Tuesday, land-drilling rig contractor Helmerich & Payne, Inc. (HP) said that it expects to record a foreign exchange loss of about $20 million in the second quarter of fiscal 2010 due to the impact of the currency devaluation recently announced by Venezuelan authorities.
With the currency devaluation, the company also expects a decline in value corresponding to unrecorded and uncollected invoices in Venezuela. As the uncollected invoices are not included in the company's consolidated accounts receivable, their value reduction is not expected to generate additional exchange losses.
Helmerich estimates that the value of future potential collections of the unrecorded invoices, earlier slated at approximately $61 million, could decline by 25% to 35%.
Helmerich said that though it has continued its efforts to collect unpaid invoice amounts in Venezuela, it has not received any payments since November 2009. All 11 H&P rigs that formerly worked for Venezuelan state-owned company Petróleos de Venezuela remain idle.
Though the company continues to pursue future drilling opportunities for its 11 large conventional rigs in Venezuela, it does not expect to sign any new contracts till it makes progress on pending receivable collections and on conversion of local currency to U.S. dollars.
HP is currently trading at $46.08, down $0.38 or 0.82%, on the NYSE.
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