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
Financial Results for Third Quarter of 2007
SNYDER, Texas – November 1, 2007 – PATTERSON-UTI ENERGY, INC. (NASDAQ: PTEN)today announced financial results for the three and nine months ended September 30, 2007. Net income for the three-month period totaled $98.2 million, or $0.62 per share, compared to $186 million, or $1.12 per share for the three months ended September 30, 2006. Revenues for the just completed quarter were $524 million, compared to $674 million for the third quarter of 2006.
Net income for the nine months ended September 30, 2007 totaled $354 million, or $2.24 per share, compared to net income of $517 million, or $3.03 per share for the first nine months of 2006. Revenues for the nine-month period ended September 30, 2007 were $1.6 billion, compared to $1.9 billion for the first nine months of 2006.
The Company also declared a quarterly cash dividend on its Common Stock of $0.12 per share, to be paid on December 28, 2007 to holders of record as of December 12, 2007.
Douglas J. Wall, Patterson-UTI’s Chief Executive Officer, stated, “Average revenues per operating day during the third quarter were $19,150, compared to $19,410 in the second quarter of 2007. Average direct costs per operating day were $10,840 for the third quarter, compared to $10,570 for the second quarter of 2007.”
Mr. Wall said, “For the quarter ended September 30, 2007, the Company had an average of 243 drilling rigs operating, including 234 rigs in the U.S. and 9 rigs in Canada. This compares to an average of 237 drilling rigs operating, including 235 rigs in the U.S. and 2 rigs in Canada, for the second quarter of 2007. We estimate that our October rig count was 238 average rigs operating, including 229 in the U.S. and 9 in Canada. For the fourth quarter, we currently expect that our rig count will be similar to the third quarter with an average of approximately 243 rigs operating.”
“Our pressure pumping business has continued to successfully expand its operations and had another record setting quarter in both revenue and operating income,” Mr. Wall added.
Mark S. Siegel, Chairman of Patterson-UTI, stated, “We are continuing to deploy capital in a manner beneficial to shareholders. During the just completed quarter, the Company purchased 2,275,000 shares of the Company’s Common Stock for an aggregate cost of $50.3 million. These purchases were made pursuant to the Board’s previously announced stock buyback program authorizing purchases of up to $250 million of the Company’s Common Stock in open market or privately negotiated transactions. In addition, we recently acquired two 1,500 horsepower and one 1,000 horsepower SCR electric land drilling rigs and spare drilling equipment for $29 million.”
Mr. Siegel added, “Although U.S. lower 48 land rig counts have remained at high levels during 2007, land rigs added to this market have exceeded the current market’s demand. In response, the construction of additional land rigs for the domestic market has slowed significantly. Most importantly, we believe that the long-term upward trend in the number of wells drilled will continue, as it is the principal mechanism to meet demand for natural gas and to offset steep decline rates. For this expected increase in rig demand, we currently have approximately 90 marketable land drilling rigs available to reactivate.”
“We also believe our strong balance sheet, our dividend and buyback strategy, and our commitment to invest in our rig fleet and pressure pumping business, all have served, and will continue to serve, our Company and its shareholders well in the future,” Mr. Siegel added.
All references to “net income per share” in this press release are diluted earnings per common share as defined within Statement of Financial Accounting Standards No. 128.
The Company will hold its quarterly conference call to discuss third 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 through November 15, 2007 atwww.patenergy.com and telephone replay of the call will be available through November 5, 2007.
About Patterson-UTI Energy, Inc.
Patterson-UTI Energy, Inc. provides onshore contract drilling services to exploration and production companies in North America. The Company has approximately 350 currently marketable land-based drilling rigs that operate primarily in the oil and natural gas producing regions of Texas, New Mexico, Oklahoma, Arkansas, Louisiana, Mississippi, Colorado, Utah, Wyoming, Montana, North Dakota, South Dakota, Pennsylvania 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, excess availability of land drilling rigs, including as a result of the reactivation or construction of new land drilling rigs, adverse industry conditions, difficulty in integrating acquisitions, demand for oil and natural gas, shortages of rig equipment 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, which may be obtained by contacting the Company or the SEC. These filings are also available through the Company’s web site athttp://www.patenergy.com or through the SEC’s Electronic Data Gathering and Analysis Retrieval System (EDGAR) athttp://www.sec.gov. We undertake no obligation to publicly update or revise any forward-looking statement.
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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, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
REVENUES | $ | 524,002 | $ | 673,658 | $ | 1,593,661 | $ | 1,908,204 | ||||||||
COSTS AND EXPENSES | ||||||||||||||||
Direct operating costs (excluding depreciation, depletion and impairment) | 297,661 | 327,710 | 882,798 | 925,225 | ||||||||||||
Depreciation, depletion and impairment | 66,523 | 49,215 | 182,401 | 140,245 | ||||||||||||
Selling, general and administrative | 16,593 | 13,777 | 47,584 | 39,428 | ||||||||||||
Embezzlement costs (recoveries) | (1,145 | ) | (1,512 | ) | (43,080 | ) | 2,941 | |||||||||
Gain on disposal of assets | (330 | ) | (437 | ) | (16,603 | ) | (437 | ) | ||||||||
Other operating expenses | 600 | 3,000 | 1,600 | 4,385 | ||||||||||||
Total Costs and Expenses | 379,902 | 391,753 | 1,054,700 | 1,111,787 | ||||||||||||
OPERATING INCOME | 144,100 | 281,905 | 538,961 | 796,417 | ||||||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||
Interest expense | (357 | ) | (363 | ) | (1,951 | ) | (476 | ) | ||||||||
Interest income | 1,091 | 948 | 1,917 | 5,579 | ||||||||||||
Other | 42 | 88 | 245 | 231 | ||||||||||||
Total Other Income | 776 | 673 | 211 | 5,334 | ||||||||||||
INCOME BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF CHANGE IN | ||||||||||||||||
ACCOUNTING PRINCIPLE | 144,876 | 282,578 | 539,172 | 801,751 | ||||||||||||
INCOME TAX EXPENSE | 46,695 | 96,588 | 185,639 | 285,502 | ||||||||||||
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE | 98,181 | 185,990 | 353,533 | 516,249 | ||||||||||||
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET OF RELATED | ||||||||||||||||
TAX EXPENSE OF $398 | — | — | — | 687 | ||||||||||||
NET INCOME | $ | 98,181 | $ | 185,990 | $ | 353,533 | $ | 516,936 | ||||||||
NET INCOME PER COMMON SHARE | ||||||||||||||||
Basic | $ | 0.63 | $ | 1.14 | $ | 2.28 | $ | 3.08 | ||||||||
Diluted | $ | 0.62 | $ | 1.12 | $ | 2.24 | $ | 3.03 | ||||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | ||||||||||||||||
Basic | 154,934 | 163,412 | 155,281 | 168,036 | ||||||||||||
Diluted | 157,339 | 165,742 | 157,491 | 170,339 | ||||||||||||
CASH DIVIDENDS PER COMMON SHARE | $ | 0.12 | $ | 0.08 | $ | 0.32 | $ | 0.20 | ||||||||
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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, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Contract Drilling: | ||||||||||||||||
Revenues | $ | 428,316 | $ | 577,047 | $ | 1,315,005 | $ | 1,616,100 | ||||||||
Direct operating costs (excluding depreciation) | $ | 242,352 | $ | 267,345 | $ | 716,803 | $ | 737,021 | ||||||||
Selling, general and administrative | $ | 1,616 | $ | 1,817 | $ | 4,467 | $ | 5,338 | ||||||||
Depreciation | $ | 56,105 | $ | 42,961 | $ | 156,075 | $ | 121,764 | ||||||||
Operating income | $ | 128,243 | $ | 264,924 | $ | 437,660 | $ | 751,977 | ||||||||
Operating days | 22,362 | 27,725 | 66,931 | 81,489 | ||||||||||||
Average revenue per operating day | $ | 19.15 | $ | 20.81 | $ | 19.65 | $ | 19.83 | ||||||||
Average direct operating costs per operating day | $ | 10.84 | $ | 9.64 | $ | 10.71 | $ | 9.04 | ||||||||
Average margin per operating day | $ | 8.32 | $ | 11.17 | $ | 8.94 | $ | 10.79 | ||||||||
Average rigs operating | 243 | 301 | 245 | 298 | ||||||||||||
Capital expenditures | $ | 120,192 | $ | 152,879 | $ | 403,381 | $ | 377,165 | ||||||||
Pressure Pumping: | ||||||||||||||||
Revenues | $ | 58,498 | $ | 40,462 | $ | 148,674 | $ | 107,800 | ||||||||
Direct operating costs (excluding depreciation) | $ | 28,682 | $ | 20,960 | $ | 75,610 | $ | 56,545 | ||||||||
Selling, general and administrative | $ | 4,882 | $ | 3,450 | $ | 13,758 | $ | 9,588 | ||||||||
Depreciation | $ | 3,702 | $ | 2,559 | $ | 10,234 | $ | 7,075 | ||||||||
Operating income | $ | 21,232 | $ | 13,493 | $ | 49,072 | $ | 34,592 | ||||||||
Total jobs | 4,065 | 3,116 | 10,477 | 8,844 | ||||||||||||
Average revenue per job | $ | 14.39 | $ | 12.99 | $ | 14.19 | $ | 12.19 | ||||||||
Average costs per job | $ | 7.06 | $ | 6.73 | $ | 7.22 | $ | 6.39 | ||||||||
Average margin per job | $ | 7.33 | $ | 6.26 | $ | 6.97 | $ | 5.80 | ||||||||
Capital expenditures | $ | 11,047 | $ | 7,692 | $ | 41,678 | $ | 27,371 | ||||||||
Drilling and Completion Fluids: | ||||||||||||||||
Revenues | $ | 27,348 | $ | 46,163 | $ | 97,775 | $ | 155,221 | ||||||||
Direct operating costs (excluding depreciation) | $ | 24,153 | $ | 36,183 | $ | 82,172 | $ | 120,418 | ||||||||
Selling, general and administrative | $ | 2,486 | $ | 2,733 | $ | 7,319 | $ | 7,765 | ||||||||
Depreciation | $ | 728 | $ | 689 | $ | 2,121 | $ | 2,000 | ||||||||
Operating income (loss) | $ | (19 | ) | $ | 6,558 | $ | 6,163 | $ | 25,038 | |||||||
Capital expenditures | $ | 460 | $ | 1,122 | $ | 2,581 | $ | 3,052 | ||||||||
Oil and Natural Gas Production and Exploration: | ||||||||||||||||
Revenues | $ | 9,840 | $ | 9,986 | $ | 32,207 | $ | 29,083 | ||||||||
Direct operating costs (excluding depreciation, depletion and impairment) | $ | 2,474 | $ | 3,222 | $ | 8,213 | $ | 11,241 | ||||||||
Selling, general and administrative | $ | 695 | $ | 684 | $ | 2,017 | $ | 2,050 | ||||||||
Depreciation, depletion and impairment | $ | 5,784 | $ | 2,804 | $ | 13,361 | $ | 8,815 | ||||||||
Operating income | $ | 887 | $ | 3,276 | $ | 8,616 | $ | 6,977 | ||||||||
Capital expenditures | $ | 4,153 | $ | 4,982 | $ | 13,804 | $ | 15,699 | ||||||||
Corporate and Other: | ||||||||||||||||
Selling, general and administrative | $ | 6,914 | $ | 5,093 | $ | 20,023 | $ | 14,687 | ||||||||
Depreciation | $ | 204 | $ | 202 | $ | 610 | $ | 591 | ||||||||
Other operating expenses | $ | 600 | $ | 3,000 | $ | 1,600 | $ | 4,385 | ||||||||
Gain on disposal of assets | $ | (330 | ) | $ | (437 | ) | $ | (16,603 | ) | $ | (437 | ) | ||||
Embezzlement costs (recoveries) | $ | (1,145 | ) | $ | (1,512 | ) | $ | (43,080 | ) | $ | 2,941 | |||||
Capital expenditures | $ | — | $ | — | $ | — | $ | 135 | ||||||||
Total capital expenditures | $ | 135,852 | $ | 166,675 | $ | 461,444 | $ | 423,422 |
September 30, | December 31, | |||||||
2007 | 2006 | |||||||
Selected Balance Sheet Data (Unaudited): | ||||||||
Cash and cash equivalents | $ | 20,516 | $ | 13,385 | ||||
Current assets | $ | 543,205 | $ | 652,670 | ||||
Total assets | $ | 2,426,900 | $ | 2,192,503 | ||||
Current liabilities | $ | 353,649 | $ | 317,618 | ||||
Long-term debt | $ | 10,000 | $ | 120,000 | ||||
Working capital | $ | 189,556 | $ | 335,052 |
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