Patterson-UTI Energy Cites Strong Balance Sheet Exiting 2009

Patterson-UTI Energy reported financial results for the three and twelve months ended December 31, 2009. The Company reported a net loss of $18.2 million, or $0.12 per share, for the fourth quarter of 2009, compared to net income of $79.5 million, or $0.52 per share, for the fourth quarter of 2008. Revenues for the quarter ended December 31, 2009 were $214 million, compared to $532 million for the fourth quarter of 2008.

During the fourth quarter of 2009, the Company retired drilling assets including 21 drilling rigs. The financial results for the fourth quarter of 2009 include pretax charges of $10.5 million ($7.0 million after tax, or $0.05 per share) from these retirements.

The financial results for the fourth quarter also include an after-tax loss of $2.1 million (or $0.01 per share) from discontinued operations related to our drilling and completion fluids service business.

The Company reported a net loss of $38.3 million, or $0.25 per share, for the twelve months ended December 31, 2009, compared to net income of $347 million, or $2.23 per share, for the twelve months ended December 31, 2008. Revenues for the twelve months ended December 31, 2009 totaled $782 million, compared to $2.1 billion for 2008.

Douglas J. Wall, Patterson-UTI's Chief Executive Officer, stated, "Our average number of rigs operating in the fourth quarter increased to 103 rigs, including 95 in the United States and 8 in Canada. This compares to an average of 73 rigs operating in the third quarter of the year, including 70 in the United States and 3 in Canada. We currently have 145 rigs operating, including 130 in the United States and 15 in Canada."

Mr. Wall added, "Average revenue per operating day for the fourth quarter of 2009 was $16,770, compared to average revenue per operating day of $16,800 for the three months ended September 30, 2009. Average direct operating costs per operating day for the fourth quarter of 2009 were $10,870, compared to $10,630 for the three months ended September 30, 2009. As a result, average margin per operating day in the fourth quarter of 2009 was $5,900, compared to $6,170 for the third quarter of 2009.

"The sequential increase in direct operating costs per day primarily resulted from increased activity in Canada, which has a higher cost structure, and a decrease in standby days in the United States. We averaged one rig earning standby revenues in the fourth quarter compared to an average of four rigs in the third quarter.

"During the fourth quarter of 2009 we had an average of approximately 33 rigs operating under term contracts. Based on contracts currently in place, we expect to have an average of approximately 42 rigs in 2010 and 26 rigs in 2011 operating under existing long-term contracts.

"We activated 20 advanced technology Apex™ rigs in 2009 and substantially completed two more Apex™ rigs for activation in early 2010. Currently, we have committed to build 13 additional Apex™ rigs in 2010, most of which are from the reinstatement of purchase orders that were deferred during the downturn early last year," he concluded.

Mark S. Siegel, Chairman of Patterson-UTI stated, "We are continuing to increase our working rig count in the United States. During the fourth quarter, our average number of rigs operating in the United States increased by 25 rigs or 36 percent, over the prior quarter. Drilling activity has continued to climb at a steep rate so far in 2010.

"In line with our commitment to provide technically advanced field-proven equipment that increases efficiency, over the past four years, we have invested more than $2 billion in our drilling fleet and other long-lived assets. During this time we have built advanced technology Apex™ rigs and invested heavily in upgrading the balance of our drilling fleet. In 2009 we activated 20 advanced technology Apex™ rigs and retired a total of 23 drilling rigs with lesser capabilities. At the end of 2009, we had 341 marketable drilling rigs in our fleet. In our pressure pumping business, we continue to invest in new equipment designed for the growing Marcellus shale play."

Mr. Siegel added, "It is worth noting that our balance sheet at December 31, 2009 remained strong with $50 million in cash and no debt. In addition, we expect net cash proceeds to total approximately $48 million from the January 2010 sale of our drilling and completion fluids service business. We are also expecting tax refunds of approximately $114 million in the second quarter of 2010. We believe our strong balance sheet provides financial flexibility to capitalize on opportunities to enhance shareholder value."

The Company declared a quarterly cash dividend on its common stock of $0.05 per share, to be paid on March 30, 2010 to holders of record as of March 15, 2010.

 

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