Patterson-UTI Energy (PTEN) 8-K 2014 Global Energy and Utilities Conference

Citi

2014 Global Energy and Utilities Conference

May 14, 2014

Exhibit 99.1

Forward Looking Statements

2

This

material

and

any

oral

statements

made

in

connection

with

this

material

include

"forward-looking

statements"

within

the

meaning

of

the

Securities

Act

of 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

future

are

forward-looking

statements

and

are

inherently

uncertain.

The

opinions,

forecasts,

projections

or

other

statements

other

than

statements

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

results

could

differ

materially

from

those

discussed

in

such

forward-looking

statements.

Important

factors

that

could

cause

actual

results

to

differ

materially

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

Company

or

the

SEC.

These

filings

are

also

available

through

the

Company’s

website

at

http://www.patenergy.com

or

through

the

SEC’s

Electronic

Data

Gathering

and

Analysis

Retrieval

System

(EDGAR)

at

http://www.sec.gov.

We

undertake

no

obligation

to

publicly

update

or

revise

any

forward-looking

statement.

Statements

made

in

this

presentation

include

non-GAAP

financial

measures.

The

required

reconciliation

to

GAAP

financial

measures

are

included

on

our

website

and

at

the

end

of

this

presentation.

Patterson-UTI Energy is a leading

provider of contract drilling and

pressure pumping services

Contract Drilling

…and Expected as of March 31, 2015

APEX-XK 1500™

APEX-XK 1000™

APEX WALKING

®

APEX 1500

®

APEX 1000

®

Total APEX

®

Rigs

Class

APEX

®

Rigs as of May 14, 2014

42

4

49

44

11

150

3/31/2015

A leader in high specification drilling rigs

22

4

49

44

11

130

5/14/2014

APEX

®

Rig Fleet

5

Permian Basin

54 Rigs

Large Geographic Footprint

6

PTEN’s Active U.S. Land Drilling Rigs

as of May 2014

East Texas

Appalachia 

& Midwest

North Texas

Mid-Continent

Rockies

South Texas

33 Rigs

34 Rigs

24 Rigs

37 Rigs

6 Rigs

14 Rigs

Improving Average Revenue Per Day

7

Patterson-UTI Total Average Revenue Per Day

Excludes

early-termination

revenues

during

the

third

and

fourth

quarter

of

2013

of

$3,600

per

day

and

$130

per day, respectively.

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

26,000

Pressure Pumping

Growing Pressure Pumping Business

9

Investments in Pressure Pumping…

…Have Increased Fleet Size and Quality

65

800

*

Includes

acquisition

of

approximately

210,000

pressure

pumping

horsepower

in

October

2010

0

200

400

600

800

1000

2006

2007

2008

2009

2010*

2011

2012

2013

2014E

Year End

Fracturing Horsepower

Other Horsepower

Southwest Region:

Northeast Region:

Fracturing horsepower: 350,000

Other horsepower: 28,000

Fracturing horsepower: 320,000

Other horsepower: 54,000

A Significant Player in Regional Markets

Pressure Pumping Areas

10

48%

52%

Fracturing Horsepower

A Leader in Bi-Fuel Technology

11

•

One of the largest bi-fuel frac

fleets in the Marcellus

•

Approximately 700 stages

completed using natural gas as a

fuel source

•

Replaced more than 358,000

gallons of diesel with cleaner

burning natural gas

•

Eliminated 2.6 million pounds of

transportation loads on local

roads

http://patenergy.com/pressurepumping/services

11

Why Invest in Patterson-UTI Energy?

•

Continuing Transformation

–

Committed to high-spec land rigs where

demand remains strong

–

Creating value through focus on well

site execution

•

Technology leader

–

Leader in walking rigs for pad drilling

–

Innovator in use of natural gas as a fuel

source for both drilling and pressure

pumping

•

Financially flexible

–

Strong balance sheet

–

History of share buybacks

–

Dividends

12

Citi

2014 Global Energy and Utilities Conference

May 14, 2014

Additional References

Contract Drilling

•

High quality fleet of land drilling

rigs including 130 APEX

®

rigs

•

Leader in walking rig technology for

pad drilling applications

•

Large footprint across North

American drilling markets

Patterson-UTI reported results for the year ended December 31, 2013

15

Pressure

Pumping

36%

Oil &

Natural

Gas

2%

Contract

Drilling

62%

Components of Revenue

Pressure Pumping

•

High quality fleet of modern pressure

pumping equipment

•

A leader in natural gas bi-fuel

technology

•

Strong reputation for regional

knowledge and efficient operations

Patterson-UTI reported results for the year ended December 31, 2013

16

Pressure

Pumping

36%

Oil &

Natural

Gas

2%

Contract

Drilling

62%

Components of Revenue

17

Contract Drilling Capital Expenditures and Acquisitions

($ in millions)

Investing in Our Drilling Rig Fleet

More than $4.5 billion invested since 2005

2006

2007

2008

2009

2010

2011

2012

2013

2014E

$531

$540

$361

$395

$656

$785

$745

$505

$700

Why invest in APEX

®

rigs?

…the impact has been transformative!

Greater Consistency in Rig Activity

19

Active APEX

®

Rig Count

0

20

40

60

80

100

120

140

Rig Count by Rig Class

20

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

APEX®

Other Electric

Mechanical

Greater Stability of Utilization

21

APEX

®

Rig Utilization

0%

20%

40%

60%

80%

100%

120%

Contribution from High Specification Rigs

22

Preferred rigs account for approximately

87% of Contract Drilling EBITDA

2010

2011

2012

2013

APEX®

& Other Electric

Mechanical

Excludes early-termination revenues during the third and fourth quarter of 2013 of $62.8 million and

$2.4 million, respectively.

Why invest in APEX

®

rigs?

…the outlook remains strong!

24

U.S. Rig Count % by Drilling Type

High-Spec rigs account

for less than half of the

total horizontal rig count

Continued Demand for APEX

®

Rigs

0%

10%

20%

30%

40%

50%

60%

70%

80%

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

% Horizontal

% Vertical

25

High-Specification Rigs by Owner Type

Consolidated Segment of Industry

Big 3 U.S. land drillers control almost

70% of the high specification rigs in the U.S.

Next 5

Largest

Public

Drillers

Big 3

U.S.

Land

Drillers

Others

Why invest in APEX

®

rigs?

…Patterson-UTI is a technology leader!

APEX WALKING

®

Rigs

27

•

Capable of walking with drill pipe

and collars racked in derrick

•

Full multi-directional walking

capability

•

Walking times average 45 minutes

for

10’

–

15’

well

spacing

http://patenergy.com/drilling/technology/apexwalk

27

Strong Demand for Pad Drilling

28

•

Pad drilling is contributing to

increasing rig efficiency

•

Pad drilling capable rigs are

highly utilized

•

All new APEX

®

rigs

completed in 2014 are

expected to have walking

systems

http://patenergy.com/drilling/technology

28

APEX-XK™

Rig Walking on Pad

29

http://patenergy.com/drilling/technology/apexwalk/

Video of APEX-XK™

Rig

29

The APEX-XK

™

30

•

Enhanced mobility including more

efficient rig up and rig down

•

Greater clearance under rig floor for

optional walking system

•

Advanced environmental spill

control integrated into drilling floor

•

Optimized number of truck loads for

rig moves

•

Available in both 1500 HP and 1000

HP

http://patenergy.com/drilling/technology

30

Enhancing our Position in Pad Drilling

31

Walking Systems Can be Added to Any Rig in Our Fleet…

…Allowing for True Multi-Directional Pad Drilling Capabilities

31

Enhancing our Position in Pad Drilling

32

http://patenergy.com/drilling/technology

32

Early Adopter of Natural Gas Engines

33

http://patenergy.com/drilling/technology

33

Using Natural Gas as a Fuel Source

34

•

First contract driller to use GE’s

Waukesha natural gas engines on

a modern land rig

•

34 rigs currently configured to use

natural gas as the primary fuel

source including 7 natural gas

powered rigs and 27 bi-fuel

capable rigs 

•

We plan to add GE Waukesha

engines to two additional rigs and

upgrade 11 additional rigs with bi-

fuel systems during the remainder

of 2014

•

Natural gas powered rigs can

result in up to 80% lower fuel

costs

http://patenergy.com/drilling/technology

34

Active in Unconventional Plays

35

PTEN’s Active Rigs in Unconventional Areas

as of May 2014

Bakken

Piceance

Haynesville

Marcellus

Barnett

20 Rigs

Eagle Ford

2 Rigs

20 Rigs

2 Rigs

35 Rigs

5 Rigs

Utica  

13 Rigs

Woodford 

2 Rigs

AC-powered rigs represent less than half

of the horizontal rig count

Total U.S. Horizontal Rig Count by Power Type

Continued Demand for APEX

®

Rigs

Analysis from Patterson-UTI Energy based on IHS drilling data

36

SCR

AC

Mechanical

Term Contract Coverage

•

Based on term contracts in place as of April 24, 2014

–

An average of 137 rigs expected under term contract in the

second quarter of 2014

–

An average of 111 rigs expected under term contract during

the remaining three quarters of 2014

•

PTEN expects to continue signing term contracts

Improving earnings visibility and returns stability

37

•

Drilling term contract revenue backlog of $1.04 billion at

March 31, 2014

Investing in Pressure Pumping

38

Pressure Pumping Capital Expenditures and Acquisitions

($ in millions)

Approximately $1 billion invested since 2005

$41

$48

$61

$43

$289

$198

$194

$123

$210

2006

2007

2008

2009

2010

2011

2012

2013

2014E

A Leader in Bi-Fuel Technology

•

Engines can burn a fuel mix

comprised of up to 70% natural

gas

•

Comparable torque and

horsepower as an all diesel engine

•

Reduces operating costs by

lowering fuel costs

•

Good for environmental

sustainability

http://patenergy.com/pressurepumping/services

39

A Leader in Bi-Fuel Technology

40

http://patenergy.com/pressurepumping/services

40

Comprehensive Lab Services

http://patenergy.com/pressurepumping/services

41

Financial Flexibility

$598

$637

$445

$453

$976

$1,012

$974

$662

$950

2006

2007

2008

2009

2010

2011

2012

2013

2014E

Investing in Our Company

43

Capital Expenditures and Acquisitions

($ in millions)

Strong Financial Position

44

•

History of returning capital to investors

–

Cash Dividend

•

Initiated cash dividend in 2004

•

Recently announced doubling of quarterly cash dividend to

$0.10 per share

–

Stock Buyback

•

Total of $843 million repurchased since 2005

•

Repurchased $85.8 million of stock in 2013 at an average

price of $20.83

•

Approximately $187 million remaining authorization as of

March 31, 2014

•

Returned approximately $1.2 billion to shareholders since

2005

Strong Financial Position

45

Total Liquidity

($ in millions)

Liquidity defined as end of period cash plus availability under revolving line of credit

208

283

398

244

387

273

571

710

718

0

100

200

300

400

500

600

700

800

2006

2007

2008

2009

2010

2011

2012

2013

1Q14

Year End

Line of Credit Availability

Cash

Strong Financial Position

46

Net Debt to Capital Ratio

$600 million of debt not due until at least 2020

6%

2%

-4%

-2%

15%

13%

18%

14%

13%

-10%

0%

10%

20%

30%

40%

50%

2006

2007

2008

2009

2010

2011

2012

2013

1Q14

Year End

Strong Financial Returns

47

Growth in Per-Share Book Value

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Strong Financial Position

•

Total liquidity of approximately $718 million

–

$258 million of cash at March 31, 2014

–

$460 million revolver availability at March 31, 2014

•

$432 million net debt at March 31, 2014

–

13.4% Net Debt/Total Capitalization

–

$300 million of 4.97% Series A notes due October 5, 2020

–

$300 million of 4.27% Series B notes due June 14, 2022

–

$90 million of 5-year term loan

•

No equity sales in last 13 years

•

Reduced share count by 27.9 million shares since

2005

48

PATTERSON-UTI ENERGY, INC.

Non-GAAP Financial Measures (Unaudited)

(dollars in thousands)

Non-GAAP Financial Measures

49

Three Months Ended

March 31,

2014

2013

Earnings Before Interest, Taxes, Depreciation and Amortization

(EBITDA)(1):

Net income

$

34,822

$

56,230

Income tax expense

16,942

32,128

Net interest expense

7,012

6,593

Depreciation, depletion, amortization and impairment

147,322

136,435

EBITDA

$

206,098

$

231,386

Total revenue

$

678,168

$

667,039

EBITDA margin

30.4%

34.7%

EBITDA by operating segment:

Contract drilling

$

173,196

$

170,171

Pressure pumping

35,585

58,751

Oil and natural gas

8,730

13,863

Corporate and other

(11,413)

(11,399)

Consolidated EBITDA

$

206,098

$

231,386

(1) 

EBITDA is not defined by generally accepted accounting principles (“GAAP”).  We present EBITDA (a non-GAAP measure) because we believe it

provides additional information with respect to both the performance of our fundamental business activities and our ability to meet our capital

expenditures and working capital requirements.  EBITDA should not be construed as an alternative to the GAAP measures of net income or

operating cash flow.

Non-GAAP Financial Measures

50

PATTERSON-UTI ENERGY, INC.

Non-GAAP Financial Measures (Unaudited)

(dollars in thousands)

(1) 

EBITDA is not defined by generally accepted accounting principles (“GAAP”).  We present EBITDA (a non-GAAP measure) because we believe it

provides additional information with respect to both the performance of our fundamental business activities and our ability to meet our capital

expenditures and working capital requirements.  EBITDA should not be construed as an alternative to the GAAP measures of net income or

operating cash flow.

2013

2012

2011

2010

2009

2008

Net income (loss)

$

188,009

$

299,477

$

322,413

$

116,942

$

(38,290)

$

347,069

Income tax expense (benefit)

108,432

176,196

187,938

72,856

(17,595)

193,490

Net interest expense (income)

27,441

22,196

15,465

11,098

3,767

(923)

Depreciation, depletion, amortization and impairment

597,469

526,614

437,279

333,493

289,847

275,990

Net

impact of discontinued operations

-

-

(209)

1,778

1,979

15,190

EBITDA

$

921,351

$1,024,483

$

962,886

$

536,167

$

239,708

$

830,816

Total revenue

$2,716,034

$2,723,414

$2,565,943

$1,462,931

$

781,946

$2,063,880

EBITDA margin

33.9%

37.6%

37.5%

36.7%

30.7%

40.3%

Earnings

Before

Interest,

Taxes,

Depreciation

and

Amortization

(EBITDA)(1):