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 FOURTH QUARTER RESULTS
RESULTS CONTINUE TO DEMONSTRATE EARNINGS LEVERAGE AS REVENUES INCREASE
SNYDER, TEXAS - JANUARY 29, 2004 - PATTERSON-UTI ENERGY, INC. (NASDAQ:
PTEN), today announced financial results for the three and twelve months ended
December 31, 2003.
The Company reported a tenfold increase in net income on a 48 percent
increase in revenues for the quarter. Net income for the quarter totaled $20.4
million, or $0.25 per share, compared to net income of $1.8 million, or $0.02
per share, for the fourth quarter of 2002. Revenues for the quarter were up 48
percent to $208.3 million, compared to $140.9 million for the fourth quarter of
2002.
Net income for the twelve months ended December 31, 2003 increased to
$55.3 million, or $0.68 per share, compared to net income of $2.2 million, or
$0.03 per share, for the twelve months ended December 31, 2002. Revenues for the
year increased by 47 percent to $776.2 million compared to $528.0 million in
2002.
Cloyce A. Talbott, Patterson-UTI's Chief Executive Officer, commented,
"While demand for drilling rigs remained relatively stable during the last half
of 2003, average revenues and margin per drilling day continued to increase in
the fourth quarter. Our average revenue per drilling day increased by $180 to
$9,760 and our average margin per drilling day increased by $240 to $2,840
compared to the third quarter of 2003.
"During the fourth quarter, we had an average of 191 rigs operating,
including 12 in Canada, compared to 192 in the previous quarter, including 11 in
Canada. We estimate that our rig count will average 186 rigs operating in
January, including 15 in
Canada. January activity levels were impacted by slow post-holiday start-ups and
weather delays, but we are seeing a steady pickup at the end of January.
Customer inquiries are increasing as 2004 drilling programs commence and we
expect our rig count will continue to increase as the first quarter progresses,"
Talbott added.
"We are also very pleased with the performance of our pressure pumping
services and oil and natural gas exploration and production business segments.
The performance of our drilling and completion fluids services business segment
was hindered by continued weakness in the Gulf of Mexico," Talbott continued.
Mark S. Siegel, Chairman of Patterson-UTI Energy, stated, "Our results
for the quarter continue to demonstrate the earnings leverage that we are able
to achieve as revenues increase and daily margins improve.
"Looking ahead, we believe that Patterson-UTI continues to be
well-situated to enhance its position as a leading provider of onshore contract
drilling services to exploration and production companies in North America.
During the year we increased our drilling rig fleet by 19, bringing our total
land-based drilling rig count to 343. Our balance sheet continues to be strong.
We ended the year with $100 million in cash and cash equivalents, $200 million
in working capital and no long-term debt, providing us with the opportunity to
be patient buyers of additional drilling capacity when the opportunity arises,"
Siegel concluded.
The results for the twelve-month period in 2003 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 twelve-month period 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" 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 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 sites
until Thursday, February 12, 2004.
ABOUT PATTERSON-UTI
Patterson-UTI Energy, Inc. provides onshore contract drilling services
to exploration and production companies in North America. The Company owns 343
land-based drilling rigs that operate primarily in the oil and natural gas
producing regions of Texas, New Mexico, Oklahoma, Louisiana, Colorado, Utah,
Wyoming 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 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 Twelve Months Ended
December 31, December 31,
2003 2002 2003 2002
------------ ------------ ------------ ------------
REVENUES $ 208,292 $ 140,876 $ 776,170 $ 527,957
COSTS AND EXPENSES
Direct operating costs (excluding depreciation,
depletion and amortization) 146,723 108,515 567,640 402,721
Depreciation, depletion and amortization 24,173 22,746 97,998 91,216
Selling, general and administrative 7,149 7,001 27,709 26,140
Bad debt expense -- 125 259 320
Restructuring and other charges -- -- (2,452) 4,700
Other (592) (389) (2,174) (538)
------------ ------------ ------------ ------------
Total Costs and Expenses 177,453 137,998 688,980 524,559
------------ ------------ ------------ ------------
OPERATING INCOME 30,839 2,878 87,190 3,398
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE)
Interest expense (76) (234) (292) (532)
Interest income 308 356 1,116 1,110
Other 6 (27) 143 (137)
------------ ------------ ------------ ------------
Total Other Income 238 95 967 441
------------ ------------ ------------ ------------
INCOME BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 31,077 2,973 88,157 3,839
INCOME TAXES 10,672 1,143 32,362 1,670
------------ ------------ ------------ ------------
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE 20,405 1,830 55,795 2,169
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE, net of $287 income tax -- -- (469) --
------------ ------------ ------------ ------------
NET INCOME $ 20,405 $ 1,830 $ 55,326 $ 2,169
============ ============ ============ ============
NET INCOME PER COMMON SHARE
BASIC:
Income before cumulative effect of change in
accounting principle $ 0.25 $ 0.02 $ 0.69 $ 0.03
Cumulative effect of change in accounting principle -- -- (0.01) --
------------ ------------ ------------ ------------
Net Income $ 0.25 $ 0.02 $ 0.68 $ 0.03
============ ============ ============ ============
DILUTED:
Income before cumulative effect of change in
accounting principle $ 0.25 $ 0.02 $ 0.68 $ 0.03
Cumulative effect of change in accounting principle -- -- -- --
------------ ------------ ------------ ------------
Net Income $ 0.25 $ 0.02 $ 0.68 $ 0.03
============ ============ ============ ============
AVERAGE COMMON SHARES OUTSTANDING
Basic 80,935 79,676 80,636 78,705
============ ============ ============ ============
Diluted 82,307 81,835 82,286 81,252
============ ============ ============ ============
</Table>
PATTERSON-UTI ENERGY, INC.
Additional Financial and Operating Data (Unaudited)
(dollars in thousands)
<Table>
<Caption>
Three Months Ended Twelve Months Ended
December 31, December 31,
2003 2002 2003 2002
------------ ------------ ------------ ------------
Contract Drilling:
Revenues $ 171,085 $ 109,627 $ 639,694 $ 410,295
Direct operating costs (excluding depreciation and
amortization) $ 121,331 $ 86,072 $ 475,224 $ 318,201
Selling, general and administrative $ 1,086 $ 912 $ 4,425 $ 3,987
Operating days 17,535 12,867 68,798 45,919
Average revenue per operating day $ 9.76 $ 8.52 $ 9.30 $ 8.94
Average direct operating costs per operating day $ 6.92 $ 6.69 $ 6.91 $ 6.93
Average margin per operating day $ 2.84 $ 1.83 $ 2.39 $ 2.01
Number of owned rigs at end of period 343 324 343 324
Average number of rigs owned during period 342 324 336 323
Average rigs operating 191 140 188 126
Rig utilization percentage 56% 43% 56% 39%
Capital expenditures $ 27,638 $ 17,009 $ 95,175 $ 68,516
Pressure Pumping:
Revenues $ 14,574 $ 9,305 $ 46,083 $ 32,996
Direct operating costs (excluding depreciation) $ 8,152 $ 5,675 $ 26,184 $ 19,802
Selling, general and administrative $ 1,552 $ 1,165 $ 5,683 $ 4,301
Total jobs 1,746 1,043 5,667 3,796
Average revenue per job $ 8.35 $ 8.92 $ 8.13 $ 8.69
Average costs per job $ 4.67 $ 5.44 $ 4.62 $ 5.22
Average margin per job $ 3.68 $ 3.48 $ 3.51 $ 3.47
Capital expenditures $ 1,525 $ 3,007 $ 10,524 $ 7,399
Drilling and Completion Fluids:
Revenues $ 17,799 $ 17,894 $ 69,230 $ 69,943
Direct operating costs (excluding depreciation and
amortization) $ 15,941 $ 15,797 $ 61,424 $ 60,762
Selling, general and administrative $ 2,029 $ 1,972 $ 7,447 $ 7,243
Total jobs 471 401 1,931 1,457
Average revenue per job $ 37.79 $ 44.62 $ 35.85 $ 48.00
Average costs per job $ 33.85 $ 39.39 $ 31.81 $ 41.70
Average margin per job $ 3.94 $ 5.23 $ 4.04 $ 6.30
Capital expenditures $ 353 $ 476 $ 912 $ 1,571
Oil and Natural Gas Production and Exploration:
Revenues $ 4,834 $ 4,050 $ 21,163 $ 14,723
Direct operating costs (excluding depreciation and
depletion) $ 1,299 $ 971 $ 4,808 $ 3,956
Selling, general and administrative $ 399 $ 423 $ 1,489 $ 1,571
Capital expenditures $ 3,116 $ 916 $ 10,484 $ 6,357
Corporate and Other:
Selling, general and administrative $ 2,083 $ 2,529 $ 8,665 $ 9,038
Bad debt expense $ -- $ 125 $ 259 $ 320
Other $ (592) $ (389) $ (4,626) $ 4,162
Total capital expenditures, excluding acquisitions $ 32,632 $ 21,408 $ 117,095 $ 83,843
</Table>
<Table>
<Caption>
December 31, December 31,
2003 2002
------------ ------------
Selected Balance Sheet Data:
Cash and cash equivalents $ 100,483 $ 82,154
Current assets $ 308,060 $ 243,015
Total assets $ 1,075,830 $ 942,509
Current liabilities $ 108,447 $ 75,152
Long-term debt, less current maturities $ -- $ --
Working capital $ 199,613 $ 167,863
</Table>