EXHIBIT 99.1
Patterson-UTI Energy Announces Second Quarter Results
Net Income Up 61 Percent
SNYDER, Texas – July 29, 2004 – PATTERSON-UTI ENERGY, INC. (Nasdaq: PTEN) today announced its financial results for the second quarter of 2004. Net income for the three months ended June 30, 2004 increased by 61 percent to $19.6 million, or $0.12 per share, from $12.2 million, or $0.07 per share for the second quarter of 2003. Revenues for the three-month period increased by 20 percent to $234.5 million, compared to revenues of $195.6 million for the quarter ended June 30, 2003.
Net income for the six months ended June 30, 2004 increased by 114 percent to $40.3 million, or $0.24 per share, from $18.8 million, or $0.11 per share for the comparable six-month period in 2003. Revenues for the six-month period increased by 26 percent to $453.3 million, compared to revenues of $360.9 million for the six months ended June 30, 2003.
During the quarter, the Company incurred exploration and production related impairment charges and dry-hole costs in the amount of $2.5 million ($1.6 million after tax) associated primarily with certain Mississippi projects.
The Company also announced that its Board of Directors has declared a cash dividend on its common stock in the amount of $0.02 per share. The dividend is to be paid to holders of record on August 16, 2004 and paid on September 1, 2004.
Cloyce A. Talbott, Patterson-UTI’s Chief Executive Officer, commented, “The two-year upward trend in our land-based contract drilling business continued in the second quarter. We expect this trend to continue well into the future based upon increasing customer demand, reflecting the expectation that natural gas prices will remain high. We therefore expect our rig count and day rates to increase.
“During the second quarter of 2004, we averaged 203 rigs operating, including 198 in the U.S. and 5 in Canada, compared to an average of 183 in the U.S. and 14 in Canada in the first quarter of the year. We estimate that our rigs operating will average approximately 209 rigs in July, including 201 in the U.S. and 8 in Canada. The operating results for the quarter were negatively affected by abnormally wet conditions in several of our drilling markets, which resulted in lower rig utilization rates and higher operating costs per day than had been anticipated,” Talbott added.
Mark S. Siegel, Chairman of Patterson-UTI Energy, stated, “On June 2, 2004 we paid our first cash dividend, and on June 30, 2004, our two-for-one stock split became effective. In addition, on June 7, 2004 we announced that our Board of Directors had approved a stock buyback program for the purchase of up to $30 million of the Company’s outstanding common stock. These actions demonstrate our faith in the Company’s ability to meet current and future financial obligations and continue our strategy of growth through selective acquisitions, while allowing us to return some of our earnings to our shareholders.”
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 second quarter results today at 9:30 a.m. Eastern (8:30 a.m. Central and 6:30 a.m. Pacific). This call is being Webcast and can be accessed through Patterson-UTI’s Web site 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, August 12, 2004. The telephone replay will be available through Saturday, July 31, 2004.
About Patterson-UTI Energy, Inc.
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 | | Six Months Ended |
| | | June 30,
| | June 30,
|
| | | 2004
| | 2003
| | 2004
| | 2003
|
| REVENUES | | $ | 234,510 | | | $ | 195,624 | | | $ | 453,289 | | | $ | 360,863 | |
| COSTS AND EXPENSES | | | | | | | | | | | | | | | | |
| Direct operating costs (excluding depreciation, depletion, amortization and impairment) | | | 165,320 | | | | 145,323 | | | | 318,606 | | | | 272,217 | |
| Depreciation, depletion, amortization and impairment | | | 30,451 | | | | 24,973 | | | | 57,734 | | | | 49,109 | |
| Selling, general and administrative | | | 7,910 | | | | 6,813 | | | | 14,708 | | | | 13,707 | |
| Bad debt expense | | | 217 | | | | 82 | | | | 307 | | | | 162 | |
| Other | | | (187 | ) | | | (720 | ) | | | (1,375 | ) | | | (3,329 | ) |
| | | |
| | | |
| | | |
| | | |
| |
| Total Costs and Expenses | | | 203,711 | | | | 176,471 | | | | 389,980 | | | | 331,866 | |
| | | |
| | | |
| | | |
| | | |
| |
| OPERATING INCOME | | | 30,799 | | | | 19,153 | | | | 63,309 | | | | 28,997 | |
| | | |
| | | |
| | | |
| | | |
| |
| OTHER INCOME (EXPENSE) | | | | | | | | | | | | | | | | |
| Interest expense | | | (54 | ) | | | (76 | ) | | | (130 | ) | | | (148 | ) |
| Interest income | | | 204 | | | | 285 | | | | 455 | | | | 545 | |
| Other | | | 172 | | | | 319 | | | | 257 | | | | 1,660 | |
| | | |
| | | |
| | | |
| | | |
| |
| Total Other Income | | | 322 | | | | 528 | | | | 582 | | | | 2,057 | |
| | | |
| | | |
| | | |
| | | |
| |
| INCOME BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE | | | 31,121 | | | | 19,681 | | | | 63,891 | | | | 31,054 | |
| INCOME TAXES | | | 11,514 | | | | 7,479 | | | | 23,602 | | | | 11,801 | |
| | | |
| | | |
| | | |
| | | |
| |
| INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE | | | 19,607 | | | | 12,202 | | | | 40,289 | | | | 19,253 | |
| CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, net of $287 income tax | | | — | | | | — | | | | — | | | | (469 | ) |
| | | |
| | | |
| | | |
| | | |
| |
| NET INCOME | | $ | 19,607 | | | $ | 12,202 | | | $ | 40,289 | | | $ | 18,784 | |
| | | |
| | | |
| | | |
| | | |
| |
| NET INCOME PER COMMON SHARE | | | | | | | | | | | | | | | | |
| BASIC: | | | | | | | | | | | | | | | | |
| Income before cumulative effect of change in accounting principle | | $ | 0.12 | | | $ | 0.08 | | | $ | 0.24 | | | $ | 0.12 | |
| | | |
| | | |
| | | |
| | | |
| |
| Cumulative effect of change in accounting principle | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | |
| | | |
| | | |
| | | |
| |
| Net Income | | $ | 0.12 | | | $ | 0.08 | | | $ | 0.24 | | | $ | 0.12 | |
| | | |
| | | |
| | | |
| | | |
| |
| DILUTED: | | | | | | | | | | | | | | | | |
| Income before cumulative effect of change in accounting principle | | $ | 0.12 | | | $ | 0.07 | | | $ | 0.24 | | | $ | 0.12 | |
| | | |
| | | |
| | | |
| | | |
| |
| Cumulative effect of change in accounting principle | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | |
| | | |
| | | |
| | | |
| |
| Net Income | | $ | 0.12 | | | $ | 0.07 | | | $ | 0.24 | | | $ | 0.11 | |
| | | |
| | | |
| | | |
| | | |
| |
| AVERAGE COMMON SHARES OUTSTANDING | | | | | | | | | | | | | | | | |
| Basic | | | 166,681 | | | | 161,058 | | | | 165,211 | | | | 160,694 | |
| | | |
| | | |
| | | |
| | | |
| |
| Diluted | | | 169,062 | | | | 164,914 | | | | 168,005 | | | | 164,218 | |
| | | |
| | | |
| | | |
| | | |
| |
PATTERSON-UTI ENERGY, INC.
Additional Financial and Operating Data (Unaudited)
(dollars in thousands)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | Six Months Ended |
| | | June 30,
| | June 30,
|
| | | 2004
| | 2003
| | 2004
| | 2003
|
| Contract Drilling: | | | | | | | | | | | | | | | | |
| Revenues | | $ | 188,222 | | | $ | 163,951 | | | $ | 367,397 | | | $ | 299,532 | |
| Direct operating costs (excluding depreciation and amortization) | | $ | 134,387 | | | $ | 124,309 | | | $ | 262,378 | | | $ | 230,737 | |
| Selling, general and administrative | | $ | 1,080 | | | $ | 1,094 | | | $ | 2,175 | | | $ | 2,229 | |
| Operating days | | | 18,473 | | | | 17,742 | | | | 36,437 | | | | 33,611 | |
| Average revenue per operating day | | $ | 10.19 | | | $ | 9.24 | | | $ | 10.08 | | | $ | 8.91 | |
| Average direct operating costs per operating day | | $ | 7.27 | | | $ | 7.01 | | | $ | 7.20 | | | $ | 6.87 | |
| Average margin per operating day | | $ | 2.92 | | | $ | 2.23 | | | $ | 2.88 | | | $ | 2.04 | |
| Number of owned rigs at end of period | | | 361 | | | | 340 | | | | 361 | | | | 340 | |
| Average number of rigs owned during period | | | 361 | | | | 334 | | | | 357 | | | | 331 | |
| Average rigs operating | | | 203 | | | | 195 | | | | 200 | | | | 186 | |
| Rig utilization percentage | | | 56 | % | | | 58 | % | | | 56 | % | | | 56 | % |
| Capital expenditures | | $ | 42,980 | | | $ | 27,400 | | | $ | 71,360 | | | $ | 40,939 | |
| Pressure Pumping: | | | | | | | | | | | | | | | | |
| Revenues | | $ | 14,577 | | | $ | 9,800 | | | $ | 28,827 | | | $ | 18,311 | |
| Direct operating costs (excluding depreciation) | | $ | 8,328 | | | $ | 5,800 | | | $ | 16,416 | | | $ | 10,806 | |
| Selling, general and administrative | | $ | 1,664 | | | $ | 1,245 | | | $ | 3,457 | | | $ | 2,756 | |
| Total jobs | | | 1,578 | | | | 1,246 | | | | 3,266 | | | | 2,307 | |
| Average revenue per job | | $ | 9.24 | | | $ | 7.87 | | | $ | 8.83 | | | $ | 7.94 | |
| Average costs per job | | $ | 5.28 | | | $ | 4.65 | | | $ | 5.03 | | | $ | 4.68 | |
| Average margin per job | | $ | 3.96 | | | $ | 3.22 | | | $ | 3.80 | | | $ | 3.26 | |
| Capital expenditures | | $ | 4,782 | | | $ | 2,406 | | | $ | 10,604 | | | $ | 6,119 | |
| Drilling and Completion Fluids: | | | | | | | | | | | | | | | | |
| Revenues | | $ | 23,424 | | | $ | 16,003 | | | $ | 41,563 | | | $ | 31,851 | |
| Direct operating costs (excluding depreciation and amortization) | | $ | 19,837 | | | $ | 13,922 | | | $ | 35,476 | | | $ | 28,303 | |
| Selling, general and administrative | | $ | 1,875 | | | $ | 1,771 | | | $ | 3,585 | | | $ | 3,548 | |
| Total jobs | | | 593 | | | | 515 | | | | 1,111 | | | | 1,001 | |
| Average revenue per job | | $ | 39.50 | | | $ | 31.07 | | | $ | 37.41 | | | $ | 31.82 | |
| Average costs per job | | $ | 33.45 | | | $ | 27.03 | | | $ | 31.93 | | | $ | 28.27 | |
| Average margin per job | | $ | 6.05 | | | $ | 4.04 | | | $ | 5.48 | | | $ | 3.55 | |
| Capital expenditures | | $ | 416 | | | $ | 146 | | | $ | 627 | | | $ | 277 | |
| Oil and Natural Gas Production and Exploration: | | | | | | | | | | | | | | | | |
| Revenues | | $ | 8,287 | | | $ | 5,870 | | | $ | 15,502 | | | $ | 11,169 | |
| Direct operating costs (excluding depreciation, depletion and impairment) | | $ | 2,768 | | | $ | 1,292 | | | $ | 4,336 | | | $ | 2,371 | |
| Selling, general and administrative | | $ | 427 | | | $ | 350 | | | $ | 840 | | | $ | 732 | |
| Capital expenditures | | $ | 3,600 | | | $ | 2,166 | | | $ | 7,132 | | | $ | 4,316 | |
| Corporate and Other: | | | | | | | | | | | | | | | | |
| Selling, general and administrative | | $ | 2,864 | | | $ | 2,353 | | | $ | 4,651 | | | $ | 4,442 | |
| Bad debt expense | | $ | 217 | | | $ | 82 | | | $ | 307 | | | $ | 162 | |
| Other | | $ | (187 | ) | | $ | (720 | ) | | $ | (1,375 | ) | | $ | (3,329 | ) |
| Total capital expenditures, excluding acquisitions | | $ | 51,778 | | | $ | 32,118 | | | $ | 89,723 | | | $ | 51,651 | |
| | | | | | | | | | | | | | | | | |
| | | June 30, | | June 30, | | | | | | | | |
| | | 2004
| | 2003
| | | | | | | | |
| Selected Balance Sheet Data: | | | | | | | | | | | | | | | | |
| Cash and cash equivalents | | $ | 63,353 | | | $ | 87,456 | | | | | | | | | |
| Current assets | | $ | 293,347 | | | $ | 265,100 | | | | | | | | | |
| Total assets | | $ | 1,193,774 | | | $ | 1,006,708 | | | | | | | | | |
| Current liabilities | | $ | 118,167 | | | $ | 93,192 | | | | | | | | | |
| Long-term debt, less current maturities | | $ | — | | | $ | — | | | | | | | | | |
| Working capital | | $ | 175,180 | | | $ | 171,908 | | | | | | | | | |
