A subsidiary of the onshore contract driller, Patterson-UTI Energy Inc. ( PTEN ) has signed a deal with a privately held company to acquire its pressure pumping operations based in East Texas.
Following the announcement, shares of Patterson-UTI gained about 1.7% in the NYSE to close at $33.56.
The deal comprises 31,500 horsepower of hydraulic fracturing equipment. The closure of the agreement is expected in the next 10 days. The acquisition provides Patterson-UTI a new operational base to carry out drilling activities in East Texas and Louisiana.
Patterson-UTI's rig data shows that almost 50% of its U.S. horizontal drilling rigs are located in Texas. The current acquisition should support the company's existing pressure pumping operations that provide well services in the Permian, Barnett and Eagle Ford basins. The company also has a significant presence in the Marcellus and Utica shale plays.
Patterson-UTI is a major onshore contract driller in the U.S. with approximately 330 land-based rigs that operate primarily in the oil and natural gas producing regions of North America.
New and well-maintained rigs, along with other advanced equipment, provide Patterson-UTI an edge over its competitors and help it to survive better in the present volatile environment. Moreover, Patterson-UTI's growing premium land rig fleet and the expected rise in demand for such services should lead to further uptrend for the company in the near term.
Patterson-UTI currently holds a Zacks Rank #2 (Buy), implying that it is expected to outperform the broader U.S. equity market over the next one to three months.
Other players worth considering in the oil and gas drilling sector include Pioneer Energy Services Corp. ( PES ), Parker Drilling Co. ( PKD ) and Helmerich & Payne, Inc. ( HP ). While Pioneer Energy sports a Zacks Rank #1 (Strong Buy), Parker Drilling and Helmerich & Payne have a Zacks Rank #2.
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PATTERSON-UTI (PTEN): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
