
Sales of reserves-in-place ............................ (1,477) (266)
--------- -------

Proved reserves at September 30, 1996 ................. 6,468,116 272,301
========= =======

Proved developed reserves at
September 30, 1994 .................................. 6,649,672 267,688
========= =======
September 30, 1995 .................................. 6,270,216 262,319
========= =======
September 30, 1996 .................................. 6,441,803 261,519
========= =======
- -------------------------------------------------------------------------------------
</TABLE>

Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil
and Gas Reserves (Unaudited) -

The "Standardized Measure of Discounted Future Net Cash Flows Relating to
Proved Oil and Gas Reserves" (Standardized Measure) is a disclosure
requirement under Financial Accounting Standards Board Statement No. 69. The
Standardized Measure does not purport to present the fair market value of a
company's proved oil and gas reserves. This would require consideration of
expected future economic and operating conditions, which are not taken into
account in calculating the Standardized Measure.

Under the Standardized Measure, future cash inflows were estimated by applying
year-end prices to the estimated future production of year-end proved
reserves. Future cash inflows were reduced by estimated future production and
development costs based on year-end costs to determine pre-tax cash inflows.
Future income taxes were computed by applying the statutory tax rate to the
excess of pre-tax cash inflows over the Company's tax basis in the associated
proved oil and gas properties. Tax credits and permanent differences were also
considered in the future income tax calculation. Future net cash inflows after
income taxes were discounted using a ten percent annual discount rate to
arrive at the Standardized Measure.

- -------------------------------------------------------------------------------

29
<PAGE> 30
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
At September 30, 1996 1995
- -------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C>
Future cash inflows ........................................ $ 549,033 $ 429,259
Future costs -
Future production and development costs .................. (193,047) (173,633)
Future income tax expense ................................ (98,158) (63,183)
--------- ---------
Future net cash flows ...................................... 257,828 192,443
10% annual discount for estimated timing of cash flows ..... (103,964) (81,509)
--------- ---------
Standardized Measure of discounted future net cash flows ... $ 153,864 $ 110,934
========= =========

- -------------------------------------------------------------------------------------
</TABLE>

Changes in Standardized Measure Relating to Proved Oil and Gas Reserves
(Unaudited)-

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Years Ended September 30, 1996 1995 1994
- -----------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Standardized Measure - Beginning of year ................ $110,934 $124,623 $178,757
Increases (decreases) -
Sales, net of production costs ........................ (56,563) (29,951) (40,030)
Net change in sales prices, net of production costs ... 59,479 (12,917) (80,347)
Discoveries and extensions, net of related future
development and production costs .................... 29,189 8,179 9,653
Changes in estimated future development costs ......... (6,651) (4,672) (14,571)
Development costs incurred ............................ 14,050 9,703 12,888
Revisions of previous quantity estimates .............. 5,731 2,825 483
Accretion of discount ................................. 14,362 16,171 23,678
Net change in income taxes ............................ (31,158) (7,538) 20,942
Purchases of reserves-in-place ........................ 643 1,202 11,219
Sales of reserves-in-place ............................ (124) (51) (62)
Other ................................................. 13,972 3,360 2,013
-------- -------- --------
Standardized Measure - End of year ...................... $153,864 $110,934 $124,623
======== ======== ========
- -----------------------------------------------------------------------------------------
</TABLE>

- -------------------------------------------------------------------------------
NOTE 13 SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
- -------------------------------------------------------------------------------
(in thousands, except per share amounts)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1st 2nd 3rd 4th
1996 Quarter Quarter Quarter Quarter
- ---------------------------------------------- ---------------------------------------
<S> <C> <C> <C> <C>
Revenues ..................................... $ 88,427 $ 95,213 $101,358 $108,257
Gross profit ................................. 16,971 17,897 23,256 21,180
Income from continuing operations ............ 9,468 9,802 12,650 13,506
Income (loss) from discontinued operations ... 1,625 1,225 508 (268)
Gain on sale of discontinued operations ...... -- -- -- 24,050
Net income ................................... 11,093 11,027 13,158 37,288
Earnings (loss) per share:
Continuing operations ...................... .38 .40 .51 .55
Discontinued operations .................... .07 .05 .02 (.01)
Gain on sale of discontinued operations .... -- -- -- .97
Net income ................................. .45 .45 .53 1.51
============================================== =======================================
<CAPTION>
1st 2nd 3rd 4th
1995 Quarter Quarter Quarter Quarter
- ---------------------------------------------- ----------------------------------------
<S> <C> <C> <C> <C>
Revenues ..................................... $ 73,993 $ 73,350 $ 74,648 $ 84,730
Gross profit (loss) .......................... 6,273 8,818 8,760 (7,155)
Income (loss) from continuing operations ..... 2,736 4,127 4,114 (5,189)
Income from discontinued operations .......... 1,680 1,693 470 120
Net income (loss) ............................ 4,416 5,820 4,584 (5,069)
Earnings (loss) per share:
Continuing operations ..................... .11 .17 .17 (.21)
Discontinued operations ................... .07 -- .02 --
Net income ................................ .18 .24 .19 (.21)
- ---------------------------------------------- -----------------------------------------
</TABLE>

Gross profit (loss) represents total revenues less operating costs,
depreciation, depletion and amortization, dry holes and abandonments, and
taxes, other than income taxes.

- -------------------------------------------------------------------------------

Net income in the fourth quarter of 1996 includes the gain from sale of
discontinued operations (see Note 6). All quarters presented have been restated
to reflect discontinued operations. Net loss from continuing operations for the
fourth quarter of 1995 includes an after-tax charge of $13.6 million ($.55 per
share) related to the Company adopting SFAS No 121 (see note 1).

- -------------------------------------------------------------------------------

30
<PAGE> 31

REPORT OF INDEPENDENT AUDITORS

HELMERICH & PAYNE, INC.

===============================================================================
The Board of Directors and Shareholders
Helmerich & Payne, Inc.

We have audited the accompanying consolidated balance sheets of Helmerich &
Payne, Inc. as of September 30, 1996 and 1995, and the related consolidated
statements of income, shareholders' equity, and cash flows for each of the
three years in the period ended September 30, 1996. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Helmerich &
Payne, Inc. at September 30, 1996 and 1995, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
September 30, 1996, in conformity with generally accepted accounting
principles.

As discussed in Note 1 to the financial statements, effective July 1, 1995,
the Company adopted Statement of Financial Accounting Standards (SFAS) No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed Of". As discussed in Note 1 to the financial statements,
effective October 1, 1994, the Company adopted SFAS No. 115, "Accounting for
Certain Investments in Debt and Equity Securities" and as discussed in Note 3
to the financial statements, effective October 1, 1993, the Company adopted
SFAS No. 109, "Accounting for Income Taxes."

/s/ ERNST & YOUNG L.L.P.

Tulsa, Oklahoma
November 15, 1996

STOCK PRICE INFORMATION

<TABLE>
<CAPTION>
===============================================================
Closing Market Price Per Share
------------------------------------------------
1996 1995
------------------------------------------------
QUARTERS HIGH LOW HIGH LOW
<S> <C> <C> <C> <C>
First......... $ 30 1/8 $ 24 1/2 $ 31 1/4 $25 5/8
Second........ 34 1/2 27 27 1/2 24 1/2
Third......... 38 1/4 33 31 26 5/8
Fourth........ 43 5/8 34 3/4 30 27 5/8
</TABLE>

DIVIDEND INFORMATION

<TABLE>
<CAPTION>
====================================================================
Paid Per Share Total Payment
----------------------------------------------
1996 1995 1996 1995
- --------------------------------------------------------------------
QUARTERS
<S> <C> <C> <C> <C>
First............ $.125 $.125 $3,095,578 $3,089,758
Second........... .125 .125 3,100,568 3,087,958
Third............ .125 .125 3,104,724 3,092,973
Fourth........... .130 .125 3,229,596 3,094,813
- --------------------------------------------------------------------
</TABLE>

===============================================================================

STOCKHOLDERS' MEETING

The annual meeting of stockholders will be held on March 5, 1997. A formal
notice of the meeting, together with a proxy statement and form of proxy, will
be mailed to shareholders on or about January 27, 1997.

===============================================================================

STOCK EXCHANGE LISTING

Helmerich & Payne, Inc. Common Stock is traded on the New York Stock Exchange
with the ticker symbol "HP." The newspaper abbreviation most commonly used for
financial reporting is "HelmP." Options on the Company's stock are also traded
on the New York Stock Exchange.

===============================================================================

STOCK TRANSFER AGENT AND REGISTRAR

As of December 16, 1996, there were 1,514 record holders of Helmerich & Payne,
Inc. common stock as listed by the transfer agent's records.

Our Transfer Agent is responsible for our shareholder records, issuance of
stock certificates, and distribution of our dividends and the IRS Form 1099.
Your requests, as shareholders, concerning these matters are most efficiently
answered by corresponding directly with The Liberty Bank of Oklahoma City at
the following address:

The Liberty National Bank and Trust Company of Oklahoma City
Stock Transfer Department
P.O. Box 25848
Oklahoma City, Oklahoma 73125-0848
Telephone: (405) 231-6325

===============================================================================

FORM 10-K

The Company's Annual Report on Form 10-K, which has been submitted to the
Securities and Exchange Commission, is available free of charge upon written
request.

DIRECT INQUIRIES TO:
President
Helmerich & Payne, Inc.
Utica at Twenty- First
Tulsa, Oklahoma 74114
Telephone: (918) 742-5531
===============================================================================

31
<PAGE> 32

ELEVEN-YEAR FINANCIAL REVIEW
===============================================================================
HELMERICH & PAYNE, INC.

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
Years Ended September 30, 1996 1995 1994
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES AND INCOME*
Contract Drilling Revenues ..................... 244,338 203,325 182,781
Crude Oil Sales ................................ 15,378 13,227 13,161
Natural Gas Sales .............................. 60,500 33,851 45,261
Gas Marketing Revenues ......................... 57,817 34,729 51,874
Real Estate Revenues ........................... 8,076 7,560 7,396
Dividend Income ................................ 3,650 3,389 3,621
Other Revenues ................................. 3,496 10,640 6,058
Total Revenues++ ............................... 393,255 306,721 310,152
Net Cash Provided by Continuing Operations++ ... 121,420 84,010 74,463
Income from Continuing Operations .............. 45,426 5,788 17,108
Net Income(3)................................... 72,566 9,751 24,971
- ---------------------------------------------------------------------------------------

PER SHARE DATA
Income from Continuing Operations .............. 1.84 .24 .70
Net Income(3)................................... 2.94 .40 1.02
Cash Dividends ................................. .505 .50 .485
Shares Outstanding* ............................ 24,886 24,765 24,710
- ---------------------------------------------------------------------------------------

FINANCIAL POSITION
Net Working Capital* ........................... 51,803 50,038 76,238
Ratio of Current Assets to Current Liabilities . 1.83 1.74 2.63
Investments* ................................... 229,809 156,908 87,414
Total Assets* .................................. 821,914 707,061 621,689
Long-Term Debt* ................................ -- -- --
Shareholders' Equity* ............................. 645,970 562,435 524,334
- ---------------------------------------------------------------------------------------

CAPITAL EXPENDITURES*
Contract Drilling Equipment .................... 79,269 80,943 53,752
Wells and Equipment ............................ 21,142 19,384 40,916
Real Estate .................................... 752 873 902
Other Assets (includes undeveloped leases) ..... 7,003 9,717 9,695
Discontinued Operations ........................ 1,581 859 618
Total Capital Outlays .......................... 109,747 111,776 105,883
- ---------------------------------------------------------------------------------------

PROPERTY, PLANT AND EQUIPMENT AT COST*
Contract Drilling Equipment .................... 568,110 501,682 444,432
Producing Properties ........................... 392,562 384,755 377,371
Undeveloped Leases ............................. 9,242 8,051 11,729
Real Estate .................................... 46,970 46,642 47,827
Other .......................................... 53,547 55,655 48,612
Discontinued Operations ........................ -- 13,937 13,131
Total Property, Plant and Equipment ............... 1,070,431 1,010,722 943,102
- ---------------------------------------------------------------------------------------
</TABLE>

* 000's omitted
++ Chemical operations were sold August 30, 1996 (see note 6). Prior year
amounts have been restated to exclude discontinued operations.
(3) Includes $13.6 million (.55 per share) effect of impairment charge for
adoption of SFAS No. 121 in 1995 and cumulative effect of change in accounting
for income taxes of $4,000,000 ($.16 per share) in 1994.

32
<PAGE> 33
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
1993 1992 1991 1990 1989 1988 1987 1986
- -----------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
149,661 112,833 105,364 90,974 78,315 75,985 64,718 68,220
15,392 16,369 17,374 16,058 14,821 14,001 15,223 20,020
52,446 38,370 35,628 37,697 33,013 26,154 17,251 21,308
63,786 40,410 10,055 10,566 -- -- -- --
7,620 7,541 7,542 7,636 7,778 7,878 7,561 6,839
3,535 4,050 5,285 7,402 9,127 10,069 9,757 11,033
8,283 6,646 20,020 56,131 17,371 15,206 34,757 29,261
300,723 226,219 201,268 226,464 160,425 149,293 149,267 156,681
72,493 60,414 50,006 53,288 65,474 54,959 36,999 53,477
22,158 8,973 19,608 45,489 20,715 17,746 20,575 6,249
24,550 10,849 21,241 47,562 22,700 20,150 22,016 7,025
- -----------------------------------------------------------------------------

.91 .37 .81 1.88 .86 .73 .85 .25
1.01 .45 .88 1.97 .94 .83 .91 .28
.48 .465 .46 .44 .42 .40 .38 .36
24,637 24,576 24,488 24,485 24,173 24,166 24,187 24,187
- -----------------------------------------------------------------------------

104,085 82,800 108,212 146,741 114,357 135,275 135,139 108,331
3.24 3.31 4.19 3.72 3.12 6.10 6.68 5.61
84,945 87,780 96,471 99,574 130,443 133,726 140,431 158,311
610,935 585,504 575,168 582,927 591,229 576,473 571,348 563,236
3,600 8,339 5,693 5,648 49,087 70,715 74,732 79,340
508,927 493,286 491,133 479,485 443,396 430,804 420,833 408,185
- -----------------------------------------------------------------------------

24,101 43,049 56,297 18,303 17,901 19,110 13,993 23,673
23,142 21,617 34,741 16,489 30,673 25,936 27,402 11,767
436 690 2,104 1,467 878 3,095 6,128 1,409
5,901 16,984 6,793 5,448 6,717 2,496 2,012 2,026
629 158 2,594 1,153 815 815 336 281
54,209 82,498 102,529 42,860 56,984 51,452 49,871 39,156
- -----------------------------------------------------------------------------

418,004 404,155 370,494 324,293 323,313 313,289 309,865 307,199
340,176 329,264 312,438 287,248 279,768 251,445 228,214 215,488
10,010 12,973 5,552 5,507 5,441 3,305 4,197 7,294
47,502 47,286 46,671 44,928 48,016 47,165 44,070 38,131
45,085 43,153 36,423 32,135 29,716 27,798 28,274 28,454
12,545 11,962 11,838 9,270 8,156 7,370 6,602 6,286
873,322 848,793 783,416 703,381 694,410 650,372 621,222 602,852
- -----------------------------------------------------------------------------
</TABLE>

33
<PAGE> 34

ELEVEN-YEAR OPERATING REVIEW
===============================================================================
HELMERICH & PAYNE, INC.

PETROLEUM EXPLORATION AND DEVELOPMENT
Gross Wells Completed ....................... 63 59 44
Net Wells Completed ......................... 35.3 27.4 15
Net Dry Holes ............................... 7.3 5.9 1.7

PETROLEUM PRODUCTION
Net Crude Oil and Natural Gas Liquids
Produced (barrels daily) .................. 2,212 2,214 2,431
Net Oil Wells Owned-- Primary Recovery ...... 176.9 186 202
Net Oil Wells Owned-- Secondary Recovery .... 63.8 64 71
Secondary Oil Recovery Projects ............. 12 12 14
Net Natural Gas Produced
(thousands of cubic feet daily) ........... 94,358 72,387 72,953
Net Gas Wells Owned ......................... 378 354 341

NATURAL GAS ODORANTS AND
OTHER CHEMICALS++
Chemicals Sold (pounds)* .................... 9,823 7,670 8,071

REAL ESTATE MANAGEMENT
Gross Leasable Area (square feet)* .......... 1,654 1,652 1,652
Percentage Occupancy ........................ 94 87 83

TOTAL NUMBER OF EMPLOYEES
Helmerich & Payne, Inc. and Subsidiaries+ ... 3,309 3,245 2,787
- -------------------------------------------------------------------------------
</TABLE>

* 000's omitted.
+ 1986-1989 include U.S. employees only
++ Chemical operations were sold August 30, 1996 (see note 6).

34
<PAGE> 35
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
1993 1992 1991 1990 1989 1988 1987 1986
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
42 39 46 49 49 48 50 48
29 30 25 20 20 18 19 19
128 100 106 119 108 115 110 110
1,504 1,085 1,301 1,316 1,350 1,284 1,182 1,384
11,746 10,853 12,274 11,059 12,500 11,165 10,745 12,582
53 42 47 50 44 45 39 44
68 69 69 45 46 30 16 30
- -------------------------------------------------------------------------------

42 54 45 36 45 45 18 27
15.9 17.8 20.2 15.3 15.2 14.6 5.2 10.3
4.3 4.3 4.3 3.4 2.8 1.6 .5 3.6
- -------------------------------------------------------------------------------

2,399 2,334 2,152 2,265 2,486 2,463 2,578 3,077
202 220 227 223 201 202 199 234
71 74 55 46 214 222 237 235
14 14 12 12 17 21 20 18

78,023 75,470 66,617 65,147 57,490 45,480 31,752 32,392
307 289 278 194 205 197 180 180
- -------------------------------------------------------------------------------

7,930 8,452 8,155 8,255 7,702 8,507 8,165 7,554
- -------------------------------------------------------------------------------

1,656 1,656 1,664 1,664 1,669 1,670 1,595 1,433
86 87 86 85 90 90 94 95
- -------------------------------------------------------------------------------

2,389 1,928 1,758 1,864 1,100 1,156 1,026 844
- -------------------------------------------------------------------------------
</TABLE>

35
<PAGE> 36

<TABLE>
<CAPTION>
DIRECTORS OFFICERS
================================================================================
<S> <C>
W. H. HELMERICH, III W. H. HELMERICH, III
Chairman of the Board, Chairman of the Board
Tulsa, Oklahoma
HANS HELMERICH
HANS HELMERICH President and Chief Executive Officer
President and Chief Executive Officer,
Tulsa, Oklahoma GEORGE S. DOTSON
Vice President,
WILLIAM L. ARMSTRONG President of Helmerich & Payne
Chairman, Ambassador Media Corporation, International Drilling Co.
Denver, Colorado
DOUGLAS E. FEARS
GLENN A. COX* Vice President,
President and Chief Operating Officer, Retired, Finance
Phillips Petroleum Co.,
Bartlesville, Oklahoma STEVEN R. MACKEY
Vice President, Secretary,
GEORGE S. DOTSON and General Counsel
Vice President,
President of Helmerich & Payne STEVEN R. SHAW
International Drilling Co., Vice President,
Tulsa, Oklahoma Exploration & Production

L. F. ROONEY, III*
Chairman,
Manhattan Construction Company
Tulsa, Oklahoma

GEORGE A. SCHAEFER
Chairman and Chief Executive Officer, Retired,
Caterpillar Inc.,
Peoria, Illinois

JOHN D. ZEGLIS
Senior Vice President and General Counsel,
American Telephone & Telegraph Co.,
Basking Ridge, New Jersey
</TABLE>

*Member, Audit Committee

<PAGE> 1
Exhibit 22

SUBSIDIARIES OF THE REGISTRANT

Helmerich & Payne, Inc.

Subsidiaries of Helmerich & Payne, Inc.

Helmerich & Payne Properties, Inc. (Incorporated in Oklahoma)
Utica Square Shopping Center, Inc. (Incorporated in Oklahoma)
The Hardware Store of Utica Square, Inc. (Incorporated in Oklahoma)
The Space Center, Inc. (Incorporated in Oklahoma)
H&P DISC, Inc. (Incorporated in Oklahoma)
Helmerich & Payne Coal Co. (Incorporated in Oklahoma)
Helmerich & Payne Energy Services, Inc. (Incorporated in Oklahoma)
Helmerich & Payne International Drilling Co. (Incorporated in Delaware)

Subsidiaries of Helmerich & Payne International Drilling Co.

Helmerich & Payne (Africa) Drilling Co. (Incorporated in Cayman
Islands, British West Indies)
Helmerich & Payne (Colombia) Drilling Co. (Incorporated in
Oklahoma)
Helmerich & Payne (Gabon) Drilling Co. (Incorporated in Cayman
Islands, British West Indies)
Helmerich & Payne (Guatemala) Drilling Co. (Incorporated in
Oklahoma)
Helmerich & Payne (Peru) Drilling Co. (Incorporated in Oklahoma)
Helmerich & Payne (Australia) Drilling Co. (Incorporated in
Oklahoma)
Helmerich & Payne del Ecuador, Inc. (Incorporated in Oklahoma)
Helmerich & Payne de Venezuela, C.A. (Incorporated in Venezuela)
Helmerich & Payne, C.A. (Incorporated in Venezuela)
Helmerich & Payne Rasco, Inc. (Incorporated in Oklahoma)
H&P Finco (Incorporated in Cayman Islands, British West Indies)
H&P Invest Ltd. (Incorporated in Cayman Islands), British West
Indies, doing business as H&P (Yemen) Drilling Co.

Subsidiary of H&P Invest Ltd.

Turrum Pty. Ltd. (Incorporated in Papua, New Guinea)

<PAGE> 1
EXHIBIT 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in this Annual Report
(Form 10-K) of Helmerich & Payne, Inc. of our report dated November 15, 1996,
included in the 1996 Annual Report to Shareholders of Helmerich & Payne, Inc.

We also consent to the incorporation by reference in the Registration
Statements (Form S-8 Nos. 33-16771 and 33-55239) pertaining, respectively, to
the Helmerich & Payne, Inc. Incentive Stock Option Plan and 1990 Stock Option
Plan of out report dated November 15, 1996, with respect to the consolidated
financial statements of Helmerich & Payne, Inc. incorporated by reference in
the Annual Report (Form 10-K) for the year ended September 30, 1996.

ERNST & YOUNG LLP

Tulsa, Oklahoma
December 27, 1996

<ARTICLE> 5
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> SEP-30-1996
<CASH> 16,892
<SECURITIES> 229,809
<RECEIVABLES> 76,086
<ALLOWANCES> 712
<INVENTORY> 16,915
<CURRENT-ASSETS> 114,368
<PP&E> 1,070,431
<DEPRECIATION> 606,935
<TOTAL-ASSETS> 821,914
<CURRENT-LIABILITIES> 62,565
<BONDS> 0
0
0
<COMMON> 2,677
<OTHER-SE> 643,293
<TOTAL-LIABILITY-AND-EQUITY> 821,914
<SALES> 387,473
<TOTAL-REVENUES> 393,255
<CGS> 313,951
<TOTAL-COSTS> 313,951
<OTHER-EXPENSES> 9,083
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 678
<INCOME-PRETAX> 69,543
<INCOME-TAX> 25,803
<INCOME-CONTINUING> 45,426
<DISCONTINUED> 27,140
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 72,566
<EPS-PRIMARY> 2.94
<EPS-DILUTED> 2.94

</TABLE>