Patterson-UTI Energy (PTEN) 8-K UBS Global Oil and Gas Conference

Patterson-UTI Energy, Inc.

Patterson-UTI Energy, Inc.

UBS Global Oil and Gas Conference

UBS Global Oil and Gas Conference

May 23, 2012

May 23, 2012

Exhibit 99.1

2

2

Forward Looking Statements

This material and any oral statements made in connection with this material

This material and any oral statements made in connection with this material

include "forward-looking statements" within the meaning of the Securities Act of

include "forward-looking statements" within the meaning of the Securities Act of

1933 and the Securities Exchange Act of 1934.  Statements made which provide

1933 and the Securities Exchange Act of 1934.  Statements made which provide

the Company’s or management’s intentions, beliefs, expectations or predictions for

the Company’s or management’s intentions, beliefs, expectations or predictions for

the future are forward-looking statements and are inherently uncertain. The

the future are forward-looking statements and are inherently uncertain. The

opinions, forecasts, projections or other statements other than statements of

opinions, forecasts, projections or other statements other than statements of

historical fact, including, without limitation, plans and objectives of management of

historical fact, including, without limitation, plans and objectives of management of

the Company are forward-looking statements.  It is important to note that actual

the Company are forward-looking statements.  It is important to note that actual

results could differ materially from those discussed in such forward-looking

results could differ materially from those discussed in such forward-looking

statements.  Important factors that could cause actual results to differ materially

statements.  Important factors that could cause actual results to differ materially

include the risk factors and other cautionary statements contained from time to

include the risk factors and other cautionary statements contained from time to

time in the Company’s SEC filings, which may be obtained by contacting the

time in the Company’s SEC filings, which may be obtained by contacting the

Company

Company

or

or

the

the

SEC.

SEC.

These

These

filings

filings

are

are

also

also

available

available

through

through

the

the

Company’s

Company’s

web

web

site

site

at

at

http://www.patenergy.com

http://www.patenergy.com

or

or

through

through

the

the

SEC’s

SEC’s

Electronic

Electronic

Data

Data

Gathering

Gathering

and

and

Analysis

Analysis

Retrieval

Retrieval

System

System

(EDGAR)

(EDGAR)

at

at

http://www.sec.gov.

http://www.sec.gov.

We

We

undertake

undertake

no

no

obligation to publicly update or revise any forward-looking statement.  Statements

obligation to publicly update or revise any forward-looking statement.  Statements

made in this presentation include non-GAAP financial measures.  The required

made in this presentation include non-GAAP financial measures.  The required

reconciliation to GAAP financial measures are included on our website and at the

reconciliation to GAAP financial measures are included on our website and at the

end of this presentation.

end of this presentation.

3

Presentation

•

PTEN Overview

•

The Energy Environment

•

PTEN’s Land Drilling Business

•

PTEN’s Well Stimulation Business

•

PTEN Investment Highlights

•

Conclusions

A Transformation in the Energy Industry…

A Transformation in the Energy Industry…

…A Transformation at PTEN

4

Overview of Patterson-UTI Energy, Inc.

•

One of the “Big 3”

US land drillers (drilling

~65% of total 2011 revenues)

•

One of the top pressure pumping companies in

the US (pressure pumping ~33% of total 2011

revenues)

•

Substantial investment in new drilling and

pressure pumping equipment

•

Strong history of creating shareholder equity

•

Trading at a substantial discount to both its

historical valuation and its peers

Changing Energy Environment

5

Source: US Energy Information Administration, Short-Term Energy Outlook, May 8, 2012

Decades of Declining US Crude Oil Production…

Reversed in 2009

Changing Energy Environment

6

Source: US Energy Information Administration, Short-Term Energy Outlook, May 8, 2012

Petroleum Imports as a Percent of Total Consumption…

More Demand Being Satisfied With US Production

7

Changing Energy Environment –

North America Land-Based Energy

Unconventional drilling and well completion has

evolved:

•

A “manufacturing”

approach to drilling and

well completion

•

Focus on oil & liquids rich plays

•

Unconventional drilling and well completion

techniques being applied to historically

conventional basins

Changing Energy Environment –

Land-Based Drilling

PTEN’s

PTEN’s

Drilling

Drilling

Business

Business

PTEN’s Drilling Business

9

Strong US Rig Count 2010 -

Current

10

PTEN’s Drilling Business

•

Increasing focus on oil & liquids rich plays

–

Horizontal drilling techniques developed for shale gas have

been a “game changer”

for oil and liquids rich shales

–

Approximately 68% of PTEN operating rigs are drilling for oil

or liquids

–

“Fit-for-purpose”

rigs are very active in oil & liquids rich

plays, but not all oil & liquids rich plays require “fit-for-

purpose”

rigs (i.e. Permian and Mississippi Lime)

•

Decreasing Dry Gas Exposure

–

Approximately 15 rigs in the US drilling for dry gas under

contracts that are well-to-well or that have an initial term of

less than one year

–

Expect continued rig movement from dry gas to oil and

liquids rich areas

PTEN’s Drilling Business

11

PTEN’s Active U.S. Land Drilling Rigs

as of May 2012

East Texas

Appalachian

Basin

North Texas

Rockies

South Texas

38 Rigs

32 Rigs

25 Rigs

45 Rigs

16 Rigs

15 Rigs

Permian Basin

Mid-Continent

56 Rigs

12

New APEX™

Rigs Have Significantly

Increased Fleet Quality.

PTEN’s Drilling Business

24 New Rigs expected to be added in 2012

27

115

13

PTEN’s Drilling Business

PTEN has designed three types of land rigs

for these “new wells”:

•

Each designed to meet customer demands in

different markets

–

Each has specific applications for which it is “most suitable”

•

Significance:

–

Drilling is an integral part of the well “manufacturing”

business

•Fast drilling and “speedy”

rig moves

–

APEX Walking ™

rigs and APEX 1000™

rigs provide access

to certain “challenging well locations”

14

PTEN’s Drilling Business

•1000 HP drawworks

•Small footprint, big rig

capability

•Fast move & rig-up

•Walking system is an

optional feature

APEX 1000™

•1500 HP drawworks

•Great all purpose rig

•Fast move & rig-up

•Ideal for Eagle Ford,

Barnett, and Haynesville

APEX 1500™

•1000 to 2000 HP

drawworks

•Able to move in all

directions

•Able to “walk”

with mast

up and drill pipe/collars

in the derrick

•A leadership position in

this “fit-for-purpose”

rig

category

APEX Walking™

…and Expected as of December 31, 2012

APEX 1500

APEX 1000

APEX Walking

Total New Rigs

Other Electric Rigs

Class

15

PTEN’s Drilling Business

Preferred Rigs as of March 31, 2012

54

15

46

115

54

12/31/2012

24 new rigs planned in 2012

~170 by the end of 2012

40

13

43

96

54

3/31/2012

PTEN has approximately 150 of these preferred rigs

TM

TM

TM

PTEN’s Drilling Business

Video of Walking Rig Moving

Video of Walking Rig Moving

17

PTEN’s Drilling Business

•

PTEN has approximately 180 other rigs in the

fleet of which approximately 90 are active

–

Major upgrade program has provided:

–

PTEN commitment to customers and service

•

PTEN’s large fleet provides substantial

“upside”

if drilling continues to increase

•

Improved mud systems

•

Iron roughnecks and other automation

•

Enhanced mobility

•

Major rig refurbishments

18

PTEN’s Drilling Business

•

Term contracts*

–

PTEN expects to average 153 rigs under term

contract in the second quarter of 2012 and 132

during the last three quarters of 2012

–

Approximately 68% of active rigs in the US are

committed under term contracts

–

Provides estimated future dayrate drilling revenue

stream of approximately $1.7 billion for 2012 and

beyond

* Term contracts are defined as having an initial duration of at

least six months.

Changing Energy Environment –

Well Stimulation

PTEN’s

PTEN’s

Pressure

Pressure

Pumping

Pumping

Business

Business

20

PTEN’s Pressure Pumping Business

•

Continuing Significance of Well Stimulation

–

Shale and other unconventional plays changed the

business

•Substantial

increases

in

horizontal

completions

•Increasing

number

of

stages

per

well

•Substantially

higher

HP

requirements

•Higher

pressures

and

higher

volumes

–

Changing equipment (“quints”) and crew

competencies

–

Key

to

unlocking

long

laterals and greatly increased

shale production

21

PTEN’s Pressure Pumping Business

Fracturing horsepower: 313,500

Other horsepower: 20,270

Frac Crews under contract : 3

Fracturing horsepower: 265,500

Other horsepower: 61,300

Frac Crews under contract: 2

A Significant Player in Growing Markets

Approximately 155,000 HP under term contract

46%

54%

Fracturing Horsepower

Southwest Region:

Northeast Region:

22

Recent Investments in Pressure Pumping…

…Have Increased Fleet Size and Quality

PTEN’s Pressure Pumping Business

* Includes acquisition of pressure pumping assets from Key Energy

65

770

23

Strong Growth in Pressure Pumping

PTEN’s Pressure Pumping Business

24

Service Intensity By Region

Average Horsepower Per Well (000s HP)*

PTEN’s Pressure Pumping Business

*Source: Simmons & Company Equity Research

25

Increasing Service Intensity

Eagle Ford Shale

PTEN’s Pressure Pumping Business

*Source: Simmons & Company Equity Research

Lateral Length*

Frac Stages*

26

Increasing Service Intensity

Marcellus Shale

PTEN’s Pressure Pumping Business

*Source: Simmons & Company Equity Research

PTEN’s Pressure Pumping Business

27

More than two-thirds of fracturing

horsepower is less than five years old

PTEN Pressure Pumping Fleet by Age

as of December 2011

>10

Years

14%

5 -

10

Years

19%

< 5

Years

67%

PTEN Investment

Highlights

29

PTEN Investment Highlights -

Strategic Approach

•

Concentrate on two core businesses

•

Plan to continue to grow organically

–

PTEN has the balance sheet and expected cash

flow to support continued organic growth in both

businesses

–

Acquisitions

and

dispositions

only

when

the

price

is

right

30

PTEN Investment Highlights

Components of

Total Revenue

EBITDA

EBITDA

Contract Drilling

65%

Pressure

Pumping

33%

Oil & Natural

Gas 2%

Segment ($ in 000’s)

Contract Drilling

$690,395

Pressure Pumping

266,719

Oil & Natural Gas

40,944

Corporate & Other

(34,596)

Discontinued Operations

(576)

Total

$962,886

31

PTEN Investment Highlights

•

No equity sales in more than 11 years

•

History of returning capital to investors

–

Stock Buyback

•

Total of $592 million in 2006 through 2008

–

Cash Dividend

•

Initiated cash dividend in 2004

•

Quarterly dividend currently $0.05 per share

32

PTEN Investment Highlights

•

Leading market position

–

One of the “Big 3”

US land drillers

–

One of the largest pressure pumping companies in the US

–

Well positioned to grow organically and through

opportunistic acquisition

•

Diverse asset base

–

Drilling rigs well-matched to customers’

needs

–

Well stimulation assets that meet customers’

needs

•

Favorable industry trends

–

Emerging shale and unconventional resource plays

–

US land drilling and pressure pumping are major

beneficiaries of these trends

33

PTEN Investment Highlights

•

Flexible operating model

–

Maximizes earnings growth during periods of increased

activity

–

Minimizes costs during periods of low activity

–

Strong cash flow generation

•

Strong management team

–

Prudent financial management

–

Operational management that is customer responsive

–

Proven track record through numerous cycles

•

Strong financial position

–

Low leverage

–

Adequate liquidity to meet medium-term growth and capex

needs

PTEN Investment Highlights

34

25 –

25 –

40% discount to both peers

40% discount to both peers

and historical trading multiples

and historical trading multiples

Low valuation relative to both peers

and historical trading multiples

Source: Thomson One Financial

PTEN Investment Highlights

0

500

1,000

1,500

2,000

2,500

3,000

Thousands

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

0

500

1,000

1,500

2,000

2,500

3,000

Thousands

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Growth in Shareholder Equity

The Warren Buffett Standard

35

36

•

Favorable trends are likely to persist in North

American oil and natural gas markets

•

US Land Drilling and Pressure Pumping are major

beneficiaries of the new trends

•

Patterson-UTI has the right assets:

–

Drilling rigs well-matched to the customers’

needs

–

Well stimulation assets that meet customers’

needs

–

Operational management that is customer responsive

–

Prudent financial management

•

Long-term record of building shareholder equity 

Conclusions

Patterson-UTI Energy, Inc.

UBS Global Oil and Gas Conference

UBS Global Oil and Gas Conference

May 23, 2012

May 23, 2012

Non-GAAP Financial Measures

38

Patterson-UTI Energy, Inc.

EBITDA Reconciliation

(dollars in thousands)

2011

2010

2009

2008

2007

2006

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA):

Net income (loss)

$    322,413

$    116,942

$ (38,290)

$    347,069

$    438,639

$    673,254

Income tax expense (benefit)

187,938

72,856

(17,595)

193,490

229,350

360,639

Net interest expense (income)

15,465

11,098

3,767

(923)

(164)

(4,310)

Depreciation, depletion, amortization and impairment

437,279

333,493

289,847

275,990

246,346

193,664

Cumulative effect of change in accounting principle

-

-

-

-

-

(687)

Results of discontinued operations:

Income tax expense (benefit)

(209)

(543)

(2,208)

2,389

2,818

10,628

Net interest expense (income)

-

-

-

7

(4)

(13)

Depreciation

-

166

2,287

2,830

2,860

2,706

Impairment of assets held for sale

-

2,155

1,900

-

-

-

Impairment of goodwill

-

-

-

9,964

-

-

EBITDA

$    962,886

$    536,167

$ 239,708

$    830,816

$    919,845

$ 1,235,881

Total Revenue

$ 2,565,943

$ 1,462,931

$ 781,946

$ 2,063,880

$ 1,986,096

$ 2,354,228

EBITDA Margin (EBITDA/Total Revenue)

37.53%

36.65%

30.66%

40.26%

46.31%

52.50%