Patterson-UTI Energy Reports Financial Results for the Three and Nine Months Ended September 30, 2020
Patterson-UTI Energy (PTEN) reported a net loss of $112 million, or $0.60 per share, for Q3 2020, an improvement from a loss of $262 million, or $1.31 per share, in Q3 2019. Total revenues fell to $207 million in Q3 2020 from $598 million a year earlier. For the first nine months, net losses reached $697 million, against $340 million in 2019. However, cash reserves increased by $57 million to $304 million, and the company anticipates a rig count increase to 61 for Q4 2020, supported by higher drilling activity. A quarterly dividend of $0.02 per share has been announced.
- Increased cash position by $57 million to $304 million.
- Anticipated rig count increase to 61 for Q4 2020.
- Pressure pumping revenues improved 21% sequentially to $72 million.
- Adjusted EBITDA improved to $6.2 million in Q3.
- Net loss of $112 million in Q3 2020, despite improvement from previous year.
- Total revenues decreased to $207 million in Q3 2020 from $598 million in Q3 2019.
- Net loss for the first nine months reached $697 million, compared to $340 million in 2019.
HOUSTON, Oct. 22, 2020 /PRNewswire/ -- PATTERSON-UTI ENERGY, INC. (NASDAQ: PTEN) today reported financial results for the three and nine months ended September 30, 2020. The Company reported a net loss of
For the nine months ended September 30, 2020, the Company reported a net loss of
Andy Hendricks, Patterson-UTI's Chief Executive Officer, stated, "Our financial results during the third quarter exceeded our expectations across all of our business segments, as drilling and completion activity stabilized during the third quarter. We further strengthened our financial position during the third quarter as our cash position increased by
Mr. Hendricks continued, "In contract drilling, our average rig count for the third quarter of 60 rigs slightly exceeded our expectation. For the fourth quarter, we expect that our rig count will average 61 rigs, with a lower proportion of idle but contracted rigs as customers reactivate rigs during the fourth quarter. We expect the rig count at the end of the year to be 63 rigs, of which approximately
"Average rig margin per day during the third quarter was
"As of September 30, 2020, we had term contracts for drilling rigs providing for approximately
"In pressure pumping, activity levels improved as we averaged five active spreads during the third quarter compared to four active spreads in the second quarter. With the higher than expected activity during the third quarter, pressure pumping revenues improved
"In directional drilling, revenues were
Mr. Hendricks continued, "Technology and performance will be an increasing differentiator, and we continue to move forward with remote operations capabilities for reduced costs, and automation technologies for improved performance and repeatability. These improvements are enabled by the high-frequency data and metadata originating from the wellsite operations, as well as by digitalizing our processes and workflow. These technology investments are capital-light and operate in a cloud data environment where, for example, in contract drilling and directional drilling, they can be added to our combined high-performance, super-spec rigs and directional systems.
"We are also seeing increased interest in a number of our technology solutions as operators focus on ESG and carbon emission reductions. We believe we have a leadership position in these technologies, including lithium battery hybrid-energy storage and automated energy transfer system, which reduce costs and lower emissions through the use of alternative energy sources.
"As always, we continue to focus on prudent capital stewardship and bolstering our already strong financial position. Our liquidity improved to more than
The Company declared a quarterly dividend on its common stock of
Financial results for the nine months ended September 30, 2020 include pre-tax charges during the first two quarters totaling
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 September 30, 2020, is scheduled for today, October 22, 2020, at 9:00 a.m. Central Time. The dial-in information for participants is (844) 494-0002 (Domestic) and (647) 253-8640 (International). The conference ID for both numbers is 9968598. The call is also being webcast and can be accessed through the Investor Relations section of the Company's website at https://investor.patenergy.com. A replay of the conference call will be on the Company's website for two weeks.
About Patterson-UTI
Patterson-UTI is a leading provider of oilfield services and products to oil and natural gas exploration and production companies in the United States, including contract drilling, pressure pumping and directional drilling services. For more information, visit 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: adverse oil and natural gas industry conditions, including the rapid decline in crude oil prices as a result of economic repercussions from the recent COVID-19 pandemic; 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, improvement or construction; liabilities from operations; weather; decline in, and ability to realize, backlog; equipment specialization and new technologies, including the ability to develop and obtain satisfactory returns from new technology; 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; cybersecurity risk; difficulty with growth and in integrating acquisitions and new technology; governmental regulation; perception of sustainability practices; product liability; legal proceedings, including technology disputes, and actions by governmental or other regulatory agencies; political, economic and social instability risk; ability to effectively identify and enter new markets; dependence on our subsidiaries to meet our long-term debt obligations; variable rate indebtedness risk; ability to maintain credit rating and service debt; stock price volatility; anti-takeover measures in our charter documents; contingent tax liabilities; and ability to use net operating losses.
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. | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
REVENUES | $ | 207,141 | $ | 598,452 | $ | 903,448 | $ | 1,978,388 | ||||||||
COSTS AND EXPENSES: | ||||||||||||||||
Direct operating costs | 141,257 | 453,214 | 632,631 | 1,410,182 | ||||||||||||
Depreciation, depletion, amortization and impairment | 157,319 | 400,764 | 517,201 | 823,862 | ||||||||||||
Impairment of goodwill | — | 17,800 | 395,060 | 17,800 | ||||||||||||
Selling, general and administrative | 22,355 | 34,231 | 76,692 | 101,680 | ||||||||||||
Credit loss expense | — | — | 5,606 | 3,594 | ||||||||||||
Restructuring expenses | — | — | 38,338 | — | ||||||||||||
Other operating expenses (income), net | 776 | (252) | 5,980 | 83 | ||||||||||||
Total costs and expenses | 321,707 | 905,757 | 1,671,508 | 2,357,201 | ||||||||||||
OPERATING LOSS | (114,566) | (307,305) | (768,060) | (378,813) | ||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||
Interest income | 238 | 1,693 | 1,229 | 4,481 | ||||||||||||
Interest expense, net of amount capitalized | (11,288) | (20,739) | (33,496) | (47,021) | ||||||||||||
Other | 512 | 119 | 682 | 328 | ||||||||||||
Total other expense | (10,538) | (18,927) | (31,585) | (42,212) | ||||||||||||
LOSS BEFORE INCOME TAXES | (125,104) | (326,232) | (799,645) | (421,025) | ||||||||||||
INCOME TAX BENEFIT | (12,993) | (64,513) | (102,480) | (81,245) | ||||||||||||
NET LOSS | $ | (112,111) | $ | (261,719) | $ | (697,165) | $ | (339,780) | ||||||||
NET LOSS PER COMMON SHARE: | ||||||||||||||||
Basic | $ | (0.60) | $ | (1.31) | $ | (3.70) | $ | (1.65) | ||||||||
Diluted | $ | (0.60) | $ | (1.31) | $ | (3.70) | $ | (1.65) | ||||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: | ||||||||||||||||
Basic | 187,280 | 199,343 | 188,193 | 206,191 | ||||||||||||
Diluted | 187,280 | 199,343 | 188,193 | 206,191 | ||||||||||||
CASH DIVIDENDS PER COMMON SHARE | $ | 0.02 | $ | 0.04 | $ | 0.08 | $ | 0.12 | ||||||||
PATTERSON-UTI ENERGY, INC. | |||||||||||||||||||
Additional Financial and Operating Data | |||||||||||||||||||
(unaudited, dollars in thousands)
| |||||||||||||||||||
Three Months Ended | Nine Months Ended | Three Months Ended | |||||||||||||||||
September 30, | September 30, | June 30, | |||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | |||||||||||||||
Contract Drilling: | |||||||||||||||||||
Revenues | $ | 115,054 | $ | 317,035 | $ | 553,552 | $ | 1,037,565 | $ | 171,134 | |||||||||
Direct operating costs | $ | 59,117 | $ | 188,934 | $ | 309,664 | $ | 609,928 | $ | 87,127 | |||||||||
Margin (1) | $ | 55,937 | $ | 128,101 | $ | 243,888 | $ | 427,637 | $ | 84,007 | |||||||||
Restructuring expenses | $ | — | $ | — | $ | 2,430 | $ | — | $ | 2,430 | |||||||||
Other operating (income) expense, net | $ | — | $ | — | $ | (4,155) | $ | — | $ | (4,155) | |||||||||
Selling, general and administrative | $ | 876 | $ | 1,510 | $ | 3,684 | $ | 4,616 | $ | 1,344 | |||||||||
Depreciation, amortization and impairment | $ | 102,275 | $ | 296,119 | $ | 328,843 | $ | 554,838 | $ | 115,130 | |||||||||
Impairment of goodwill | $ | — | $ | — | $ | 395,060 | $ | — | $ | — | |||||||||
Operating loss | $ | (47,214) | $ | (169,528) | $ | (481,974) | $ | (131,817) | $ | (30,742) | |||||||||
Operating days – United States | 5,499 | 13,054 | 24,137 | 43,036 | 7,450 | ||||||||||||||
Operating days – Canada | — | 27 | 47 | 217 | — | ||||||||||||||
Operating days – Total | 5,499 | 13,081 | 24,184 | 43,253 | 7,450 | ||||||||||||||
Average revenue per operating day – United States | $ | 20.92 | $ | 24.25 | $ | 22.89 | $ | 24.02 | $ | 22.96 | |||||||||
Average direct operating costs per operating day – United States | $ | 10.62 | $ | 14.40 | $ | 12.73 | $ | 14.07 | $ | 11.65 | |||||||||
Average margin per operating day – United States (1) | $ | 10.31 | $ | 9.85 | $ | 10.16 | $ | 9.95 | $ | 11.32 | |||||||||
Average rigs operating – United States | 60 | 142 | 88 | 158 | 82 | ||||||||||||||
Average revenue per operating day – Canada | $ | — | $ | 17.67 | $ | 21.11 | $ | 18.16 | $ | — | |||||||||
Average direct operating costs per operating day – Canada | $ | — | $ | 35.07 | $ | 48.60 | $ | 20.65 | $ | — | |||||||||
Average margin per operating day – Canada (1) | $ | — | $ | (17.41) | $ | (27.49) | $ | (2.49) | $ | — | |||||||||
Average rigs operating – Canada | — | — | — | 1 | — | ||||||||||||||
Average revenue per operating day – Total | $ | 20.92 | $ | 24.24 | $ | 22.89 | $ | 23.99 | $ | 22.97 | |||||||||
Average direct operating costs per operating day – Total | $ | 10.75 | $ | 14.44 | $ | 12.80 | $ | 14.10 | $ | 11.69 | |||||||||
Average margin per operating day – Total (1) | $ | 10.17 | $ | 9.79 | $ | 10.08 | $ | 9.89 | $ | 11.28 | |||||||||
Average rigs operating – Total | 60 | 142 | 88 | 158 | 82 | ||||||||||||||
Capital expenditures | $ | 9,502 | $ | 34,752 | $ | 101,448 | $ | 158,141 | $ | 42,501 | |||||||||
Pressure Pumping: | |||||||||||||||||||
Revenues | $ | 71,973 | $ | 208,637 | $ | 256,613 | $ | 707,246 | $ | 59,533 | |||||||||
Direct operating costs | $ | 63,721 | $ | 176,306 | $ | 234,844 | $ | 585,191 | $ | 56,268 | |||||||||
Margin (2) | $ | 8,252 | $ | 32,331 | $ | 21,769 | $ | 122,055 | $ | 3,265 | |||||||||
Restructuring expenses | $ | — | $ | — | $ | 31,331 | $ | — | $ | 31,331 | |||||||||
Selling, general and administrative | $ | 2,004 | $ | 3,154 | $ | 6,748 | $ | 9,734 | $ | 1,677 | |||||||||
Depreciation, amortization and impairment | $ | 37,104 | $ | 72,139 | $ | 118,586 | $ | 188,459 | $ | 38,811 | |||||||||
Operating loss | $ | (30,856) | $ | (42,962) | $ | (134,896) | $ | (76,138) | $ | (68,554) | |||||||||
Fracturing jobs | 69 | 126 | 193 | 412 | 35 | ||||||||||||||
Other jobs | 180 | 173 | 541 | 629 | 152 | ||||||||||||||
Total jobs | 249 | 299 | 734 | 1,041 | 187 | ||||||||||||||
Average revenue per fracturing job | $ | 960.70 | $ | 1,631.71 | $ | 1,251.37 | $ | 1,687.39 | $ | 1,549.71 | |||||||||
Average revenue per other job | $ | 31.58 | $ | 17.58 | $ | 27.91 | $ | 19.14 | $ | 34.82 | |||||||||
Average revenue per total job | $ | 289.05 | $ | 697.78 | $ | 349.61 | $ | 679.39 | $ | 318.36 | |||||||||
Average costs per total job | $ | 255.91 | $ | 589.65 | $ | 319.95 | $ | 562.14 | $ | 300.90 | |||||||||
Average margin per total job (2) | $ | 33.14 | $ | 108.13 | $ | 29.66 | $ | 117.25 | $ | 17.46 | |||||||||
Margin as a percentage of revenues (2) | 11.5 | % | 15.5 | % | 8.5 | % | 17.3 | % | 5.5 | % | |||||||||
Capital expenditures | $ | 1,653 | $ | 19,826 | $ | 17,880 | $ | 90,028 | $ | 1,947 | |||||||||
PATTERSON-UTI ENERGY, INC. | |||||||||||||||||||
Additional Financial and Operating Data | |||||||||||||||||||
(unaudited, dollars in thousands)
| |||||||||||||||||||
Three Months Ended | Nine Months Ended | Three Months Ended | |||||||||||||||||
September 30, | September 30, | June 30, | |||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | |||||||||||||||
Directional Drilling: | |||||||||||||||||||
Revenues | $ | 10,271 | $ | 47,037 | $ | 56,498 | $ | 150,214 | $ | 11,742 | |||||||||
Direct operating costs | $ | 9,754 | $ | 56,215 | $ | 54,348 | $ | 143,919 | $ | 12,265 | |||||||||
Margin (3) | $ | 517 | $ | (9,178) | $ | 2,150 | $ | 6,295 | $ | (523) | |||||||||
Restructuring expenses | $ | — | $ | — | $ | 3,175 | $ | — | $ | 3,175 | |||||||||
Selling, general and administrative | $ | 829 | $ | 2,805 | $ | 4,169 | $ | 7,998 | $ | 1,010 | |||||||||
Depreciation, amortization and impairment | $ | 9,600 | $ | 20,518 | $ | 29,698 | $ | 41,755 | $ | 9,677 | |||||||||
Operating loss | $ | (9,912) | $ | (32,501) | $ | (34,892) | $ | (43,458) | $ | (14,385) | |||||||||
Margin as a percentage of revenues (3) | 5.0 | % | (19.5) | % | 3.8 | % | 4.2 | % | (4.5) | % | |||||||||
Capital expenditures | $ | 510 | $ | 5,559 | $ | 4,562 | $ | 11,121 | $ | 2,044 | |||||||||
Other Operations: | |||||||||||||||||||
Revenues | $ | 9,843 | $ | 25,743 | $ | 36,785 | $ | 83,363 | $ | 7,971 | |||||||||
Direct operating costs | $ | 8,665 | $ | 31,759 | $ | 33,775 | $ | 71,144 | $ | 9,086 | |||||||||
Margin (4) | $ | 1,178 | $ | (6,016) | $ | 3,010 | $ | 12,219 | $ | (1,115) | |||||||||
Restructuring expenses | $ | — | $ | — | $ | 501 | $ | — | $ | 501 | |||||||||
Selling, general and administrative | $ | 747 | $ | 5,149 | $ | 2,969 | $ | 12,660 | $ | 763 | |||||||||
Depreciation, depletion, amortization and impairment | $ | 6,852 | $ | 10,227 | $ | 35,087 | $ | 33,472 | $ | 7,976 | |||||||||
Impairment of goodwill | $ | — | $ | 17,800 | $ | — | $ | 17,800 | $ | — | |||||||||
Operating loss | $ | (6,421) | $ | (39,192) | $ | (35,547) | $ | (51,713) | $ | (10,355) | |||||||||
Capital expenditures | $ | 1,704 | $ | 7,191 | $ | 9,776 | $ | 21,194 | $ | 2,808 | |||||||||
Corporate: | |||||||||||||||||||
Selling, general and administrative | $ | 17,899 | $ | 21,613 | $ | 59,122 | $ | 66,672 | $ | 19,197 | |||||||||
Restructuring expenses | $ | — | $ | — | $ | 901 | $ | — | $ | 901 | |||||||||
Depreciation | $ | 1,488 | $ | 1,761 | $ | 4,987 | $ | 5,338 | $ | 1,491 | |||||||||
Credit loss expense | $ | — | $ | — | $ | 5,606 | $ | 3,594 | $ | 4,551 | |||||||||
Other operating expenses (income), net | $ | 776 | $ | (252) | $ | 10,135 | $ | 83 | $ | 8,908 | |||||||||
Capital expenditures | $ | 73 | $ | 700 | $ | 1,377 | $ | 2,804 | $ | 373 | |||||||||
Total capital expenditures | $ | 13,442 | $ | 68,028 | $ | 135,043 | $ | 283,288 | $ | 49,673 | |||||||||
(1) | For Contract Drilling, margin is defined as revenues less direct operating costs and excludes restructuring expenses, depreciation, amortization and |
(2) | For Pressure Pumping, margin is defined as revenues less direct operating costs and excludes restructuring expenses, depreciation, amortization |
(3) | For Directional Drilling, margin is defined as revenues less direct operating costs and excludes restructuring expenses, depreciation, amortization and impairment and selling, general and administrative expenses. Margin as a percentage of revenues is defined as margin divided by revenues. |
(4) | For Other Operations, margin is defined as revenues less direct operating costs and excludes restructuring expenses, depreciation, depletion, amortization and impairment, impairment of goodwill and selling, general and administrative expenses. |
September 30, | December 31, | |||||||||
Selected Balance Sheet Data (unaudited, in thousands): | 2020 | 2019 | ||||||||
Cash and cash equivalents | $ | 303,741 | $ | 174,185 | ||||||
Current assets | $ | 532,110 | $ | 631,815 | ||||||
Current liabilities | $ | 263,397 | $ | 400,602 | ||||||
Working capital | $ | 268,713 | $ | 231,213 | ||||||
Long-term debt | $ | 967,366 | $ | 966,540 | ||||||
PATTERSON-UTI ENERGY, INC. | |||||||||||||||||||
Three Months Ended | Nine Months Ended | Three Months Ended | |||||||||||||||||
September 30, | September 30, | June 30, | |||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | |||||||||||||||
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA) (1): | |||||||||||||||||||
Net loss | $ | (112,111) | $ | (261,719) | $ | (697,165) | $ | (339,780) | $ | (150,332) | |||||||||
Income tax benefit | (12,993) | (64,513) | (102,480) | (81,245) | (19,317) | ||||||||||||||
Net interest expense | 11,050 | 19,046 | 32,267 | 42,540 | 10,650 | ||||||||||||||
Depreciation, depletion, amortization and impairment | 157,319 | 400,764 | 517,201 | 823,862 | 173,085 | ||||||||||||||
Impairment of goodwill | — | 17,800 | 395,060 | 17,800 | — | ||||||||||||||
Adjusted EBITDA | $ | 43,265 | $ | 111,378 | $ | 144,883 | $ | 463,177 | $ | 14,086 | |||||||||
Total revenues | $ | 207,141 | $ | 598,452 | $ | 903,448 | $ | 1,978,388 | $ | 250,380 | |||||||||
Adjusted EBITDA margin | 20.9 | % | 18.6 | % | 16.0 | % | 23.4 | % | 5.6 | % | |||||||||
Adjusted EBITDA by operating segment: | |||||||||||||||||||
Contract drilling | $ | 55,061 | $ | 126,591 | $ | 241,929 | $ | 423,021 | $ | 84,388 | |||||||||
Pressure pumping | 6,248 | 29,177 | (16,310) | 112,321 | (29,743) | ||||||||||||||
Directional drilling | (312) | (11,983) | (5,194) | (1,703) | (4,708) | ||||||||||||||
Other operations | 431 | (11,165) | (460) | (441) | (2,379) | ||||||||||||||
Corporate | (18,163) | (21,242) | (75,082) | (70,021) | (33,472) | ||||||||||||||
Consolidated Adjusted EBITDA | $ | 43,265 | $ | 111,378 | $ | 144,883 | $ | 463,177 | $ | 14,086 | |||||||||
(1) | Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") is not defined by accounting principles generally |
PATTERSON-UTI ENERGY, INC. | ||||
Three Months Ended | ||||
September 30, | ||||
2020 | ||||
Contract drilling margin | $ | 55,937 | ||
Less lump sum early termination revenue | (2,631) | |||
Less sales and use taxes credit | (3,883) | |||
Contract drilling margin excluding certain items | $ | 49,423 | ||
Operating days - Total | 5,499 | |||
Average margin per operating day excluding certain items - Total (1) | $ | 8.99 | ||
(1) | We present average margin per operating day excluding certain items in order to convey to investors the performance of our contract drilling business |
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SOURCE PATTERSON-UTI ENERGY, INC.
FAQ
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