Exhibit 99.1
For Immediate Release | Contact: | John E. Vollmer III | ||
SVP-Corporate Development | ||||
Patterson-UTI Energy, Inc. | ||||
(214) 360-7800 |
Patterson-UTI Energy Announces First Quarter Results
Net Income Increases by 214 Percent on 32 Percent Increase in Revenues
Initiates Quarterly Cash Dividend and Declares Two-for-One Stock Split
SNYDER, Texas – April 29, 2004 – PATTERSON-UTI ENERGY, INC. (Nasdaq: PTEN) today announced its financial results for the first quarter of 2004. Net income for the three months ended March 31, 2004 increased by 214 percent to $20.7 million, or $0.25 per share, from $6.6 million, or $0.08 per share for the first quarter of 2003. Revenues for the three-month period increased by 32 percent to $218.8 million, compared to revenues of $165.2 million for the quarter ended March 31, 2003.
The Company also announced that its Board of Directors has approved the initiation of a quarterly cash dividend on its Common Stock as well as a two-for-one stock split in the form of a stock dividend. The stock dividend will be effective on June 30, 2004, for holders of record on the close of business on June 14, 2004. The cash dividends will aggregate $0.16 per share on an annual basis ($0.08 per share post-split) with the first quarterly dividend in the amount of $0.04 per share ($0.02 per share post-split) to be paid to holders of record on May 17, 2004 and paid on June 2, 2004.
Cloyce A. Talbott, Patterson-UTI’s Chief Executive Officer, commented, “The long-term upward trend in drilling activity, which commenced in the second quarter of 2002, has continued in 2004. During the first quarter of 2004, we averaged 197 rigs operating, including 183 in the U.S. and 14 in Canada, compared to the fourth quarter of 2003 average of 191 rigs operating, including 179 in the U.S. and 12 in Canada. We are especially pleased that we were able to achieve this utilization level despite unusually inclement weather during the first quarter.
“We estimate that our rig count will average approximately 200 rigs operating in April, including 196 in the U.S. and 4 in Canada. The Canadian rig count reflects the customary decline as a result of the spring breakup. During the week ended April 24, 2004, we averaged 207 rigs operating, including 204 in the U.S. and 3 in Canada. Customer inquiries remain strong, reflecting the impact of high natural gas prices and the expectation that such prices will continue, and for this reason, we expect our rig count will continue to increase throughout the year.
“Each of our three smaller business units – pressure pumping, drilling fluids and E&P – also had strong performances that contributed to the successful first quarter,” Talbott added.
Mark S. Siegel, Chairman of Patterson-UTI Energy, stated, “We ended the first quarter with approximately $92 million in cash and cash equivalents, $192 million in working capital, and no long-term debt, after having completed the acquisition of TMBR/Sharp Drilling during the quarter. We believe that the first quarter again demonstrates that our strategy – growth through selective acquisitions – continues to benefit our customers and reward our shareholders.”
“Our confidence in the long-term strength of the Company and its earnings leverage, and the industry trend, is underscored by the action of our Board to initiate a quarterly cash dividend and declare a two-for-one stock split. We believe our successful operating results and the prospects for the industry will enable us to generate sufficient cash flow to fund our current needs and our expectations for further growth, while allowing us to return some of our earnings to our shareholder,” Siegel added.
All references to “earnings per share” in this press release are diluted earnings per share as defined within the Statement of Financial Accounting Standards No. 128.
The Company will hold its quarterly conference call to discuss first quarter results today at 10:00 a.m. Eastern (9:00 a.m. Central and 7:00 a.m. Pacific). This call is being webcast and can be accessed through Patterson-UTI’s website at www.patenergy.com or at www.streetevents.com in the Individual Investor Center. Replay of the conference call webcast will be available at these same sites until Thursday, May 13, 2004.
About Patterson-UTI
Patterson-UTI Energy, Inc. provides onshore contract drilling services to exploration and production companies in North America. The Company owns 361 land-based drilling rigs that operate primarily in the oil and natural gas producing regions of Texas, New Mexico, Oklahoma, Louisiana, Mississippi, Colorado, Utah, Wyoming and western Canada. Patterson-UTI Energy, Inc. is also engaged in the businesses of pressure pumping services and drilling and completion fluid services. Additionally, the Company has an exploration and production business that is based in Texas.
Statements made in this press release which state the Company’s or management’s intentions, beliefs, expectations or predictions for the future are forward-looking statements. It is important to note that actual results could differ materially from those discussed in such forward-looking statements. Important factors that could cause actual results to differ materially include, but are not limited to, declines in oil and natural gas prices that could adversely affect demand for the Company’s services, and their associated effect on day rates, rig utilization and planned capital expenditures, adverse industry conditions, difficulty in integrating acquisitions, demand for oil and natural gas, and ability to retain management and field personnel. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company’s SEC filings. Copies of these filings may be obtained by contacting the Company or the SEC.
PATTERSON-UTI ENERGY, INC.
Condensed Consolidated Statements of Income (Unaudited)
(in thousands, except per share data)
Three Months Ended | ||||||||
March 31, | ||||||||
2004 | 2003 | |||||||
REVENUES | $ | 218,779 | $ | 165,239 | ||||
COSTS AND EXPENSES | ||||||||
Direct operating costs (excluding depreciation, depletion and amortization) | 153,286 | 126,894 | ||||||
Depreciation, depletion and amortization | 27,283 | 24,136 | ||||||
Selling, general and administrative | 6,798 | 6,894 | ||||||
Bad debt expense | 90 | 80 | ||||||
Other | (1,188 | ) | (2,609 | ) | ||||
Total Costs and Expenses | 186,269 | 155,395 | ||||||
OPERATING INCOME | 32,510 | 9,844 | ||||||
OTHER INCOME (EXPENSE) | ||||||||
Interest expense | (76 | ) | (72 | ) | ||||
Interest income | 251 | 260 | ||||||
Other | 85 | 1,341 | ||||||
Total Other Income | 260 | 1,529 | ||||||
INCOME BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE | 32,770 | 11,373 | ||||||
INCOME TAXES | 12,088 | 4,322 | ||||||
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE | 20,682 | 7,051 | ||||||
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, net of $287 income tax | — | (469 | ) | |||||
NET INCOME | $ | 20,682 | $ | 6,582 | ||||
NET INCOME PER COMMON SHARE | ||||||||
BASIC: | ||||||||
Income before cumulative effect of change in accounting principle | $ | 0.25 | $ | 0.09 | ||||
Cumulative effect of change in accounting principle | — | (0.01 | ) | |||||
Net Income | $ | 0.25 | $ | 0.08 | ||||
DILUTED: | ||||||||
Income before cumulative effect of change in accounting principle | $ | 0.25 | $ | 0.09 | ||||
Cumulative effect of change in accounting principle | — | (0.01 | ) | |||||
Net Income | $ | 0.25 | $ | 0.08 | ||||
AVERAGE COMMON SHARES OUTSTANDING | ||||||||
Basic | 81,874 | 80,163 | ||||||
Diluted | 83,617 | 82,085 | ||||||
PATTERSON-UTI ENERGY, INC.
Additional Financial and Operating Data (Unaudited)
(dollars in thousands)
Three Months Ended | ||||||||
March 31, | ||||||||
2004 | 2003 | |||||||
Contract Drilling: | ||||||||
Revenues | $ | 179,175 | $ | 135,581 | ||||
Direct operating costs (excluding depreciation and amortization) | $ | 127,991 | $ | 106,428 | ||||
Selling, general and administrative | $ | 1,095 | $ | 1,135 | ||||
Operating days | 17,964 | 15,869 | ||||||
Average revenue per operating day | $ | 9.97 | $ | 8.54 | ||||
Average direct operating costs per operating day | $ | 7.12 | $ | 6.71 | ||||
Average margin per operating day | $ | 2.85 | $ | 1.83 | ||||
Number of owned rigs at end of period | 361 | 331 | ||||||
Average number of rigs owned during period | 353 | 329 | ||||||
Average rigs operating | 197 | 176 | ||||||
Rig utilization percentage | 56 | % | 54 | % | ||||
Capital expenditures | $ | 28,380 | $ | 13,539 | ||||
Pressure Pumping: | ||||||||
Revenues | $ | 14,250 | $ | 8,511 | ||||
Direct operating costs (excluding depreciation) | $ | 8,088 | $ | 5,006 | ||||
Selling, general and administrative | $ | 1,793 | $ | 1,511 | ||||
Total jobs | 1,688 | 1,061 | ||||||
Average revenue per job | $ | 8.44 | $ | 8.02 | ||||
Average costs per job | $ | 4.79 | $ | 4.72 | ||||
Average margin per job | $ | 3.65 | $ | 3.30 | ||||
Capital expenditures | $ | 5,822 | $ | 3,713 | ||||
Drilling and Completion Fluids: | ||||||||
Revenues | $ | 18,139 | $ | 15,848 | ||||
Direct operating costs (excluding depreciation and amortization) | $ | 15,639 | $ | 14,381 | ||||
Selling, general and administrative | $ | 1,710 | $ | 1,777 | ||||
Total jobs | 518 | 486 | ||||||
Average revenue per job | $ | 35.02 | $ | 32.61 | ||||
Average costs per job | $ | 30.19 | $ | 29.59 | ||||
Average margin per job | $ | 4.83 | $ | 3.02 | ||||
Capital expenditures | $ | 211 | $ | 131 | ||||
Oil and Natural Gas Production and Exploration: | ||||||||
Revenues | $ | 7,215 | $ | 5,299 | ||||
Direct operating costs (excluding depreciation and depletion) | $ | 1,568 | $ | 1,079 | ||||
Selling, general and administrative | $ | 413 | $ | 382 | ||||
Capital expenditures | $ | 3,532 | $ | 2,150 | ||||
Corporate and Other: | ||||||||
Selling, general and administrative | $ | 1,787 | $ | 2,089 | ||||
Bad debt expense | $ | 90 | $ | 80 | ||||
Other | $ | (1,188 | ) | $ | (2,609 | ) | ||
Total capital expenditures, excluding acquisitions | $ | 37,945 | $ | 19,533 |
March 31, | March 31, | |||||||
2004 | 2003 | |||||||
Selected Balance Sheet Data: | ||||||||
Cash and cash equivalents | $ | 92,192 | $ | 70,796 | ||||
Current assets | $ | 309,876 | $ | 251,084 | ||||
Total assets | $ | 1,179,948 | $ | 966,235 | ||||
Current liabilities | $ | 117,483 | $ | 83,999 | ||||
Long-term debt, less current maturities | $ | — | $ | — | ||||
Working capital | $ | 192,393 | $ | 167,085 |