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Patterson-UTI (PTEN) Signs $200M Worth Term Loan Deal - Analyst Blog

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Onshore contract driller, Patterson-UTI Energy Inc.PTEN has signed a contract with a consortium of financial firms, led by Wells Fargo Bank NA.

Per the deal, Patterson-UTI will get $200 million worth unsecured senior loan - expected to mature by Sep 27, 2017. The funded term loan will partly be utilized by the company to pay back its $150 million outstanding debt under the revolving credit facility. The remaining funds are expected to be used for normal corporate activities.

Previously, Patterson-UTI had inked a deal with The Bank of Nova Scotia BNS . As per the agreement, the contract driller can request the bank to issue an unspecified sum of letters of credit through 2017. With this, the company will replace its outstanding $39.8 million in letters of credit.

Management revealed that after repaying all of its outstanding revolving debts and letter of credits replacements, Patterson-UTI will avail of a $500 million worth line of credit.

With the increased liquidity from the two latest financings, Patterson-UTI will be able to strengthen its balance sheet and operate in an unfavorable business scenario created by the plummeting crude prices.

Houston, TX-based Patterson-UTI is one of the largest onshore contract drillers in the U.S. with approximately 184 land-based rigs that operate primarily in the oil and natural gas producing regions of North America. The company currently carries a Zacks Rank #3 (Hold), implying that the stock will perform in line with the broader U.S. equity market over the next one to three months.

Some better-ranked players in the energy sector are Ferrellgas Partners LP FGP and Valero Energy Partners LP VLP . Both stocks sport a Zacks Rank #1 (Strong Buy).

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PATTERSON-UTI (PTEN): Free Stock Analysis Report

FERRELLGAS -LP (FGP): Free Stock Analysis Report

BANK OF NOVA SC (BNS): Free Stock Analysis Report

VALERO EGY PTNR (VLP): 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.

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