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Patterson-UTI Energy Inc. (NASDAQ: PTEN) is a prominent provider of drilling and completion services to oil and natural gas exploration and production companies in North America. Headquartered in Houston, Texas, the company operates one of the largest and technologically advanced fleets of land-based drilling rigs in the continent. Their operations span key oil and natural gas producing regions of the continental United States, Alaska, and parts of Canada. Patterson-UTI's services are integral to both major and independent oil and gas companies, providing a comprehensive drilling solution that includes the renowned APEX® drilling rigs.
In 2023, Patterson-UTI significantly expanded its pressure pumping operations through a merger with NexTier, positioning the company as a leader with nearly 20% of the North American market for drilling and completions services. The company also offers directional drilling services and tool rentals across most U.S. onshore oil and gas basins. The integration of NexTier and Ulterra has bolstered their capabilities, enabling Patterson-UTI to achieve $100 million in annualized synergy run-rate by early 2024, with further growth potential in international markets.
Financially, Patterson-UTI has demonstrated robust performance. For the fourth quarter of 2023, the company reported revenue of $464 million in its Drilling Services segment, achieving an adjusted gross profit of $187 million. The Completion Services segment generated $1,014 million in revenue with an adjusted gross profit of $232 million, reflecting strong demand and effective merger integrations. Their advanced technologies, including investments in automation, natural gas, and electric assets, have positioned Patterson-UTI for continued success as the industry evolves.
Patterson-UTI is not only focused on financial growth but also on operational excellence and environmental responsibility. The company continues to invest in technology to enhance well performance, reduce emissions, and improve safety. By mid-2024, they plan to operate approximately 140,000 horsepower of electric frac equipment and have nearly 80% of their active fleets powered by natural gas.
The company is also committed to returning value to shareholders. For 2024, Patterson-UTI has allocated a $740 million capital expenditure budget while aiming to generate substantial free cash flow. The goal is to convert at least 40% of adjusted EBITDA to free cash flow and utilize over $400 million for dividends and share repurchases.
Looking forward, Patterson-UTI remains a dynamic player in the oil and gas drilling industry, with expectations to outperform market trends. Their strategic partnerships, such as the collaboration with ADNOC Drilling and SLB in the Middle East, highlight their global expansion ambitions and potential for long-term growth.
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