Exhibit 99.1
| | | | | |
For Immediate Release | | Contact: | | John E. Vollmer III |
| | | | | SVP & Chief Financial Officer |
| | | | | Patterson-UTI Energy, Inc. |
| | | | | (214) 360-7800 |
Patterson-UTI Energy Reports Record Financial Results
For Third Quarter of 2006
SNYDER, Texas — November 1, 2006 — PATTERSON-UTI ENERGY, INC. (NASDAQ: PTEN)today announced record results for the third quarter ended September 30, 2006. Net income for the quarter increased by 75 percent to $186 million, or $1.12 per share, from $106 million, or $0.61 per share, for the third quarter ended September 30, 2005. Revenues for the quarter were up by 44 percent to $674 million, compared to $469 million for the third quarter of 2005.
Net income for the nine months ended September 30, 2006 increased by 117 percent to $517 million, or $3.03 per share, from $239 million, or $1.38 per share, for the nine months ended September 30, 2005. Revenues for the nine-month period were up by 58 percent to $1.9 billion, compared to $1.2 billion for the comparable nine months of 2005.
The Company also announced that during the third quarter of 2006 it purchased $167 million of the Company’s common stock, bringing the year-to-date total purchases to $367 million.
The Company also declared a quarterly cash dividend on its Common Stock of $0.08 per share, to be paid to holders of record as of December 14, 2006 and will be paid on December 29, 2006.
Cloyce A. Talbott, Patterson-UTI’s President and Chief Executive Officer, commented, “During the quarter we continued to experience strong demand for our
contract drilling services. Average revenues per operating day increased by $1,030 to a record $20,810, and our average margins per operating day grew by $190 to $11,170, compared to the quarter ended June 30, 2006. While the high level of activity in our industry contributed to increased pricing for drilling services, it also contributed to substantial increases in compensation and repair costs during the quarter.”
He added, “During the third quarter of 2006 we had an average of 301 rigs operating, including 290 in the U.S. and 11 in Canada. Compared to the second quarter of 2006, our average rigs working increased by 4 in the U.S. and by 2 in Canada.
“We are maintaining our program of refurbishing approximately 30 drilling rigs during 2006, including 23 that have been completed so far this year,” Mr. Talbott added.
Mark S. Siegel, Chairman of Patterson-UTI Energy, stated, “Given the moderate weather last winter, the level of natural gas in storage before the start of the upcoming winter is not a surprise for us. The current gas storage overhang combined with the effect of some customer budgets that are running low and have not yet been replenished, have resulted in some recent moderation of demand in certain markets.
“Our operating strategy has been and remains based upon the conviction that the trend to a substantial increase in natural gas wells drilled in North America is long-term, albeit subject to some weather and other volatility. We believe that our quality-service approach and upgraded rig fleet, along with our strong balance sheet, position our company to take full advantage of the next upward wave in the natural gas market,” Mr. Siegel added.
All references to “net income per share” in this press release are diluted earnings per common share as defined within the Statement of Financial Accounting Standards No. 128.
The Company will hold its quarterly conference call to discuss third 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 Web site atwww.patenergy.com or atwww.streetevents.com in the Individual Investor Center. Replay of the conference call Webcast and will be available through Wednesday, November 15, 2006 atwww.patenergy.com and telephone replay of the call will be available through November 3, 2006.
About Patterson-UTI
Patterson-UTI Energy, Inc. provides onshore contract drilling services to exploration and production companies in North America. The Company owns 403 land-based drilling rigs that operate primarily in the oil and natural gas producing regions of Texas, New Mexico, Oklahoma, Arkansas, Louisiana, Mississippi, Colorado, Utah, Wyoming, Montana, North Dakota, South Dakota 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.
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 amounts)
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| | | Three Months Ended | | | Nine Months Ended | |
| | | September 30, | | | September 30, | |
| | | 2006 | | | 2005 | | | 2006 | | | 2005 | |
| REVENUES | | $ | 673,658 | | | $ | 468,739 | | | $ | 1,908,204 | | | $ | 1,209,254 | |
| | | | | | | | | | | | | | | | | |
| COSTS AND EXPENSES | | | | | | | | | | | | | | | | |
| Direct operating costs (excluding depreciation, depletion and impairment) | | | 327,710 | | | | 245,045 | | | | 925,225 | | | | 676,065 | |
| Depreciation, depletion and impairment | | | 49,215 | | | | 39,545 | | | | 140,245 | | | | 112,319 | |
| Selling, general and administrative | | | 13,777 | | | | 10,565 | | | | 39,428 | | | | 30,157 | |
| Embezzlement costs, net of recoveries | | | (1,512 | ) | | | 5,431 | | | | 2,941 | | | | 12,193 | |
| Other operating expenses | | | 2,563 | | | | 707 | | | | 3,948 | | | | 2,590 | |
| | | | | | | | | | | | | |
| Total Costs and Expenses | | | 391,753 | | | | 301,293 | | | | 1,111,787 | | | | 833,324 | |
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| OPERATING INCOME | | | 281,905 | | | | 167,446 | | | | 796,417 | | | | 375,930 | |
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| OTHER INCOME (EXPENSE) | | | | | | | | | | | | | | | | |
| Interest expense | | | (363 | ) | | | (56 | ) | | | (476 | ) | | | (179 | ) |
| Interest income | | | 948 | | | | 944 | | | | 5,579 | | | | 2,011 | |
| Other | | | 88 | | | | 19 | | | | 231 | | | | 39 | |
| | | | | | | | | | | | | |
| Total Other Income | | | 673 | | | | 907 | | | | 5,334 | | | | 1,871 | |
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| | | �� | | | | | | | | | | | | | | |
| INCOME BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE | | | 282,578 | | | | 168,353 | | | | 801,751 | | | | 377,801 | |
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| INCOME TAX EXPENSE | | | 96,588 | | | | 62,048 | | | | 285,502 | | | | 139,250 | |
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| INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE | | | 185,990 | | | | 106,305 | | | | 516,249 | | | | 238,551 | |
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| CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET OF RELATED TAX EXPENSE OF $398 | | | — | | | | — | | | | 687 | | | | — | |
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| NET INCOME | | $ | 185,990 | | | $ | 106,305 | | | $ | 516,936 | | | $ | 238,551 | |
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| NET INCOME PER COMMON SHARE | | | | | | | | | | | | | | | | |
| Basic | | $ | 1.14 | | | $ | 0.62 | | | $ | 3.08 | | | $ | 1.40 | |
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| Diluted | | $ | 1.12 | | | $ | 0.61 | | | $ | 3.03 | | | $ | 1.38 | |
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| WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | | | | | | | | | | | | | | | | |
| Basic | | | 163,412 | | | | 171,613 | | | | 168,036 | | | | 169,846 | |
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| Diluted | | | 165,742 | | | | 174,587 | | | | 170,339 | | | | 173,211 | |
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PATTERSON-UTI ENERGY, INC.
Additional Financial and Operating Data (Unaudited)
(dollars in thousands)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | Nine Months Ended |
| | | September 30, | | September 30, |
| | | 2006 | | 2005 | | 2006 | | 2005 |
| Contract Drilling: | | | | | | | | | | | | | | | | |
| Revenues | | $ | 577,047 | | | $ | 401,046 | | | $ | 1,616,100 | | | $ | 1,025,938 | |
| Direct operating costs (excluding depreciation) | | $ | 267,345 | | | $ | 202,956 | | | $ | 737,021 | | | $ | 558,607 | |
| Selling, general and administrative | | $ | 1,817 | | | $ | 1,286 | | | $ | 5,338 | | | $ | 3,701 | |
| Operating days | | | 27,725 | | | | 26,015 | | | | 81,489 | | | | 73,746 | |
| Average revenue per operating day | | $ | 20.81 | | | $ | 15.42 | | | $ | 19.83 | | | $ | 13.91 | |
| Average direct operating costs per operating day | | $ | 9.64 | | | $ | 7.80 | | | $ | 9.04 | | | $ | 7.57 | |
| Average margin per operating day | | $ | 11.17 | | | $ | 7.62 | | | $ | 10.79 | | | $ | 6.34 | |
| Number of owned rigs at end of period | | | 403 | | | | 403 | | | | 403 | | | | 403 | |
| Average number of rigs owned during period | | | 403 | | | | 398 | | | | 403 | | | | 395 | |
| Average rigs operating | | | 301 | | | | 283 | | | | 298 | | | | 270 | |
| Rig utilization percentage | | | 75 | % | | | 71 | % | | | 74 | % | | | 68 | % |
| Capital expenditures | | $ | 152,879 | | | $ | 90,114 | | | $ | 377,165 | | | $ | 222,492 | |
| | | | | | | | | | | | | | | | | |
| Pressure Pumping: | | | | | | | | | | | | | | | | |
| Revenues | | $ | 40,462 | | | $ | 27,640 | | | $ | 107,800 | | | $ | 66,358 | |
| Direct operating costs (excluding depreciation) | | $ | 20,960 | | | $ | 15,662 | | | $ | 56,545 | | | $ | 38,648 | |
| Selling, general and administrative | | $ | 3,450 | | | $ | 2,464 | | | $ | 9,588 | | | $ | 6,858 | |
| Total jobs | | | 3,116 | | | | 2,714 | | | | 8,844 | | | | 6,968 | |
| Average revenue per job | | $ | 12.99 | | | $ | 10.18 | | | $ | 12.19 | | | $ | 9.52 | |
| Average costs per job | | $ | 6.73 | | | $ | 5.77 | | | $ | 6.39 | | | $ | 5.55 | |
| Average margin per job | | $ | 6.26 | | | $ | 4.41 | | | $ | 5.80 | | | $ | 3.97 | |
| Capital expenditures | | $ | 7,692 | | | $ | 5,865 | | | $ | 27,371 | | | $ | 20,598 | |
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| Drilling and Completion Fluids: | | | | | | | | | | | | | | | | |
| Revenues | | $ | 46,183 | | | $ | 29,819 | | | $ | 155,221 | | | $ | 88,812 | |
| Direct operating costs (excluding depreciation) | | $ | 36,183 | | | $ | 24,062 | | | $ | 120,418 | | | $ | 71,857 | |
| Selling, general and administrative | | $ | 2,733 | | | $ | 2,402 | | | $ | 7,765 | | | $ | 6,964 | |
| Total jobs | | | 550 | | | | 485 | | | | 1,569 | | | | 1,515 | |
| Average revenue per job | | $ | 83.93 | | | $ | 61.48 | | | $ | 98.93 | | | $ | 58.62 | |
| Average costs per job | | $ | 65.79 | | | $ | 49.61 | | | $ | 76.75 | | | $ | 47.43 | |
| Average margin per job | | $ | 18.14 | | | $ | 11.87 | | | $ | 22.18 | | | $ | 11.19 | |
| Capital expenditures | | $ | 1,122 | | | $ | 687 | | | $ | 3,052 | | | $ | 2,039 | |
| | | | | | | | | | | | | | | | | |
| Oil and Natural Gas Production and Exploration: | | | | | | | | | | | | | | | | |
| Revenues | | $ | 9,986 | | | $ | 10,234 | | | $ | 29,083 | | | $ | 28,146 | |
| Direct operating costs (excluding depreciation, depletion and impairment) | | $ | 3,222 | | | $ | 2,365 | | | $ | 11,241 | | | $ | 6,953 | |
| Selling, general and administrative | | $ | 684 | | | $ | 545 | | | $ | 2,050 | | | $ | 1,598 | |
| Capital expenditures | | $ | 4,982 | | | $ | 3,858 | | | $ | 15,699 | | | $ | 12,286 | |
| | | | | | | | | | | | | | | | | |
| Corporate and Other: | | | | | | | | | | | | | | | | |
| Selling, general and administrative | | $ | 5,093 | | | $ | 3,868 | | | $ | 14,687 | | | $ | 11,036 | |
| Other operating expenses | | $ | 2,563 | | | $ | 707 | | | $ | 3,948 | | | $ | 2,590 | |
| Embezzlement costs, net of recoveries | | $ | (1,512 | ) | | $ | 5,431 | | | $ | 2,941 | | | $ | 12,193 | |
| Capital expenditures | | $ | — | | | $ | — | | | $ | 135 | | | $ | 5,308 | |
| | | | | | | | | | | | | | | | | |
| Total capital expenditures, excluding acquisitions | | $ | 166,675 | | | $ | 100,524 | | | $ | 423,422 | | | $ | 262,723 | |
| | | | | | | | | |
| | | September 30, | | December 31, |
| | | 2006 | | 2005 |
| Selected Balance Sheet Data (Unaudited): | | | | | | | | |
| Cash and cash equivalents | | $ | 16,945 | | | $ | 136,398 | |
| Current assets | | $ | 661,964 | | | $ | 637,857 | |
| Total assets | | $ | 2,094,889 | | | $ | 1,795,781 | |
| Current liabilities | | $ | 339,927 | | | $ | 255,409 | |
| Long-term debt, less current maturities | | $ | 65,000 | | | $ | — | |
| Working capital | | $ | 322,037 | | | $ | 382,448 | |
