UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): May 19, 2015

 

 

Patterson-UTI Energy, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   0-22664   75-2504748

(State or other jurisdiction

of incorporation)

  

(Commission

File Number)

  

(I.R.S. Employer

Identification No.)

 

450 Gears Road, Suite 500, Houston, Texas   77067
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: 281-765-7100

Not Applicable

Former name or former address, if changed since last report

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 7.01 Regulation FD Disclosure.

Patterson-UTI Energy, Inc. will deliver an investor presentation that includes the slides attached as Exhibit 99.1 to this Current Report on Form 8-K, which are incorporated herein by reference.

The information furnished pursuant to Item 7.01, including Exhibit 99.1 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, shall not otherwise be subject to the liabilities of that section and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference. The furnishing of these slides is not intended to constitute a representation that such information is required by Regulation FD or that the materials they contain include material information that is not otherwise publicly available.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

99.1 Investor presentation slides.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Patterson-UTI Energy, Inc.
May 19, 2015 By: /s/ John E. Vollmer III
Name: John E. Vollmer III

Title: Senior Vice President—Corporate Development,

          Chief Financial Officer and Treasurer

Exhibit Index

 

Exhibit
No.

   

Description

99.1    Investor presentation slides.


UBS
Global Oil and Gas Conference
May 19, 2015
Exhibit 99.1

Forward Looking Statements
2
This material and any oral statements made in connection with this material
include "forward-looking statements" within the meaning of the Securities Act of
1933 and the Securities Exchange Act of 1934.  Statements made which provide
the Company’s or management’s intentions, beliefs, expectations or predictions for
the future are forward-looking statements and are inherently uncertain. The
opinions, forecasts, projections or other statements other than statements of
historical fact, including, without limitation, plans and objectives of management of
the Company 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 the risk factors and other cautionary statements 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.  Statements
made in this presentation include non-GAAP financial measures.  The required
reconciliation to GAAP financial measures are included on our website and at the
end of this presentation.

Patterson-UTI Energy is a leading
Patterson-UTI Energy is a leading
provider of contract drilling and
provider of contract drilling and
pressure pumping services
pressure pumping services
3

Contract Drilling
•
High quality fleet of land drilling rigs
including 155 APEX
®
rigs
•
Leader in walking rig technology for
pad drilling applications
•
Large footprint across North
American drilling markets
Patterson-UTI reported results for the year ended December 31, 2014
4
Pressure
Pumping
41%

Pressure Pumping
•
High quality fleet of modern pressure
pumping equipment
•
A leader in natural gas bi-fuel
technology
•
Strong reputation for regional
knowledge and efficient operations
Patterson-UTI reported results for the year ended December 31, 2014
5
Pressure
Pumping
41%

Contract Drilling

Improved Performance
2008 -
2009
Total Baker Hughes U.S. Land Rig Count: -45%
Total PTEN U.S. Rig Count: -68%
2014 -
2015
Total PTEN U.S. Rig Count: -43%
Total Baker Hughes U.S. Land Rig Count: -54%
Baker Hughes and Patterson-UTI U.S. Land Rig Counts as of May 15, 2015
7

A Rig Fleet Transformation
8
Mechanical
Patterson-UTI Energy Total Rig Fleet
Mechanical
December 2009
Projected December 2015

…and Expected as of December 31, 2015
APEX-XK 1500™
APEX-XK 1000™
APEX WALKING
®
APEX 1500
®
APEX 1000
®
Total
APEX
®
Rigs
Class
APEX
®
Rigs as of May 19, 2015
53
4
49
44
11
161
12/31/2015
A leader in high specification drilling rigs
47
4
49
44
11
155
5/19/2015
APEX
®
Rig Fleet
9

Large Geographic Footprint
10
PTEN’s Active U.S. Land Drilling Rigs
as of May 15, 2015
Rockies
22 Rigs
Mid-Continent
8 Rigs
East Texas
14 Rigs
Appalachia
29 Rigs
South Texas
24 Rigs
Permian Basin
26 Rigs

Patterson-UTI Energy
…the impact of APEX®
rigs has been transformative!

Increasing APEX
®
Drilling Activity
12
Active APEX
®
Rig Count

PTEN Relative Active Rig Count by Rig Class
13

Greater Stability of Utilization
14
APEX
®
Rig Utilization

Improving Average Rig Revenue Per Day
15
Patterson-UTI Total Average Rig Revenue Per Day
Excludes
early-termination
revenues
during
the
third
and
fourth
quarter
of
2013
of
$3,600
per
day
and
$130
per day, respectively, and early-termination revenues during the first quarter of 2015 of $1,020 per day.

Adjusted EBITDA Contribution from High
Specification Rigs
16
Preferred rigs account for approximately
91% of Adjusted EBITDA in Contract Drilling
Excludes
early-termination
revenues
during
the
third
and
fourth
quarter
of
2013
of
$62.8
million
and
$2.4
million,
respectively, and early-termination revenue during the first quarter of 2015 of $15.8 million.

Patterson-UTI Energy
…the APEX®
rig outlook remains strong!

18
U.S. Rig Count % by Drilling Type
Continued Demand for APEX
®
Rigs
Source: Baker Hughes North America Rotary Rig Count

AC-powered rigs have increased as a
percentage of the horizontal rig count
Total U.S. Horizontal Rig Count by Power Type
Continued Demand for APEX
®
Rigs
Analysis
from
Patterson-UTI
Energy
based
on
data
from
RigData
and
company
filings.
19
Mechanical

Patterson-UTI Energy
…Patterson-UTI is a technology leader!

APEX WALKING
®
Rigs
21
•
Capable of walking with drill pipe
and collars racked in the mast
•
Full multi-directional walking
capability
•
Walking times average 45 minutes
for 10’
–
15’
well spacing
http://patenergy.com/drilling/technology/apexwalk
21

Strong Demand for Pad Drilling
22
•
Pad drilling is contributing to
increasing rig efficiency
•
Pad drilling capable rigs are
highly utilized
•
Most new APEX
®
rigs are
expected to have walking
systems
http://patenergy.com/drilling/technology
22

APEX-XK™
Rig Walking on Pad
23
http://patenergy.com/drilling/technology/apexwalk/
Video of APEX-XK™
Rig
23

The APEX-XK
™
24
•
Enhanced mobility including more
efficient rig up and rig down
•
Greater clearance under rig floor for
optional walking system
•
Advanced environmental spill
control integrated into drilling floor
•
Minimized number of truck loads for
rig moves
•
Available in both 1500 HP and 1000
HP
http://patenergy.com/drilling/technology
24

Enhancing our Position in Pad Drilling
25
Walking Systems Can be Added to Any Rig in Our Fleet…
…Allowing for True Multi-Directional Pad Drilling Capabilities
25

Enhancing our Position in Pad Drilling
26
http://patenergy.com/drilling/technology
26

Early Adopter of Natural Gas Engines
27
http://patenergy.com/drilling/technology
27

Pressure Pumping

Growing Pressure Pumping Business
29
Investments in Pressure Pumping…
…Have Increased Fleet Size and Quality
65
1,100

Southwest Region:
Northeast Region:
Fracturing horsepower: 663,800
Other horsepower: 32,165
Fracturing horsepower: 326,300
Other horsepower: 55,400
A Significant Player in Regional Markets
Pressure Pumping Areas
30
Horsepower distribution as of March 31, 2015

A Leader in Bi-Fuel Technology
•
Engines can burn a fuel mix
comprised of up to 70% natural
gas
•
Comparable torque and
horsepower to an all diesel
engine
•
Reduces operating costs by
lowering fuel costs
•
Good for environmental
sustainability
http://patenergy.com/pressurepumping/services
31

A Leader in Bi-Fuel Technology
32
http://patenergy.com/pressurepumping/services
32

Comprehensive Lab Services
http://patenergy.com/pressurepumping/services
33

Financial Flexibility

Investing in Our Company
35
Capital Expenditures and Acquisitions
($ in millions)
2015 Capital expenditure forecast as of April 23, 2015

Strong Financial Position
36
•
History of returning capital to investors
–
Cash Dividend
•
Initiated cash dividend in 2004
•
Doubled quarterly cash dividend to $0.10 per share in
February 2014
–
Stock Buyback
•
Total of $857 million repurchased since 2005
•
Approximately $187 million remaining authorization as of
March 31, 2015
•
Returned approximately $1.3 billion to shareholders
since 2005

Strong Financial Position
37
Total Liquidity
($ in millions)
Liquidity defined as end of period cash plus availability under revolving line of credit

Strong Financial Position
38
Net Debt to Capital Ratio
$600 million of debt not due until at least 2020

Why Invest in Patterson-UTI Energy?
•
Continuing Transformation
–
Committed to high-spec land rigs where
demand remains strong
–
Creating value through focus on well
site execution
•
Technology leader
–
Leader in walking rigs for pad drilling
–
Innovator in use of natural gas as a fuel
source for both drilling and pressure
pumping
•
Financially flexible
–
Strong balance sheet
–
History of share buybacks
–
Dividends
39

UBS
Global Oil and Gas Conference
May 19, 2015

Additional References

42
Contract Drilling Capital Expenditures and Acquisitions
($ in millions)
Investing in Our Drilling Rig Fleet
More than $5 billion invested since 2005
2015 Capital expenditure forecast as of April 23, 2015

Investing in Pressure Pumping
43
Pressure Pumping Capital Expenditures and Acquisitions
($ in millions)
More Than $1.4 billion invested since 2005
2015 Capital expenditure forecast as of April 23, 2015

Term Contract Coverage
•
Based on term contracts in place as of April 23, 2015
–
An average of 101 rigs expected under term contract in the
second quarter of 2015
–
An average of 83 rigs expected under term contract during
the last three quarters of 2015
•
Drilling term contract revenue backlog of $1.24 billion at
March 31, 2015
•
As previously disclosed on April 23, 2015, we expect 12
rigs to be early terminated during the second quarter of
2015.  We also expect approximately $19 million of early-
termination revenue during the second quarter.
44

Strong Financial Position
•
Total liquidity of approximately $587 million
–
$86.9 million of cash at March 31, 2015
–
$500 million revolver availability at April 27, 2015
•
$793.1 million net debt at March 31, 2015
–
21.5% Net Debt/Total Capitalization
–
$300 million of 4.97% Series A notes due October 5, 2020
–
$300 million of 4.27% Series B notes due June 14, 2022
–
$280 million of term loans maturing September 27, 2017
•
No equity sales in last 14 years
•
Reduced share count by 25.6 million shares since 2005
45

Three Months Ended
March 31,
Twelve Months Ended
December 31,
2015
2014
2014
2013
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization
(Adjusted EBITDA)(1):
Net income
$      9,125
$   34,822
$   162,664
$   188,009
Income tax expense
6,720
16,942
91,619
108,432
Net interest expense
8,258
7,012
28,846
27,441
Depreciation, depletion, amortization and impairment
175,382
147,322
718,730
597,469
Adjusted EBITDA
$199,485
$ 206,098
$1,001,859
$    921,351
Total revenue
$ 657,699
$  678,168
$3,182,291
$2,716,034
Adjusted EBITDA margin
30.3%
30.4%
31.5%
33.9%
Adjusted EBITDA by operating segment:
Contract drilling
$ 174,970
$ 173,196
$  765,874
$   704,990
Pressure pumping
31,903
35,585
236,676
217,228
Oil and natural gas
3,702
8,730
37,094
44,348
Corporate and other
(11,090)
(11,413)
(37,785)
(45,215)
Consolidated Adjusted EBITDA
$ 199,485
$ 206,098
$1,001,859
$   921,351
PATTERSON-UTI ENERGY, INC.
Non-GAAP Financial Measures (Unaudited)
(dollars in thousands)
Non-GAAP Financial Measures
46
The company makes use of financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”) to help in the
assessment of ongoing operating performance. These non-GAAP financial measures are reconciled to their most directly comparable GAAP measures in the tables above.
We define Adjusted EBITDA as net income plus net interest expense, income tax expense and depreciation, depletion, amortization and impairment expense. We present
Adjusted EBITDA 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 is not defined by GAAP and, as such, should not
be construed as an alternative to net income
(loss) or operating cash flow. We define margin as revenues less
direct operating costs.
We present margin because we believe it to be the component of our earnings most
impacted by the variability in our contract drilling and pressure pumping operations. Margin is not defined by GAAP and, as such, should not be construed as an alternative
to net income (loss).
(1)

Non-GAAP Financial Measures
47
2014
2013
2012
2011
2010
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization
(Adjusted EBITDA)(1):
Net income (loss)
$   162,664
$   188,009
$   299,477
$   322,413
$   116,942
Income tax expense (benefit)
91,619
108,432
176,196
187,938
72,856
Net interest expense (income)
28,846
27,441
22,196
15,465
11,098
Depreciation, depletion, amortization and impairment
718,730
597,469
526,614
437,279
333,493
Net impact of discontinued operations
-
-
-
(209)
1,778
Adjusted EBITDA
$
1,001,859
$    921,351
$1,024,483
$   962,886
$   536,167
Total revenue
$ 3,182,291
$2,716,034
$2,723,414
$2,565,943
$1,462,931
Adjusted EBITDA margin
31.5% 
33.9% 
37.6% 
37.5% 
36.7% 
PATTERSON-UTI ENERGY, INC.
Non-GAAP Financial Measures (Unaudited)
(dollars in thousands)
The company makes use of financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”) to help in the assessment of
ongoing operating performance. These non-GAAP financial measures are reconciled to their most directly comparable GAAP measures in the tables above. We define Adjusted
EBITDA as net income plus net interest expense, income tax expense and depreciation, depletion, amortization and impairment expense. We present Adjusted EBITDA 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 is not defined by GAAP and, as such, should not
be construed as an alternative to net income (loss) or operating cash flow. We
define margin as revenues less direct operating costs.
We present margin because we believe it to be the component of our earnings most impacted by the variability in our
contract drilling and pressure pumping operations. Margin is not
defined by GAAP and, as such, should not be construed as an alternative to net income (loss).
(1)
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