Patterson Uti Energy Inc (PTEN) SEC Filing 10-K Annual report for the fiscal year ending Tuesday, December 31, 2019

Exhibit 99.1

Contact: Mike Drickamer

Vice President, Investor Relations

Patterson-UTI Energy, Inc.

(281) 765-7170

Patterson-UTI Energy Reports Financial Results for the Three Months and Year Ended December 31, 2019

HOUSTON, Texas – February 6, 2020 – PATTERSON-UTI ENERGY, INC.

For the year ended December 31, 2019, the Company reported a net loss of $426 million, or $2.10 per share, compared to a net loss of $321 million, or $1.47 per share, for the year ended December 31, 2018.  Revenues for the year ended December 31, 2019 were $2.5 billion, compared to $3.3 billion for the year ended December 31, 2018.  

During 2019, the Company spent $250 million to repurchase 22.6 million shares pursuant to the Company’s share repurchase program.  The Company also reduced its long-term debt by $150 million during 2019 and extended debt maturities.  During the fourth quarter, the Company issued $350 million of senior, unsecured notes due 2029 in order to refinance $300 million of notes due 2022 and to reduce outstanding borrowings under a bank term loan.  The early repayment of notes due 2022 resulted in a pre-tax charge of $15.8 million during the fourth quarter.      

Andy Hendricks, Patterson-UTI’s Chief Executive Officer, stated, “We believe our rig count bottomed in the fourth quarter and will modestly increase in early-2020.  Lower than expected rig activity and higher than expected operating costs in the fourth quarter were the result of changes in our geographic mix and gaps in rig activity between jobs.  In the first quarter, increasing rig count in the Permian should more than offset lower activity in other markets.”

Mr. Hendricks continued, “In contract drilling, our rig count averaged 123 rigs in the fourth quarter, down from 142 rigs in the third quarter.  The decrease in activity primarily occurred early in the fourth quarter with our December rig count showing the first increase in a year.  For the first quarter, we expect activity will improve from December levels and result in an average rig count similar to the fourth quarter.  

“During the fourth quarter, the fluctuation in activity resulted in increased revenues and expenses associated with stacking rigs in some basins, while reactivating rigs in the Permian.  Additionally, gaps in the work schedule resulted in some rigs being stacked early in the quarter and being reactivated later in the quarter, which required us to carry extra labor while the rigs were not generating revenue or operating days.  Therefore, average rig revenue per operating day and average rig direct operating cost per day of $23,980 and $15,540, respectively, were both higher than expected.      

“As of December 31, 2019, we had term contracts for drilling rigs providing for approximately $605 million of future dayrate drilling revenue.  Based on contracts currently in place, we expect an average of 77 rigs operating under term contracts during the first quarter and an average of 58 rigs operating under term contracts during 2020.  

“In pressure pumping, our gross profit was $21.9 million for the fourth quarter, which included the benefit of a $10.8 million sales tax refund that reduced direct operating costs.  We started the fourth quarter with 14 active spreads and stacked one spread in October and two spreads in November, as activity declined throughout the quarter.  We expect to average 10 active spreads for the first quarter and will be negatively impacted by the sudden operational stoppage of a major oil company customer, however, due to the actions we have taken and continue to take, we believe that pressure pumping results should improve later in the year.