Onshore contract driller
Patterson-UTI Energy Inc.
) declared that its Nov 2013 drill rig count increased by seven
from Oct 2013 to average 194. The company operated 184 rigs in
the U.S. and 10 in Canada in November.
Patterson-UTI reveals that for the two months ending Nov 30, the
rig count of the company averaged 181 in the U.S. and 10 in
Patterson-UTI's activity levels in the U.S. peaked in early Oct
2008, with a rig count of 275. Since then, and through the second
quarter of 2009, the company witnessed a steep and rapid decline
in rig count on the back of decreased demand, largely caused by
lower commodity prices for natural gas.
However, natural gas prices have recovered significantly from
their multi-year lows amid signs of economic stabilization.
Moreover, according to U.S Energy Information Administration
(EIA), the winters of 2013 and 2014 are expected to be colder,
compared to a relatively warm 2012 winter. Hence natural gas
demand is expected to increase, which would help set an
increasing price trend.
Houston, Texas-based Patterson-UTI Energy is one of the largest
onshore contract drillers in the U.S. with more than 300
land-based rigs that operate primarily in the oil and natural gas
producing regions of North America. The company operates
primarily in three segments - contract drilling, pressure
pumping, and oil and natural gas production and exploration -
with contract drilling being the most significant contributor to
However, with a strong competitive market, there is excess
availability of land drilling rigs as well as pressure pumping
equipment. Hence, the company has lost some of its market share
to competitors who offer better products and services at a
Patterson-UTI currently retains a Zacks Rank #3 (Hold), implying
that it is expected to perform in line with the broader U.S.
equity market over the next one to three months.
Meanwhile one can look at better-ranked players in the oil and
gas drilling sector like
Helmerich & Payne Inc.
Pacific Drilling SA
). Tesco sports a Zacks Rank #1 (Strong Buy) while Helmerich
& Payne and Pacific Drilling hold a Zacks Rank #2
HELMERICH&PAYNE (HP): Free Stock Analysis
PACIFIC DRILLNG (PACD): Free Stock Analysis
PATTERSON-UTI (PTEN): Free Stock Analysis
TESCO CORP (TESO): Free Stock Analysis Report
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