Patterson Uti Energy Inc (PTEN) SEC Filing 10-Q Quarterly report for the period ending Sunday, September 30, 2018

Exhibit 99.1

Contact: Mike Drickamer

Vice President, Investor Relations

Patterson-UTI Energy, Inc.

(281) 765-7170

Patterson-UTI Energy Reports Financial Results for Three and Nine Months Ended September 30, 2018

Share Repurchases of $50 Million in Third Quarter

HOUSTON, Texas – October 25, 2018 – PATTERSON-UTI ENERGY, INC. (NASDAQ: PTEN) today reported financial results for the three months ended September 30, 2018.  The Company reported a net loss of $75.0 million, or $0.34 per share, for the third quarter of 2018, compared to a net loss of $33.8 million, or $0.16 per share, for the quarter ended September 30, 2017.  The Company recorded $65.9 million of non-cash impairment charges in the third quarter.  Excluding the impairment charges discussed in more detail below, the net loss for the third quarter of 2018 would have been $21.1 million, or $0.10 per share.  Revenues for the third quarter of 2018 were $867 million, compared to $685 million for the third quarter of 2017.  

For the nine months ended September 30, 2018, the Company reported a net loss of $120 million, or $0.55 per share, compared to a net loss of $189 million, or $0.99 per share, for the nine months ended September 30, 2017.  Revenues for the nine months ended September 30, 2018 were $2.5 billion, compared to $1.6 billion for the same period in 2017.

Financial results for the third quarter include pre-tax impairment charges totaling $65.9 million ($54.0 million after-tax) of which $48.4 million is related to the retirement of 42 legacy non-APEX® rigs and related equipment, and $17.4 million is for pressure pumping equipment.  Based on the strong customer preference across the industry for super-spec drilling rigs, we believe the 42 rigs being retired have limited commercial opportunity.  The pressure pumping equipment is primarily obsolete sand handling equipment, which has been replaced with more efficient sand solutions.  

During the third quarter, the Company repurchased approximately 2.9 million of its outstanding shares for $50.0 million.  During the nine months ended September 30, 2018, the Company repurchased approximately 5.5 million of its outstanding shares for $100 million.  At September 30, 2018, the remaining amount under the Company’s share repurchase authorization was approximately $200 million.

Andy Hendricks, Patterson-UTI’s Chief Executive Officer, stated, “In contract drilling, our rig count averaged 178 rigs during the third quarter, an increase of two rigs from the second quarter.  Demand for super-spec rigs remains strong, and we expect our fourth quarter rig count will average 182.”

Mr. Hendricks added, “High utilization for super-spec rigs contributed to a $410 per day sequential increase in average rig revenue per day to $22,280.  Average rig operating costs per day for the third quarter were $13,810, resulting in an average rig margin per day for the third quarter of $8,470 – a sequential increase of $200.  

“Since the beginning of 2018, we have completed 12 major rig upgrades, including one thus far in the fourth quarter.  Our major upgrades primarily consist of turning lower-capacity rigs, which were originally intended for shallower wells, such as those in the Barnett Shale, into rigs with current super-spec capabilities.  Our major upgrades have similar components, specifications, and expected useful lives as newbuild rigs, but require a significantly lower capital investment.  We currently have customer contracts for two additional major upgrades to be completed later in the fourth quarter, and two in early-2019.