PATTERSON-UTI ENERGY, INC. (PTEN) today reported financial results for the three and nine months ended September 30, 2014.  Including the non-cash charge discussed below, the Company reported net income of $16.0 million, or $0.11 per share, for the third quarter of 2014, compared to net income of $74.4 million, or $0.51 per share, for the quarter ended September 30, 2013.  Revenues for the third quarter of 2014 were $846 million, a quarterly record, compared to $731 million for the third quarter of 2013.

Consistent with the transformation of the Company’s rig fleet, 55 mechanical rigs were retired during the quarter.  As a result, the financial results for the three months ended September 30, 2014 include a pretax non-cash charge of $77.9 million ($52.9 million after-tax, or $0.36 per share).  This non-cash charge reflects the retirement of these rigs and the write-off of excess spare components for the now reduced size of the Company’s mechanical rig fleet.  For the three months ended September 30, 2013, the Company’s financial results include revenue of $62.8 million from the early contract termination of six rigs.

The Company reported net income of $105 million, or $0.71 per share, for the nine months ended September 30, 2014, compared to net income of $171 million, or $1.16 per share, for the nine months ended September 30, 2013.  Revenues for the nine months ended September 30, 2014 were $2.3 billion, compared to $2.1 billion for the same period in 2013.

Andy Hendricks, Patterson-UTI’s Chief Executive Officer, stated, “Our average rig count in the United States increased by eight rigs in the third quarter to 209 rigs from 201 rigs in the second quarter.  In Canada, our average rig count increased to 10 rigs in the third quarter from three rigs in the second quarter.  Overall, we continue to experience high levels of demand for rigs.  For the month of October, we expect to average 212 rigs operating in the United States and 10 rigs in Canada.”

Mr. Hendricks added, “Strong demand for high-specification drilling rigs is positively impacting rig pricing.  Average rig revenue per day and average rig margin per day both increased sequentially across all of our rig classes.  Average rig revenue per day increased $380 sequentially to $24,010 and average rig margin per day increased by $290 sequentially to $10,160.

“We completed six new APEX® rigs during the third quarter, bringing our APEX® rig fleet to 139 rigs at quarter end.  Since our last earnings release we have signed seven contracts for new APEX® rigs.  In response to strong customer demand, we are increasing our manufacturing rate and now expect to complete 30 new APEX® rigs during the four quarters ending September 2015, including six in the fourth quarter of 2014.  Of the 30 new APEX® rigs to be completed, 22 are currently contracted.

“As of September 30, 2014, we had term contracts for drilling rigs providing for approximately $1.7 billion of future dayrate drilling revenue.  Based on contracts currently in place, we expect an average of 157 rigs operating under term contracts during the fourth quarter, and an average of 93 rigs operating under term contracts during 2015.

“In pressure pumping, we generated record quarterly revenues of $349 million, a sequential increase of $42.1 million, as activity levels increased, including from the full-quarter impact of our June 2014 acquisition of 31,500 horsepower.  During the quarter, we incurred higher costs related to sand transportation and equipment maintenance, as well as startup costs and crew activations associated with a new frac spread that started in early-October as well as our June acquisition.  At the end of the third quarter, flooding in the Permian Basin negatively impacted revenue and increased costs for both sand demurrage and crews on suspended jobs.  As a result of these factors, our pressure pumping EBITDA increased $3.3 million during the quarter to $62.8 million, which was a smaller than expected increase.

“As previously announced, we acquired approximately 180,000 horsepower in two transactions.  Additionally, we previously ordered three horizontal frac spreads plus spares totaling 155,000 horsepower in response to multiple customers requesting incremental fracturing horsepower.  The first of these new frac spreads went to work in early-October, and the two remaining spreads on order are scheduled for delivery in the first and second quarters of 2015,” he concluded.

Mark S. Siegel, Chairman of Patterson-UTI, stated, “North American land drilling and pressure pumping are excellent businesses, and we are well positioned in both of these segments.  We are increasing our scale within pressure pumping through both accretive acquisitions and incremental new equipment orders to meet the rising demand from our customers.  As rising horizontal drilling activity and increasing frac intensity positively impact pressure pumping demand, we will benefit through our position as a high-quality, execution-focused pumping company.

“As customer demand has shifted in favor of high-spec drilling rigs, such as our APEX® rigs, we made the decision to retire 55 idle rigs.  After the retirement, we have 44 mechanical rigs in our fleet with a net book value of $113 million.  This group of rigs has maintained high utilization and generated more than $85 million of EBITDA during the four quarters ended September 30, 2014.  The cash flow from these rigs is helping to fund the Company’s new APEX® rig manufacturing program.

“We have fundamentally changed our Company through the transformation of our rig fleet and the substantial increase in our pressure pumping horsepower.  Our rig fleet continues to evolve, as we align our fleet with customer demand and focus on modern, highly-efficient APEX® rigs, with a preponderance of our rig fleet now under term contract.  In pressure pumping, our fleet consists of the latest technology, high-horsepower pumps, and has increased by more than 500% during the last five years to one million horsepower,” he concluded.

The Company declared a quarterly dividend on its common stock of $0.10 per share, to be paid on December 24, 2014 to holders of record as of December 10, 2014.

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, 2014 is scheduled for today, October 23, 2014 at 9:00 a.m. Central Time. The dial-in information for participants is 877-280-4960 (Domestic) and 857-244-7317 (International).  The access code for both numbers is 50285712.  The call is also being webcast and can be accessed through the Investor Relations section at  A replay of the conference call will be on the Company’s website for two weeks.  A telephonic replay will be available through October 27, 2014 at 888-286-8010 (Domestic) and 617-801-6888 (International) with the access code 99577515.

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 and its subsidiaries operate land-based drilling rigs in oil and natural gas producing regions of the continental United States, Alaska, and western and northern Canada.  Universal Pressure Pumping, Inc. and Universal Well Services, Inc. provide pressure pumping services primarily in Texas and the Appalachian region.

Location information about the Company’s drilling rigs and their individual inventories is available through the Company’s website at

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