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Patterson-UTI Energy Reports Financial Results for Three Months Ended March 31, 2017

HOUSTON, April 27, 2017 /PRNewswire/ -- PATTERSON-UTI ENERGY, INC. (NASDAQ: PTEN) today reported financial results for the three months ended March 31, 2017.  As previously announced, Patterson-UTI completed the merger with Seventy Seven Energy on April 20, 2017.  All reported financial results for Patterson-UTI for the first quarter of 2017 are on a standalone basis.

The Company reported a net loss of $63.5 million, or $0.40 per share, for the first quarter of 2017, compared to a net loss of $70.5 million, or $0.48 per share, for the quarter ended March 31, 2016.  Revenues for the first quarter of 2017 were $305 million, compared to $269 million for the first quarter of 2016.

The financial results for the three months ended March 31, 2017 include a pretax gain of $11.2 million ($7.1 million after-tax or $0.04 per share) related to the sale of real estate, and pretax transaction expenses related to the merger with Seventy Seven Energy of $5.2 million ($3.3 million after-tax or $0.02 per share).  For purposes of comparison, the financial results for the three months ended March 31, 2016 include a pretax non-cash charge of $2.2 million ($1.5 million after tax or $0.01 per share) related to the impairment of certain oil and natural gas properties.

Andy Hendricks, Patterson-UTI's Chief Executive Officer, stated, "We experienced strong rig demand during the first quarter.  Our average rig count in the United States increased 22% to 81 rigs during the first quarter, up from 66 rigs in the fourth quarter.  The growth in our rig count continues to be robust as we expect to average 96 rigs in the United States for the month of April, excluding the contribution to the rig count from rigs operated by Seventy Seven Energy. From the Seventy Seven Energy fleet, 58 rigs are currently operating.  We expect our combined rig count in the United States to average 115 rigs in April including the pro rata contribution from these rigs.    

"In Canada, our average rig count was two rigs during the first quarter, unchanged from the prior quarter.  For the month of April, we expect to average two rigs in Canada." 

Mr. Hendricks added, "Total average rig revenue per day for the first quarter was $21,200 compared to $21,640 during the fourth quarter.  Average rig operating costs per day increased for the first quarter to $14,450 from $13,770 in the fourth quarter as a result of a reduction in the proportion of rigs on standby and an increase in rig reactivation expenses as our rig count accelerated.  As a result, total average rig margin per day decreased to $6,750 for the first quarter from $7,870 during the fourth quarter.

"As of March 31, 2017, we had term contracts for drilling rigs providing for approximately $385 million of future dayrate drilling revenue.  Based on contracts currently in place and including rigs from Seventy Seven Energy, we expect an average of 84 rigs operating under term contracts during the second quarter, and an average of 61 rigs operating under term contracts during the 12 months ending March 31, 2018. 

"In pressure pumping, revenues increased 34% sequentially to $141 million in the first quarter from $106 million in the fourth quarter.  Pressure pumping gross margin as a percentage of revenues improved to 15.7% during the first quarter from 5.3% during the fourth quarter.  Since mid-December, we have reactivated a total of four frac spreads.  Two of these frac spreads were reactivated in April, and we expect to reactivate additional frac spreads in the second half of this year," he concluded.

Mark S. Siegel, Chairman of Patterson-UTI, stated, "The merger with Seventy Seven Energy further solidifies our position as a leading high-spec drilling company and gives us one of the largest and most modern pressure pumping fleets in the industry.  I would like to welcome the people from Seventy Seven Energy into the Patterson-UTI family.  Seventy Seven Energy employees share a devotion to the same core values of safety and customer service that are cornerstones of the Patterson-UTI culture.

"The merger integration process has begun, and I am pleased with the integration plan that we and Seventy Seven Energy have developed.  We believe this collaborative plan and our enhanced position in the industry will help maximize the value of the combined entity for all shareholders," he concluded.

The Company declared a quarterly dividend on its common stock of $0.02 per share, to be paid on June 22, 2017, to holders of record as of June 8, 2017.

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 March 31, 2017, is scheduled for today, April 27, 2017, at 9:00 a.m. Central Time. The dial-in information for participants is 844-498-0567 (Domestic) and 443-961-0820 (International).  The passcode for both numbers is 91755184.  The call is also being webcast and can be accessed through the Investor Relations section at www.patenergy.com.  A replay of the conference call will be on the Company's website for two weeks. 

About Patterson-UTI

Patterson-UTI is an oilfield services company that primarily owns and operates in the United States one of the largest fleets of land-based drilling rigs and a large fleet of pressure pumping equipment.  Our contract drilling business operates in the continental United States and western Canada, and our pressure pumping and oilfield rental tools businesses operate primarily in Texas and the Mid-Continent and Appalachian regions.  We also provide drilling rig pipe handling technology to drilling contractors in North America and other select markets.  In addition, we own and invest as a non-operating working interest owner in oil and natural gas assets that are primarily located in Texas and New Mexico. 

Location information about the Company's drilling rigs and their individual inventories is available through the Company's website at 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: 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 or construction; liabilities from operations; weather; decline in, and ability to realize, backlog; equipment specialization and new technologies; 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; difficulty with growth and in integrating acquisitions; governmental regulation; product liability; legal proceedings; political, economic and social instability risk; ability to effectively identify and enter new markets; cybersecurity risk; dependence on our subsidiaries to meet our long-term debt obligations; variable rate indebtedness risk; and anti-takeover measures in our charter documents.

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



March 31,



2017



2016

REVENUES


$

305,175



$

268,939

COSTS AND EXPENSES








Direct operating costs



230,493




170,801

Depreciation, depletion, amortization and impairment



156,217




176,770

Selling, general and administrative



18,852




17,972

Acquisition related expenses



5,156




Other operating income, net



(12,904)




(1,345)









Total costs and expenses



397,814




364,198









OPERATING LOSS



(92,639)




(95,259)









OTHER INCOME (EXPENSE)








Interest income



406




110

Interest expense



(8,270)




(10,800)

Other



17




16









Total other expense



(7,847)




(10,674)









LOSS BEFORE INCOME TAXES



(100,486)




(105,933)

INCOME TAX BENEFIT



(36,947)




(35,430)









NET LOSS


$

(63,539)



$

(70,503)









NET LOSS PER COMMON SHARE








Basic


$

(0.40)



$

(0.48)

Diluted


$

(0.40)



$

(0.48)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING








Basic



160,062




145,770

Diluted



160,062




145,770

CASH DIVIDENDS PER COMMON SHARE


$

0.02



$

0.10

 

PATTERSON-UTI ENERGY, INC.


Additional Financial and Operating Data


(unaudited, dollars in thousands)













Three Months Ended




March 31,




2017



2016











Contract Drilling:









Revenues


$

158,728



$

168,659


Direct operating costs


$

108,221



$

80,898


Margin (1)


$

50,507



$

87,761


Selling, general and administrative


$

1,654



$

1,758


Depreciation, amortization and impairment


$

110,559



$

121,099


Operating loss


$

(61,706)



$

(35,096)











Operating days – United States



7,309




6,425


Operating days – Canada



178




232


Operating days – Total



7,487




6,657











Average revenue per operating day – United States


$

21.18



$

25.27


Average direct operating costs per operating day – United States


$

14.41



$

11.85


Average margin per operating day – United States (1)


$

6.77



$

13.42


Average rigs operating – United States



81




71











Average revenue per operating day – Canada


$

22.17



$

27.15


Average direct operating costs per operating day – Canada


$

16.26



$

20.63


Average margin per operating day – Canada (1)


$

5.91



$

6.53


Average rigs operating – Canada



2




3











Average revenue per operating day – Total


$

21.20



$

25.34


Average direct operating costs per operating day – Total


$

14.45



$

12.15


Average margin per operating day – Total (1)


$

6.75



$

13.18


Average rigs operating – Total



83




73











Capital expenditures


$

44,221



$

11,880











Pressure Pumping:









Revenues


$

141,174



$

96,313


Direct operating costs


$

119,013



$

87,813


Margin (2)


$

22,161



$

8,500


Selling, general and administrative


$

2,802



$

2,889


Depreciation, amortization and impairment


$

42,250



$

49,570


Operating loss


$

(22,891)



$

(43,959)











Fracturing jobs



95




83


Other jobs



282




158


Total jobs



377




241











Average revenue per fracturing job


$

1,451.33



$

1,132.71


Average revenue per other job


$

11.70



$

14.54


Average revenue per total job


$

374.47



$

399.64


Average costs per total job


$

315.68



$

364.37


Average margin per total job (2)


$

58.78



$

35.27


Margin as a percentage of revenues (2)



15.7

%



8.8

%










Capital expenditures


$

19,413



$

7,552











Other Operations:









Revenues


$

5,273



$

3,967


Direct operating costs


$

3,259



$

2,090


Margin (3)


$

2,014



$

1,877


Selling, general and administrative


$

1,793



$

376


Depreciation, depletion and impairment


$

2,172



$

4,732


Operating loss


$

(1,951)



$

(3,231)











Capital expenditures


$

4,352



$

1,528











Corporate:









Selling, general and administrative


$

12,603



$

12,949


Acquisition related expenses


$

5,156



$


Depreciation


$

1,236



$

1,369


Other operating income, net


$

(12,904)



$

(1,345)











Capital expenditures


$

454



$

341


Total capital expenditures


$

68,440



$

21,301




(1)

For Contract Drilling, margin is defined as revenues less direct operating costs and excludes depreciation, amortization and impairment and selling, general and administrative expenses. Average margin per operating day is defined as margin divided by operating days.



(2)

For Pressure Pumping, margin is defined as revenues less direct operating costs and excludes depreciation, amortization and impairment and selling, general and administrative expenses. Total average margin per job is defined as margin divided by total jobs. Margin as a percentage of revenues is defined as margin divided by revenues.



(3)

For Other Operations, margin is defined as revenues less direct operating costs and excludes depreciation, depletion and impairment and selling, general and administrative expenses.

 



March 31,



December 31,

Selected Balance Sheet Data (unaudited, dollars in thousands):


2017



2016

Cash and cash equivalents


$

466,608



$

35,152

Current assets


$

729,944



$

246,882

Current liabilities


$

294,166



$

264,815

Working capital


$

435,778



$

(17,933)

Current portion of long-term debt


$



$

Borrowings under revolving credit facility


$



$

Other long-term debt


$

598,524



$

598,437

 

PATTERSON-UTI ENERGY, INC.

Non-U.S. GAAP Financial Measures

(unaudited, dollars in thousands)




Three Months Ended




March 31,




2017



2016


Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA)(1):









Net loss


$

(63,539)



$

(70,503)


Income tax benefit



(36,947)




(35,430)


Net interest expense



7,864




10,690


Depreciation, depletion, amortization and impairment



156,217




176,770











Adjusted EBITDA


$

63,595



$

81,527











Total revenue


$

305,175



$

268,939


Adjusted EBITDA margin



20.8

%



30.3

%










Adjusted EBITDA by operating segment:









Contract drilling


$

48,853



$

86,003


Pressure pumping



19,359




5,611


Other



221




1,501


Corporate



(4,838)




(11,588)











Consolidated Adjusted EBITDA


$

63,595



$

81,527




(1)

Adjusted EBITDA is a supplemental financial measure not defined by United States generally accepted accounting principles, or U.S. GAAP. We define Adjusted EBITDA as net income (loss) plus net interest expense, income tax expense (benefit) and depreciation, depletion, amortization and impairment expense (including impairment of goodwill).  We present Adjusted EBITDA because we believe it provides to both management and investors 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.  Adjusted EBITDA should not be construed as an alternative to the U.S. GAAP measure of net income (loss).

 

PATTERSON-UTI ENERGY, INC.

Selected Costs and Expenses

(unaudited, dollars in thousands)



2017



2016



First Quarter



First Quarter



Gain on Sale of
Real Estate



Transaction
Expenses



Impairment of
Oil and Natural
Gas Properties














Pretax amount

$

11,210



$

(5,156)



$

(2,201)














Effective tax rate


36.8

%



36.8

%



33.4

%

After-tax amount

$

7,088



$

(3,260)



$

(1,465)














Weighted average number of common shares outstanding


160,062




160,062




145,770


Amount per share - diluted

$

0.04



$

(0.02)



$

(0.01)


 

PATTERSON-UTI ENERGY, INC.

Contract Drilling Per Day Successive Quarters

(unaudited, dollars in thousands)




2017



2016



First



Fourth



Quarter



Quarter

Contract drilling revenues


$

158,728



$

136,085

Operating days - Total



7,487




6,288

Average revenue per operating day - Total


$

21.20



$

21.64

Direct operating costs - Total


$

108,221



$

86,586

Average direct operating costs per operating day - Total


$

14.45



$

13.77

Average margin per operating day - Total


$

6.75



$

7.87

 

PATTERSON-UTI ENERGY, INC.

Pressure Pumping Margin and Adjusted EBITDA

(unaudited, dollars in thousands)




2017



2016




First



Fourth




Quarter



Quarter











Pressure pumping revenues


$

141,174



$

105,642


Direct operating costs



119,013




100,008


Margin



22,161




5,634


Selling, general and administrative



2,802




2,394


Adjusted EBITDA


$

19,359



$

3,240











Margin as a percentage of revenues



15.7

%



5.3

%

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/patterson-uti-energy-reports-financial-results-for-three-months-ended-march-31-2017-300446789.html

SOURCE PATTERSON-UTI ENERGY, INC.

Mike Drickamer, Vice President, Investor Relations, (281) 765-7170