Patterson-UTI Energy, Inc. (PTEN) Bundle
A Brief History of Patterson-UTI Energy, Inc. (PTEN)
Patterson-UTI Energy, Inc. has undergone significant transformations and strategic developments leading up to 2024. The company is primarily engaged in providing drilling and pressure pumping services to oil and natural gas exploration and production companies in the United States and internationally.
Recent Mergers and Acquisitions
On September 1, 2023, Patterson-UTI completed its merger with NexTier Oilfield Solutions Inc., valued at approximately $2.8 billion, including debt assumption. This merger expanded Patterson-UTI's service offerings in the completion services sector.
Additionally, the company acquired Ulterra Drilling Technologies on August 14, 2023, for approximately $894 million, enhancing its manufacturing and distribution capabilities for drill bits.
Financial Performance Overview
As of September 30, 2024, Patterson-UTI reported a net loss attributable to common shareholders of $978.8 million, translating to a diluted loss per share of $2.50. Excluding significant charges, such as an $885 million impairment of goodwill and $114 million for asset abandonment, the adjusted net income was approximately $1.9 million.
| Financial Metric | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Revenues | $1,357.2 million | $1,011.5 million | 34.2% |
| Net Loss | $(978.8 million) | $(278 million) | NA |
| Adjusted Net Income | $1.9 million | $50 million | NA |
| Capital Expenditures | $150 million (Projected Q4 2024) | $107.5 million | 39.2% |
Operational Metrics
The average active rig count in the U.S. for Q3 2024 was 107, a decrease from 114 in Q2 2024. Patterson-UTI expects this rig count to average approximately 106 in the fourth quarter of 2024.
Market Conditions and Commodity Prices
Oil prices averaged $76.43 per barrel in Q3 2024, down from $81.81 in Q2 2024. Natural gas prices averaged $2.11 per MMBtu, slightly up from $2.07 in the previous quarter.
Impairments and Charges
Patterson-UTI recorded significant impairments in Q3 2024, including an $885 million goodwill impairment associated with its completion services unit and a $114 million charge for abandoning non-Tier-1 super-spec drilling rigs.
Future Outlook
Looking forward, Patterson-UTI anticipates increased capital expenditures and strategic adjustments in response to fluctuating market conditions and operational efficiencies. The company expects its total capital expenditures for Q4 2024 to be approximately $150 million.
A Who Owns Patterson-UTI Energy, Inc. (PTEN)
Shareholder Composition
As of 2024, Patterson-UTI Energy, Inc. (PTEN) has a diverse shareholder base. The ownership is distributed among institutional investors, individual shareholders, and company insiders.
| Shareholder Type | Percentage Ownership | Number of Shares |
|---|---|---|
| Institutional Investors | 80% | approximately 312 million shares |
| Insider Ownership | 5% | approximately 19.5 million shares |
| Retail Investors | 15% | approximately 58.5 million shares |
Major Institutional Shareholders
The following table lists the top institutional shareholders of Patterson-UTI Energy, Inc. as of 2024:
| Institution | Percentage Ownership | Number of Shares |
|---|---|---|
| The Vanguard Group, Inc. | 10.5% | approximately 41 million shares |
| BlackRock, Inc. | 9.8% | approximately 38 million shares |
| State Street Corporation | 7.9% | approximately 31 million shares |
| Fidelity Investments | 6.2% | approximately 24 million shares |
| Invesco Ltd. | 5.5% | approximately 21 million shares |
Insider Ownership Structure
Insider ownership at Patterson-UTI Energy includes executives and board members, contributing to approximately 5% of total shares.
| Name | Position | Shares Owned |
|---|---|---|
| Andy Hendricks | CEO | 5 million shares |
| Jason McKee | CFO | 2 million shares |
| Board of Directors | Various | 12.5 million shares |
Recent Changes in Ownership
In 2024, Patterson-UTI Energy experienced changes in its ownership structure due to significant mergers and acquisitions, including the merger with NexTier Oilfield Solutions, which resulted in the issuance of additional shares.
| Event | Date | Impact on Shares |
|---|---|---|
| NexTier Merger | September 1, 2023 | 172 million shares issued |
| Ulterra Acquisition | August 14, 2023 | 35 million shares issued |
Current Stock Performance
The stock performance of Patterson-UTI Energy reflects market reactions to its ownership changes and financial performance. As of the latest financial report in September 2024, PTEN shares traded at approximately $14.50.
| Date | Stock Price | Market Capitalization |
|---|---|---|
| September 30, 2024 | $14.50 | $5.6 billion |
| June 30, 2024 | $15.75 | $6.2 billion |
Future Ownership Projections
Analysts predict that institutional ownership may increase in the coming quarters due to the company's growth strategies and market expansion plans.
| Forecast Period | Projected Institutional Ownership | Projected Retail Ownership |
|---|---|---|
| Q4 2024 | 82% | 13% |
| 2025 | 85% | 10% |
Patterson-UTI Energy, Inc. (PTEN) Mission Statement
Company Overview
Patterson-UTI Energy, Inc. is a leading provider of drilling and completions services to the oil and natural gas exploration and production industry. The company operates primarily in North America and aims to provide efficient, reliable, and innovative services to its clients.
Mission Statement
Patterson-UTI Energy’s mission is to deliver superior value to its customers through innovative technologies and services that improve performance and mitigate risks. The company is committed to safety, operational excellence, and sustainable practices in all its operations.
Core Values
- Safety: Prioritizing the safety of employees, clients, and the environment.
- Integrity: Conducting business with honesty and transparency.
- Innovation: Continually improving services through advanced technology and processes.
- Customer Focus: Building long-term relationships by understanding and meeting customer needs.
- Teamwork: Collaborating across all levels and functions to achieve common goals.
Financial Performance
As of September 30, 2024, Patterson-UTI reported a net loss attributable to common shareholders of $979 million, equivalent to $2.50 per share. Excluding impairments and other adjustments, the adjusted net income was $2 million or $0.00 per share.
Operational Metrics
During the third quarter of 2024, Patterson-UTI's average active rig count was 107, down from 114 in the previous quarter. The company expects an average of 106 rigs for the fourth quarter.
| Operational Metric | Q3 2024 | Q2 2024 | Change |
|---|---|---|---|
| Average Active Rig Count | 107 | 114 | -7 |
| Contract Drilling Backlog (USD) | $401 million | N/A | N/A |
| Capital Expenditures (USD) | $150 million (expected) | $86.8 million | +78.0% |
| Impairment Charge (USD) | $885 million | N/A | N/A |
Market Environment
Oil prices averaged $76.43 per barrel in the third quarter of 2024, down from $81.81 per barrel in the second quarter. Natural gas prices averaged $2.11 per MMBtu, compared to $2.07 in the previous quarter.
Recent Developments
Patterson-UTI completed its merger with NexTier Oilfield Solutions on September 1, 2023, valuing the transaction at approximately $2.8 billion. The company also acquired Ulterra Drilling Technologies for $894 million.
Conclusion on Commitment to Stakeholders
Patterson-UTI Energy remains committed to its stakeholders by focusing on operational efficiency, technological advancements, and maintaining a robust financial position. The company aims to foster sustainable growth while navigating the challenges of the oil and gas sector.
How Patterson-UTI Energy, Inc. (PTEN) Works
Business Structure
Patterson-UTI Energy, Inc. operates through three main segments:
- Drilling Services
- Completion Services
- Drilling Products
Financial Overview
For the three months ended September 30, 2024, Patterson-UTI reported the following financial results:
| Segment | Revenues (in $ thousands) | Direct Operating Costs (in $ thousands) | Adjusted Gross Profit (in $ thousands) | Operating Income (Loss) (in $ thousands) | Capital Expenditures (in $ thousands) |
|---|---|---|---|---|---|
| Drilling Services | 421,563 | 250,877 | 170,686 | (34,395) | 69,127 |
| Completion Services | 831,567 | 703,809 | 127,758 | (908,665) | 86,755 |
| Drilling Products | 89,102 | 47,144 | 41,958 | 9,136 | 16,309 |
| Other | 14,990 | 10,077 | 4,913 | (3,573) | 5,909 |
| Total | 1,357,222 | 1,011,877 | 345,315 | (936,207) | 178,100 |
Recent Performance Metrics
During the third quarter of 2024, Patterson-UTI experienced the following key metrics:
- Net loss attributable to common shareholders: $978 million or $2.50 per share
- Adjusted net income attributable to common shareholders: $2 million or $0.00 per share
- Average active rig count in the U.S.: 107 rigs
- Contract drilling backlog in the U.S.: approximately $401 million
Market Conditions
The average price of oil was $76.43 per barrel, and natural gas prices averaged $2.11 per MMBtu during the third quarter of 2024.
Operational Highlights
For the nine months ended September 30, 2024, Patterson-UTI reported:
| Metric | Value |
|---|---|
| Total Revenues (in $ thousands) | 4,215,776 |
| Net Income (Loss) (in $ thousands) | (915,007) |
| Capital Expenditures (in $ thousands) | 538,000 |
| Average Revenue per Operating Day (U.S.) | $36.04 |
| Average Direct Operating Costs per Operating Day (U.S.) | $19.87 |
Impairment and Charges
Patterson-UTI recorded a significant impairment charge of $885 million related to goodwill and an abandonment charge of $114 million for legacy drilling rigs during the third quarter of 2024.
Corporate Developments
Recent mergers and acquisitions include:
- Merger with NexTier Oilfield Solutions, valued at approximately $2.8 billion, completed on September 1, 2023.
- Acquisition of Ulterra Drilling Technologies for approximately $894 million, completed on August 14, 2023.
Stock Performance and Shareholder Returns
Patterson-UTI has a stock buyback program authorized for $1.0 billion, with approximately $780 million remaining for future repurchases as of September 30, 2024.
How Patterson-UTI Energy, Inc. (PTEN) Makes Money
Business Segments Overview
Patterson-UTI Energy, Inc. operates primarily in three business segments: Drilling Services, Completion Services, and Drilling Products.
Drilling Services
In the Drilling Services segment, revenues for the three months ended September 30, 2024, were $421,563,000, while direct operating costs were $250,877,000, resulting in an adjusted gross profit of $170,686,000.
| Metrics | 3 Months Ended September 30, 2024 | 3 Months Ended June 30, 2024 |
|---|---|---|
| Revenues | $421,563,000 | $440,289,000 |
| Direct Operating Costs | $250,877,000 | $261,497,000 |
| Adjusted Gross Profit | $170,686,000 | $178,792,000 |
| Selling, General & Administrative | $3,809,000 | $4,073,000 |
| Depreciation, Amortization & Impairment | $201,272,000 | $98,607,000 |
| Operating Income (Loss) | $(34,395,000) | $76,112,000 |
| Capital Expenditures | $69,127,000 | $58,426,000 |
Completion Services
The Completion Services segment reported revenues of $831,567,000 for the three months ended September 30, 2024, with direct operating costs amounting to $703,809,000. The adjusted gross profit was $127,758,000.
| Metrics | 3 Months Ended September 30, 2024 | 3 Months Ended June 30, 2024 |
|---|---|---|
| Revenues | $831,567,000 | $805,373,000 |
| Direct Operating Costs | $703,809,000 | $653,240,000 |
| Adjusted Gross Profit | $127,758,000 | $152,133,000 |
| Selling, General & Administrative | $10,253,000 | $10,637,000 |
| Depreciation, Amortization & Impairment | $140,930,000 | $138,693,000 |
| Operating Income (Loss) | $(908,665,000) | $10,725,000 |
| Capital Expenditures | $86,755,000 | $48,728,000 |
Drilling Products
In the Drilling Products segment, revenues reached $89,102,000 for the three months ended September 30, 2024, with direct operating costs of $47,144,000, resulting in an adjusted gross profit of $41,958,000.
| Metrics | 3 Months Ended September 30, 2024 | 3 Months Ended June 30, 2024 |
|---|---|---|
| Revenues | $89,102,000 | $86,054,000 |
| Direct Operating Costs | $47,144,000 | $46,147,000 |
| Adjusted Gross Profit | $41,958,000 | $39,907,000 |
| Selling, General & Administrative | $9,898,000 | $8,092,000 |
| Depreciation, Amortization & Impairment | $22,924,000 | $23,176,000 |
| Operating Income | $9,136,000 | $8,639,000 |
| Capital Expenditures | $16,309,000 | $13,958,000 |
Financial Performance Overview
For the nine months ended September 30, 2024, Patterson-UTI Energy reported total revenues of $4,215,776,000, compared to $2,562,139,000 for the same period in 2023. The increase in revenues is attributed to the acquisition of NexTier Oilfield Solutions and Ulterra Drilling Technologies, which expanded the company's operational capacity.
Capital Expenditures and Cash Flow
During the nine months ended September 30, 2024, Patterson-UTI incurred capital expenditures totaling $538 million, primarily for the betterment and refurbishment of drilling and completion services equipment.
| Cash Flow Metrics | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|
| Net Income (Loss) | $(915,007,000) | $184,014,000 |
| Cash Flows from Operating Activities | $859,702,000 | $553,282,000 |
| Cash Flows from Investing Activities | $(524,815,000) | $(813,636,000) |
| Cash Flows from Financing Activities | $(411,332,000) | $188,311,000 |
Debt and Equity Management
Patterson-UTI has a significant focus on managing its debt. As of September 30, 2024, the company had no borrowings under its revolving credit facility and had available borrowing capacity of approximately $613 million.
The company also executed stock buybacks, purchasing approximately $269 million worth of treasury stock during the nine months ended September 30, 2024.
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Article updated on 8 Nov 2024
Resources:
- Patterson-UTI Energy, Inc. (PTEN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Patterson-UTI Energy, Inc. (PTEN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Patterson-UTI Energy, Inc. (PTEN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.