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 SECOND QUARTER RESULTS
NET INCOME MORE THAN DOUBLES OVER PRIOR QUARTER
SNYDER, TEXAS - JULY 23, 2003 - PATTERSON-UTI ENERGY, INC. (NASDAQ:
PTEN) today announced financial results for the three months and six months
ended June 30, 2003.
The Company reported net income of $12.1 million, or $0.15 per share,
for the three-month period, compared to a net loss of $3.8 million, or $0.05 per
share, for the quarter ended June 30, 2002. Revenue for the quarter was $195.6
million, versus $125.4 million for the comparable three-month period in 2002.
Net income for the six months ended June 30, 2003 was $17.8 million, or
$0.22 per share, compared to net income of $90,000, or $0.00 per share, for the
first six months of fiscal 2002. Revenue for the six-month period reached $360.9
million, compared to $253.6 million for the comparable six months in 2002.
Cloyce A. Talbott, Patterson-UTI's Chief Executive Officer, commented,
"Our average margin per drilling day increased to $2,230 during the second
quarter of this year compared to $1,830 in the first quarter, an increase of
$400. Average revenue per drilling day increased $700 over the first quarter as
demand for land drilling services increased. Average costs per drilling day
increased a net $300, as a result of reversing the 10 percent wage cuts that we
implemented during the first quarter of 2002, partially offset by cost-savings
from improved efficiency as a result of increased drilling activity.
"Our average rig count increased sequentially from the first quarter,
with drilling activity in the U.S. more than sufficient to compensate for the
decline in drilling activity in Canada due to spring breakup. We had 195 average
rigs operating in the quarter, including 5 in Canada, compared to 176 average
rigs, including 15 in Canada, for the prior quarter. Thus far in the third
quarter we have averaged 194 rigs operating, including 11 rigs in Canada,"
Talbott said.
Mark S. Siegel, Chairman of Patterson-UTI Energy, stated, "Net income
for the quarter more than doubled compared to the first quarter of this year on
an 18 percent increase in revenue, demonstrating the earnings leverage that we
are able to achieve as rig utilization increases and margins improve.
"We expect further increases in rig utilization later in the year as
our customers attempt to overcome natural gas production declines and meet the
demand for natural gas during the winter withdrawal season. We believe that
continued strong commodity prices will provide our customers with cash flow for
increased investment in land drilling activities," he added.
The results for the 2003 six-month period include income in the amount
of $2.5 million ($1.6 million after tax) from the collection of a disputed
receivable acquired in the 1999 merger with Norton Drilling Services, Inc., as
well as a net of tax charge of $469,000 resulting from a change in the
accounting rules (SFAS No.143) pertaining to the Company's exploration and
production activities. The results for the 2002 three- and six-month periods
include a pretax charge of $4.7 million ($2.8 million after tax) due to the
financial failure of a workers' compensation insurance carrier that had provided
coverage for the Company between 1992 and March of 2001.
All references to "earnings per share" set forth 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 second
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 at www.patenergy.com or at www.streetevents.com in the Individual
Investor Center. Replay of the conference call webcast will be available at
these same websites through August 6, 2003.
ABOUT PATTERSON-UTI
Patterson-UTI Energy, Inc. provides onshore contract drilling services
to exploration and production companies in North America. Patterson-UTI owns 340
land-based drilling rigs that operate primarily in oil and natural gas producing
regions of Texas, New Mexico, Oklahoma, Utah, Louisiana, Mississippi and western
Canada. Patterson-UTI Energy, Inc. is also engaged in the businesses of pressure
pumping services and drilling and completion fluid services. Additionally,
Patterson-UTI has a small exploration and production business that is based in
Texas.
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.
PATTERSON-UTI ENERGY, INC.
Condensed Consolidated Statements of Income (Unaudited)
(in thousands, except per share data)
<Table>
<Caption>
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
--------- --------- --------- ---------
REVENUES $ 195,624 $ 125,363 $ 360,863 $ 253,586
COSTS AND EXPENSES
Direct operating costs (excluding depreciation, depletion and amortization) 145,323 97,540 272,217 190,832
Depreciation, depletion and amortization 24,973 23,090 49,109 45,292
Selling, general and administrative 6,813 6,610 13,707 12,953
Bad debt expense 82 30 162 30
Restructuring and other charges -- 4,700 -- 4,700
Other (720) (16) (3,329) (58)
--------- --------- --------- ---------
Total Costs and Expenses 176,471 131,954 331,866 253,749
--------- --------- --------- ---------
OPERATING INCOME (LOSS) 19,153 (6,591) 28,997 (163)
--------- --------- --------- ---------
OTHER INCOME (EXPENSE)
Interest expense (76) (94) (148) (205)
Interest income 285 268 545 493
Other 77 8 85 25
--------- --------- --------- ---------
Total Other Income 286 182 482 313
--------- --------- --------- ---------
INCOME (LOSS) BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 19,439 (6,409) 29,479 150
INCOME TAXES 7,387 (2,564) 11,202 60
--------- --------- --------- ---------
INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE 12,052 (3,845) 18,277 90
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE, net of $287 income tax -- -- (469) --
--------- --------- --------- ---------
NET INCOME (LOSS) $ 12,052 $ (3,845) $ 17,808 $ 90
========= ========= ========= =========
NET INCOME (LOSS) PER COMMON SHARE
BASIC:
Income (loss) before cumulative effect of change in
accounting principle $ 0.15 $ (0.05) $ 0.23 $ 0.00
Cumulative effect of change in accounting principle -- -- (0.01) --
--------- --------- --------- ---------
Net Income (loss) $ 0.15 $ (0.05) $ 0.22 $ 0.00
========= ========= ========= =========
DILUTED:
Income (loss) before cumulative effect of change in
accounting principle $ 0.15 $ (0.05) $ 0.22 $ 0.00
Cumulative effect of change in accounting principle -- -- -- --
--------- --------- --------- ---------
Net Income (loss) $ 0.15 $ (0.05) $ 0.22 $ 0.00
========= ========= ========= =========
AVERAGE COMMON SHARES OUTSTANDING
Basic 80,529 78,742 80,347 78,080
========= ========= ========= =========
Diluted 82,457 78,742 82,109 80,684
========= ========= ========= =========
</Table>
PATTERSON-UTI ENERGY, INC.
Additional Financial and Operating Data (Unaudited)
(dollars in thousands)
<Table>
<Caption>
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
--------- --------- --------- ---------
EBITDA, excluding income of $2.5 million and a charge of $4.7 million $ 44,126 $ 21,199 $ 75,654 $ 49,829
in 2003 and 2002, respectively
Total capital expenditures, excluding acquisitions $ 32,118 $ 19,700 $ 51,651 $ 46,008
Contract Drilling:
Revenues $ 163,951 $ 98,461 $ 299,532 $ 200,401
Direct operating costs (excluding depreciation and amortization) $ 124,309 $ 78,323 $ 230,737 $ 151,755
Selling, general and administrative $ 1,094 $ 974 $ 2,229 $ 2,157
Operating days 17,742 10,846 33,611 21,396
Average revenue per operating day $ 9.24 $ 9.08 $ 8.91 $ 9.36
Average direct operating costs per operating day $ 7.01 $ 7.22 $ 6.87 $ 7.09
Average margin per operating day $ 2.23 $ 1.86 $ 2.04 $ 2.27
Number of owned rigs at end of period 340 324 340 324
Average number of rigs owned during period 334 324 331 322
Average rigs operating 195 119 186 118
Rig utilization percentage 58% 37% 56% 37%
Capital expenditures $ 27,400 $ 16,599 $ 40,939 $ 38,266
Drilling and Completion Fluids:
Revenues $ 16,003 $ 16,189 $ 31,851 $ 32,335
Direct operating costs (excluding depreciation and amortization) $ 13,922 $ 13,849 $ 28,303 $ 28,572
Selling, general and administrative $ 1,771 $ 1,761 $ 3,548 $ 3,488
Total jobs 515 352 1,001 673
Average revenue per job $ 31.07 $ 45.99 $ 31.82 $ 48.05
Average costs per job $ 27.03 $ 39.34 $ 28.27 $ 42.45
Average margin per job $ 4.04 $ 6.65 $ 3.55 $ 5.60
Capital expenditures $ 146 $ 278 $ 277 $ 941
Pressure Pumping:
Revenues $ 9,800 $ 6,614 $ 18,311 $ 14,042
Direct operating costs (excluding depreciation) $ 5,800 $ 4,352 $ 10,806 $ 8,509
Selling, general and administrative $ 1,245 $ 980 $ 2,756 $ 2,161
Total jobs 1,246 777 2,307 1,616
Average revenue per job $ 7.87 $ 8.51 $ 7.94 $ 8.69
Average costs per job $ 4.65 $ 5.60 $ 4.68 $ 5.27
Average margin per job $ 3.22 $ 2.91 $ 3.26 $ 3.42
Capital expenditures $ 2,406 $ 1,438 $ 6,119 $ 2,374
Oil and Natural Gas Production and Exploration:
Revenues $ 5,870 $ 4,099 $ 11,169 $ 6,808
Direct operating costs (excluding depreciation and depletion) $ 1,292 $ 1,016 $ 2,371 $ 1,996
Selling, general and administrative $ 350 $ 394 $ 732 $ 847
Capital expenditures $ 2,166 $ 1,385 $ 4,316 $ 4,427
Corporate and Other:
Selling, general and administrative $ 2,353 $ 2,501 $ 4,442 $ 4,300
Bad debt expense $ 82 $ 30 $ 162 $ 30
Other $ (720) $ 4,684 $ (3,329) $ 4,642
</Table>
<Table>
<Caption>
June 30, June 30,
2003 2002
---------- ----------
Selected Balance Sheet Data:
Cash and cash equivalents $ 87,456 $ 52,869
Current assets $ 265,100 $ 194,592
Total assets $1,005,260 $ 899,844
Current liabilities $ 93,192 $ 64,038
Long-term debt, less current maturities $ -- $ --
Working capital $ 171,908 $ 130,554
</Table>