Last10K.com

Patterson Uti Energy Inc (PTEN) SEC Filing 8-K Material Event for the period ending Thursday, October 22, 2020

SEC Filings

Patterson Uti Energy Inc

CIK: 889900 Ticker: PTEN

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 and Nine Months Ended September 30, 2020

 

HOUSTON, Texas – October 22, 2020 – PATTERSON-UTI ENERGY, INC. (NASDAQ: PTEN) today reported financial results for the three and nine months ended September 30, 2020.  The Company reported a net loss of $112 million, or $0.60 per share, for the third quarter of 2020, compared to a net loss of $262 million, or $1.31 per share, for the third quarter of 2019.  Revenues for the third quarter of 2020 were $207 million, compared to $598 million for the third quarter of 2019.

 

For the nine months ended September 30, 2020, the Company reported a net loss of $697 million, or $3.70 per share, compared to a net loss of $340 million, or $1.65 per share, for the nine months ended September 30, 2019.  Revenues for the nine months ended September 30, 2020 were $903 million, compared to $2.0 billion for the same period in 2019.

 

Andy Hendricks, Patterson-UTI’s Chief Executive Officer, stated, “Our financial results during the third quarter exceeded our expectations across all of our business segments, as drilling and completion activity stabilized during the third quarter.  We further strengthened our financial position during the third quarter as our cash position increased by $57 million to $304 million.  Based on our customer engagement, we expect activity will continue to improve through at least the first quarter of 2021.  Assuming commodity prices remain around current levels, we expect our profitability will be at or near an inflection point in the fourth quarter and move higher in early-2021.”

 

Mr. Hendricks continued, “In contract drilling, our average rig count for the third quarter of 60 rigs slightly exceeded our expectation.  For the fourth quarter, we expect that our rig count will average 61 rigs, with a lower proportion of idle but contracted rigs as customers reactivate rigs during the fourth quarter.  We expect the rig count at the end of the year to be 63 rigs, of which approximately 10% will be idle but contracted.  

 

“Average rig margin per day during the third quarter was $10,170, which included benefits from lump sum early termination revenue and a credit to operating costs for sales and use taxes.  Excluding these items, average rig margin per day would have been $8,990, which exceeded our expectation.    

 

“As of September 30, 2020, we had term contracts for drilling rigs providing for approximately $305 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 fourth quarter, and an average of 35 rigs operating under term contracts during the four quarters ending September 30, 2021.  

 

“In pressure pumping, activity levels improved as we averaged five active spreads during the third quarter compared to four active spreads in the second quarter.  With the higher than expected activity during the third quarter, pressure pumping revenues improved 21% sequentially to $72.0 million.  Adjusted EBITDA improved to $6.2 million during the third quarter and exceeded pressure pumping capital expenditures of $1.7 million.    

 

“In directional drilling, revenues were $10.3 million, and operating margin was $0.5 million.  Results improved during the quarter, as we were able to increase activity and gain market share in what was essentially a flat rig market during the quarter.  The market share increase was a result of the enhanced performance of our new technology, the Mercury™ measurement while drilling system and new Mpact® directional drilling motor sizes, which were introduced in the first quarter of the year.”    

 


Mr. Hendricks continued, “Technology and performance will be an increasing differentiator, and we continue to move forward with remote operations capabilities for reduced costs, and automation technologies for improved performance and repeatability.  These improvements are enabled by the high-frequency data and metadata originating from the wellsite operations, as well as by digitalizing our processes and workflow.  These technology investments are capital-light and operate in a cloud data environment where, for example, in contract drilling and directional drilling, they can be added to our combined high-performance, super-spec rigs and directional systems.  

 

“We are also seeing increased interest in a number of our technology solutions as operators focus on ESG and carbon emission reductions.  We believe we have a leadership position in these technologies, including lithium battery hybrid-energy storage and automated energy transfer system, which reduce costs and lower emissions through the use of alternative energy sources.

 

“As always, we continue to focus on prudent capital stewardship and bolstering our already strong financial position.  Our liquidity improved to more than $900 million at September 30, 2020, including an increase of $57 million of cash to $304 million of cash and $600 million of availability under our undrawn revolver.  Patterson-UTI is well positioned to emerge from this downturn even stronger.”

 

The Company declared a quarterly dividend on its common stock of $0.02 per share, payable on December 17, 2020 to holders of record as of December 3, 2020.

 

Financial results for the nine months ended September 30, 2020 include pre-tax charges during the first two quarters totaling $461 million, consisting of $423 million of non-cash impairment charges and $38.3 million of restructuring costs.  Partially offsetting these charges is a pre-tax gain in the second quarter of $4.2 million included in other operating income from the realization of insurance proceeds.  The financial results for the nine months ended September 30, 2019 include pre-tax charges totaling $276 million.  

 

All references to "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 September 30, 2020, is scheduled for today, October 22, 2020, at 9:00 a.m. Central Time. The dial-in information for participants is (844) 494-0002 (Domestic) and (647) 253-8640 (International).  The conference ID for both numbers is 9968598.  The call is also being webcast and can be accessed through the Investor Relations section of the Company’s website at https://investor.patenergy.com.  A replay of the conference call will be on the Company’s website for two weeks.  



About Patterson-UTI

 

Patterson-UTI is a leading provider of oilfield services and products to oil and natural gas exploration and production companies in the United States, including contract drilling, pressure pumping and directional drilling services.  For more information, visit www.patenergy.com.  

 

Cautionary Statement Regarding Forward-Looking Statements

 

This press release contains forward-looking statements which are protected as forward-looking statements under the Private Securities Litigation Reform Act of 1995 that are not limited to historical facts, but reflect Patterson-UTI’s current beliefs, expectations or intentions regarding future events.  Words such as “anticipate,” “believe,” “budgeted,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “potential,” “project,” “pursue,” “should,” “strategy,” “target,” or “will,” and similar expressions are intended to identify such forward-looking statements.  The statements in this press release that are not historical statements, including statements regarding Patterson-UTI’s future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts, are forward-looking statements within the meaning of the federal securities laws.  These statements are subject to numerous risks and uncertainties, many of which are beyond Patterson-UTI's control, which could cause actual results to differ materially from the results expressed or implied by the statements.  These risks and uncertainties include, but are not limited to: adverse oil and natural gas industry conditions, including the rapid decline in crude oil prices as a result of economic repercussions from the recent COVID-19 pandemic; volatility in customer spending and in oil and natural gas prices, which could adversely affect demand for Patterson-UTI’s 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, improvement or construction; liabilities from operations; weather; decline in, and ability to realize, backlog; equipment specialization and new technologies, including the ability to develop and obtain satisfactory returns from new technology; shortages, delays in delivery and interruptions of supply of equipment and materials; ability to hire and retain personnel; loss of, or reduction in business with, key customers; cybersecurity risk; difficulty with growth and in integrating acquisitions and new technology; governmental regulation; perception of sustainability practices; product liability; legal proceedings, including technology disputes, and actions by governmental or other regulatory agencies; political, economic and social instability risk; ability to effectively identify and enter new markets; dependence on our subsidiaries to meet our long-term debt obligations; variable rate indebtedness risk; ability to maintain credit rating and service debt; stock price volatility; anti-takeover measures in our charter documents; contingent tax liabilities; and ability to use net operating losses.

 

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 Patterson-UTI’s SEC filings.  Patterson-UTI’s filings may be obtained by contacting Patterson-UTI or the SEC or through Patterson-UTI’s website at http://www.patenergy.com or through the SEC's Electronic Data Gathering and Analysis Retrieval System (EDGAR) at http://www.sec.gov.  Patterson-UTI undertakes 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

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

REVENUES

 

$

207,141

 

 

$

598,452

 

 

$

903,448

 

 

$

1,978,388

 

COSTS AND EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct operating costs

 

 

141,257

 

 

 

453,214

 

 

 

632,631

 

 

 

1,410,182

 

Depreciation, depletion, amortization and impairment

 

 

157,319

 

 

 

400,764

 

 

 

517,201

 

 

 

823,862

 

Impairment of goodwill

 

 

 

 

 

17,800

 

 

 

395,060

 

 

 

17,800

 

Selling, general and administrative

 

 

22,355

 

 

 

34,231

 

 

 

76,692

 

 

 

101,680

 

Credit loss expense

 

 

 

 

 

 

 

 

5,606

 

 

 

3,594

 

Restructuring expenses

 

 

 

 

 

 

 

 

38,338

 

 

 

 

Other operating expenses (income), net

 

 

776

 

 

 

(252

)

 

 

5,980

 

 

 

83

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total costs and expenses

 

 

321,707

 

 

 

905,757

 

 

 

1,671,508

 

 

 

2,357,201

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING LOSS

 

 

(114,566

)

 

 

(307,305

)

 

 

(768,060

)

 

 

(378,813

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

238

 

 

 

1,693

 

 

 

1,229

 

 

 

4,481

 

Interest expense, net of amount capitalized

 

 

(11,288

)

 

 

(20,739

)

 

 

(33,496

)

 

 

(47,021

)

Other

 

 

512

 

 

 

119

 

 

 

682

 

 

 

328

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total other expense

 

 

(10,538

)

 

 

(18,927

)

 

 

(31,585

)

 

 

(42,212

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS BEFORE INCOME TAXES

 

 

(125,104

)

 

 

(326,232

)

 

 

(799,645

)

 

 

(421,025

)

INCOME TAX BENEFIT

 

 

(12,993

)

 

 

(64,513

)

 

 

(102,480

)

 

 

(81,245

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

$

(112,111

)

 

$

(261,719

)

 

$

(697,165

)

 

$

(339,780

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS PER COMMON SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.60

)

 

$

(1.31

)

 

$

(3.70

)

 

$

(1.65

)

Diluted

 

$

(0.60

)

 

$

(1.31

)

 

$

(3.70

)

 

$

(1.65

)

WEIGHTED AVERAGE NUMBER OF COMMON

   SHARES OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

187,280

 

 

 

199,343

 

 

 

188,193

 

 

 

206,191

 

Diluted

 

 

187,280

 

 

 

199,343

 

 

 

188,193

 

 

 

206,191

 

CASH DIVIDENDS PER COMMON SHARE

 

$

0.02

 

 

$

0.04

 

 

$

0.08

 

 

$

0.12

 

 

 



PATTERSON-UTI ENERGY, INC.

 

Additional Financial and Operating Data

 

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

September 30,

 

 

September 30,

 

 

June 30,

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

2020

 

Contract Drilling:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

115,054

 

 

$

317,035

 

 

$

553,552

 

 

$

1,037,565

 

 

$

171,134

 

Direct operating costs

$

59,117

 

 

$

188,934

 

 

$

309,664

 

 

$

609,928

 

 

$

87,127

 

Margin (1)

$

55,937

 

 

$

128,101

 

 

$

243,888

 

 

$

427,637

 

 

$

84,007

 

Restructuring expenses

$

 

 

$

 

 

$

2,430

 

 

$

 

 

$

2,430

 

Other operating (income) expense, net

$

 

 

$

 

 

$

(4,155

)

 

$

 

 

$

(4,155

)

Selling, general and administrative

$

876

 

 

$

1,510

 

 

$

3,684

 

 

$

4,616

 

 

$

1,344

 

Depreciation, amortization and impairment

$

102,275

 

 

$

296,119

 

 

$

328,843

 

 

$

554,838

 

 

$

115,130

 

Impairment of goodwill

$

 

 

$

 

 

$

395,060

 

 

$

 

 

$

 

Operating loss

$

(47,214

)

 

$

(169,528

)

 

$

(481,974

)

 

$

(131,817

)

 

$

(30,742

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating days – United States

 

5,499

 

 

 

13,054

 

 

 

24,137

 

 

 

43,036

 

 

 

7,450

 

Operating days – Canada

 

 

 

 

27

 

 

 

47

 

 

 

217

 

 

 

 

Operating days – Total

 

5,499

 

 

 

13,081

 

 

 

24,184

 

 

 

43,253

 

 

 

7,450

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average revenue per operating day – United States

$

20.92

 

 

$

24.25

 

 

$

22.89

 

 

$

24.02

 

 

$

22.96

 

Average direct operating costs per operating day – United States

$

10.62

 

 

$

14.40

 

 

$

12.73

 

 

$

14.07

 

 

$

11.65

 

Average margin per operating day – United States (1)

$

10.31

 

 

$

9.85

 

 

$

10.16

 

 

$

9.95

 

 

$

11.32

 

Average rigs operating – United States

 

60

 

 

 

142

 

 

 

88

 

 

 

158

 

 

 

82

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average revenue per operating day – Canada

$

 

 

$

17.67

 

 

$

21.11

 

 

$

18.16

 

 

$

 

Average direct operating costs per operating day – Canada

$

 

 

$

35.07

 

 

$

48.60

 

 

$

20.65

 

 

$

 

Average margin per operating day – Canada (1)

$

 

 

$

(17.41

)

 

$

(27.49

)

 

$

(2.49

)

 

$

 

Average rigs operating – Canada

 

 

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average revenue per operating day – Total

$

20.92

 

 

$

24.24

 

 

$

22.89

 

 

$

23.99

 

 

$

22.97

 

Average direct operating costs per operating day – Total

$

10.75

 

 

$

14.44

 

 

$

12.80

 

 

$

14.10

 

 

$

11.69

 

Average margin per operating day – Total (1)

$

10.17

 

 

$

9.79

 

 

$

10.08

 

 

$

9.89

 

 

$

11.28

 

Average rigs operating – Total

 

60

 

 

 

142

 

 

 

88

 

 

 

158

 

 

 

82

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

$

9,502

 

 

$

34,752

 

 

$

101,448

 

 

$

158,141

 

 

$

42,501

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pressure Pumping:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

71,973

 

 

$

208,637

 

 

$

256,613

 

 

$

707,246

 

 

$

59,533

 

Direct operating costs

$

63,721

 

 

$

176,306

 

 

$

234,844

 

 

$

585,191

 

 

$

56,268

 

Margin (2)

$

8,252

 

 

$

32,331

 

 

$

21,769

 

 

$

122,055

 

 

$

3,265

 

Restructuring expenses

$

 

 

$

 

 

$

31,331

 

 

$

 

 

$

31,331

 

Selling, general and administrative

$

2,004

 

 

$

3,154

 

 

$

6,748

 

 

$

9,734

 

 

$

1,677

 

Depreciation, amortization and impairment

$

37,104

 

 

$

72,139

 

 

$

118,586

 

 

$

188,459

 

 

$

38,811

 

Operating loss

$

(30,856

)

 

$

(42,962

)

 

$

(134,896

)

 

$

(76,138

)

 

$

(68,554

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fracturing jobs

 

69

 

 

 

126

 

 

 

193

 

 

 

412

 

 

 

35

 

Other jobs

 

180

 

 

 

173

 

 

 

541

 

 

 

629

 

 

 

152

 

Total jobs

 

249

 

 

 

299

 

 

 

734

 

 

 

1,041

 

 

 

187

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average revenue per fracturing job

$

960.70

 

 

$

1,631.71

 

 

$

1,251.37

 

 

$

1,687.39

 

 

$

1,549.71

 

Average revenue per other job

$

31.58

 

 

$

17.58

 

 

$

27.91

 

 

$

19.14

 

 

$

34.82

 

Average revenue per total job

$

289.05

 

 

$

697.78

 

 

$

349.61

 

 

$

679.39

 

 

$

318.36

 

Average costs per total job

$

255.91

 

 

$

589.65

 

 

$

319.95

 

 

$

562.14

 

 

$

300.90

 

Average margin per total job (2)

$

33.14

 

 

$

108.13

 

 

$

29.66

 

 

$

117.25

 

 

$

17.46

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Margin as a percentage of revenues (2)

 

11.5

%

 

 

15.5

%

 

 

8.5

%

 

 

17.3

%

 

 

5.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

$

1,653

 

 

$

19,826

 

 

$

17,880

 

 

$

90,028

 

 

$

1,947

 

 

 

 


PATTERSON-UTI ENERGY, INC.

 

Additional Financial and Operating Data

 

(unaudited, dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

September 30,

 

 

September 30,

 

 

June 30,

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

2020

 

Directional Drilling:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

10,271

 

 

$

47,037

 

 

$

56,498

 

 

$

150,214

 

 

$

11,742

 

Direct operating costs

$

9,754

 

 

$

56,215

 

 

$

54,348

 

 

$

143,919

 

 

$

12,265

 

Margin (3)

$

517

 

 

$

(9,178

)

 

$

2,150

 

 

$

6,295

 

 

$

(523

)

Restructuring expenses

$

 

 

$

 

 

$

3,175

 

 

$

 

 

$

3,175

 

Selling, general and administrative

$

829

 

 

$

2,805

 

 

$

4,169

 

 

$

7,998

 

 

$

1,010

 

Depreciation, amortization and impairment

$

9,600

 

 

$

20,518

 

 

$

29,698

 

 

$

41,755

 

 

$

9,677

 

Operating loss

$

(9,912

)

 

$

(32,501

)

 

$

(34,892

)

 

$

(43,458

)

 

$

(14,385

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Margin as a percentage of revenues (3)

 

5.0

%

 

 

(19.5

%)

 

 

3.8

%

 

 

4.2

%

 

 

(4.5

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

$

510

 

 

$

5,559

 

 

$

4,562

 

 

$

11,121

 

 

$

2,044

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

9,843

 

 

$

25,743

 

 

$

36,785

 

 

$

83,363

 

 

$

7,971

 

Direct operating costs

$

8,665

 

 

$

31,759

 

 

$

33,775

 

 

$

71,144

 

 

$

9,086

 

Margin (4)

$

1,178

 

 

$

(6,016

)

 

$

3,010

 

 

$

12,219

 

 

$

(1,115

)

Restructuring expenses

$

 

 

$

 

 

$

501

 

 

$

 

 

$

501

 

Selling, general and administrative

$

747

 

 

$

5,149

 

 

$

2,969

 

 

$

12,660

 

 

$

763

 

Depreciation, depletion, amortization and impairment

$

6,852

 

 

$

10,227

 

 

$

35,087

 

 

$

33,472

 

 

$

7,976

 

Impairment of goodwill

$

 

 

$

17,800

 

 

$

 

 

$

17,800

 

 

$

 

Operating loss

$

(6,421

)

 

$

(39,192

)

 

$

(35,547

)

 

$

(51,713

)

 

$

(10,355

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

$

1,704

 

 

$

7,191

 

 

$

9,776

 

 

$

21,194

 

 

$

2,808

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

$

17,899

 

 

$

21,613

 

 

$

59,122

 

 

$

66,672

 

 

$

19,197

 

Restructuring expenses

$

 

 

$

 

 

$

901

 

 

$

 

 

$

901

 

Depreciation

$

1,488

 

 

$

1,761

 

 

$

4,987

 

 

$

5,338

 

 

$

1,491

 

Credit loss expense

$

 

 

$

 

 

$

5,606

 

 

$

3,594

 

 

$

4,551

 

Other operating expenses (income), net

$

776

 

 

$

(252

)

 

$

10,135

 

 

$

83

 

 

$

8,908