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): June 17, 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.
June 17, 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.


Tudor, Pickering, Holt & Co.
2015 Hotter ‘N Hell Conference
June 17, 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
provider of contract drilling and
pressure pumping services
3

Contract Drilling
•
High quality fleet of land drilling
rigs including 156 APEX
®
rigs
•
Leader in walking rig technology
for pad drilling applications
•
Large footprint across North
American drilling markets
Pressure
Pumping
41%
Oil &
Natural
Gas
1%
Contract
Drilling
58%
Components of Revenue
Patterson-UTI reported results for the year ended December 31, 2014
4

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%
Oil &
Natural
Gas
1%
Contract
Drilling
58%
Components of Revenue

Contract Drilling

Improved Performance
0%
20%
40%
60%
80%
100%
120%
U.S. Rig Count Downturn
0%
20%
40%
60%
80%
100%
120%
2008 -
2009
Total Baker Hughes U.S. Land Rig
Count: -53%
Total PTEN U.S. Rig Count: -77%
2014 -
2015
Total PTEN U.S. Rig Count: -47%
Total
Baker
Hughes
U.S.
Land
Rig
Count:
-56%
Baker Hughes and Patterson-UTI U.S. Land Rig Counts as of June 12, 2015
7

A Rig Fleet Transformation
8
Other
Electric
APEX®
Mechanical
Patterson-UTI Energy Total Rig Fleet
Other
Electric
APEX®
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 June 12, 2015
53
4
49
44
11
161
12/31/2015
A leader in high specification drilling rigs
48
4
49
44
11
156
6/12/2015
APEX
®
Rig Fleet
9

West Texas
24 Rigs
Large Geographic Footprint
10
PTEN’s Active U.S. Land Drilling Rigs
as of June 12, 2015
Appalachia 
23 Rigs
East Texas
15 Rigs
Mid-Continent
8 Rigs
Mid-Continent
8 Rigs
Rockies
9 Rigs
South Texas
21 Rigs
North Dakota
13 Rigs

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

Increasing APEX
®
Drilling Activity
12
0
20
40
60
80
100
120
140
160
Active APEX
®
Rig Count

PTEN Relative Active Rig Count by Rig Class
13
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
APEX®
Other Electric
Mechanical

Greater Stability of Utilization
14
0%
20%
40%
60%
80%
100%
120%
APEX
®
Rig Utilization

Improving Average Rig Revenue Per Day
15
10,000
12,000
14,000
16,000
18,000
20,000
22,000
24,000
26,000
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
2010
2011
2012
2013
2014
2015
APEX® & Other Electric
Mechanical
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!

0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
% Horizontal
% Vertical
18
U.S. Rig Count % by Drilling Type
Continued Demand for APEX
®
Rigs
Source: Baker Hughes North America Rotary Rig Count

SCR
AC
Mechanical
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

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
2006
2007
2008
2009
2010
2011
2012
2013
2014
June
0
200
400
600
800
1000
1200
Fracturing Horsepower
Other Horsepower
Period End
2015E

Southwest Region:
Northeast Region:
Fracturing horsepower: 663,800
Other horsepower: 32,165
Fracturing horsepower: 326,30
Other horsepower: 55,400
A Significant Player in Regional Markets
Pressure Pumping Areas
30
Horsepower distribution as of March 31, 2015
Fracturing Horsepower
33%
67%

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

A Leader in Bi-Fuel Technology
33
•
One of the largest bi-fuel frac
fleets in the Marcellus
•
Approximately 1,950 stages
completed using natural gas as
a fuel source
•
Replaced approximately 1.3
million gallons of diesel with
cleaner burning natural gas
•
Eliminated 9.6 million pounds of
transportation loads on local
roads
http://patenergy.com/pressurepumping/services
33

Comprehensive Lab Services
http://patenergy.com/pressurepumping/services
34

Financial Flexibility

Investing in Our Company
36
$598
$637
$445
$453
$976
$1,012
$974
$662
$1,229
$710
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015E
Year End
Capital Expenditures and Acquisitions
($ in millions)
2015 Capital expenditure forecast as of April 23, 2015

Strong Financial Position
37
•
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
38
2006
2007
2008
2009
2010
2011
2012
2013
2014
1Q15
Period End
Line of Credit Availability
Cash
Total Liquidity
($ in millions)
Liquidity defined as end of period cash plus availability under revolving line of credit

Strong Financial Position
39
6%
2%
-4%
-2%
15%
13%
18%
14%
24%
21%
-10%
0%
10%
20%
30%
40%
50%
2006
2007
2008
2009
2010
2011
2012
2013
2014
1Q15
Period End
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
40

Additional References

42
Contract Drilling Capital Expenditures and Acquisitions
($ in millions)
Investing in Our Drilling Rig Fleet
2015 Capital expenditure forecast as of April 23, 2015
$531
$540
$361
$395
$656
$785
$745
$505
$772
$520
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015E
More than $5 billion invested since 2005

Investing in Pressure Pumping
43
$41
$48
$61
$43
$289
$198
$194
$123
$418
$165
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015E
Pressure Pumping Capital Expenditures and Acquisitions
($ in millions)
More Than $1.4 billion invested since 2005
2015 Capital expenditure forecast as of April 23, 2015

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
44

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
31.5%
33.9%
Adjusted EBITDA by operating segment:
Contract drilling
$
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
(1)
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).
PATTERSON-UTI ENERGY, INC.
Non-GAAP Financial Measures (Unaudited)
(dollars in thousands)
Non-GAAP Financial Measures
45
$
174,970
$
173,196
30.3%
30.4%

Non-GAAP Financial Measures
46
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%
(1) 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).
PATTERSON-UTI ENERGY, INC.
Non-GAAP Financial Measures (Unaudited)
(dollars in thousands)
-
-
-
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