Earnings call transcript Q1 2023

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Operator

Thank you for standing by. At this time, I would like to welcome everyone to the Patterson-UTI Energy First Quarter 2023 Earnings Conference Call. [Operator Instructions]. Mike Drickamer Vice President, Investor Relations.

You may begin your conference.

James Drickamer

Cheryl. you, Thank Good morning. Energy, call today's the to ended XX, Patterson-UTI like welcome X of March to I'd discuss XXXX. to behalf conference you on months And results for Officer; be Hendricks, will Financial call today's Smith, Chief in Chief Participating Executive and Andy Officer. Andy

statements the as this in in statements. are the forward-looking future company's are reminder state beliefs, expectations subject conference intentions, statements and disclosed management's forward-looking company's plans, to quick which targets, that uncertainties to or the could made actual A company's call or differ filings, predictions as risks for materially. SEC These cause results

The measures made update in publicly included are company reconciliations financial or Statements call conference release some and to Andy? forward-looking required pleasure to include on our in prior call. non-GAAP statement. now obligation undertakes this no measures. to press over financial opening revise GAAP to for The any call company's the Andy it's issued And patenergy.com Hendricks remarks. turn my conference this website, the to

William Hendricks

Mike. us quarter today you for for Good joining first call. conference thank Patterson-UTI's morning, Thanks, and

report for quarter rigs the We ability to current at demonstrate renewal capitalize drilling ongoing The robust contract drilling another in super-spec pleased of segment our results. solid to the rig contracts on exceptional Tier are X results demand financial our of and rates.

shares $X.X our During indebtedness we the million long-term first common $XX.X sheet our million. at balance to strengthen $X same quarter, return the We for repurchased and to of million, we X.X of continued stock shareholders million time. repurchased only capital and for

fundamentals outstanding are our believe we and the represent disconnected an accelerated of opportunity. pace Our repurchases business of from underlying the our share shares of as price

transitory the of along mid-cycle led gas and with prices a pause we believe uncertainty prices, has natural to activity. in in future be trajectory regarding to what oil Softness

and super-spec oil Tier current operator However, due to the align count rigs discipline crude current relative drilling capital prices prices support and continue X we stability to in activity. with for rig ongoing closely crude oil as expect budgets completion

rig been bifurcated. rig by to economics overall primarily supported during mechanical the overall the high The net has rigs industry demand decline level date nuanced first of and grading, the of the and impacts grading quarter was the the in result released count Tier rigs high a driven operators. positively various Lower-spec fleet, SCR were and which and high This has for industry X super-spec utilization. well maintained across both

be will fundamentals as and improving profitability position impact Looking drilling forward, oil contract drilling by capitalize focus to current drilling, rigs for natural prices. gas will expect and completion over flow cash and activity super-spec we activity modestly that may positively provider of our near-term Tier strategically will X market on affected levels, on although activity leading levels. continue we a In

best we customers rigs focus our solutions, operational confident customers efficiency our By focusing super-spec their integrating excellence. technology through X well are gains can drilling on economics. we the their by We Tier improve economics offered latest improve help help our our and continued on

cause near will our reduction prices a the the rig gas anticipate We small count natural in term. current in

and below of quarter. lead repricing second years market the contract profitability quarter is this upon in continued from contracts the increased current expected to However, signed rates in to previous renewal margins drilling overall rates to contract increased

increase the despite revenues disruptions, to these the quarter were pleased strong we utilization. pumping softness market year, expectations current move quarter team. achieve resulted due the market in by half pumping, our combined But count into our primarily which, In pressure second execution activity calendar some in reduced we anticipate weather to As environment increased of driven in in for frac able spreads. our to spot oil that softness will for the that the rig first white This first the has space I'm basins. during contributed challenges, pressure the with of the and we margins

due pressure fuel remain The X demand our to costs. ability to their pumping as dual dual-fuel spreads XX Currently, operators' reduce industry continues bifurcate fuel higher of capable. in spreads to are

Given longer to this market current spread year. our reactivate the XXth environment, no we plan

continue to of However, to to this capable we will X dual dual convert the XX expect fuel and our year. end fuel be spreads engines of by

exceptional the service be drilling distinguishing reliability. leveraging innovation and directional to our focus ourselves continues quality segment, In by technology, and emphasizing

ourselves a high-performance like to X,XXX-foot customer have shaped a W a within utilizing clients even for in which recently. drilled a leaders drill shape single conventionally involves established enabling XX,XXX-foot drilling laterals We've U-turn a successfully well U, drill motor as wells a We mud complex wells, to section. in

ensures zone, systems pay efficiency. Our reduction within reliability, the demonstrated impact effectively in efficiency improve quality with the motors outstanding Mpower replace and well contributing overall that top-notch MWD combining enhanced the economics. boosting operator remains By we required mud number of the tools in trips wellbore service have turn, to can this to and

As Andy cater that With the business financial remain the turn our Smith, delivering we by the for first forward, efficient who and call now the reliable our needs technologies, the solutions I over to clients. evolving segments results drilling refining we will that, and of move industry will directional quarter. to collaboration review to fostering in maintaining edge our continually dedicated across our

Andrew Smith

the first rig U.S. EBITDA was due for from $XXX quarter the previous Adjusted Net successful rig day renewal per for contracts average to growth increased average quarter $X,XXX $XX.X contract Average revenue fourth XXXX. for of by per million $X,XXX cost rig to quarter million improved $XXX Thanks. $XX,XXX. million higher drilling, This to per $X.XX current operating of increased in margin or the increased rates. first which the the share. was by adjusted to $XX,XXX. quarter rig In day the driven $XXX income per over to day

place at approximately end $XXX U.S., the of of operating average of expect million XXXX, quarter dayrate an approximately XXXX. up average during in Based under quarter. currently for fourth XX, XX an XXXX, the At drilling March term providing the on $XXX drilling rigs term U.S., the in for had in second rigs for revenue, we X contracts XX, operating XX rigs and contracts under future March contracts we contracts of the ending million the quarters term from of

In an Colombia, first quarter of contract revenues drilling $XX.X adjusted million. margin million gross were with $X.X

rates further margins than to increase For at the in improvement contract offset expected contract anticipate more count. the a is renewals our slight resulting we second quarter, profitability drilling as in current in decline from rig

of or Colombia, generate we to is $X,XXX, $X.X revenue adjusted the approximately during million approximately expected of Average expect rigs. increase approximately adjusted contract our count second decline average X $XX.X per In to gross X million. rig while rig to day with is margin drilling quarter margin expected

gross revenues million, revenues were pressure adjusted by with disruptions an both were weather the of pumping, and $XX.X In Pressure impacted pumping space million. $XXX and increasing margins white calendar. margin in

quarter, pumping second in approximately are of the million adjusted we softness Accordingly, revenues white margin expected the gross given market. to an For space additional $XX expect be pressure in spot calendar million. the the $XXX with

were first $X.X adjusted reduced and a activity we decline levels. drilling $XX.X the directional of an revenues drilling million the gross with during margin revenue segment, quarter due to in first quarter margin In million. experienced primarily in Directional our

levels. increase quarter, approximately by the the first second quarter For margin $X expect million and we to both over revenue

E&P revenues million other the of were quarter technology operations, with which gross rental, our includes margin $X.X an In businesses, for first million. and our adjusted $XX.X

to the second in quarter. quarter, margin quarter, charges. first For On basis, depreciation, amortization million, to $XXX adjusted million total and the the to $X.X we a revenues and depletion, of consolidated expense first expect including amounted gross be impairment similar impairment the

the we impairment expense and expect For amortization second depletion, total quarter, $XXX of million. depreciation,

debt be $XX first expense million. quarter included is Interest first million expected of debt second gain $X.X to $X we related in from the to a the administrative $X.X quarter. and approximately of the expense general the extinguishment repurchased Selling, early million the million quarter for for of

For quarter, approximately expect the be expense interest second million. $XX we to

for U.S. not to although rate expected to we cash any XXXX taxes. XX%, tax approximately is effective significant federal be do expect pay Our

CapEx CapEx XXXX of million which $XXX $XXX million. to to million, customer-funded $XX $XXX forecast forecast approximately down drilling million, excluding $XXX our expected be million lowering are Contract equates is from We of rig previous upgrades. our when to

this for such rigs to or as requested million, of natural line of our which of throughout specific XXXX, forecast rig upgrades for rig engines CapEx is X these $XXX customers, now reactivation power. from contracted. X and and is All majority rig all very be expected reactivations currently maintenance gas are for emission-reducing by reactivation including high Included skids the utility in The is the decrease million. CapEx include down reactivations packages $XXX

CapEx reactivation by of year's for Additionally, approximately and million the this $XX was customer. paid upgrade

term rigs with our disciplined to long has we contract. history no any strategy Patterson-UTI being a intention reactivate have of a contracting and without

million. pressure been CapEx $XX reduced has $XXX by pumping Our forecast to million approximately

longer we a no a Andy reactivate Andy to call As upgrading plan that, we turn back but Tier I'll With dual spread Hendricks. X mentioned, now fuel. to are XXth to the spread

William Hendricks

increased believe we count economics rigs result leverage a activity. our increasing XXXX leading Patterson-UTI's Tier a to market during will pause as ability technology positioned through stable any summarize, and our To of well Andy. of efficiency in in customers' super-spec our despite rig Thanks, in provider near-term to X support slightly

renewal we flow will to rig drilling of will our and contracts year higher contract our the cash we Given the portfolio, rates. expect term operating from results as throughout continue at benefit improve

levels. we continue will return we over cash target shareholders spending of flow continue activity contracting cash to dividends Furthermore, to to combination both flow, discipline will and strategies and flow our through capital a we and of XX% prioritize free through share long-standing of substantial cash commitment our demonstrate capital free where buybacks. margin our With Patterson-UTI's to a

products like all provide people's and their now call up would to gas efforts world successes we'd work, we help questions. like better. the to hard our that, make of for With thank the that to employees the Cheryl, open and with lives to for oil

Operator

Instructions]. [Operator

is question from Jim Your of Raymond first Rollyson James.

James Rollyson

amazing, still It's well. actually is doing business

and you One fuel electric, of year. upgrading fuel the out would year, have because mentioned obviously, so of today, to huge XX X the put and to by that Andy, you're tied the around especially cost this, of you of to the you that peers of basically continued -- is gas fleet end another savings of is adding mentioned or this some kind frac evolution fleets your questions, the dual mentioned of

Are you Tier on Or difference fuel? fleets the kind decisions. generation pricing X short-term X, I'm more X discernible those it demand of curious between the basis. just for seeing in drives versus the customer old a is Tier diesel that of a newer -- dual kind what's

William Hendricks

Yes.

engines X been the out no So program new in to it older really but year, to engines to a X. then be do worth some are it's our we over we where do first, of coming to rebuilding the upgrade. the for continue Tier Tier hour has as It's now going in with longer

for a And it so burn then the do is ahead point. dual the that's on for top starting they able be as add the can course, worthwhile to to natural because the we of they when go bit and natural because pads. us of benefit can to E&P fuel that much a economically kits gas get gas premium is, of the to as bring And

on So of ongoing is replacing really which engine, is CapEx. Tier but process. upgrade part Tier the older upgrade maintenance the dual portion it adding smaller the process, our an Xs, is I It's part but is a portion this X kit, maintenance is not just the and the fuel an just of capital. mean that's the real of upgrade

to dual So improve budget. going the number fleet, to get we of And primarily And bit margin better be the quality for that are think do of to on E&P. continues fuel that huge there's us. benefit a the spreads are when our we maintenance part it's because we a of increasing it the

James Rollyson

then And as just helpful. follow-up. a That's Excellent.

second continues You solid obviously average least contract kind second and sequential the pretty through it per mentioned, of increase as posted revenue quarter -- in based quarter guys at have sounds guidance. move renewals day on the you that and in like

seen like basins the in curious bidding recent rigs or in the degradation impacted strength were that's mentioned curious months? some if fleet obviously but you've price the peers -- weeks it continuing One talking about you've financials, just in if your here I'm of but And basins. or your obviously, seem oily way that they doesn't your others I'm gas in

William Hendricks

need the what the on I just the high-quality of we any doing for get I'm Yes. systems, choice we're about day the a we natural questions sure We trains to to mean can our activity few LNG we've basins going is on and what pause, a and work. in rigs. that It's rates. really that rates the the are market. given and LNG in to reduce we is that's kind the And the and see got rates reduce a gas We that do to choose don't demand don't slowdown rigs going occur oil pricing. demand in especially see feeding see to still in need we so just see basins. If think

with And just wait slowdown up again. those the gas activity rigs in any natural when starts basins, we'll pick and that so work to

Operator

Your Pant Saurabh next Bank question from is of America. of

Saurabh Pant

they're seems better? to on it like XQ numbers, guess peers, so outlook to follow think about in are reported comment and on and second mean your do I mix? big we for pumping contract? off I it about side. because others, a activity decline the first one delta historically but you A side XQ. sounds or much can't then ask of up help your just roll the rigs doing but ones, contrasting to such just it about Is on Is there unfair on seen. Because rig you your else? you a -- And couple I'll your the Why is just the what talking the customer earlier to guess Is down I their I X% XX% be basin X%. expected quarter. right, maybe pressure for something activity have it's ask too it's to just much way the

just to clarify on I that, Andy. please, So want

William Hendricks

Mid-Con. gas Yes, slowdown we've and slowdown rigs some going in we start oil, different producing oil that I what's in at seen and Mid-Con let's happening looking for I seen gas on changes Mid-Con. mean for by basins. in different in think seeing discussion both in the you're drilling are the some Bakken have basins

East got for you've got Louisiana. course, South of oil, Haynesville rigs Texas mix a Texas, some gas. drilling covering you've of then, some And and

is think I heavily Northeast. we of so Permian more the also that, we're those positive us to course, for a are this in and basins And but the operate to and weighted,

structure basin, and a is of market. relatively a That's gas the segregated activity all all from the rest Northeast the steady a well that's our industrial up and know we the that in services but stays bit you the Now gas basin is here. U.S., that anticipate heating as pipeline of Northeast the

And while growth some Texas, in in challenges the basins. weighting long-term Haynesville, along And with those I see operate you're less Permian. see so Northeast. stability we think the We and there, we near-term seeing we have South in Mid-Con, in the

I things on waiting now. for right being basin just drilling the different it's how affected So are contractors think

Saurabh Pant

how or little that let's think extra about Obviously, white about said, are start say, of right? on taking that think white that to looks X on Andy, quickly versus help you to on XX accept be saying makes point willing X No, But this due then decision you're get there. whether How me do you profitability, was up. I back. I'm a better. to it's X months profitability hit Okay. space hit the pumping just things my taking, just going about spacing talked to sense. pause about side, general, short-term you stack think near-term spacing going the spot on fleets you And a market to do white might might this In just than a it think like looser and like working

William Hendricks

Yes.

calendar support the continue more So customers. the and a We little to spread complex. it's trying stack to then it's out just a fill can't

you've that higher higher we we got going pressure are you rates. a have it's higher which think down little the market, pressure, to the a to bring are to the white Utica space, operating, I rates pressure, Northeast the going -- of primarily where where through at at some and But and places when margins Basin, then higher look lot do Delaware the bit. are that's work We in pumping

customers pause. those adjust pulling affecting are holding later and on pricing we've the that's going steady But to fill think with to the have that got their us. that it's back In it really later space white for But I we're seeing we're and out markets, white just I this a and less in the year. see And calendar, activity in now. we'll see the again, will space more year, as schedules,

Operator

Your is from next question Benchmark. Kurt of Hallead

Kurt Hallead

there. other so congrats Andy, quite to peers, Yes, everybody differential a your of to execution, relative some radical excellent

kind you with Just as other more dynamics and some curious, drilling the to Marcellus than the the referenced your right, areas. first to the of maybe Haynesville exposure on front

structural understanding better customer take differences every the terms also away of but your and that will chip understanding opportunity of So and pricing. better base to market, kind that get

Would the give has seen been that whatsoever, been on having in you more discussions the typical have got bit in aggressive and any change lately you've friction you E&Ps than have recent Is discussions a to as some us little the around insight that they have quarters? pricing? --

William Hendricks

been to doesn't. Kurt, to Haynesville, things it E&Ps I markets makes they have drill wouldn't gotten have necessarily it's challenged certainly the the prices gas like have gas But a their either the in down, of more ask. sense affected some have to coming job more more by well which it say aggressive, or do and especially

And the boost is XX% by to a on so us get going reducing to economics drilled. rate a not day the or rig XX% well

some it's I a really have of at our rigs pressure. lot basins. rigs South and slowdowns, gas -- the also Mid-Con, basins same seeing around where putting those earlier you've production, but down Haynesville challenges Permian the reactivations, some seeing we're we're basins, oil where that come because was more into in we're to got Texas mentioning I just the of say and in the wouldn't I would time, going the So of we're some

in we've moving rig our some got count. So pieces

only be it's work few choose much. rigs hear But positioned in in rigs, aggressiveness, probably of some really say but going for rates. us, that. a our we kind earlier, down But don't our that I some We contractors do wouldn't at of our we're so it's the the our and I net is where terms drilling choice. basins need it the just today. we're that lowering saying equipment, about pressure again, seeing of to are we're highly of some like you're was anecdotal rates. we But the very of lower feel to to And not think and evidence to teams going pumping But

Kurt Hallead

That's Okay. good color.

So a frac follow-up on the side.

obviously going to the of You X year, you're this will year spell out, which dual X XX frac, be have it exiting fuel.

So I cost assets? for fleets your and and reduction you the fuel towards is moving the on kind see gains dual would longer Andy, how as frac and term, market of curious of efficiency et just maybe clearly the was cetera. mix obvious and evolving What's electric take here your

William Hendricks

natural good got doing customers what we're their well And later. to ability I'll natural there. out that is are really happy are into posted and our let on some boost gas seen improve to site some really there their employ Yes. economics. and I we'll use not technologies fuel. primary some that think electric. the that we've with results. We've It's various at interesting is -- few, there keep with you We're experimenting technologies And electric the a gas new ability just

environment, instance, that investment had I that. buying, term electric get good for spread think contract happen we just gas. that can return to don't think use the and some I see on we things were improve unless and other new to natural this seen a to fully we new supported don't we have in I a But really us a technology do some of with going But haven't that's that it.

Operator

Derek Your Podhaizer from next Barclays. question is of

Derek Podhaizer

between like defensive are. you larger a I to a your went your dropping to just through they're than around seems more go Obviously, more of contracts little little is mix? maybe gets wanted more dynamics rigs back peers you the than on your the the also Just bit but than peers? function I you also double hit color it comment one know can help of rig it on and and customer then versus a understand your spot your differences this also X us you little a those bit, term to

William Hendricks

Yes. know relative our Derek, say to have versus say basins they really we really would drilling peers coverage we the the me the rigs customers the good is our it's it have. don't because some is Northeast and these weighting pressure term and but I more to tough what in for the I back what on I have term to would spot our towards the even and basins, Permian on of more then pumping. that take

you're I we're work equipment Permian, see basin. oil steady rig the seeing we're goes available in think counts and on the to If then Northeast going to Permian $XX back increase depending activity oil in see so the goes. over consume gas especially XXX%, And up all over increasing yes, where in going and the on in that the And spread time, market. count

more really basins, about I it's think. So the

Derek Podhaizer

Got it.

about that talked you're the the count so to second months increase. increase the You bottom out here, expecting maybe rig of over summer half,

Just your going work? confidence help the in come rigs year? a to rigs in Just can up of back talking to about of little half what around up maybe the gives bit the to you you to confidence unpack half? locked gives the customers? back rig Are it a the on you have increase see you what you talk to Do

William Hendricks

throughout really if we're It's stays that what oil year, flat, natural the think going basin increase see to gas you're potential relatively basins. And customers. the the to in around with discussions in even the I doing

drive of a to that. going lot And so that's

course, going the natural months. in next of and get demand with over Now rate we ground plays do the in the and the see drive to happen into of to have end customers on year well customers, the for the LNG, XXXX. inventory increase, of where that that's to side, some But we'll going and to gas that anticipate going commodity this discussions few on how upcoming is the towards that the of need out they're

see a natural else. more reduction than gas in anything pause we this So do activity as

Operator

[Operator Instructions].

Your is question John next Partners. Daniel Daniel of Energy from

John Daniel

I questions today. got X

just -- discussions, the rig one -- just you of recover, those having are with the you already to count assuming based discussions on First, this those customers for about the later does answered, the year the last on Andy, price rigs?

William Hendricks

to for that discussion last a this price it I pretty price the need rates last is our where they this us, think we current mean be where pleased rig to how rates with contracts is. which short to So older on at the to is We continue margins be is of the year, year. and really where rig. the have the able years moved over reprice year from quarter-on-quarter going this improve

rigs teams type track day and employing is the on So the we the the record operate us, with and the of for technologies the our they're rate. day performance of rigs, rate

John Daniel

public where count some going lost change, wrong, have use to rig you -- bit been about know, see a right vocal scenario from I'm price. competitors. or larger from say more opt to smaller a the because E&Ps, your the more share a go looking you as Fair rig have players if lower priced enough. we're at are we now, months defending let's when overall maybe just the larger credit, curious Well, X to we're players

what maybe words, is makes if sense. So that top guys, less a the from in bit some as the count any guidance overall of other X rig the than declined little

William Hendricks

up seen the coverage look to customers, us and rigs We rig that these for of fast. manage equity-backed with used come private hard those We've we've And saw provide our overall trying E&Ps at P&Ls days, don't those trying those to they're valuation. seen to rigs, were we their count mechanical and prove lot a their come by SCR It's given down. down being acreage.

affect the back see It it is. using taking rigs, larger what contractors contractors, the potentially drilling but is those are doesn't that share from away So public super-spec rigs could I coming it us. drilling and

John Daniel

assuming operational utilization working U-shape does trend? question. more I'm earnings. too, And for one's an obviously the frac, out how Matador for how their And of broad-based the this spread? is you're assuming in the referenced benefits them. you're to the impact I'm Okay. Last called the curious, doing it it? you lateral that are What maybe

William Hendricks

Yes.

how for I'm for technologies U any on the lateral. versus doing a that I we the operate straight jobs And For of public the not pleased that we of these hydraulic the different just shape fracturing Matador for wells, E&Ps. on few the pleased some of a able Certainly, we've shows and know them. we're aware those done that U-shaped as the really there data to them to trial and customer. work have be out with to a that new difference

John Daniel

I'll Fair I enough. it. down guess it I understand so just can dumb

now X doing I'm two two laterals doing complete, were it you -- If by those in up of each X,XXX-foot laterals the to if much how job U? just if to took and X,XXX-foot make is time? see just savings the there's number, it trying X days those for

William Hendricks

to single to in really you're -- the maximize a trying in It's that drilling in reservoir section working because you're and your you're section. exposure

the two the on lease you've lines constrained X,XXX-foot you're the that it's of where turn So frac will in that turn. where by U as reservoir exposed well operators a square there, you're efficiencies, to and we do not plus the got because improve doing you've some laterals, section. U necessarily section that But it's it's X,XXX-foot

Operator

from question is of Crist Your Johnson next Rice. Don

Donald Crist

i.e., on this could in activity do a amount of in pause just if there? competitors in quick today, higher following based price of rigs your could to seeing try se to are rigs basins that one spot move think planning to you you're the of question that, affect there's you is kind you large anyway. basin Permian the think basin -- Are And rigs to stack because weakness in per on move the Just kind any broader operating a around and rigs you move in?

William Hendricks

Yes.

the that So some we've to had and Haynesville down in natural the and that's data begin chosen gas to it there. gas public other in basin. we have We that, time with, in a already rigs work. had fill natural this in able in rigs on to will that just areas back We're think stacked rig stack crews to pause is that to -- go we've we come the help work. And use

not there. So a problem that's

rigs Do the for move? move. Well, I that E&Ps pay think will

for there Central an South We've but rigs X to Texas move cases where at do we the may over from E&P paid E&Ps had to other had least to -- a be And the South mobilizations case the pay Texas basin that. when we've so some move Permian. from where are a Basin by rig

does it So happen.

I going in large wouldn't get are And say price, drilling that to on away. be I say a contractors some situation. there that a right would different in if they're that number it's aggressive

So some right of that's mean reduce you. a your at more -- you're contractor, for no you for doesn't getting day. end rates. I details, thing there's drilling we're those into if the all reason large to the shareholders of trying of to do That benefit the our

rates. and can it's to we few that's material, choose and small a don't those and keep and you're choose those rigs a We you may rates, you're do drilling to meaningful, to you rigs, take have those If losing contractor, not what working.

Donald Crist

Are cetera? other Okay. available, rig bit. X one. that or other there's coming any steel cost movement And more of any et little labor you the kind Obviously, in in people is if a given count sneak seeing input or I could on

William Hendricks

It's relatively still tight. is. is So what labor it

great We are torque, of not buy that from very large in on on any time. that a getting that's still job drill -- high us. double-shoulder lead public in pipe, a breaks supplier we're pipe terms drill still where a has from pipe for And brakes casing, of pipe terms we high-end, high that tubulars lot in of hearing specialty a long connection does seeing seeing who operators they're I'm

But on the passing that E&Ps we sand completion to better and those savings can. rates, side, we're we're on can we get where seeing at

are around to going big see be some in some are And their so casing. in cost that overall, places. changes service getting, the don't savings there I going But around be rates. to it's It's E&Ps sand

Operator

[Operator Instructions].

Capital of MacKey Your is next Markets. Keith question from RBC

Keith MacKey

the spot in might the little you how expect about Appreciate change And portion throughout market. to year? dynamic the exposure market you contracted your frac. of to your Can the bit to wanted do just spot Just out you start that fleet? relative talk in a --

William Hendricks

Yes.

market X any of We have spot spot, and could white that's the in do that just seeing calendar. space say be -- what still wells, we're has about the X I don't time, throughout expect some not a time. When period that I there. for of wells we some a at year X/X change exposure, real

seeing are the per spot just some continuity bit things in It's is falling a more again, there we calendar. just are service white in But So pricing not, affecting of affecting but little way even space. se. because that the it's market, margins really

Keith MacKey

it. Got

out And additional And year spread help the rule so engines $XXX year? Like next us million Does used then conversion. out an additional And there's next putting swap if from an relative the to together are activation fleet -- -- that pumping be year, what year? and existing that's no activation of got kind pressure think additional just being to that of this case, you kind for fuel this can CapEx the year? dual about but that should next the now you've you equipment. precludes

William Hendricks

upgrade budget. the is of to part X, again, the So our Tier maintenance

the that. to current Again, for of supports where more I CapEx. So get consider systems, addition dual reactivate, And market going the fuel that. better market we're that's I that looking And based to conditions. think that's really coming still the no out try plans at an of maintenance to the but upgrade then on rates

$XX for a the we moves oil today. could some XXXX, existing see going dynamics into of if change that could customers period it demand time, and from there and fair stays Now over

have to I will think I just year. So and And do commodities it this of be year wait we the think lot a throughout this by see how what driven out. plays

Operator

of Your is next Benchmark. from Kurt question Hallead

Kurt Hallead

A to quick follow-up, around guidance. other coming the back Andy's financial

income operating roughly looking should do quarter. first So flat with profit if be it at math looks correctly, my the and gross right way? it I Am I like

Andrew Smith

consolidated basis? a On

Kurt Hallead

Yes. Yes.

Andrew Smith

second. X Hang on

that's quick. here Yes. something about me right, pull think up let That's I but real right.

Operator

no Daniel Daniel call of Partners. question. -- time. more actually There now we the at have further are over will John Energy this one I turn to questions

John Daniel

I the timing just and much, the of cost when assume does the just any I quick, mean not thoughts. Real rigs the but can recover, to would speak market bringing you out? back

Andrew Smith

timing When the and the market recovers, the cost...

William Hendricks

To back out. bring rigs

John Daniel

Yes.

William Hendricks

do we relatively reactivation short, it. that relatively that consider a down we timing, cost So because necessarily a don't CapEx for low. only don't to months, is We budget few growth much had have to a if to rig for

we're upgrades budget, there rigs our for -- it rig been if was And million to some of years. same in a of on have reactivations And top bring around the rig reactivating years. a been not that's as couple that's got of that. we've down where a it's back then X economics those for $X down CapEx So in that's

And been But back so to don't down for I growth that's just maintenance fall a will probably rig months. we bring that a this CapEx. CapEx few out consider only into --

Operator

Andrew will remarks. I to the now closing turn Hendricks call for over

William Hendricks

questions. Well, like I'd call thanks Patterson-UTI on appreciate at to all this the job and the for us joined is great Thanks. everybody thank team morning And to that the who Again, our doing. everybody

Operator

today's concludes Thank participation. for you This your conference call.

You may disconnect. now

Patterson-UTI Energy (PTEN) 27 Apr 232023 Q1 Earnings call transcript