HOUSTON, Oct. 30 /PRNewswire-FirstCall/ -- PATTERSON-UTI ENERGY, INC.
(Nasdaq: PTEN) today reported net income of $108.7 million, or $0.70 per
share, for the three months ended September 30, 2008, compared to net income
of $98.2 million, or $0.62 per share, for the three months ended September 30,
2007. Revenues for the third quarter of 2008 were $609 million, compared to
revenues of $524 million for the third quarter of 2007.
The Company reported net income of $268 million, or $1.72 per share, for
the nine months ended September 30, 2008, compared to net income of
$354 million, or $2.24 per share, for the nine months ended September 30,
2007. Revenues for the first nine months of 2008 were $1.64 billion, compared
to revenues of $1.59 billion for the first nine months of 2007.
The results for the nine months ended September 30, 2007 include pre-tax
nonrecurring gains of $59.6 million. These gains, net of tax, increased net
income for the nine months ended September 30, 2007 by $38.7 million, or
$0.25 per share.
Commenting on the second quarter's results, Douglas J. Wall,
Patterson-UTI's Chief Executive Officer, stated, "We had an average of 276
rigs operating, comprised of 264 in the U.S. and 12 in Canada. This
represents an increase of 32 average rigs operating over the second quarter of
2008."
Mr. Wall added, "Average revenue per operating day for the three months
ended September 30, 2008 was $19,620, an increase of $880 over the prior
three-month period ended June 30, 2008. Average direct operating costs per
operating day for the third quarter decreased by $170 to $11,130 compared to
the three months ended June 30, 2008. As a result, average margin per
operating day in the third quarter was $8,490, an increase of $1,050 over the
second quarter of 2008."
"During the third quarter, we continued to see high levels of demand from
our customers and dayrates continued to increase. We estimate that our
October rig count increased to 283 average rigs operating comprised of 270 in
the U.S. and 13 in Canada. Our average rigs operating in the U.S. have
increased by 40 since December 2007, including the activation of 13 new rigs
and the reactivation of rigs from our existing fleet."
"Revenues in our pressure pumping operations in Appalachia continued to
improve during the third quarter. In anticipation of increased activity
associated with the Marcellus Shale, we have added equipment and people over
the past year. However, delays in the development of the Marcellus Shale have
caused a slower ramp-up of customer activity than we had expected, negatively
impacting profitability of this business," Mr. Wall added.
Mark S. Siegel, Chairman of Patterson-UTI stated, "In light of recent
declines in commodity prices and the severe contraction of credit markets, we
have been expecting a decline in rig activity. While October has generally
been marked by increased activity, we have very recently seen some weakness in
our rig count, and have been advised by certain customers of their plans to
reduce their drilling programs. Thus, we expect that our rig count will
decline -- consistent with the industry's downturn -- in the next couple
months."
Mr. Siegel added, "As we enter a more challenging period, we are pleased
that we have a strong balance sheet with no long-term debt and $333 million in
working capital as of September 30, 2008. Moreover, our experienced
management team has dealt with industry downturns before and has plans in
place to do so again.
"Furthermore, we believe that we will be able to use this period to
continue to build shareholder value by investing in our rig fleet, buying back
stock and paying dividends. During the third quarter, we activated 5 new
rigs, and bought back $50.3 million of our common stock and have $129 million
of authority remaining under our previously announced buyback plan. Over the
next two years, we expect to construct 34 new advanced technology rigs, and
currently have long-term contracts for 25 of these rigs."
"Finally, our experience has shown that decreases in rig activity have
ultimately led to decreases in supply of natural gas, which in turn has
generated higher commodity prices and then increased drilling. This 'virtuous
cycle' in the land-drilling industry leads us to be highly confident about our
industry over the long-term", Mr. Siegel added.
The Company also declared a quarterly cash dividend on its Common Stock of
$0.16 per share, to be paid on December 30, 2008, to holders of record as of
December 12, 2008. Based on our closing stock price on October 29, 2008, this
equates to an annualized yield of approximately 5.2%.
All references to "net income per share" in this press release are diluted
earnings per common share as defined within Statement of Financial Accounting
Standards No. 128.
The Company will hold its conference call to discuss third quarter results
on Thursday, October 30, 2008, at 10:00 a.m. Eastern Time (9:00 a.m. Central
Time and 7:00 a.m. Pacific Time). This call is being webcast and can be
accessed through Patterson-UTI's web site at http://www.patenergy.com or at
http://www.streetevents.com in the Individual Investor Center. Webcast
participants should go to one of the web addresses above 10-15 minutes prior
to the scheduled start time. Replay of the conference call webcast will be
available at these sites through Wednesday, November 12, 2008.
About Patterson-UTI
Patterson-UTI Energy, Inc. provides onshore contract drilling services to
exploration and production companies in North America. The Company has
approximately 350 currently marketable land-based drilling rigs that operate
primarily in the oil and natural gas producing regions of Texas, New Mexico,
Oklahoma, Arkansas, Louisiana, Mississippi, Alabama, Colorado, Utah, Wyoming,
Montana, North Dakota, South Dakota, Pennsylvania and western Canada.
Patterson-UTI Energy, Inc. is also engaged in the businesses of pressure
pumping services and drilling and completion fluid services. Additionally, the
Company has an exploration and production business.
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, declines in oil and natural gas
prices that could adversely affect demand for the Company's services, and
their associated effect on day rates, rig utilization and planned capital
expenditures, excess availability of land drilling rigs, including as a result
of the reactivation or construction of new land drilling rigs, adverse
industry conditions, difficulty in integrating acquisitions, demand for oil
and natural gas, shortages of rig equipment 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 Income (Unaudited)
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
------------ ------------ ------------ ------------
REVENUES $608,532 $524,002 $1,639,369 $1,593,661
COSTS AND EXPENSES
Direct operating
costs (excluding
depreciation,
depletion
and impairment) 357,038 297,661 979,375 882,798
Depreciation,
depletion
and impairment 67,998 66,523 197,397 182,401
Selling, general and
administrative 17,469 16,593 52,212 47,584
Embezzlement recoveries - (1,145) - (43,080)
Gain on disposal of
assets (505) (330) (3,040) (16,603)
Other operating
expenses 1,250 600 1,850 1,600
------------ ------------ ------------ ------------
Total Costs and
Expenses 443,250 379,902 1,227,794 1,054,700
------------ ------------ ------------ ------------
OPERATING INCOME 165,282 144,100 411,575 538,961
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE)
Interest expense (125) (357) (465) (1,951)
Interest income 601 1,091 1,437 1,917
Other 44 42 781 245
------------ ------------ ------------ ------------
Total Other Income 520 776 1,753 211
------------ ------------ ------------ ------------
INCOME BEFORE INCOME
TAXES 165,802 144,876 413,328 539,172
INCOME TAX EXPENSE 57,056 46,695 145,751 185,639
------------ ------------ ------------ ------------
NET INCOME $108,746 $98,181 $267,577 $353,533
============ ============ ============ ============
NET INCOME PER COMMON
SHARE
Basic $0.70 $0.63 $1.74 $2.28
============ ============ ============ ============
Diluted $0.70 $0.62 $1.72 $2.24
============ ============ ============ ============
WEIGHTED AVERAGE
NUMBER OF
COMMON SHARES
OUTSTANDING
Basic 154,266 154,934 153,617 155,281
============ ============ ============ ============
Diluted 155,919 157,339 155,655 157,491
============ ============ ============ ============
CASH DIVIDENDS PER
COMMON SHARE $0.16 $0.12 $0.44 $0.32
============ ============ ============ ============
PATTERSON-UTI ENERGY, INC.
Additional Financial and Operating Data (Unaudited)
(dollars in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
------------ ------------ ------------ ------------
Contract Drilling:
Revenues $498,510 $428,316 $1,335,494 $1,315,005
Direct operating
costs (excluding
depreciation) $282,698 $242,352 $778,446 $716,803
Selling, general and
administrative $1,382 $1,616 $4,203 $4,467
Depreciation $57,187 $56,105 $170,421 $156,075
Operating income $157,243 $128,243 $382,424 $437,660
Operating days 25,403 22,362 69,881 66,931
Average revenue per
operating day $19.62 $19.15 $19.11 $19.65
Average direct
operating costs
per operating day $11.13 $10.84 $11.14 $10.71
Average rigs operating 276 243 255 245
Capital expenditures $125,892 $120,192 $260,918 $403,381
Pressure Pumping:
Revenues $60,618 $58,498 $160,576 $148,674
Direct operating costs
(excluding
depreciation) $36,576 $28,682 $97,587 $75,610
Selling, general and
administrative $6,109 $4,882 $17,550 $13,758
Depreciation $5,073 $3,702 $13,850 $10,234
Operating income $12,860 $21,232 $31,589 $49,072
Total jobs 3,732 4,065 10,043 10,477
Average revenue per job $16.24 $14.39 $15.99 $14.19
Average costs per job $9.80 $7.06 $9.72 $7.22
Capital expenditures $17,607 $11,047 $48,255 $41,678
Drilling and Completion
Fluids:
Revenues $35,734 $27,348 $107,029 $97,775
Direct operating
costs (excluding
depreciation) $33,426 $24,153 $93,408 $82,172
Selling, general and
administrative $2,478 $2,486 $7,621 $7,319
Depreciation $754 $728 $2,202 $2,121
Operating income (loss) $(924) $(19) $3,798 $6,163
Capital expenditures $1,398 $460 $2,931 $2,581
Oil and Natural Gas
Production and
Exploration:
Revenues $13,670 $9,840 $36,270 $32,207
Direct operating
costs (excluding
depreciation, depletion
and impairment) $4,338 $2,474 $9,934 $8,213
Selling, general and
administrative $ - $695 $ - $2,017
Depreciation, depletion
and impairment $4,778 $5,784 $10,312 $13,361
Operating income $4,554 $887 $16,024 $8,616
Capital expenditures $7,852 $4,153 $16,807 $13,804
Corporate and Other:
Selling, general and
administrative $7,500 $6,914 $22,838 $20,023
Depreciation $206 $204 $612 $610
Other operating
expenses $1,250 $600 $1,850 $1,600
Embezzlement recoveries $ - $(1,145) $ - $(43,080)
Gain on disposal of
assets $(505) $(330) $(3,040) $(16,603)
Capital expenditures $351 $ - $351 $ -
Total capital
expenditures $153,100 $135,852 $329,262 $461,444
September 30, December 31,
2008 2007
------------ ------------
Selected Balance Sheet Data
(Unaudited):
Cash and cash equivalents $25,019 $17,434
Current assets $632,096 $522,785
Total assets $2,658,549 $2,465,199
Current liabilities $299,373 $295,208
Borrowings outstanding
under line of credit $ - $50,000
Working capital $332,723 $227,577
