HOUSTON, April 28, 2016 /PRNewswire/ -- PATTERSON-UTI ENERGY, INC. (NASDAQ: PTEN) today reported financial results for the three months ended March 31, 2016.  The Company reported a net loss of $70.5 million, or $0.48 per share, for the first quarter of 2016, compared to net income of $9.1 million, or $0.06 per share, for the quarter ended March 31, 2015.  Revenues for the first quarter of 2016 were $269 million, compared to $658 million for the first quarter of 2015.

Andy Hendricks, Patterson-UTI's Chief Executive Officer, stated, "During the first quarter, our rig count averaged 71 rigs in the United States and three rigs in Canada, compared to the fourth quarter average of 88 rigs in the United States and three in Canada.  For the month of April, we expect our average rig count will be 56 in the United States, and in Canada we expect a minimal number of operating days due to the industry downturn and spring breakup." 

Mr. Hendricks added, "We recognized $16.8 million of revenues related to early contract terminations in our drilling business during the first quarter.  These early termination revenues positively impacted our total average rig revenue per day of $25,340 by $2,520.  Excluding early termination revenue from both the fourth and first quarters, total average rig revenue per day during the first quarter would have been $22,820 compared to $23,140 in the fourth quarter.

"Total average rig operating costs per day during the first quarter decreased $490 to $12,150 from $12,640 in the fourth quarter.  This decrease is due in part to a reduction in our workers' compensation reserves, resulting from our strong and consistent operational record.  In addition, the proportion of rigs on standby increased during the quarter, further reducing the average rig operating costs per day as rigs on standby have very little associated cost.  Total average rig margin per day, excluding the positive impact from early termination revenues in both the fourth and first quarters, increased to $10,660 during the first quarter, from $10,500 during the fourth quarter.

"As of March 31, 2016, we had term contracts for drilling rigs providing for approximately $580 million of future dayrate drilling revenue.  Based on contracts currently in place, we expect an average of 43 rigs operating under term contracts during the second quarter, and an average of 40 rigs operating under term contracts during the remaining three quarters of 2016.  We also expect approximately $5 million of early termination revenues during the second quarter.

"In pressure pumping, industry activity decreased further in the first quarter, and pricing remains unsustainable.  We believe it is prudent to be disciplined in the use of our assets and have chosen to stack horsepower rather than operate the equipment at pricing levels that do not generate acceptable cash flow.  With the lower activity levels and our stacking of horsepower during the first quarter, pressure pumping revenues decreased 27% to $96.3 million from $132 million in the fourth quarter.  Gross margin as a percentage of revenues decreased to 8.8% during the first quarter from 10.4% in the fourth quarter.  Pressure pumping Adjusted EBITDA was $5.6 million in the first quarter compared to $10.9 million in the fourth quarter," he concluded.

Mark S. Siegel, Chairman of Patterson-UTI, stated, "We believe the U.S. rig count is beginning to stabilize as crude oil prices have improved from the cyclical lows reached in the first quarter.  The outlook for crude oil prices remains uncertain with numerous economic and geopolitical concerns.  For this reason, visibility into the timing of a recovery remains limited, and we do not believe current oil prices in the mid-$40s are sufficient to support a meaningful increase in U.S. drilling activity.

"Despite limited visibility into a recovery, we remain optimistic about a recovery in our cyclical industry.  The severe downturn in the rig count has brought the U.S. rig count to the lowest level in more than 65 years.  We believe this unprecedented low level of U.S. drilling activity will further reduce U.S. oil production and help to balance oil supply and demand.  At Patterson-UTI, we remain focused on operational execution and preserving the strength of our balance sheet. 

"Our cash position in the quarter improved by more than $73 million to $187 million, and our revolver remains undrawn.  To further improve our liquidity position in advance of the opportunities arising from a cyclical recovery, we have elected to reduce our quarterly dividend to $0.02 per share, which should save the Company approximately $47 million on an annual basis," he concluded.

The Company declared a quarterly dividend on its common stock of $0.02 per share, to be paid on June 23, 2016, to holders of record as of June 9, 2016.

The financial results for the three months ended March 31, 2016 include a pretax non-cash charge of $2.2 million ($1.5 million after-tax or $0.01 per share) related to the impairment of certain oil and natural gas properties.

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, 2016, is scheduled for today, April 28, 2016, at 9:00 a.m. Central Time. The dial-in information for participants is 866-841-7265 (Domestic) and 704-908-0463 (International).  The passcode for both numbers is 51014956.  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. 

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 low commodity prices, reactivation or construction; liabilities from operations; decline in, and ability to realize, backlog; 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; legal proceedings; ability to effectively identify and enter new markets; governmental regulation; 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.

Condensed Consolidated Statements of Operations

(unaudited, in thousands, except per share data)



Three Months Ended


March 31,


2016

2015

REVENUES

$

268,939

$

657,699

COSTS AND EXPENSES







Direct operating costs

170,801


428,333

Depreciation, depletion, amortization and impairment

176,770


175,382

Selling, general and administrative

17,972


20,537

Other operating (income) expense, net

(1,345)


9,344









Total costs and expenses

364,198


633,596









OPERATING INCOME (LOSS)

(95,259)


24,103









OTHER INCOME (EXPENSE)







Interest income

110


283

Interest expense

(10,800)


(8,541)

Other

16


—









Total other expense

(10,674)


(8,258)









INCOME (LOSS) BEFORE INCOME TAXES

(105,933)


15,845

INCOME TAX EXPENSE (BENEFIT)

(35,430)


6,720









NET INCOME (LOSS)

$

(70,503)

$

9,125









NET INCOME (LOSS) PER COMMON SHARE







Basic

$

(0.48)

$

0.06

Diluted

$

(0.48)

$

0.06

WEIGHTED AVERAGE NUMBER OF COMMON

   SHARES OUTSTANDING







Basic

145,770


144,983









Diluted

145,770


145,745









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,


2016

2015

Contract Drilling:







Revenues

$

168,659

$

401,478

Direct operating costs

$

80,898

$

212,810

Margin (1)

$

87,761

$

188,668

Selling, general and administrative

$

1,758

$

1,438

Depreciation, amortization and impairment

$

121,099

$

118,832

Operating income (loss)

$

(35,096)

$

68,398









Operating days – United States

6,425


14,827

Operating days – Canada

232


693

Operating days – Total

6,657


15,520









Average revenue per operating day – United States

$

25.27

$

25.87

Average direct operating costs per operating day – United States

$

11.85

$

13.50

Average margin per operating day – United States (1)

$

13.42

$

12.37

Average rigs operating – United States

71


165









Average revenue per operating day – Canada

$

27.15

$

25.76

Average direct operating costs per operating day – Canada

$

20.63

$

18.18

Average margin per operating day – Canada (1)

$

6.53

$

7.58

Average rigs operating – Canada

3


8









Average revenue per operating day – Total

$

25.34

$

25.87

Average direct operating costs per operating day – Total

$

12.15

$

13.71

Average margin per operating day – Total (1)

$

13.18

$

12.16

Average rigs operating – Total

73


172









Capital expenditures

$

11,880

$

157,422









Pressure Pumping:







Revenues

$

96,313

$

249,721

Direct operating costs

$

87,813

$

212,725

Margin (2)

$

8,500

$

36,996

Selling, general and administrative

$

2,889

$

5,093

Depreciation, amortization and impairment

$

49,570

$

46,919

Operating loss

$

(43,959)

$

(15,016)









Fracturing jobs

83


216

Other jobs

158


618

Total jobs

241


834









Average revenue per fracturing job

$

1,132.71

$

1,097.87

Average revenue per other job

$

14.54

$

20.36

Average revenue per total job

$

399.64

$

299.43

Average costs per total job

$

364.37

$

255.07

Average margin per total job (2)

$

35.27

$

44.36

Margin as a percentage of revenues (2)

8.8

%

14.8

%









Capital expenditures and acquisitions

$

7,552

$

75,810









Oil and Natural Gas Production and Exploration:







Revenues – Oil

$

3,357

$

5,864

Revenues – Natural gas and liquids

$

610

$

636

Revenues – Total

$

3,967

$

6,500

Direct operating costs

$

2,090

$

2,798

Margin (3)

$

1,877

$

3,702

Depletion

$

2,531

$

4,900

Impairment of oil and natural gas properties

$

2,201

$

3,364

Operating loss

$

(2,855)

$

(4,562)









Capital expenditures

$

1,528

$

7,592









Corporate and Other:







Selling, general and administrative

$

13,325

$

14,006

Depreciation

$

1,369

$

1,367

Other operating (income) expense, net

$

(1,345)

$

9,344









Capital expenditures

$

341

$

642

Total capital expenditures

$

21,301

$

241,466


(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, dollars in thousands):

2016

2015

Cash and cash equivalents

$

186,557

$

113,346

Current assets

$

494,211

$

486,536

Current liabilities

$

313,384

$

307,649

Working capital

$

180,827

$

178,887

Current portion of long-term debt

$

76,970

$

63,267

Borrowings under revolving credit facility

$

—

$

—

Other long-term debt

$

764,559

$

787,900

 

PATTERSON-UTI ENERGY, INC.

Non-U.S. GAAP Financial Measures

(unaudited, dollars in thousands)



Three Months Ended


March 31,


2016

2015

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA)(1):







Net income (loss)

$

(70,503)

$

9,125

Income tax expense (benefit)

(35,430)


6,720

Net interest expense

10,690


8,258

Depreciation, depletion, amortization and impairment

176,770


175,382









Adjusted EBITDA

$

81,527

$

199,485









Total revenue

$

268,939

$

657,699

Adjusted EBITDA margin

30.3

%

30.3

%









Adjusted EBITDA by operating segment:







Contract drilling

$

86,003

$

187,230

Pressure pumping

5,611


31,903

Oil and natural gas

1,877


3,702

Corporate and other

(11,964)


(23,350)









Consolidated Adjusted EBITDA

$

81,527

$

199,485


(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 (loss) or operating cash flow.

 

PATTERSON-UTI ENERGY, INC.

Impact of Early Termination Revenues

(unaudited, dollars in thousands)



2016

2015


First

Fourth


Quarter

Quarter

Contract drilling revenues

$

168,659

$

202,276

Operating days - Total

6,657


8,344

Average revenue per operating day - Total

$

25.34

$

24.24

Early termination revenues - Total

$

16,776

$

9,173

Early termination revenues per operating day - Total

$

2.52

$

1.10

Average revenue per operating day excluding early termination revenues - Total

$

22.82

$

23.14

Direct operating costs - Total

$

80,898

$

105,472

Average direct operating costs per operating day - Total

$

12.15

$

12.64

Average margin per operating day excluding early termination revenues - Total

$

10.66

$

10.50

 

PATTERSON-UTI ENERGY, INC.

Pressure Pumping Margin and Adjusted EBITDA

(unaudited, dollars in thousands)



2016

2015


First

Fourth


Quarter

Quarter









Pressure pumping revenues

$

96,313

$

131,702

Direct operating costs

87,813


117,943

Margin

8,500


13,759

Selling, general and administrative

2,889


2,855

Adjusted EBITDA

$

5,611

$

10,904

Margin as a percentage of revenues

8.8

%

10.4

%

 

Patterson-UTI Energy, Inc.

Impact of Non-Cash Charge

Three Months Ended March 31, 2016

(unaudited, dollars in thousands, except per share amount)

Impairment of oil and natural gas properties

$

(2,201)





Effective tax rate

33.4

%





After tax amount

$

(1,466)





Weighted average number of common shares outstanding - diluted

145,770





Non-cash charge per share - diluted

$

(0.01)

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/patterson-uti-energy-reports-financial-results-for-three-months-ended-march-31-2016-300258894.html

SOURCE PATTERSON-UTI ENERGY, INC.

Copyright 2016 PR Newswire

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