Core Viewpoint - Patterson-UTI has experienced a decline in share price by approximately 13.6% since the last earnings report, underperforming the S&P 500, raising questions about the potential for a breakout or continued negative trend leading up to the next earnings release [1] Financial Performance - The company reported an adjusted net profit of 5 cents per share for Q2 2024, missing the Zacks Consensus Estimate of 9 cents, primarily due to poor performance in the Drilling Services segment [2] - Total revenues reached $1.3 billion, falling short of the Zacks Consensus Estimate of $1.4 billion, but reflecting a year-over-year increase of 77.7%, driven by higher revenue from the Completion Services segment [3] Shareholder Returns - Patterson-UTI will pay a quarterly dividend of 8 cents per share on September 16, 2024, to shareholders of record as of September 3 [4] - The company returned $164 million to shareholders in Q2 and $295 million in the first half of the year, including the repurchase of 12 million shares for $132 million in Q2 [4] - Since the completion of the NexTier merger and Ulterra acquisition, Patterson-UTI has returned a total of $407 million to shareholders, with $819 million remaining in its share repurchase authorization as of June 30, 2024 [5] Segment Performance - Drilling Services segment revenues totaled $440.3 million, down 10.1% from the prior year and below projections [6] - Completion Services segment revenues increased by 221.8% year-over-year to $805.4 million, but missed projections [7] - Drilling Products revenues were $86.1 million, missing estimates, while operating profit exceeded expectations [8] - Other Services revenues were $16.5 million, down 13.2% year-over-year, but operating profit improved compared to the previous year [9] Capital Expenditure & Financial Position - Capital expenditures for the quarter were $130.5 million, slightly lower than the prior year [10] - As of June 30, 2024, the company had cash and cash equivalents of $75 million and long-term debt of $1,219.2 million, with a debt-to-capitalization ratio of 20.9% [10] Outlook - The company anticipates generating free cash flow from adjusted EBITDA at a rate of 40% by 2024 [12] - Management expects steady industry drilling activity for the remainder of the year, with customers managing budgets through completion activity, potentially impacting frac activity [13] - Estimates for the company have trended downward, with a consensus estimate shift of -54% [14][16]

Patterson-UTI Energy, Inc. (PTEN) reported second-quarter 2024 adjusted net profit of 3 cents per share, down from the prior-year quarter's level of 40 cents. This year-over-year deterioration was mainly due to poor contribution from the Drilling Services segment. Drilling Services: Revenues in this segment totaled $440.3 million, down 10.1% from the prior-year quarter's figure of $489.7 million. Additionally, the top line was also below our projection of $441.5 million. Operating profit amounted to $0.4 mi ...

We had $48.0 million of outstanding letters of credit at June 30, 2024, which was comprised of $43.8 million outstanding under the Reimbursement Agreement, $2.3 million outstanding under the Credit Agreement, and $1.9 million outstanding with financial institutions providing for short-term borrowing capacity, overdraft protection and bonding requirements. We maintain these letters of credit primarily for the benefit of various insurance companies as collateral for retrospective premiums and retained losses ...

Financial Data and Key Metrics Changes - Total reported revenue for Q2 2024 was $1.348 billion, with a net income attributable to common shareholders of $11 million or $0.03 per share, which included $11 million in merger and integration expenses [22][23] - Free cash flow for the first half of the year was $206 million, with $164 million returned to shareholders, including an $0.08 per share dividend and $132 million used to repurchase 12 million shares [23][51] - Adjusted EBITDA for the quarter totaled $324 million, excluding merger and integration expenses [50] Business Line Data and Key Metrics Changes - In the Drilling Services segment, Q2 revenue was $440 million, with an adjusted gross profit of $179 million. The average rig revenue per day was $36,430, and the average adjusted rig gross profit per day was $16,190, showing a slight increase from the prior quarter [24] - Completion Services segment revenue totaled $805 million with an adjusted gross profit of $152 million [77] - Drilling Products segment revenue was $86 million, down 4% sequentially, with an adjusted gross profit of $40 million [27] Market Data and Key Metrics Changes - Approximately 80% of the active fleets are capable of being powered by natural gas, with a strong rollout of electric frac equipment [19] - International revenues are expected to be up mid-teens percent year-over-year, particularly in Saudi Arabia [48] - The company began Q3 operating 111 rigs and is currently operating 107 rigs, with expectations for a modest improvement in rig count as larger customers prepare for 2025 [45] Company Strategy and Development Direction - The company is focused on a capital-efficient operating strategy to maximize returns through the cycle and is excited about growth opportunities in integrated drilling and completion offerings [4][10] - There is a strong emphasis on power services, with discussions around increasing demand for power in the oil and gas industry and other sectors [11][39] - The company aims to leverage its unique operational footprint and integrated service offerings to enhance competitive positioning and drive growth [31][49] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term prospects for the industry, anticipating a modest recovery in U.S. shale activity in 2025 with steady oil markets and growth in natural gas markets [44] - The company remains disciplined in capital deployment and expects to generate strong free cash flow in the second half of the year [44][80] - Management noted that while the overall market is steady, they are selectively choosing projects to protect pricing and margins [68][95] Other Important Information - The company has committed to returning at least $400 million to shareholders in 2024, evaluating the best use for the remainder of the free cash flow [43][56] - The company closed Q2 with no amounts drawn on its $615 million revolving credit facility and $75 million in cash on hand [80] Q&A Session Summary Question: What is the magnitude of the power services business today? - The power services business is a significant revenue generator, exceeding $100 million, and is expected to grow as the company expands its electric frac fleets and enters new markets like data centers [61][85] Question: How is the performance of electric fleets compared to dual fuel fleets? - Initial reactions to electric fleets have been positive, with efficiencies observed, but the industry is expected to continue relying on dual fuel for the foreseeable future [63] Question: Can you elaborate on the integrated drilling and completion offering? - The integrated offering aims to provide services across the spectrum to improve efficiency and productivity, with a focus on sharing value with E&P customers rather than simply bundling services [92][94] Question: What are the expectations for pricing and competition in the market? - Pricing is stabilizing, but there is pressure from older diesel assets. The company is not competing at lower pricing levels and is focused on maintaining stable pricing for its services [133]

Management Commentary • Total revenue of $1.3 billion Within the Drilling Services segment for the second quarter, U.S. Contract Drilling revenue was $378 million, and adjusted gross profit was $168 million, with the segment beating our expectations on a slight increase in revenue per day and adjusted gross profit per operating day. U.S. operating days totaled 10,388, with activity in line with our expectation. The average rig revenue per operating day in U.S. Contract Drilling was $36,430 in the quarter, a ...

The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on July 24. On the other hand, if they miss, the stock may move lower. This provider of onshore contract drilling services is expected to post quarterly earnings of $0.09 per share in its upcoming report, which represents a year-over-year change of -79.6%. The consensus EPS estimate for the quarter has been revised 8.04% lower over the last 30 days to the current level. This is ...

Highlights of Q1 Earnings The Zacks Consensus Estimate for second-quarter 2024 earnings has witnessed no upward revision and one downward movement in the past 30 days. The estimated figure indicates a 79.55% year-over-year decline. The Zacks Consensus Estimate for revenues indicates an increase of 86.6% from the year-ago period. What Does Our Model Say? Stocks to Consider TechnipFMC (FTI) has an Earnings ESP of +4.17% and a Zacks Rank #3. The firm is scheduled to release earnings on Jul 25. Baker Hughes is ...

Patterson-UTI Energy, Inc. (PTEN) disclosed a significant development involving its subsidiary, Patterson-UTI International Holdings, Inc. The subsidiary has entered into a non-binding term sheet with ADNOC Drilling, a subsidiary of Abu Dhabi National Oil Company (“ADNOC”). Subject to definitive agreements and regulatory approvals, Patterson-UTI expects to acquire a minority equity interest in Turnwell Industries LLC OPC, a company newly established by ADNOC Drilling. Additionally, Abu Dhabi-based oil and g ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________ Form 10-Q ______________________ þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-39270 ______________________ Patterson-UTI Energy, Inc. (Exact name of regist ...

Financial Data and Key Metrics Changes - Total reported revenue for Q1 2024 was $1.510 billion, with net income attributable to common shareholders of $51 million or $0.13 per share, including $12 million in merger and integration expenses [8][9] - Adjusted net income attributable to common shareholders, excluding merger and integration expenses, was $61 million or $0.15 per share [8] - Free cash flow for the first quarter was $139 million, with $130 million returned to shareholders, including an $0.08 per share dividend and $98 million used to repurchase 9 million shares [25][26] Business Line Data and Key Metrics Changes - In the Drilling Services segment, Q1 revenue was $458 million with adjusted gross profit of $186 million [10] - Completion Services revenue totaled $945 million with an adjusted gross profit of $199 million, impacted by lower activity and a shift away from higher revenue jobs in the Haynesville [49] - Drilling Products revenue was $90 million, up 2% sequentially, with adjusted gross profit of $41 million [12] Market Data and Key Metrics Changes - The company expects to average 114 active rigs in Q2 compared to 121 in Q1, with adjusted gross profit per day expected to decrease by roughly $300 [11] - International revenue improved sequentially, with growth primarily from operations in the Middle East, showing over 15% growth compared to Q1 last year [23] Company Strategy and Development Direction - The company is focused on investing in technologies that enhance efficiency in U.S. shale drilling, aiming to improve returns and free cash flow [3][18] - The operational integration with Nextier is largely complete, achieving over $200 million in annualized synergies faster than expected [14][22] - The company is committed to returning at least $400 million to shareholders through dividends and share repurchases in 2024, exceeding the targeted return of more than 50% of free cash flow [26][73] Management's Comments on Operating Environment and Future Outlook - Management expressed a constructive outlook for the industry in 2024, citing strong demand for technology and stable oil prices [30] - Weak natural gas prices are impacting activity, but long-term positive views on natural gas remain unchanged due to increasing LNG exports and demand for power in the U.S. [19] - The company anticipates modest demand upside in all basins starting later this year, despite current challenges in natural gas markets [19] Other Important Information - The company is advancing its transition to natural gas-powered frac equipment, with plans to grow electric frac horsepower to 140,000 by mid-year [7][12] - Total CapEx for Q1 was $227 million, with expectations of approximately $180 million for Q2 [51][52] Q&A Session Summary Question: Can you discuss the integration of well site services? - Management highlighted the successful integration of wireline systems and logistics to ensure efficient operations without delays [32][33] Question: What are the expectations for frac activity in Q3? - Management indicated that Q3 is expected to see increased activity as customers resume normal operations, with a potential return to Q1 levels [36][80] Question: How is the company addressing the current soft gas market? - Management noted that while the gas market is soft, structural changes and increasing LNG exports are expected to improve the situation in 2025 and beyond [61] Question: What is the outlook for capital returns and share repurchases? - The company remains committed to returning at least $400 million this year through dividends and buybacks, with a focus on maintaining flexibility in capital allocation [72][74] Question: Can you provide an update on the e-frac program? - Management confirmed that the e-frac program is progressing well, with long-term agreements in place and positive early results from the new fleet [81][82]