Patterson-UTI Energy(US:PTEN)2024-10-28 20:27Financial Performance - For Q3 2024, the company reported a net loss attributable to common shareholders of $979 million, or $2.50 per share, with adjusted net income of $2 million, or $0.00 per share [140]. - The company recorded an $885 million impairment charge to goodwill for the completion services reporting unit during Q3 2024 [138]. - The company reported an adjusted net loss of $978.3 million for the three months ended September 30, 2024 [223]. - For the three months ended September 30, 2024, the net income attributable to common stockholders was a loss of $978,761 thousand, compared to a profit of $11,077 thousand for the previous quarter [224]. - Adjusted net income attributable to common stockholders (Non-GAAP) for the nine months ended September 30, 2024, was $82,241 thousand, down from $249,926 thousand for the same period in 2023 [225]. Revenue and Segment Performance - Drilling services segment revenues decreased by 4.3% sequentially to $421,563,000, while adjusted gross profit fell by 4.5% to $170,686,000 [153]. - Completion services revenues increased by 3.3% sequentially to $831,567,000, but adjusted gross profit decreased by 16.0% to $127,758,000 due to disproportionately higher direct operating costs [159]. - Revenues for the completion services segment increased to $2,581,937 thousand for the nine months ended September 30, 2024, compared to $1,003,083 thousand for the same period in 2023, representing a 157.4% increase [177]. - Revenues for the drilling products segment surged to $265,129 thousand for the nine months ended September 30, 2024, a 469.3% increase from $46,570 thousand in the same period of 2023 [181]. - Revenues in the other segment decreased to $49,285 thousand, down 12.5% from 56,325 thousand for the nine months ended September 30, 2023 [184]. Capital Expenditures and Financial Position - The company expects total capital expenditures of approximately $150 million for Q4 2024 [137]. - Capital expenditures for drilling services increased by 18.3% sequentially to $69,127,000, while completion services capital expenditures surged by 78.0% to $86,755,000 [153][159]. - The company reported cash flow from operating activities of $860 million for the nine months ended September 30, 2024, with capital expenditures of $538 million during the same period [211]. - As of September 30, 2024, the company had approximately $444 million in working capital, including $115 million in cash and cash equivalents [193]. - The company had outstanding long-term debt of $1.2 billion, which included $483 million of 2028 Notes, $345 million of 2029 Notes, $400 million of 2033 Notes, and $9.5 million of Equipment Loans [205]. Market Conditions and Price Trends - Oil prices averaged $76.43 per barrel in Q3 2024, down from $81.81 per barrel in Q2 2024 [244]. - Natural gas prices averaged $2.11 per MMBtu in Q3 2024, slightly up from $2.07 per MMBtu in Q2 2024 [244]. - The company expects continued volatility in oil and natural gas prices, impacting financial condition and operations [245]. - A decline in demand for oil and natural gas could lead to reduced capital expenditures by customers, adversely affecting the company's operating results [245]. Mergers and Acquisitions - The company completed the merger with NexTier Oilfield Solutions Inc. on September 1, 2023, valued at approximately $2.8 billion [142]. - The acquisition of Ulterra Drilling Technologies was completed on August 14, 2023, valued at approximately $894 million [144]. Impairments and Charges - The company recorded an impairment charge of $885 million related to goodwill in the completion services reporting unit [162]. - A goodwill impairment charge of $885 million was recorded for the completion services reporting unit during the third quarter of 2024 due to a decline in fair value [238]. - The company identified 42 legacy, non-Tier-1 super-spec drilling rigs for abandonment, resulting in a $114 million abandonment charge during Q3 2024 [139]. Operational Metrics - The average active rig count in the United States for Q3 2024 was 107 rigs, down from 114 in Q2 2024, with an expected average of 106 rigs in Q4 2024 [134]. - The company experienced a 9.1% decrease in operating days in the U.S. for drilling services, reflecting industry-wide activity declines [173]. - Average revenue per operating day in the U.S. for drilling services was $36.04, a slight decrease of 1.1% from the previous quarter [153]. Tax and Compliance - The effective income tax rate for the nine months ended September 30, 2024, was (0.8)%, compared to 13.9% for the same period in 2023 [191]. - The company maintained compliance with its credit agreement covenants, including a total debt to capitalization ratio not exceeding 50% as of September 30, 2024 [199]. Shareholder Returns - The company paid cash dividends totaling $95.6 million during the nine months ended September 30, 2024, with a dividend of $0.08 per share approved for December 16, 2024 [212]. - The company had remaining authorization to purchase approximately $780 million of its outstanding common stock under the stock buyback program as of September 30, 2024 [214].