HOUSTON, April 23, 2015 /PRNewswire/
-- PATTERSON-UTI ENERGY, INC. (NASDAQ: PTEN) today
reported financial results for the three months ended March 31, 2015. The Company reported net
income of $9.1 million, or
$0.06 per share, for the first
quarter of 2015, compared to net income of $34.8 million, or $0.24 per share, for the quarter ended
March 31, 2014. Revenues for
the first quarter of 2015 were $658
million, compared to $678
million for the first quarter of 2014.
Andy Hendricks, Patterson-UTI's
Chief Executive Officer, stated, "In the first quarter, during what
has been a sharp decrease in drilling activity across our industry
and in our rig count, we have nonetheless gained market share in
our contract drilling business. We attribute this growth in
our market share to our term contract coverage, and ultimately to
the quality of our rigs and operations. Our rig count in the
first quarter averaged 165 rigs in the
United States and eight rigs in Canada. Our rig count
and pressure pumping activity continue to be negatively impacted by
the reduction in spending by exploration and production companies,
caused primarily by the lower price for crude oil. For the
month of April, we expect our rig count to average 130 rigs in
the United States and two rigs in
Canada.
Mr. Hendricks added, "In contract drilling, we recognized
$15.8 million of revenues related to
early contract terminations. These early termination revenues
positively impacted our total average rig revenue per day of
$25,870 by $1,020. Excluding this early termination
revenue, our total average rig revenue per day during the first
quarter would have been $24,850, an
increase of $410 per day from the
fourth quarter.
"In addition to the increase in total average rig revenue per
day, total average rig operating costs per day decreased
$300 sequentially to $13,710 in the first quarter. Accordingly,
excluding the positive impact from the early termination revenues
in the first quarter, total average rig margin per day increased
$710 to $11,140.
"We completed six new APEX® rigs during the first
quarter, bringing our APEX® rig fleet to 151 rigs at the
end of the quarter. We plan to complete 10 additional
APEX® rigs this year, all of which are under
contract. Included among these remaining new APEX®
rigs is our first APEX® rig that will be delivered to
work in Canada. We are excited about this new opportunity for
APEX® rigs as the Canadian market continues a transition
to more multi-well pad drilling.
"As of March 31, 2015, we had term
contracts for drilling rigs providing for approximately
$1.24 billion of future dayrate
drilling revenue. Based on contracts currently in place, we
expect an average of 101 rigs operating under term contracts during
the second quarter, and an average of 83 rigs operating under term
contracts during the remaining three quarters of 2015. We
also expect approximately $19 million
of early termination revenues during the second quarter.
"In pressure pumping, our activity levels slowed dramatically in
the latter-half of the quarter as customers reduced their activity,
and we were unwilling to pursue work at what we consider extremely
low margins. Our gross profit margin of 14.8% was generally
in line with our expectation, while revenues decreased more than
expected sequentially to $250
million. With the decrease in revenues, pressure
pumping EBITDA decreased during the first quarter to $31.9 million," he concluded.
Mark S. Siegel, Chairman of
Patterson-UTI, stated, "Market conditions were challenging during
the first quarter given the steep decrease in the industry rig
count and well completion activity. Nonetheless, we
efficiently and effectively executed upon our plan during the
quarter to weather this downturn and to be well-positioned for a
recovery.
"Operationally, we promptly scaled our cost structure and
capital expenditures to the lower levels of activity.
Financially, we completed two debt financings during the first
quarter that increased our liquidity and enhanced our ability to
take advantage of future opportunities this downturn may create,"
he concluded.
The financial results for the three months ended March 31, 2015 include a pretax non-cash charge
of $3.4 million related to the
impairment of certain oil and natural gas properties, and a
$12.3 million charge, which is
included in selling, general and administrative expenses, and is
related to our settlement with the EEOC. Collectively, these
charges negatively impacted diluted earnings per share by
$0.06 for the three months ended
March 31, 2015. We also had
$15.8 million of revenues from the
early termination of drilling contracts that increased diluted
earnings per share by $0.06 for the
three months ended March 31,
2015. Taken together, the charges and early termination
revenues reduced net income by less than $100,000, and diluted earnings per share remains
$0.06 for the three months ended
March 31, 2015 when all of these
items are excluded from the calculation.
The Company declared a quarterly dividend on its common stock of
$0.10 per share, to be paid on
June 24, 2015 to holders of record as
of June 10, 2015.
All references to "net income per share" in this press release
are diluted earnings per common share as defined within Accounting
Standards Codification Topic 260.
The Company's quarterly conference call to discuss the operating
results for the quarter ended March 31,
2015 is scheduled for today, April
23, 2015 at 9:00 a.m. Central
Time. The dial-in information for participants is
877-546-5018 (Domestic) and 857-244-7550 (International). The
access code for both numbers is 67191816. The call is also
being webcast and can be accessed through the Investor Relations
section at www.patenergy.com. A replay of the conference call
will be on the Company's website for two weeks. A telephonic
replay will be available through April 27,
2015 at 888-286-8010 (Domestic) and 617-801-6888
(International) with the access code 88170007.
About Patterson-UTI
Patterson-UTI Energy, Inc. subsidiaries provide onshore contract
drilling and pressure pumping services to exploration and
production companies in North America. Patterson-UTI Drilling
Company LLC and its subsidiaries operate land-based drilling rigs
in oil and natural gas producing regions of the continental
United States and western
Canada. Universal Pressure Pumping, Inc. and Universal Well
Services, Inc. provide pressure pumping services primarily in
Texas and the Appalachian
region.
Location information about the Company's drilling rigs and their
individual inventories is available through the Company's website
at www.patenergy.com.
Statements made in this press release which state the
Company's or management's intentions, beliefs, expectations or
predictions for the future are forward-looking statements. It is
important to note that actual results could differ materially from
those discussed in such forward-looking statements. Important
factors that could cause actual results to differ materially
include, but are not limited to, volatility in customer spending
and in oil and natural gas prices, which could adversely affect
demand for our services and their associated effect on rates,
utilization, margins and planned capital expenditures; global
economic conditions; excess availability of land drilling rigs and
pressure pumping equipment, including as a result of reactivation
or construction; equipment specialization and new technologies;
adverse industry conditions; adverse credit and equity market
conditions; difficulty in building and deploying new equipment;
difficulty in integrating acquisitions; shortages, delays in
delivery and interruptions of supply of equipment, supplies and
materials; weather; loss of, or reduction in business with, key
customers; liabilities from operations; ability to effectively
identify and enter new markets; governmental regulation; ability to
realize backlog; and ability to retain management and field
personnel. Additional information concerning factors that could
cause actual results to differ materially from those in the
forward-looking statements is contained from time to time in the
Company's SEC filings, which may be obtained by contacting the
Company or the SEC. These filings are also available through the
Company's web site at http://www.patenergy.com or
through the SEC's Electronic Data Gathering and Analysis Retrieval
System (EDGAR) at http://www.sec.gov. We undertake no
obligation to publicly update or revise any forward-looking
statement.
|
|
PATTERSON-UTI
ENERGY, INC.
Consolidated
Condensed Statements of Operations
(unaudited, in
thousands, except per share amounts)
|
|
|
|
Three Months
Ended
March
31,
|
|
2015
|
2014
|
|
|
|
REVENUES
|
$ 657,699
|
$ 678,168
|
|
|
|
COSTS AND
EXPENSES
|
|
|
Direct operating
costs
|
428,333
|
454,141
|
Depreciation,
depletion, amortization and impairment
|
175,382
|
147,322
|
Selling, general and
administrative
|
32,797
|
19,673
|
Net gain on asset
disposals
|
(2,916)
|
(1,744)
|
Total costs and
expenses
|
633,596
|
619,392
|
|
|
|
OPERATING
INCOME
|
24,103
|
58,776
|
|
|
|
OTHER INCOME
(EXPENSE)
|
|
|
Interest
income
|
283
|
176
|
Interest
expense
|
(8,541)
|
(7,188)
|
Total other
expense
|
(8,258)
|
(7,012)
|
|
|
|
INCOME BEFORE INCOME
TAXES
|
15,845
|
51,764
|
INCOME TAX
EXPENSE
|
6,720
|
16,942
|
|
|
|
NET INCOME
|
$
9,125
|
$
34,822
|
|
|
|
NET INCOME PER COMMON
SHARE
|
|
|
Basic
|
$
0.06
|
$
0.24
|
Diluted
|
$
0.06
|
$
0.24
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING
|
|
|
Basic
|
144,983
|
142,892
|
Diluted
|
145,745
|
145,099
|
|
|
|
CASH DIVIDENDS PER
COMMON SHARE
|
$
0.10
|
$
0.10
|
|
|
PATTERSON-UTI
ENERGY, INC.
Additional Financial
and Operating Data
(unaudited, dollars
in thousands)
|
|
|
|
Three Months
Ended
March
31,
|
|
2015
|
2014
|
|
|
|
Contract
Drilling:
|
|
|
Revenues
|
$ 401,478
|
$ 425,903
|
Direct operating
costs
|
$ 212,810
|
$ 251,059
|
Margin (1)
|
$ 188,668
|
$ 174,844
|
Selling, general and
administrative
|
$ 13,698
|
$ 1,648
|
Depreciation,
amortization and impairment
|
$ 118,832
|
$ 106,119
|
Operating
income
|
$ 56,138
|
$ 67,077
|
|
|
|
Operating days –
United States
|
14,827
|
17,325
|
Operating days –
Canada
|
693
|
889
|
Total operating
days
|
15,520
|
18,214
|
|
|
|
Average revenue per
operating day – United States
|
$ 25.87
|
$ 23.00
|
Average direct
operating costs per operating day – United States
|
$ 13.50
|
$ 13.47
|
Average margin per
operating day – United States (1)
|
$ 12.37
|
$
9.53
|
Average rigs
operating – United States
|
165
|
193
|
|
|
|
Average revenue per
operating day – Canada
|
$ 25.76
|
$ 30.84
|
Average direct
operating costs per operating day – Canada
|
$ 18.18
|
$ 19.98
|
Average margin per
operating day – Canada (1)
|
$
7.58
|
$ 10.86
|
Average rigs
operating – Canada
|
8
|
10
|
|
|
|
Average revenue per
operating day – Total
|
$ 25.87
|
$ 23.38
|
Average direct
operating costs per operating day – Total
|
$ 13.71
|
$ 13.78
|
Average margin per
operating day – Total (1)
|
$ 12.16
|
$
9.60
|
Average rigs
operating – Total
|
172
|
202
|
|
|
|
Capital
expenditures
|
$ 157,422
|
$ 124,923
|
|
|
|
Pressure
Pumping:
|
|
|
Revenues
|
$ 249,721
|
$ 240,261
|
Direct operating
costs
|
$ 212,725
|
$ 199,808
|
Margin (2)
|
$ 36,996
|
$ 40,453
|
Selling, general and
administrative
|
$ 5,093
|
$ 4,868
|
Depreciation,
amortization and impairment
|
$ 46,919
|
$ 34,042
|
Operating
income
|
$ (15,016)
|
$ 1,543
|
|
|
|
Fracturing
jobs
|
216
|
243
|
Other jobs
|
618
|
880
|
Total jobs
|
834
|
1,123
|
|
|
|
Average revenue per
fracturing job
|
$ 1,097.87
|
$ 914.73
|
Average revenue per
other job
|
$ 20.36
|
$ 20.43
|
Total average revenue
per job
|
$ 299.43
|
$ 213.95
|
Total average direct
operating costs per job
|
$ 255.07
|
$ 177.92
|
Total average margin
per job (2)
|
$ 44.36
|
$ 36.02
|
Margin as a
percentage of revenues (2)
|
14.8%
|
16.8%
|
|
|
|
Capital
expenditures
|
$ 75,810
|
$ 36,297
|
|
|
|
Oil and Natural Gas
Production and Exploration:
|
|
|
Revenues –
Oil
|
$ 5,864
|
$ 10,331
|
Revenues – Natural
gas and liquids
|
$
636
|
$ 1,673
|
Revenues –
Total
|
$ 6,500
|
$ 12,004
|
Direct operating
costs
|
$ 2,798
|
$ 3,274
|
Margin (3)
|
$ 3,702
|
$ 8,730
|
Depletion
|
$ 4,900
|
$ 4,994
|
Impairment of oil and
natural gas properties
|
$ 3,364
|
$ 1,033
|
Operating
income
|
$
(4,562)
|
$ 2,703
|
|
|
|
Capital
expenditures
|
$ 7,592
|
$ 8,684
|
|
|
|
Corporate and
Other:
|
|
|
Selling, general and
administrative
|
$ 14,006
|
$ 13,157
|
Depreciation
|
$ 1,367
|
$ 1,134
|
Net gain on asset
disposals
|
$
(2,916)
|
$
(1,744)
|
|
|
|
Capital
expenditures
|
$
642
|
$
468
|
|
|
|
Total capital
expenditures
|
$ 241,466
|
$ 170,372
|
|
(1)
|
For Contract
Drilling, margin is defined as revenues less direct operating costs
and excludes depreciation, amortization and impairment and selling,
general and administrative expenses. Average margin per operating
day is defined as margin divided by operating days.
|
|
(2)
|
For Pressure Pumping,
margin is defined as revenues less direct operating costs and
excludes depreciation, amortization and impairment and selling,
general and administrative expenses. Total average margin per job
is defined as margin divided by total jobs. Margin as a percentage
of revenues is defined as margin divided by revenues.
|
|
(3)
|
For Oil and Natural
Gas Production and Exploration, margin is defined as revenues less
direct operating costs and excludes depletion and
impairment.
|
|
|
|
|
March 31,
|
December
31,
|
Selected Balance Sheet
Data (unaudited):
|
2015
|
2014
|
Cash and cash
equivalents
|
$
86,917
|
$
43,012
|
Current
assets
|
$
687,620
|
$
909,092
|
Current
liabilities
|
$
560,616
|
$
568,404
|
Working
capital
|
$
127,004
|
$
340,688
|
Current portion of
long-term debt
|
$
35,000
|
$
12,500
|
Borrowings under
revolving credit facility
|
$
—
|
$
303,000
|
Other long-term
debt
|
$
845,000
|
$
670,000
|
|
|
|
|
|
|
|
|
PATTERSON-UTI
ENERGY, INC.
Non-U.S. GAAP
Financial Measures
(unaudited, dollars
in thousands)
|
|
|
|
|
|
|
|
Three Months
Ended
March
31,
|
|
2015
|
2014
|
Adjusted Earnings
Before Interest, Taxes, Depreciation and Amortization (Adjusted
EBITDA)(1):
|
|
|
Net income
|
$ 9,125
|
$ 34,822
|
Income tax
expense
|
6,720
|
16,942
|
Net interest
expense
|
8,258
|
7,012
|
Depreciation,
depletion, amortization and impairment
|
175,382
|
147,322
|
Adjusted
EBITDA
|
$
199,485
|
$
206,098
|
|
|
|
Total
revenue
|
$ 657,699
|
$ 678,168
|
|
|
|
Adjusted EBITDA
margin
|
30.3%
|
30.4%
|
|
|
|
Adjusted EBITDA by
operating segment:
|
|
|
Contract
drilling
|
$ 174,970
|
$ 173,196
|
Pressure
pumping
|
31,903
|
35,585
|
Oil and natural
gas
|
3,702
|
8,730
|
Corporate and
other
|
(11,090)
|
(11,413)
|
Consolidated Adjusted
EBITDA
|
$
199,485
|
$
206,098
|
|
|
|
|
(1)
|
Adjusted EBITDA is
not defined by accounting principles generally accepted in the
United States of America ("U.S. GAAP"). We present Adjusted EBITDA
(a non-U.S. GAAP measure) because we believe it provides additional
information with respect to both the performance of our fundamental
business activities and our ability to meet our capital
expenditures and working capital requirements. Adjusted EBITDA
should not be construed as an alternative to the U.S. GAAP measures
of net income or operating cash flow.
|
|
PATTERSON-UTI
ENERGY, INC.
Impact of Adjustments
Three Months Ended March 31, 2015
(unaudited, dollars in thousands, except per share
amount)
|
|
|
|
|
|
Charges
|
Early
Termination Revenues
|
Net
Impact
|
|
|
|
|
Impairment of oil and
natural gas properties
|
$
(3,364)
|
$
—
|
$
(3,364)
|
Legal
settlement
|
(12,260)
|
—
|
(12,260)
|
Early termination
revenues
|
—
|
15,794
|
15,794
|
Pre-tax
amount
|
$
(15,624)
|
$
15,794
|
$
170
|
|
|
|
|
Effective tax
rate
|
42.4%
|
42.4%
|
42.4%
|
|
|
|
|
After-tax
amount
|
$
(8,998)
|
$
9,096
|
$
98
|
|
|
|
|
Weighted average number
of common shares outstanding – diluted
|
145,745
|
145,745
|
145,745
|
|
|
|
|
Impact on net income
per share - diluted
|
$
(0.06)
|
$
0.06
|
$
—
|
|
|
|
|
To view the original version on PR Newswire,
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SOURCE PATTERSON-UTI ENERGY, INC.