Onshore contract driller
Patterson-UTI Energy Inc.
) reported weak second-quarter 2013 results owing to seasonal
depression in Canadian operations as well as declining
utilization of conventional rigs.
Patterson-UTI's earnings per share (EPS) - excluding a one-time
gain - came in at 16 cents, failing to beat the Zacks Consensus
Estimate of 29 cents. The figure also decreased 67.4% in
comparison with the year-ago adjusted profit of 49 cents.
Revenues of $659.3 million were above our projection of $642.0
million primarily due to greater contribution from pressure
pumping unit. However, comparing year over year, revenues dropped
Rig Count Statistics
The number of operational rigs of Patterson-UTI during the
reported quarter averaged 185 (183 located in the U.S. and 2 in
Canada) compared with 224 in the second quarter of 2012.
This segment's revenues totaled $390.0 million (59.2% of the
total revenue), down 15.3% year over year. Average revenues per
operating day was $23,120, up 2.4% year over year, while average
direct costs per operating day increased 7.6% year over year to
$14,390. The segment's operating profit decreased to $47.1
million from $90.5 million in the year-ago quarter owing to
significant increase in selling, general and administrative
Revenues of $254.6 million were up 23.5% year over year. However,
the segment's operating profit decreased to $30.3 million from
$36.9 million in the prior-year quarter owing to adverse market
Oil & Natural Gas:
Revenues were $14.7 million, up marginally by 0.2% from the
year-ago quarter. However, operating income of $5.5 million was
down from $7.2 million in the prior-year quarter due to
substantial hike in direct operating costs.
Capital Expenditure & Balance Sheet
During the quarter, Patterson-UTI spent approximately $158.4
million on capital programs (against $248.7 million in the second
quarter of 2012). As of Jun 30, 2013, the company had $148.9
million in cash and $696.3 million in long-term debt (including
Patterson-UTI currently carries a Zacks Rank #3 (Hold), which
implies that it is expected to perform in line with the broader
U.S. equity market over the next one to three months.
Patterson-UTI, the second-largest North American land drilling
Nabors Industries Ltd.
), has a large, high-quality fleet of drilling rigs. The
company's technologically-advanced 'Apex' rigs are the key to its
Patterson-UTI's proprietary design makes the rigs move faster,
drill quicker and provide a safer operating environment in
comparison to other conventional rigs. Moreover, these rigs are
better suited for the new demands of the exploration business
and, therefore, command higher dayrates and utilization than rigs
from other land drillers.
ATWOOD OCEANICS (ATW): Free Stock Analysis
NABORS IND (NBR): Free Stock Analysis Report
OCEAN RIG UDW (ORIG): Free Stock Analysis
PATTERSON-UTI (PTEN): Free Stock Analysis
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On the flip side, Patterson-UTI's high natural gas exposure
raises its sensitivity to gas price fluctuations. The company
remains particularly exposed to this situation since its business
is heavily biased to gas drilling.
Meanwhile, one can look at oil and gas drilling firms that are
expected to perform well over the short term. These include
Atwood Oceanics Inc.
Ocean Rig UDW Inc.
). Both the firms sport a Zacks Rank #2 (Buy).