Exhibit 99.1
For Immediate Release | Contact: | John E. Vollmer III | ||
SVP-Corporate Development | ||||
Patterson-UTI Energy, Inc. | ||||
(214) 360-7800 |
Patterson-UTI Energy Announces
Record Third Quarter Results
Net Income Up 268 Percent on 81 Percent Increase in Revenues
SNYDER, Texas – October 27, 2005 – PATTERSON-UTI ENERGY, INC. (Nasdaq: PTEN)today announced financial results for the third quarter and nine months ended September 30, 2005. Net income for the quarter increased by 268 percent to $110 million, or $0.63 per share, from $30 million, or $0.18 per share, for the quarter ended September 30, 2004. Revenues for the quarter were up by 81 percent to $469 million, compared to $259 million for the third quarter of 2004.
Net income for the nine months ended September 30, 2005 increased by 252 percent to $248 million, or $1.43 per share, from $70 million, or $0.42 per share, for the nine months ended September 30, 2004. Revenues for the nine months were up by 70 percent to $1.2 billion, compared to $712 million for the first nine months of 2004.
The Company also declared a quarterly cash dividend on its Common Stock of $0.04 per share, to be paid on December 1, 2005 to holders of record as of November 15, 2005.
Cloyce A. Talbott, Patterson-UTI’s Chief Executive Officer, commented, “The combination of continuing strong demand for our drilling services, coupled with the ongoing scarcity of land-based drilling rigs, has resulted in further increases in pricing for these services. Our average revenue per operating day for the recently completed quarter increased by $1,720 to $15,410, and our average margin per operating day increased by $1,400 to $7,610 compared to the second quarter of 2005.”
He added, “Our rig count also increased sequentially from the second quarter, with rig utilization increasing to 71 percent, compared to 67 percent for the previous quarter. During the recently completed quarter we had an average of 283 rigs operating, including 269 in the U.S. and 14 in Canada, compared to an average of 265 rigs operating, including 259 in the U.S. and 6 in Canada for the second quarter of 2005. We estimate that our rig count will increase to an average of 288 rigs operating in October, including 271 in the U.S. and 17 in Canada.
“We continue to remain on target to activate approximately 30 drilling rigs during 2005, including 22 that have been activated so far this year. Based upon customer inquiries for rigs in 2006 and our expectations of rig demand, we plan to continue to activate rigs at a similar pace next year,” Mr. Talbott added.
Commenting on the financial results, Mark S. Siegel, Chairman of Patterson-UTI Energy, stated, “The results for the recently completed quarter reflect the continued strong performance by our contract drilling segment, which once again achieved record average revenue per operating day, average margin per operating day and average rigs operating.
“Moreover, our revenues, net income and net income per common share also hit new highs in the third quarter of 2005. While revenues were up by 81 percent compared to the third quarter of 2004, our net income increased by 268 percent. These results continue to demonstrate the earnings leverage we are able to achieve as rig utilization and pricing increase.
Mr. Siegel added, “We continue to maintain a strong balance sheet and ended the quarter with approximately $131 million in cash and cash equivalents, $321 million in working capital and no long-term debt.”
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 third quarter results today at 11:00 a.m. Eastern (10:00 a.m. Central and 8:00 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 will be available until November 10, 2005 atwww.patenergy.com and telephone replay of the call will be available through October 30, 2005.
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, 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.
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PATTERSON-UTI ENERGY, INC.
Condensed Consolidated Statements Of Income (Unaudited)
(in thousands, except per share amounts)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
REVENUES | $ | 468,739 | $ | 259,174 | $ | 1,209,254 | $ | 712,463 | ||||||||
COSTS AND EXPENSES | ||||||||||||||||
Direct operating costs (excluding depreciation, depletion and impairment) | 245,045 | 172,629 | 676,065 | 491,235 | ||||||||||||
Depreciation, depletion and impairment | 39,216 | 30,789 | 110,575 | 88,523 | ||||||||||||
Selling, general and administrative | 10,571 | 8,309 | 30,175 | 23,017 | ||||||||||||
Bad debt expense | 50 | 192 | 416 | 499 | ||||||||||||
Other | 346 | (153 | ) | 1,844 | (1,528 | ) | ||||||||||
Total Costs and Expenses | 295,228 | 211,766 | 819,075 | 601,746 | ||||||||||||
OPERATING INCOME | 173,511 | 47,408 | 390,179 | 110,717 | ||||||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||
Interest expense | (56 | ) | (75 | ) | (179 | ) | (205 | ) | ||||||||
Interest income | 944 | 233 | 2,011 | 688 | ||||||||||||
Other | 19 | 56 | 39 | 313 | ||||||||||||
Total Other Income | 907 | 214 | 1,871 | 796 | ||||||||||||
INCOME BEFORE INCOME TAXES | 174,418 | 47,622 | 392,050 | 111,513 | ||||||||||||
INCOME TAXES | 64,283 | 17,658 | 144,502 | 41,260 | ||||||||||||
NET INCOME | $ | 110,135 | $ | 29,964 | $ | 247,548 | $ | 70,253 | ||||||||
NET INCOME PER COMMON SHARE | ||||||||||||||||
Basic | $ | 0.64 | $ | 0.18 | $ | 1.46 | $ | 0.42 | ||||||||
Diluted | $ | 0.63 | $ | 0.18 | $ | 1.43 | $ | 0.42 | ||||||||
AVERAGE COMMON SHARES OUTSTANDING | ||||||||||||||||
Basic | 171,613 | 167,006 | 169,846 | 165,744 | ||||||||||||
Diluted | 174,587 | 169,664 | 173,211 | 168,795 | ||||||||||||
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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, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Contract Drilling: | ||||||||||||||||
Revenues | $ | 401,046 | $ | 206,454 | $ | 1,025,938 | $ | 573,851 | ||||||||
Direct operating costs (excluding depreciation) | $ | 202,956 | $ | 140,608 | $ | 558,607 | $ | 402,986 | ||||||||
Selling, general and administrative | $ | 1,292 | $ | 1,092 | $ | 3,719 | $ | 3,267 | ||||||||
Operating days | 26,015 | 19,855 | 73,746 | 56,292 | ||||||||||||
Average revenue per operating day | $ | 15.41 | $ | 10.40 | $ | 13.91 | $ | 10.19 | ||||||||
Average direct operating costs per operating day | $ | 7.80 | $ | 7.08 | $ | 7.57 | $ | 7.16 | ||||||||
Average margin per operating day | $ | 7.61 | $ | 3.32 | $ | 6.34 | $ | 3.03 | ||||||||
Number of owned rigs at end of period | 403 | 361 | 403 | 361 | ||||||||||||
Average number of rigs owned during period | 398 | 361 | 395 | 358 | ||||||||||||
Average rigs operating | 283 | 216 | 270 | 205 | ||||||||||||
Rig utilization percentage | 71 | % | 60 | % | 68 | % | 57 | % | ||||||||
Capital expenditures | $ | 95,539 | $ | 40,511 | $ | 224,667 | $ | 111,871 | ||||||||
Pressure Pumping: | ||||||||||||||||
Revenues | $ | 27,640 | $ | 19,663 | $ | 66,358 | $ | 48,490 | ||||||||
Direct operating costs (excluding depreciation) | $ | 15,662 | $ | 10,455 | $ | 38,648 | $ | 26,871 | ||||||||
Selling, general and administrative | $ | 2,464 | $ | 1,725 | $ | 6,858 | $ | 5,182 | ||||||||
Total jobs | 2,714 | 2,200 | 6,968 | 5,466 | ||||||||||||
Average revenue per job | $ | 10.18 | $ | 8.94 | $ | 9.52 | $ | 8.87 | ||||||||
Average costs per job | $ | 5.77 | $ | 4.75 | $ | 5.55 | $ | 4.92 | ||||||||
Average margin per job | $ | 4.41 | $ | 4.19 | $ | 3.97 | $ | 3.95 | ||||||||
Capital expenditures | $ | 5,865 | $ | 3,508 | $ | 20,598 | $ | 14,112 | ||||||||
Drilling and Completion Fluids: | ||||||||||||||||
Revenues | $ | 29,819 | $ | 23,455 | $ | 88,812 | $ | 65,018 | ||||||||
Direct operating costs (excluding depreciation) | $ | 24,062 | $ | 19,851 | $ | 71,857 | $ | 55,327 | ||||||||
Selling, general and administrative | $ | 2,402 | $ | 1,965 | $ | 6,964 | $ | 5,550 | ||||||||
Other expense from operations | $ | 200 | $ | — | $ | 200 | $ | — | ||||||||
Total jobs | 485 | 550 | 1,515 | 1,661 | ||||||||||||
Average revenue per job | $ | 61.48 | $ | 42.65 | $ | 58.62 | $ | 39.14 | ||||||||
Average costs per job | $ | 49.61 | $ | 36.09 | $ | 47.43 | $ | 33.31 | ||||||||
Average margin per job | $ | 11.87 | $ | 6.56 | $ | 11.19 | $ | 5.83 | ||||||||
Capital expenditures | $ | 687 | $ | 354 | $ | 2,039 | $ | 981 | ||||||||
Oil and Natural Gas Production and Exploration: | ||||||||||||||||
Revenues | $ | 10,234 | $ | 9,602 | $ | 28,146 | $ | 25,104 | ||||||||
Direct operating costs (excluding depreciation, depletion and impairment) | $ | 2,365 | $ | 1,715 | $ | 6,953 | $ | 6,051 | ||||||||
Selling, general and administrative | $ | 545 | $ | 484 | $ | 1,598 | $ | 1,324 | ||||||||
Capital expenditures | $ | 3,858 | $ | 2,739 | $ | 12,286 | $ | 9,871 | ||||||||
Corporate and Other: | ||||||||||||||||
Selling, general and administrative | $ | 3,868 | $ | 3,043 | $ | 11,036 | $ | 7,694 | ||||||||
Bad debt expense | $ | 50 | $ | 192 | $ | 416 | $ | 499 | ||||||||
Other expense (income) from operations | $ | 146 | $ | (153 | ) | $ | 1,644 | $ | (1,528 | ) | ||||||
Capital expenditures | $ | — | $ | — | $ | 5,308 | $ | — | ||||||||
Total capital expenditures, excluding acquisitions | $ | 105,949 | $ | 47,112 | $ | 264,898 | $ | 136,835 |
September 30, | September 30, | |||||||
2005 | 2004 | |||||||
Selected Balance Sheet Data (Unaudited): | ||||||||
Cash and cash equivalents | $ | 131,211 | $ | 69,766 | ||||
Current assets | $ | 561,529 | $ | 330,521 | ||||
Total assets | $ | 1,716,481 | $ | 1,249,828 | ||||
Current liabilities | $ | 240,646 | $ | 134,520 | ||||
Long-term debt, less current maturities | $ | — | $ | — | ||||
Working capital | $ | 320,883 | $ | 196,001 |
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