Patterson-UTI Energy Reports Financial Results for Three and Nine Months Ended September 30, 2011
27.10.2011 | PR Newswire
Revenues Up by 78%, Net Income by 179%
HOUSTON, Oct. 27, 2011 /PRNewswire/ -- PATTERSON-UTI ENERGY, INC.
today reported financial results for the three and nine months ended September 30, 2011. The Company reported net income of $81.9 million, or $0.53 per share, for the third quarter of 2011, compared to net income of $29.4 million, or $0.19 per share, for the quarter ended September 30, 2010. Revenues for the third quarter of 2011 were $674 million, compared to $379 million for the third quarter of 2010.The Company reported net income of $235 million, or $1.50 per share, for the nine months ended September 30, 2011, compared to net income of $63.1 million, or $0.41 per share, for the comparable nine month period in 2010. Revenues for the nine months ended September 30, 2011 were $1.8 billion, compared to $957 million for the same nine month period in 2010.
The financial results for the three and nine months ended September 30, 2011 include pretax impairment charges of $4.3 million ($2.7 million after-tax) from the retirement of twenty-two of the Company's rigs. Components from these rigs are now available as spare parts to support other rigs in the fleet. These retirements reduced net income per share by $0.02 for the three and the nine month periods ended September 30, 2011.
Douglas J. Wall, Patterson-UTI's Chief Executive Officer, stated, 'Activity in our U.S. drilling business continued to increase in the third quarter and our Canadian rig count rebounded from the annual spring breakup. Our average number of rigs operating in the third quarter was 221, including 209 in the United States and 12 in Canada. This compares to an average of 202 rigs operating in the second quarter of 2011, including 199 in the United States and 3 in Canada.'
Mr. Wall added, 'Average revenue per operating day for the third quarter of 2011 increased by $440 to $21,440, compared to $21,000 for the second quarter of 2011. Average direct operating costs per operating day for the third quarter of 2011 increased to $12,980 from $11,880 for the second quarter of 2011. As a result, average margin per operating day for the third quarter of 2011 was $8,460, compared to $9,110 for the second quarter of 2011. Average costs per operating day increased primarily as a result of higher repairs, maintenance and labor costs. These costs increased primarily as a result of cost inflation in our industry and, in connection with operating our conventional rig fleet, unusually high levels of repairs and maintenance.
'Our rig count has continued to increase and we expect to average approximately 230 rigs operating in October, comprised of 218 in the United States and 12 in Canada. This represents an increase of 38 rigs as compared to October 2010.
'We have continued to increase our long-term contracts coverage and have a long-term contract revenue backlog of approximately $1.7 billion for our drilling business. Based on contracts currently in place, we expect to have an average of approximately 124 rigs operating under long-term contracts during the fourth quarter of 2011 and an average of approximately 96 rigs for 2012.
'We completed 7 new Apex(TM) rigs during the third quarter, bringing our year-to-date total to 18 new rigs. We expect to complete an additional 7 new Apex(TM) rigs in the fourth quarter of 2011 and 30 in 2012. With regard to customer contracts for new Apex(TM) rigs, we entered into long-term agreements for 7 rigs during the third quarter. We currently have long-term contracts for all of the new Apex(TM) rigs scheduled for delivery in 2011 and substantially all of the new Apex(TM) rigs scheduled for delivery through the first quarter of 2012.
'In the third quarter, our pressure pumping business achieved a 13% sequential increase in revenue despite the interruption of operations caused by hurricane-related flooding in Appalachia. However, operating income from this segment was relatively flat as a result of cost inefficiencies associated with the flooding-related interruption of operations, product cost increases and higher depreciation expense.
'Demand for our pressure pumping services remains high, and we are adding fracturing capacity. We deployed 138,750 horsepower of new fracturing equipment during the first nine months of 2011. We expect to deploy an additional 66,500 horsepower in the latter part of the fourth quarter and to add approximately 140,000 horsepower for delivery in 2012,' he concluded.
Mark S. Siegel, Chairman of Patterson-UTI stated, 'Despite recent concerns we have heard about our industry, our average number of rigs operating has increased by 14 rigs from July to October, and we expect continued revenue growth in both drilling and pressure pumping in the fourth quarter. Our businesses continue to benefit from the increased activity associated with oil and liquids-rich plays and our investment in high quality, new equipment. These investments have transformed our Company into a top tier service provider and resulted in greater demand for our services in the current environment of increasing well complexity.'
Mr. Siegel further stated, 'The evolution of our rig and fracturing fleets is reflected in the portion of our revenues from horizontal and directional wells. For the third quarter, 83% of drilling revenue and 74% of our fracturing revenue was derived from these types of wells.'
The Company declared a quarterly cash dividend on its common stock of $0.05 per share, to be paid on December 30, 2011 to holders of record as of December 15, 2011.
All references to 'net income 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, 2011 is scheduled for October 27, 2011 at 9:00 a.m. Central Time. The dial-in information for participants is 800-561-2601 (Domestic) and 617-614-3518 (International). The Passcode for both numbers is 92022749. The call is also being webcast and can be accessed through the Investor Relations section at www.patenergy.com. Webcast participants should log on 10-15 minutes prior to the scheduled start time. Replay of the conference call will be available at www.patenergy.com through November 10, 2011 and at 888-286-8010 (Domestic) and 617-801-6888 (International) through October 31, 2011. The Passcode for both telephone numbers is 64369642.
About Patterson-UTI
Patterson-UTI Energy, Inc. subsidiaries provide onshore contract drilling and pressure pumping services to exploration and production companies in North America. Patterson-UTI Drilling Company LLC has approximately 350 marketable land-based drilling rigs that operate primarily in the oil and natural gas producing regions of Texas, New Mexico, Oklahoma, Arkansas, Louisiana, Mississippi, Colorado, Utah, Wyoming, Montana, North Dakota, Pennsylvania, West Virginia, Ohio and western Canada. Universal Pressure Pumping, Inc. and Universal Well Services, Inc. provide pressure pumping services primarily in Texas and the Appalachian region.
Statements made in this press release which state the Company's or management's intentions, beliefs, expectations or predictions for the future are forward-looking statements. It is important to note that actual results could differ materially from those discussed in such forward-looking statements. Important factors that could cause actual results to differ materially include, but are not limited to, deterioration of global economic conditions, declines in oil and natural gas prices that could adversely affect demand for the Company's services, and their associated effect on rates, utilization, margins and planned capital expenditures, excess availability of land drilling rigs and pressure pumping equipment, including as a result of reactivation or construction, adverse industry conditions, adverse credit and equity market conditions, difficulty in integrating acquisitions, shortages of equipment and materials, governmental regulation and ability to retain management and field personnel. 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 the Company's SEC filings, which may be obtained by contacting the Company or the SEC. These filings are also available through the Company's web site at http://www.patenergy.com or through the SEC's Electronic Data Gathering and Analysis Retrieval System (EDGAR) at http://www.sec.gov. We undertake no obligation to publicly update or revise any forward-looking statement.
PATTERSON-UTI ENERGY, INC.
Condensed Consolidated Statements of Income (Unaudited)
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September September September
30, 30, 30, September 30,
2011 2010 2011 2010
---- ---- ---- ----
REVENUES $673,828 $378,663 $1,841,296 $957,253
COSTS AND
EXPENSES
Direct
operating
costs
(excluding
depreciation,
depletion,
amortization
and
impairment) 416,301 227,788 1,105,295 597,175
Depreciation,
depletion,
amortization
and
impairment 110,713 85,431 309,677 239,930
Selling,
general
and
administrative 15,957 13,685 48,681 37,491
Net gain
on asset
disposals (1,437) (250) (4,058) (21,940)
Provision
for bad
debts - (500) - (1,500)
--- ---- --- ------
Total
costs and
expenses 541,534 326,154 1,459,595 851,156
------- ------- --------- -------
OPERATING
INCOME 132,294 52,509 381,701 106,097
------- ------ ------- -------
OTHER
INCOME
(EXPENSE)
Interest
income 47 64 135 1,631
Interest
expense (3,835) (6,227) (11,238) (9,011)
Other 375 260 572 509
--- --- --- ---
Total
other
expense (3,413) (5,903) (10,531) (6,871)
------ ------ ------- ------
INCOME
FROM
CONTINUING
OPERATIONS
BEFORE
INCOME
TAXES 128,881 46,606 371,170 99,226
INCOME TAX
EXPENSE 46,953 17,232 135,985 36,138
------ ------ ------- ------
INCOME
FROM
CONTINUING
OPERATIONS 81,928 29,374 235,185 63,088
LOSS FROM
DISCONTINUED
OPERATIONS,
NET OF
INCOME
TAXES - - (367) -
--- --- ---- ---
NET INCOME $81,928 $29,374 $234,818 $63,088
======= ======= ======== =======
BASIC
INCOME
(LOSS)
PER
COMMON
SHARE:
INCOME
FROM
CONTINUING
OPERATIONS $0.53 $0.19 $1.52 $0.41
LOSS FROM
DISCONTINUED
OPERATIONS,
NET OF
INCOME
TAXES $0.00 $0.00 $0.00 $0.00
NET INCOME $0.53 $0.19 $1.52 $0.41
DILUTED
INCOME
(LOSS)
PER
COMMON
SHARE:
INCOME
FROM
CONTINUING
OPERATIONS $0.53 $0.19 $1.50 $0.41
LOSS FROM
DISCONTINUED
OPERATIONS,
NET OF
INCOME
TAXES $0.00 $0.00 $0.00 $0.00
NET INCOME $0.53 $0.19 $1.50 $0.41
WEIGHTED
AVERAGE
NUMBER OF
COMMON
SHARES
OUTSTANDING:
Basic 152,617 152,933 153,661 152,682
======= ======= ======= =======
Diluted 154,120 154,109 155,369 152,682
======= ======= ======= =======
CASH
DIVIDENDS
PER
COMMON
SHARE $0.05 $0.05 $0.15 $0.15
===== ===== ===== =====
PATTERSON-UTI ENERGY, INC.
Additional Financial and Operating Data (Unaudited)
(dollars in thousands)
Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30,
2011 2010 2011 2010
---- ---- ---- ----
Contract Drilling:
Revenues $436,827 $290,759 $1,200,664 $741,470
Direct operating costs (excluding
depreciation) $264,418 $174,999 $701,871 $459,448
Selling, general and administrative $2,240 $1,664 $4,833 $3,816
Depreciation and impairment $84,461 $72,617 $242,598 $205,927
Operating income $85,708 $41,479 $251,362 $72,279
Operating days - United States 19,217 15,639 54,618 41,405
Operating days - Canada 1,153 761 2,804 2,002
Total operating days 20,370 16,400 57,422 43,407
Average revenue per operating day -
United States $21.19 $17.63 $20.63 $16.95
Average direct operating costs per
operating day -United States $12.74 $10.49 $11.94 $10.40
Average rigs operating -United
States 209 170 200 152
Average revenue per operating day -
Canada $25.69 $19.70 $26.42 $19.73
Average direct operating costs per
operating day -Canada $17.05 $14.39 $17.78 $14.31
Average rigs operating - Canada 12 8 10 7
Average revenue per operating day -
Total $21.44 $17.73 $20.91 $17.08
Average direct operating costs per
operating day -Total $12.98 $10.67 $12.22 $10.58
Average rigs operating - Total 221 178 210 159
Capital expenditures $224,288 $192,233 $556,263 $455,708
Pressure Pumping:
Revenues $225,164 $81,104 $604,954 $194,219
Direct operating costs (excluding
depreciation and amortization) $149,577 $51,305 $397,018 $132,401
Selling, general and administrative $4,455 $2,668 $13,250 $8,014
Depreciation and amortization $20,706 $9,545 $52,542 $25,035
Operating income $50,426 $17,586 $142,144 $28,769
Fracturing jobs 416 420 1,150 1,078
Other jobs 1,990 1,600 5,071 4,350
Total jobs 2,406 2,020 6,221 5,428
Average revenue per fracturing job $453.78 $147.20 $445.29 $134.31
Average revenue per other job $18.29 $12.05 $18.31 $11.36
Total average revenue per job $93.58 $40.15 $97.24 $35.78
Total average costs per job $62.17 $25.40 $63.82 $24.39
Capital expenditures $52,826 $15,531 $135,442 $36,342
Oil and Natural Gas Production and
Exploration:
Revenues - Oil $10,081 $5,580 $31,168 $16,987
Revenues -Natural gas and liquids $1,756 $1,220 $4,510 $4,577
Revenues - Total $11,837 $6,800 $35,678 $21,564
Direct operating costs (excluding
depletion and impairment) $2,306 $1,484 $6,406 $5,326
Depletion $3,359 $2,732 $9,727 $7,240
Impairment of oil and natural gas
properties $1,418 $119 $2,844 $789
Operating income $4,754 $2,465 $16,701 $8,209
Capital expenditures $5,467 $4,782 $15,213 $15,902
Corporate and Other:
Selling, general and administrative $9,262 $9,353 $30,598 $25,661
Depreciation $769 $418 $1,966 $939
Net gain on asset disposals $(1,437) $(250) $(4,058) $(21,940)
Provision for bad debts $ - $(500) $ - $(1,500)
Capital expenditures $1,237 $2,288 $4,518 $5,727
Total capital expenditures $283,818 $214,834 $711,436 $513,679
September 30, December 31,
2011 2010
---- ----
Selected Balance Sheet Data
(Unaudited):
Cash and cash equivalents $10,645 $27,612
Current assets $691,278 $557,410
Current liabilities $431,145 $315,965
Working capital $260,133 $241,445
PATTERSON-UTI ENERGY, INC.
Non-GAAP Financial Measures (Unaudited)
(dollars in thousands)
Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30,
2011 2010 2011 2010
---- ---- ---- ----
Earnings Before Interest, Taxes,
Depreciation and Amortization
(EBITDA) (1):
Net income $81,928 $29,374 $234,818 $63,088
Income tax expense 46,953 17,232 135,985 36,138
Net interest expense 3,788 6,163 11,103 7,380
Depreciation, depletion,
amortization and impairment 110,713 85,431 309,677 239,930
Results of discontinued operations:
Income tax benefit - - (209) -
Depreciation - - - 166
--- --- --- ---
EBITDA $243,382 $138,200 $691,374 $346,702
======== ======== ======== ========
EBITDA margin 36.1% 36.5% 37.5% 36.2%
EBITDA is not defined by generally accepted accounting principles
('GAAP'). We present EBITDA (a non-GAAP measure) because we
believe it provides additional information with respect to both the
performance of our fundamental business activities and our ability
to meet our capital expenditures and working capital requirements.
EBITDA should not be construed as an alternative to the GAAP
(1) measures of net income or operating cash flow.
PATTERSON-UTI ENERGY, INC.
CONTACT: John E. Vollmer III, SVP & Chief Financial Officer of
Patterson-UTI Energy, Inc., +1-281-765-7100
Web site: http://www.patenergy.com/