Credit Suisse 20 th Annual Energy Summit February 24-25, 2015 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 web site 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. |
Improved Performance 2008 - 2009 Total Baker Hughes U.S. Land Rig Count: -23% Total PTEN U.S. Rig Count: -46% 2014 - 2015 Total PTEN U.S. Rig Count: -21% Total Baker Hughes U.S. Land Rig Count: -30% Baker Hughes and Patterson-UTI U.S. Land Rig Counts as of February 13, 2015 0% 20% 40% 60% 80% 100% 120% U.S. Rig Count Downturn 0% 20% 40% 60% 80% 100% 120% |
Investing in Our Company 4 Capital Expenditures and Acquisitions ($ in millions) 2015 Capital expenditure forecast as of February 5, 2015 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E $598 $637 $445 $453 $976 $1,012 $974 $662 $1,229 $750 |
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 5 |
Credit Suisse 20 th Annual Energy Summit February 24-25, 2015 |
Additional References |
Patterson-UTI Energy is a leading Patterson-UTI Energy is a leading provider of contract drilling and provider of contract drilling and pressure pumping services pressure pumping services 8 |
Contract Drilling • High quality fleet of land drilling rigs including 149 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, 2014 9 Contract Drilling 58% Pressure Pumping 41% Components of Revenue Oil & Natural Gas 1% |
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, 2014 10 Contract Drilling 58% Pressure Pumping 41% Components of Revenue Oil & Natural Gas 1% |
Contract Drilling |
A Rig Fleet Transformation 12 Mechanical Patterson-UTI Energy Total Rig Fleet Mechanical December 2009 Projected December 2015 Other Electric APEX® Other Electric APEX® |
…and Expected as of December 31, 2015 APEX-XK 1500™ APEX-XK 1000™ APEX WALKING ® APEX 1500 ® APEX 1000 ® Total APEX ® Rigs Class APEX ® Rigs as of February 24, 2015 53 4 49 44 11 161 12/31/2015 A leader in high specification drilling rigs 41 4 49 44 11 149 2/24/2015 APEX ® Rig Fleet 13 |
Large Geographic Footprint 14 PTEN’s Active U.S. Land Drilling Rigs as of February 2015 Patterson-UTI rig count as of February 19, 2015 Permian Basin 37 Rigs Appalachia 38 Rigs East Texas 14 Rigs Mid-Continent 18 Rigs Rockies 28 Rigs South Texas 33 Rigs |
Patterson-UTI Energy …the impact of APEX® rigs has been transformative! |
Increasing APEX ® Drilling Activity 16 Active APEX ® Rig Count |
PTEN Relative Active Rig Count by Rig Class 17 |
Greater Stability of Utilization 18 APEX ® Rig Utilization |
Improving Average Rig Revenue Per Day 19 Patterson-UTI Total Average Rig 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. |
Adjusted EBITDA Contribution from High Specification Rigs 20 Preferred rigs account for approximately 89% of Adjusted EBITDA in Contract Drilling Excludes early-termination revenues during the third and fourth quarter of 2013 of $62.8 million and $2.4 million, respectively. 2010 2011 2012 2013 2014 APEX® & Other Electric Mechanical |
Patterson-UTI Energy …the APEX® rig outlook remains strong! |
22 U.S. Rig Count % by Drilling Type Continued Demand for APEX ® Rigs Source: Baker Hughes North America Rotary Rig Count |
AC-powered rigs have increased as a percentage 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 data from RigData and company filings. 23 SCR AC Mechanical |
Patterson-UTI Energy …Patterson-UTI is a technology leader! |
APEX WALKING ® Rigs 25 • Capable of walking with drill pipe and collars racked in the mast • Full multi-directional walking capability • Walking times average 45 minutes for 10’ – 15’ well spacing 25 http://patenergy.com/drilling/technology/apexwalk |
Strong Demand for Pad Drilling 26 • Pad drilling is contributing to increasing rig efficiency • Pad drilling capable rigs are highly utilized • Most new APEX ® rigs are expected to have walking systems http://patenergy.com/drilling/technology 26 |
APEX-XK™ Rig Walking on Pad 27 http://patenergy.com/drilling/technology/apexwalk/ Video of APEX-XK™ Rig 27 |
The APEX-XK ™ 28 • 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 • Minimized number of truck loads for rig moves • Available in both 1500 HP and 1000 HP http://patenergy.com/drilling/technology 28 |
Enhancing our Position in Pad Drilling 29 Walking Systems Can be Added to Any Rig in Our Fleet… …Allowing for True Multi-Directional Pad Drilling Capabilities 29 |
Enhancing our Position in Pad Drilling 30 http://patenergy.com/drilling/technology 30 |
Early Adopter of Natural Gas Engines 31 http://patenergy.com/drilling/technology 31 |
Using Natural Gas as a Fuel Source 32 • First contract driller to use GE’s Waukesha natural gas engines on a modern land rig • 54 rigs currently configured to use natural gas as the primary fuel source including 10 natural gas powered rigs and 44 bi-fuel capable rigs • We plan to add bi-fuel systems to four contracted new APEX ® rigs to be completed in 2015 • Natural gas powered rigs can result in up to 80% lower fuel costs http://patenergy.com/drilling/technology 32 |
Pressure Pumping |
Growing Pressure Pumping Business 34 Investments in Pressure Pumping… …Have Increased Fleet Size and Quality 65 1,100 0 200 400 600 800 1000 1200 2006 2007 2008 2009 2010 2011 2012 2013 2014 June 2015E Year End Fracturing Horsepower Other Horsepower |
Southwest Region: Northeast Region: Fracturing horsepower: 638,800 Other horsepower: 32,165 Fracturing horsepower: 303,800 Other horsepower: 54,700 A Significant Player in Regional Markets Pressure Pumping Areas 35 Horsepower distribution as of December 31, 2014 32% 68% Fracturing Horsepower |
A Leader in Bi-Fuel Technology • Engines can burn a fuel mix comprised of up to 70% natural gas • Comparable torque and horsepower to an all diesel engine • Reduces operating costs by lowering fuel costs • Good for environmental sustainability http://patenergy.com/pressurepumping/services 36 |
A Leader in Bi-Fuel Technology 37 http://patenergy.com/pressurepumping/services 37 |
A Leader in Bi-Fuel Technology 38 • One of the largest bi-fuel frac fleets in the Marcellus • Approximately 1,800 stages completed using natural gas as a fuel source • Replaced approximately 1.2 million gallons of diesel with cleaner burning natural gas • Eliminated 9.0 million pounds of transportation loads on local roads http://patenergy.com/pressurepumping/services 38 |
Comprehensive Lab Services http://patenergy.com/pressurepumping/services 39 |
Financial Flexibility |
Strong Financial Position 41 • History of returning capital to investors – Cash Dividend • Initiated cash dividend in 2004 • Doubled quarterly cash dividend to $0.10 per share in February 2014 – Stock Buyback • Total of $857 million repurchased since 2005 • Approximately $187 million remaining authorization as of December 31, 2014 • Returned approximately $1.3 billion to shareholders since 2005 |
Strong Financial Position 42 Net Debt to Capital Ratio $600 million of debt not due until at least 2020 * Subsequent to December 31, 2014, we received an $82 million federal income tax refund. The refund, along with other cash generated was used to repay $103 million outstanding under our revolving line of credit. As of February 10, 2015, availability under the revolving credit facility was $260 million. 6% 2% -4% 2% 15% 13% 18% 14% 24% 22% -10% 0% 10% 20% 30% 40% 50% 2006 2007 2008 2009 2010 2011 2012 2013 2014 Pro Forma 2014* Year End - |
43 Contract Drilling Capital Expenditures and Acquisitions ($ in millions) Investing in Our Drilling Rig Fleet More than $5 billion invested since 2005 2015 Capital expenditure forecast as of February 5, 2015 $531 $540 $361 $395 $656 $785 $745 $505 $772 $525 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E |
Investing in Pressure Pumping 44 Pressure Pumping Capital Expenditures and Acquisitions ($ in millions) More Than $1.4 billion invested since 2005 2015 Capital expenditure forecast as of February 5, 2015 $41 $48 $61 $43 $289 $198 $194 $123 $418 $200 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E |
Active in Unconventional Plays 45 PTEN’s Active Rigs in Unconventional Areas as of February 2015 Piceance Haynesville Marcellus Barnett 17 Rigs Eagle Ford 1 Rig 20 Rigs 1 Rig 29 Rigs 4 Rigs 14 Rigs 1 Rig Pinedale 4 Rigs Woodford Utica Bakken |
Term Contract Coverage An average of 138 rigs expected under term contract in the first quarter of 2015 An average of 104 rigs expected under term contract during 2015 46 • – – Based on term contracts in place as of February 5, 2015 Drilling term contract revenue backlog of $1.5 billion at December 31, 2014 As disclosed during our earnings conference call on February 5, 2015, the amount of early termination payments to be received and the magnitude of the decline in the number of rigs under term contract is uncertain, but based upon customer conversations at that time it could be around 20 rigs and $40 million in the first half of 2015. • • |
Strong Financial Position • Total liquidity of approximately $200 million* – $43.0 million of cash at December 31, 2014 – $157 million revolver availability at December 31, 2014* • $942.5 million net debt at December 31, 2014* – 24.5% 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 – $82.5 million of 5-year term loan – $303 million outstanding under revolving line of credit • No equity sales in last 14 years • Reduced share count by 26.0 million shares since 2005 47 * Subsequent to December 31, 2014, we received an $82 million federal income tax refund. The refund, along with other cash generated was used to repay $103 million outstanding under our revolving line of credit. As of February 10, 2015, availability under the revolving credit facility was $260 million. |
Three Months Ended December 31, Twelve Months Ended December 31, 2014 2013 2014 2013 Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA)(1): Net income $ 57,583 $ 16,591 $ 162,664 $ 188,009 Income tax expense 41,216 9,475 91,619 108,432 Net interest expense 8,034 6,947 28,846 27,441 Depreciation, depletion, amortization and impairment 180,157 183,118 718,730 597,469 Adjusted EBITDA $ 286,990 $ 216,131 $ 1,001,859 $ 921,351 Total revenue $ 901,219 $ 658,772 $3,182,291 $2,716,034 Adjusted EBITDA margin 31.8% 32.8% 31.5% 33.9% Adjusted EBITDA by operating segment: Contract drilling $ 208,200 $ 172,178 $ 765,874 $ 704,990 Pressure pumping 78,763 45,757 236,676 217,228 Oil and natural gas 7,671 8,757 37,094 44,348 Corporate and other (7,644) (10,561) (37,785) (45,215) Consolidated Adjusted EBITDA $ 286,990 $ 216,131 $ 1,001,859 $ 921,351 (1) PATTERSON-UTI ENERGY, INC. Non-GAAP Financial Measures (Unaudited) (dollars in thousands) Non-GAAP Financial Measures 48 The company makes use of financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”) to help in the assessment of ongoing operating performance. These non-GAAP financial measures are reconciled to their most directly comparable GAAP measures in the tables above. We define Adjusted EBITDA as net income plus net interest expense, income tax expense and depreciation, depletion, amortization and impairment expense. We present Adjusted EBITDA 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. Adjusted EBITDA is not defined by GAAP and, as such, should not be construed as an alternative to net income (loss) or operating cash flow. We define margin as revenues less direct operating costs. We present margin because we believe it to be the component of our earnings most impacted by the variability in our contract drilling and pressure pumping operations. Margin is not defined by GAAP and, as such, should not be construed as an alternative to net income (loss). |
Non-GAAP Financial Measures 49 2014 2013 2012 2011 2010 Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA)(1): Net income (loss) $ 162,664 $ 188,009 $ 299,477 $ 322,413 $ 116,942 Income tax expense (benefit) 91,619 108,432 176,196 187,938 72,856 Net interest expense (income) 28,846 27,441 22,196 15,465 11,098 Depreciation, depletion, amortization and impairment 718,730 597,469 526,614 437,279 333,493 Net impact of discontinued operations - - - (209) 1,778 Adjusted EBITDA $ 1,001,859 $ 921,351 $ 1,024,483 $ 962,886 $ 536,167 Total revenue $ 3,182,291 $ 2,716,034 $ 2,723,414 $ 2,565,943 $ 1,462,931 Adjusted EBITDA margin 31.5% 33.9% 37.6% 37.5% 36.7% PATTERSON-UTI ENERGY, INC. Non-GAAP Financial Measures (Unaudited) (dollars in thousands) (1) The company makes use of financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”) to help in the assessment of ongoing operating performance. These non-GAAP financial measures are reconciled to their most directly comparable GAAP measures in the tables above. We define Adjusted EBITDA as net income plus net interest expense, income tax expense and depreciation, depletion, amortization and impairment expense. We present Adjusted EBITDA 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. Adjusted EBITDA is not defined by GAAP and, as such, should not be construed as an alternative to net income (loss) or operating cash flow. We define margin as revenues less direct operating costs. We present margin because we believe it to be the component of our earnings most impacted by the variability in our contract drilling and pressure pumping operations. Margin is not defined by GAAP and, as such, should not be construed as an alternative to net income (loss). |