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 Fourth Quarter
and Year-End Results
Board Increases Available Stock Buyback to $200 million
SNYDER, Texas – March 30, 2006 – PATTERSON-UTI ENERGY, INC. (Nasdaq: PTEN)today announced record financial results for the fourth quarter and year-ended December 31, 2005. Net income for the quarter increased by 292 percent to $134 million, or $0.77 per share, from $34 million, or $0.20 per share, for the fourth quarter ended December 31, 2004. Revenues for the quarter were up by 84 percent to $531 million, compared to $288 million for the fourth quarter of 2004.
Net income for the twelve months ended December 31, 2005 increased by 295 percent to $373 million, or $2.15 per share, from $94 million, or $0.56 per share, for the year-ended December 31, 2004. Revenues for the twelve months were up by 74 percent to $1.7 billion, compared to $1.0 billion for the previous twelve-month period.
The results for the three months and twelve months ended December 31, 2005 include pretax expenses of approximately $8 million and $20 million, respectively, related to the previously announced embezzlement by the Company’s former Chief Financial Officer. Net of tax, these expenses reduced earnings per share for the fourth quarter and year-ended December 31, 2005 by $0.03 and $0.07, respectively.
The Company also announced that its Board of Directors has approved an increase in the Company’s stock buyback program, authorizing future purchases of up to $200 million of the Company’s common stock in open market or privately negotiated transactions.
Cloyce A. Talbott, Patterson-UTI’s Chief Executive Officer, commented, “Our contract drilling operations achieved further increases in pricing, reflecting the continuing demand for our services, along with the ongoing scarcity of land-based drilling rigs. Compared to the third quarter, average revenue per operating day for the fourth quarter of 2005 increased by $1,720 to $17,130 and our average margin per operating day increased by $1,410 to $9,020.”
He added, “Our rig count also increased sequentially from the third quarter. During the fourth quarter we had an average of 292 rigs operating, including 275 in the U.S. and 17 in Canada. This compares to an average of 283 rigs operating, including 269 in the U.S. and 14 in Canada for the third quarter of 2005. We estimate that our rig count will increase to an average of 300 rigs operating in the first quarter of 2006, including 282 in the U.S. and 18 in Canada.
“Looking ahead, we expect continued strong demand for our rigs and an ongoing scarcity of rigs in the overall market, and we are continuing our program of activating approximately 30 drilling rigs during 2006, including four that have been activated so far this year,” Mr. Talbott added.
Commenting on the financial results, Mark S. Siegel, Chairman of Patterson-UTI Energy, stated, “The record results for the fourth quarter and the full year of 2005 reflect strong performances from all of our operating segments, including our pressure pumping operations, drilling and completion fluids segment, and oil and natural gas exploration activities.”
Mr. Siegel noted that the Company’s contract drilling business once again achieved records in average revenue per operating day, average margin per operating day and average rigs operating.
He added, “This marks the twelfth consecutive quarter that we have achieved increases in average revenue and average margin per operating day in our contract drilling segment.
“Moreover, total revenues, net income and net income per common share set new records in the fourth quarter and for the full year. While revenues were up by 74 percent in 2005 compared to 2004, net income nearly quadrupled, once again demonstrating the earnings leverage we are able to achieve as rig utilization and pricing increase.”
Commenting on the increase in the stock buyback program, Mr. Siegel stated, “Our decision to increase the stock buyback program demonstrates continued confidence in the Company’s strong cash flow and our continuing commitment to deploy excess capital in a manner beneficial to shareholders.”
Mr. Siegel added, “We continue to maintain a strong balance sheet and as of December 31, 2005 we had approximately $136 million in cash and cash equivalents, $382 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 fourth 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 will be available until April 14, 2006 atwww.patenergy.com.
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.
1
PATTERSON-UTI ENERGY, INC.
Condensed Consolidated Statements of Income (Unaudited)
(in thousands, except per share amounts)
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
Restated | Restated | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
REVENUES | $ | 531,201 | $ | 288,306 | $ | 1,740,455 | $ | 1,000,769 | ||||||||
COSTS AND EXPENSES | ||||||||||||||||
Direct operating costs (excluding depreciation, depletion and impairment) | 263,300 | 187,676 | 939,365 | 678,911 | ||||||||||||
Depreciation, depletion and impairment | 44,074 | 31,763 | 156,393 | 122,800 | ||||||||||||
Selling, general and administrative | 8,953 | 8,984 | 39,110 | 31,983 | ||||||||||||
Bad debt expense | 815 | 398 | 1,231 | 897 | ||||||||||||
Embezzled funds and related expenses | 7,850 | 5,643 | 20,043 | 19,122 | ||||||||||||
Other (including gain or loss on sale of assets) | 843 | 14 | 3,017 | (1,411 | ) | |||||||||||
Total Costs and Expenses | 325,835 | 234,478 | 1,159,159 | 852,302 | ||||||||||||
OPERATING INCOME | 205,366 | 53,828 | 581,296 | 148,467 | ||||||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||
Interest expense | (337 | ) | (490 | ) | (516 | ) | (695 | ) | ||||||||
Interest income | 1,540 | 452 | 3,551 | 1,140 | ||||||||||||
Other | 389 | (78 | ) | 428 | 235 | |||||||||||
Total Other Income | 1,592 | (116 | ) | 3,463 | 680 | |||||||||||
INCOME BEFORE INCOME TAXES | 206,958 | 53,712 | 584,759 | 149,147 | ||||||||||||
INCOME TAXES | 72,769 | 19,487 | 212,019 | 54,801 | ||||||||||||
NET INCOME | $ | 134,189 | $ | 34,225 | $ | 372,740 | $ | 94,346 | ||||||||
NET INCOME PER COMMON SHARE | ||||||||||||||||
Basic | $ | 0.78 | $ | 0.20 | $ | 2.19 | $ | 0.57 | ||||||||
Diluted | $ | 0.77 | $ | 0.20 | $ | 2.15 | $ | 0.56 | ||||||||
AVERAGE COMMON SHARES OUTSTANDING | ||||||||||||||||
Basic | 172,146 | 167,697 | 170,426 | 166,258 | ||||||||||||
Diluted | 174,853 | 170,494 | 173,767 | 169,211 | ||||||||||||
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PATTERSON-UTI ENERGY, INC.
Additional Financial and Operating Data (Unaudited)
(dollars in thousands)
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
Restated | Restated | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Contract Drilling: | ||||||||||||||||
Revenues | $ | 459,746 | $ | 235,840 | $ | 1,485,684 | $ | 809,691 | ||||||||
Direct operating costs (excluding depreciation) | $ | 217,706 | $ | 153,883 | $ | 776,313 | $ | 556,869 | ||||||||
Selling, general and administrative | $ | 1,368 | $ | 1,168 | $ | 5,069 | $ | 4,417 | ||||||||
Operating days | 26,845 | 21,063 | 100,591 | 77,355 | ||||||||||||
Average revenue per operating day | $ | 17.13 | $ | 11.20 | $ | 14.77 | $ | 10.47 | ||||||||
Average direct operating costs per operating day | $ | 8.11 | $ | 7.31 | $ | 7.72 | $ | 7.20 | ||||||||
Average margin per operating day | $ | 9.02 | $ | 3.89 | $ | 7.05 | $ | 3.27 | ||||||||
Number of owned rigs at end of period | 403 | 361 | 403 | 361 | ||||||||||||
Average number of rigs owned during period | 403 | 361 | 397 | 359 | ||||||||||||
Average rigs operating | 292 | 229 | 276 | 211 | ||||||||||||
Rig utilization percentage | 72 | % | 63 | % | 69 | % | 59 | % | ||||||||
Capital expenditures | $ | 106,581 | $ | 40,408 | $ | 329,073 | $ | 140,945 | ||||||||
Pressure Pumping: | ||||||||||||||||
Revenues | $ | 26,786 | $ | 18,164 | $ | 93,144 | $ | 66,654 | ||||||||
Direct operating costs (excluding depreciation) | $ | 16,308 | $ | 10,690 | $ | 54,956 | $ | 37,561 | ||||||||
Selling, general and administrative | $ | 2,572 | $ | 2,052 | $ | 9,430 | $ | 7,234 | ||||||||
Total jobs | 2,647 | 1,978 | 9,615 | 7,444 | ||||||||||||
Average revenue per job | $ | 10.12 | $ | 9.18 | $ | 9.69 | $ | 8.95 | ||||||||
Average costs per job | $ | 6.16 | $ | 5.40 | $ | 5.72 | $ | 5.05 | ||||||||
Average margin per job | $ | 3.96 | $ | 3.78 | $ | 3.97 | $ | 3.90 | ||||||||
Capital expenditures | $ | 4,910 | $ | 3,593 | $ | 25,508 | $ | 17,705 | ||||||||
Drilling and Completion Fluids: | ||||||||||||||||
Revenues | $ | 33,199 | $ | 25,539 | $ | 122,011 | $ | 90,557 | ||||||||
Direct operating costs (excluding depreciation) | $ | 26,673 | $ | 21,176 | $ | 98,530 | $ | 76,503 | ||||||||
Selling, general and administrative | $ | 1,948 | $ | 2,146 | $ | 8,912 | $ | 7,696 | ||||||||
Other expense from operations | $ | 54 | $ | — | $ | 254 | $ | — | ||||||||
Total jobs | 465 | 544 | 1,980 | 2,205 | ||||||||||||
Average revenue per job | $ | 71.40 | $ | 46.95 | $ | 61.62 | $ | 41.07 | ||||||||
Average costs per job | $ | 57.36 | $ | 38.93 | $ | 49.76 | $ | 34.70 | ||||||||
Average margin per job | $ | 14.04 | $ | 8.02 | $ | 11.86 | $ | 6.37 | ||||||||
Capital expenditures | $ | 1,003 | $ | 507 | $ | 3,042 | $ | 1,488 | ||||||||
Oil and Natural Gas Production and Exploration: | ||||||||||||||||
Revenues | $ | 11,470 | $ | 8,763 | $ | 39,616 | $ | 33,867 | ||||||||
Direct operating costs (excluding depreciation, depletion and impairment) | $ | 2,613 | $ | 1,927 | $ | 9,566 | $ | 7,978 | ||||||||
Selling, general and administrative | $ | 591 | $ | 492 | $ | 2,189 | $ | 1,816 | ||||||||
Capital expenditures | $ | 4,877 | $ | 4,580 | $ | 17,163 | $ | 14,451 | ||||||||
Corporate and Other: | ||||||||||||||||
Selling, general and administrative | $ | 2,474 | $ | 3,126 | $ | 13,510 | $ | 10,820 | ||||||||
Bad debt expense | $ | 815 | $ | 398 | $ | 1,231 | $ | 897 | ||||||||
Other operating (including gain or loss on sale of assets) | $ | 789 | $ | 14 | $ | 2,763 | $ | (1,411 | ) | |||||||
Embezzled funds and related expenses | $ | 7,850 | $ | 5,643 | $ | 20,043 | $ | 19,122 | ||||||||
Capital expenditures | $ | — | $ | — | $ | 5,308 | $ | — | ||||||||
Total capital expenditures, excluding acquisitions | $ | 117,371 | $ | 49,088 | $ | 380,094 | $ | 174,589 |
Restated | ||||||||
December 31, | December 31, | |||||||
2005 | 2004 | |||||||
Selected Balance Sheet Data (Unaudited): | ||||||||
Cash and cash equivalents | $ | 136,398 | $ | 112,371 | ||||
Current assets | $ | 637,857 | $ | 387,033 | ||||
Total assets | $ | 1,795,781 | $ | 1,256,785 | ||||
Current liabilities | $ | 255,409 | $ | 151,553 | ||||
Long-term debt, less current maturities | $ | — | $ | — | ||||
Working capital | $ | 382,448 | $ | 235,480 |
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PATTERSON-UTI ENERGY, INC.
Condensed Consolidated Statements of Income (Unaudited)
(in thousands, except per share amounts)
Restated | Restated | Restated | ||||||||||||||||||
1st | 2nd | 3rd | 4th | Year ended | ||||||||||||||||
Quarter | Quarter | Quarter | Quarter | December 31, | ||||||||||||||||
2005 | 2005 | 2005 | 2005 | 2005 | ||||||||||||||||
REVENUES | $ | 350,593 | $ | 389,922 | $ | 468,739 | $ | 531,201 | $ | 1,740,455 | ||||||||||
COSTS AND EXPENSES | ||||||||||||||||||||
Direct operating costs (excluding depreciation, depletion and impairment) | 211,949 | 219,071 | 245,045 | 263,300 | 939,365 | |||||||||||||||
Depreciation, depletion and impairment | 35,215 | 37,559 | 39,545 | 44,074 | 156,393 | |||||||||||||||
Selling, general and administrative | 9,673 | 9,919 | 10,565 | 8,953 | 39,110 | |||||||||||||||
Bad debt expense | 223 | 143 | 50 | 815 | 1,231 | |||||||||||||||
Embezzled funds and related expenses | 1,606 | 5,156 | 5,431 | 7,850 | 20,043 | |||||||||||||||
Other (including gain or loss on sale of assets) | 94 | 1,423 | 657 | 843 | 3,017 | |||||||||||||||
Total Costs and Expenses | 258,760 | 273,271 | 301,293 | 325,835 | 1,159,159 | |||||||||||||||
OPERATING INCOME | 91,833 | 116,651 | 167,446 | 205,366 | 581,296 | |||||||||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||||||
Interest expense | (66 | ) | (57 | ) | (56 | ) | (337 | ) | (516 | ) | ||||||||||
Interest income | 433 | 634 | 944 | 1,540 | 3,551 | |||||||||||||||
Other | 4 | 16 | 19 | 389 | 428 | |||||||||||||||
Total Other Income | 371 | 593 | 907 | 1,592 | 3,463 | |||||||||||||||
INCOME BEFORE INCOME TAXES | 92,204 | 117,244 | 168,353 | 206,958 | 584,759 | |||||||||||||||
INCOME TAXES | 33,984 | 43,218 | 62,048 | 72,769 | 212,019 | |||||||||||||||
NET INCOME | $ | 58,220 | $ | 74,026 | $ | 106,305 | $ | 134,189 | $ | 372,740 | ||||||||||
NET INCOME PER COMMON SHARE | ||||||||||||||||||||
Basic | $ | 0.34 | $ | 0.44 | $ | 0.62 | $ | 0.78 | $ | 2.19 | ||||||||||
Diluted | $ | 0.34 | $ | 0.43 | $ | 0.61 | $ | 0.77 | $ | 2.15 | ||||||||||
AVERAGE COMMON SHARES OUTSTANDING | ||||||||||||||||||||
Basic | 168,757 | 169,992 | 171,613 | 172,146 | 170,426 | |||||||||||||||
Diluted | 171,742 | 173,162 | 174,587 | 174,853 | 173,767 | |||||||||||||||
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PATTERSON-UTI ENERGY, INC.
Additional Financial and Operating Data (Unaudited)
(dollars in thousands)
Restated | Restated | Restated | ||||||||||||||||||||||
1st | 2nd | 3rd | 4th | Year ended | ||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | December 31, | ||||||||||||||||||||
2005 | 2005 | 2005 | 2005 | 2005 | ||||||||||||||||||||
Contract Drilling: | | |||||||||||||||||||||||
Revenues | $295,389 | $ | 329,503 | $ | 401,046 | $ | 459,746 | $ | 1,485,684 | |||||||||||||||
Direct operating costs (excluding depreciation) | $175,466 | $ | 180,185 | $ | 202,956 | $ | 217,706 | $ | 776,313 | |||||||||||||||
Selling, general and administrative | $1,216 | $ | 1,199 | $ | 1,286 | $ | 1,368 | $ | 5,069 | |||||||||||||||
Operating days | 23,657 | 24,074 | 26,015 | 26,845 | 100,591 | |||||||||||||||||||
Average revenue per operating day | $12.49 | $ | 13.69 | $ | 15.41 | $ | 17.13 | $ | 14.77 | |||||||||||||||
Average direct operating costs per operating day | $7.42 | $ | 7.48 | $ | 7.80 | $ | 8.11 | $ | 7.72 | |||||||||||||||
Average margin per operating day | $5.07 | $ | 6.21 | $ | 7.61 | $ | 9.02 | $ | 7.05 | |||||||||||||||
Number of owned rigs at end of period | 396 | 397 | 403 | 403 | 403 | |||||||||||||||||||
Average number of rigs owned during period | 391 | 396 | 398 | 403 | 397 | |||||||||||||||||||
Average rigs operating | 263 | 265 | 283 | 292 | 276 | |||||||||||||||||||
Rig utilization percentage | 67% | 67 | % | 71 | % | 72 | % | 69 | % | |||||||||||||||
Capital expenditures | $57,735 | $ | 74,643 | $ | 90,114 | $ | 106,581 | $ | 329,073 | |||||||||||||||
Pressure Pumping: | | |||||||||||||||||||||||
Revenues | $16,693 | $ | 22,025 | $ | 27,640 | $ | 26,786 | $ | 93,144 | |||||||||||||||
Direct operating costs (excluding depreciation) | $10,364 | $ | 12,622 | $ | 15,662 | $ | 16,308 | $ | 54,956 | |||||||||||||||
Selling, general and administrative | $2,202 | $ | 2,192 | $ | 2,464 | $ | 2,572 | $ | 9,430 | |||||||||||||||
Total jobs | 1,909 | 2,345 | 2,714 | 2,647 | 9,615 | |||||||||||||||||||
Average revenue per job | $8.74 | $ | 9.39 | $ | 10.18 | $ | 10.12 | $ | 9.69 | |||||||||||||||
Average costs per job | $5.43 | $ | 5.38 | $ | 5.77 | $ | 6.16 | $ | 5.72 | |||||||||||||||
Average margin per job | $3.31 | $ | 4.01 | $ | 4.41 | $ | 3.96 | $ | 3.97 | |||||||||||||||
Capital expenditures | $7,658 | $ | 7,075 | $ | 5,865 | $ | 4,910 | $ | 25,508 | |||||||||||||||
�� | ||||||||||||||||||||||||
Drilling and Completion Fluids: | | |||||||||||||||||||||||
Revenues | $29,406 | $ | 29,587 | $ | 29,819 | $ | 33,199 | $ | 122,011 | |||||||||||||||
Direct operating costs (excluding depreciation) | $23,949 | $ | 23,846 | $ | 24,062 | $ | 26,673 | $ | 98,530 | |||||||||||||||
Selling, general and administrative | $2,195 | $ | 2,367 | $ | 2,402 | $ | 1,948 | $ | 8,912 | |||||||||||||||
Other expense from operations | $- | $ | - | $ | 200 | $ | 54 | $ | 254 | |||||||||||||||
Total jobs | 527 | 503 | 485 | 465 | 1,980 | |||||||||||||||||||
Average revenue per job | $55.80 | $ | 58.82 | $ | 61.48 | $ | 71.40 | $ | 61.62 | |||||||||||||||
Average costs per job | $45.44 | $ | 47.41 | $ | 49.61 | $ | 57.36 | $ | 49.76 | |||||||||||||||
Average margin per job | $10.36 | $ | 11.41 | $ | 11.87 | $ | 14.04 | $ | 11.86 | |||||||||||||||
Capital expenditures | $586 | $ | 766 | $ | 687 | $ | 1,003 | $ | 3,042 | |||||||||||||||
Oil and Natural Gas Production and Exploration: | | |||||||||||||||||||||||
Revenues | $9,105 | $ | 8,807 | $ | 10,234 | $ | 11,470 | $ | 39,616 | |||||||||||||||
Direct operating costs (excluding depreciation, depletion and impairment) | $2,170 | $ | 2,418 | $ | 2,365 | $ | 2,613 | $ | 9,566 | |||||||||||||||
Selling, general and administrative | $501 | $ | 552 | $ | 545 | $ | 591 | $ | 2,189 | |||||||||||||||
Capital expenditures | $5,021 | $ | 3,407 | $ | 3,858 | $ | 4,877 | $ | 17,163 | |||||||||||||||
Corporate and Other: | | |||||||||||||||||||||||
Selling, general and administrative | $3,559 | $ | 3,609 | $ | 3,868 | $ | 2,474 | $ | 13,510 | |||||||||||||||
Bad debt expense | $223 | $ | 143 | $ | 50 | $ | 815 | $ | 1,231 | |||||||||||||||
Other operating (including gain or loss on sale of assets) | $94 | $ | 1,423 | $ | 457 | $ | 789 | $ | 2,763 | |||||||||||||||
Embezzled funds and related expenses | $1,606 | $ | 5,156 | $ | 5,431 | $ | 7,850 | $ | 20,043 | |||||||||||||||
Capital expenditures | $5,200 | $ | 108 | $ | - | $ | - | $ | 5,308 | |||||||||||||||
Total capital expenditures, excluding acquisitions | $76,200 | $ | 85,999 | $ | 100,524 | $ | 117,371 | $ | 380,094 |
Restated | Restated | Restated | ||||||||||||||
March 31, | June 30, | September 30, | December 31, | |||||||||||||
2005 | 2005 | 2005 | 2005 | |||||||||||||
Selected Balance Sheet Data (Unaudited): | ||||||||||||||||
Cash and cash equivalents | $ | 68,296 | $ | 70,077 | $ | 131,211 | $ | 136,398 | ||||||||
Current assets | $ | 400,013 | $ | 437,119 | $ | 561,529 | $ | 637,857 | ||||||||
Total assets | $ | 1,368,523 | $ | 1,453,208 | $ | 1,646,106 | $ | 1,795,781 | ||||||||
Current liabilities | $ | 199,740 | $ | 181,816 | $ | 253,410 | $ | 255,409 | ||||||||
Long-term debt, less current maturities | $ | — | $ | — | $ | — | $ | — | ||||||||
Working capital | $ | 200,273 | $ | 255,303 | $ | 308,119 | $ | 382,448 |
5