Patterson Uti Energy Inc (PTEN) SEC Filing 10-K Annual report for the fiscal year ending Thursday, December 31, 2020

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, 2020

HOUSTON, Texas – February 4, 2021 – PATTERSON-UTI ENERGY, INC.

For the year ended December 31, 2020, the Company reported a net loss of $804 million, or $4.27 per share, compared to a net loss of $426 million, or $2.10 per share, for the year ended December 31, 2019.  Revenues for the year ended December 31, 2020 were $1.1 billion, compared to $2.5 billion for 2019.

Financial results for the year ended December 31, 2020, include pre-tax charges during the first two quarters of the year 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 Company reduced gross debt by $66.2 million in the fourth quarter, including the repayment of $50.0 million of the Company’s bank term loan and open market purchases of $16.2 million of the Company’s senior notes.  The open market purchases were made at a discount to face value, resulting in a $3.6 million gain, which is reflected as an offset to interest expense.  

Andy Hendricks, Patterson-UTI’s Chief Executive Officer, stated, “Drilling and completion activity improved during the quarter, marking what we believe to be the beginning of a recovery.  Based on our customer engagement, we are confident that activity levels will continue to improve.  With increased confidence that a recovery has begun, we took advantage of our strong balance sheet by repurchasing a portion of our senior notes at a discount, and repaying half of our outstanding bank term loan, leaving only $50 million of total debt due before 2028.”

Mr. Hendricks continued, “In contract drilling, our average rig count for the fourth quarter improved to 62 rigs from 60 rigs in the third quarter.  The proportion of rigs that were idle but contracted decreased to 16% in the fourth quarter from 28% in the third quarter.  Our rig count at the end of 2020 was 65 rigs, of which five were idle but contracted.  For the first quarter, we expect our rig count will average 69 rigs, of which five are expected to be idle but contracted.    

“Average rig margin per day during the fourth quarter was $7,770, which exceeded our expectation.  Relative to the third quarter, average rig revenue per day of $20,210 was negatively impacted by lower dayrates and the absence of any lump-sum early termination revenues in the fourth quarter.  Average rig operating cost per day increased to $12,440 due to a smaller proportion of rigs that were idle but contracted, relative to the third quarter.      

“As of December 31, 2020, we had term contracts for drilling rigs providing for approximately $300 million of future dayrate drilling revenue.  Based on contracts currently in place, we expect an average of 42 rigs operating under term contracts during the first quarter, and an average of 34 rigs operating under term contracts during 2021.  

“In pressure pumping, revenues increased to $79.5 million during the fourth quarter from $72.0 million during the third quarter, as we averaged seven active spreads in the fourth quarter, compared to five in the third quarter.  Gross margin for pressure pumping decreased to $4.1 million in the fourth quarter from $8.3 million in the third quarter.