04-HP-876_newMDA.qxd 12/15/04 3:04 PM Page 25 SPIN-OFF AND MERGER TRANSACTIONS EXECUTIVE SUMMARY On September 30, 2002, Helmerich Payne, Inc. completed its  distribution of 100 percent of the common stock of Cimarex Energy Co. to the Company’s shareholders and the merger of Key Production Company, Inc. into a subsidiar of Cimarex making Key a wholly- owned subsidiary of Cimarex. The Cimarex Energy Co. stock  distribution was recorded as a dividend and resulted in a decrease to consolidated stockholders’ equity of approximately $152.2 million. The Company and its subsidiaries continue to own and operate contract drilling and real estate businesses, while Cimarex Energy Co. is a  separate, publicly traded company that owns and operates an  exploration and production business.  The Company does not own any common stock of Cimarex Energy Co . (See note 2 of the Consolidated Financial Statements for complete description of the transaction.) As a result of the transaction, the Company has reported the results of its former exploration and production division (Cimarex Energy Co.) as discontinued operations. Helmerich & Payne, Inc. is a contract drilling company which owned and operated a total of 130 drilling rigs at September 30, 2004. The Company’s primary markets ar the United States land rig business in which the Company owned 87 rigs, the United States offshore platform rig business in which the Company o wned 11 offshore platform rigs, and the international land rig business in which the Company owned 32 rigs at year end. Over the past year , crude oil and natural gas prices hav risen significantly as the supply and demand outlook for both commodities have changed. Crude oil demand has improved as markets 26