Onshore contract driller Patterson-UTI Energy Inc.PTEN announced the pricing of 15.8 million shares of its common stock.
The company has priced the stock at $26.45 per share in a public offering, which is anticipated to close on Jan 27, 2017. The offering will likely generate gross proceeds of $417.9 million for Patterson-UTI. This offering has been upsized by 1 million shares from the originally proposed share offering of 14.8 million shares. Also, it gives a 30-day option to underwriters to purchase up to an additional 2.37 million shares of common stock from the company.
Patterson-UTI plans to utilize the net proceeds to fund the repayment of the outstanding debt of Seventy Seven Energy Inc. However, the company will use the proceeds for general corporate purposes if the merger is not consummated.
Headquartered in Houston, TX, Patterson-UTI Energy is one of the largest North American land drilling contractor with a large, high-quality fleet of drilling rigs. The company's technologically advanced 'Apex' rigs are the key to its success.
Patterson-UTI Energy, Inc. Price
Patterson-UTI's proprietary design makes the rigs move faster than conventional ones. These also drill quicker and more efficiently than conventional rigs and allow for a safer operating environment. As such, these rigs are better suited to meet the demands of the exploration business and, therefore, command higher dayrates and utilization than rigs from other land drillers.
However, results oil services and equipment suppliers, such as North Atlantic Drilling Ltd. ( NADL),Helmerich & Payne, Inc. ( HP), Independence Contract Drilling, Inc. ( ICD) to name a few, are directly exposed to commodity prices, which are inherently volatile and subject to complex market forces. Patterson-UTI is no exception to this fact. As a result, the ongoing weakness in oil and natural gas prices have curtailed drilling and dampened equipment demand, adversely affecting bookings at Patterson-UTI.
Year to date, the Zacks categorized Oil/Gas Drilling industry has registered an impressive growth of 26.2%. However, the Patterson-UTI stock has outperformed the industry by gaining 90.1%.
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