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8-K - FORM 8-K - PATTERSON UTI ENERGY INCd627131d8k.htm
Patterson-UTI Energy, Inc.
Patterson-UTI Energy, Inc.
Jefferies
Jefferies
2013 Global Energy Conference
2013 Global Energy Conference
November 2013
November 2013
Exhibit 99.1


2
2
Forward Looking Statements
Forward Looking Statements
This material and any oral statements made in connection with this material
This material and any oral statements made in connection with this material
include "forward-looking statements" within the meaning of the Securities Act of
include "forward-looking statements" within the meaning of the Securities Act of
1933 and the Securities Exchange Act of 1934.  Statements made which provide
1933 and the Securities Exchange Act of 1934.  Statements made which provide
the Company’s or management’s intentions, beliefs, expectations or predictions for
the Company’s or management’s intentions, beliefs, expectations or predictions for
the future are forward-looking statements and are inherently uncertain. The
the future are forward-looking statements and are inherently uncertain. The
opinions, forecasts, projections or other statements other than statements of
opinions, forecasts, projections or other statements other than statements of
historical fact, including, without limitation, plans and objectives of management of
historical fact, including, without limitation, plans and objectives of management of
the Company are forward-looking statements.  It is important to note that actual
the Company are forward-looking statements.  It is important to note that actual
results could differ materially from those discussed in such forward-looking
results could differ materially from those discussed in such forward-looking
statements.  Important factors that could cause actual results to differ materially
statements.  Important factors that could cause actual results to differ materially
include the risk factors and other cautionary statements contained from time to
include the risk factors and other cautionary statements contained from time to
time in the Company’s SEC filings, which may be obtained by contacting the
time in the Company’s SEC filings, which may be obtained by contacting the
Company
Company
or
or
the
the
SEC.
SEC.
These
These
filings
filings
are
are
also
also
available
available
through
through
the
the
Company’s
Company’s
web
web
site
site
at
at
http://www.patenergy.com
http://www.patenergy.com
or
or
through
through
the
the
SEC’s
SEC’s
Electronic
Electronic
Data
Data
Gathering
Gathering
and
and
Analysis
Analysis
Retrieval
Retrieval
System
System
(EDGAR)
(EDGAR)
at
at
http://www.sec.gov.
http://www.sec.gov.
We
We
undertake
undertake
no
no
obligation to publicly update or revise any forward-looking statement.  Statements
obligation to publicly update or revise any forward-looking statement.  Statements
made in this presentation include non-GAAP financial measures.  The required
made in this presentation include non-GAAP financial measures.  The required
reconciliation to GAAP financial measures are included on our website and at the
reconciliation to GAAP financial measures are included on our website and at the
end of this presentation.
end of this presentation.


Why Invest in Patterson-UTI Energy?
Why Invest in Patterson-UTI Energy?
Technology leader
Technology leader
Leader in walking rigs for pad
Leader in walking rigs for pad
drilling
drilling
Innovator in use of natural gas as a
Innovator in use of natural gas as a
fuel source for both drilling and
fuel source for both drilling and
pressure pumping
pressure pumping
Customer focused
Customer focused
Solid relationships with broad and
Solid relationships with broad and
diverse customer base
diverse customer base
Creating value through focus on
Creating value through focus on
well site execution
well site execution
Financially flexible
Financially flexible
Strong balance sheet
Strong balance sheet
History of share buybacks
History of share buybacks
Dividends
Dividends
3


Who We Are
Who We Are


Contract Drilling
Contract Drilling
High quality fleet of land drilling
High quality fleet of land drilling
rigs including 123 APEX
rigs including 123 APEX
®
®
rigs
rigs
Leader in walking rig
Leader in walking rig
technology for pad drilling
technology for pad drilling
applications
applications
Large footprint across North
Large footprint across North
American drilling markets
American drilling markets
5
Pressure
Pumping
36%
Contract
Drilling
62%
Oil &
Natural
Gas
2%
Components of Revenue
Patterson-UTI reported results for the nine months ended September 30, 2013


Pressure Pumping
Pressure Pumping
High quality fleet of modern
High quality fleet of modern
pressure pumping equipment
pressure pumping equipment
A leader in natural gas bi-fuel
A leader in natural gas bi-fuel
technology
technology
Strong reputation for safe and
Strong reputation for safe and
efficient operations
efficient operations
Patterson-UTI reported results for the nine months ended September 30, 2013
6
Components of Revenue
Components of Revenue
Pressure
Pressure
Pumping
Pumping
36%
36%
Oil &
Oil &
Natural
Natural
Gas
Gas
2%
2%
Contract
Contract
Drilling
Drilling
62%
62%


Contract Drilling
Contract Drilling


8
Continued Demand for APEX
Continued Demand for APEX
®
®
Rigs
Rigs
Percentage of Horizontal Wells Continues to Increase
Percentage of Horizontal Wells Continues to Increase
0%
0%
80%
80%
70%
70%
60%
60%
50%
50%
40%
40%
30%
30%
20%
20%
10%
10%
2003
2003
2004
2004
2005
2005
2006
2006
2007
2007
2008
2008
2009
2009
2010
2010
2011
2011
2012
2012
2013
2013
% Horizontal
% Horizontal
% Vertical
% Vertical
Baker Hughes U.S. Rig Count
Baker Hughes U.S. Rig Count
% by Drilling Type
% by Drilling Type


…and Expected as of December 31, 2014
…and Expected as of December 31, 2014
9
APEX
APEX
®
®
Rigs as of November 13, 2013
Rigs as of November 13, 2013
A leader in high specification drilling rigs
A leader in high specification drilling rigs
APEX
APEX
®
®
Rig Fleet
Rig Fleet
APEX-XK 1500
APEX-XK 1500
APEX-XK 1000
APEX-XK 1000
APEX WALKING
APEX WALKING
®
®
APEX 1500
APEX 1500
®
®
APEX 1000
APEX 1000
®
®
Total APEX
Total APEX
®
®
Rigs
Rigs
Class
Class
12/31/2014
12/31/2014
16
16
4
4
48
48
44
44
11
11
123
123
11/13/2013
11/13/2013
36
36
4
4
49
49
44
44
11
11
144
144


Preferred rigs account for approximately
Preferred rigs account for approximately
87% of Contract Drilling EBITDA
87% of Contract Drilling EBITDA
Contribution from High Specification Rigs
Contribution from High Specification Rigs
Contract Drilling EBITDA Contribution by Rig Class
Contract Drilling EBITDA Contribution by Rig Class
Nine Months Ended September 30, 2013
Nine Months Ended September 30, 2013
10
APEX
®
& Other
Electric
Mechanical


APEX WALKING
APEX WALKING
®
®
Rigs
Rigs
Capable of walking with drill
Capable of walking with drill
pipe and collars racked in
pipe and collars racked in
derrick
derrick
Full multi-directional walking
Full multi-directional walking
capability
capability
Walking times average 45
Walking times average 45
minutes for 10’
minutes for 10’
15’
15’
well
well
spacing
spacing
11
http://patenergy.com/drilling/technology/apexwalk
http://patenergy.com/drilling/technology/apexwalk


Strong Demand for Pad Drilling
Strong Demand for Pad Drilling
12
Pad drilling is contributing
Pad drilling is contributing
to increasing rig efficiency
to increasing rig efficiency
Pad drilling capable rigs are
Pad drilling capable rigs are
highly utilized
highly utilized
All new APEX
All new APEX
®
rigs delivered
rigs delivered
in 2013 will have walking
in 2013 will have walking
systems suitable for pad
systems suitable for pad
drilling
drilling
http://patenergy.com/drilling/technology
http://patenergy.com/drilling/technology


APEX-XK™
APEX-XK™
Rig Walking on Pad
Rig Walking on Pad
13
http://patenergy.com/drilling/technology/apexwalk/
http://patenergy.com/drilling/technology/apexwalk/
Video of APEX-XK
Rig


The APEX-XK
The APEX-XK
Enhanced mobility including
Enhanced mobility including
more efficient rig up and rig
more efficient rig up and rig
down
down
Greater clearance under rig
Greater clearance under rig
floor for optional walking
floor for optional walking
system
system
Advanced environmental spill
Advanced environmental spill
control integrated into drilling
control integrated into drilling
floor
floor
Optimized number of truck
Optimized number of truck
loads for rig moves
loads for rig moves
Available in both 1500 HP and
Available in both 1500 HP and
1000 HP
1000 HP
14
http://patenergy.com/drilling/technology
http://patenergy.com/drilling/technology


Enhancing our Position in Pad Drilling
Enhancing our Position in Pad Drilling
15
Walking Systems Can be Added to Any Rig in Our Fleet…
Walking Systems Can be Added to Any Rig in Our Fleet…
…Allowing for True Multi-Directional Pad Drilling Capabilities
…Allowing for True Multi-Directional Pad Drilling Capabilities


Enhancing our Position in Pad Drilling
Enhancing our Position in Pad Drilling
16
http://patenergy.com/drilling/technology
http://patenergy.com/drilling/technology


Early Adopter of Natural Gas Engines
Early Adopter of Natural Gas Engines
17
http://patenergy.com/drilling/technology
http://patenergy.com/drilling/technology


Using Natural Gas as a Fuel Source
Using Natural Gas as a Fuel Source
18
First contract driller to use GE’s
First contract driller to use GE’s
Waukesha natural gas engines
Waukesha natural gas engines
on a modern land rig
on a modern land rig
23 rigs currently configured to
23 rigs currently configured to
use natural gas as the primary
use natural gas as the primary
fuel source including 5 natural
fuel source including 5 natural
gas powered rigs and 18 bi-fuel
gas powered rigs and 18 bi-fuel
capable rigs. 
capable rigs. 
34 rigs expected to be equipped
34 rigs expected to be equipped
with natural gas or bi-fuel
with natural gas or bi-fuel
engines by early-2014
engines by early-2014
Natural gas powered rigs can
Natural gas powered rigs can
result in up to 80% lower fuel
result in up to 80% lower fuel
costs
costs
http://patenergy.com/drilling/technology
http://patenergy.com/drilling/technology


Pressure Pumping 
Pressure Pumping 


A Leader in Bi-Fuel Technology
A Leader in Bi-Fuel Technology
Engines can burn a fuel mix
Engines can burn a fuel mix
comprised of up to 70%
comprised of up to 70%
natural gas
natural gas
Comparable torque and
Comparable torque and
horsepower as an all diesel
horsepower as an all diesel
engine
engine
Reduces operating costs by
Reduces operating costs by
lowering fuel costs
lowering fuel costs
Good for environmental
Good for environmental
sustainability
sustainability
20
http://patenergy.com/pressurepumping/services
http://patenergy.com/pressurepumping/services


A Leader in Bi-Fuel Technology
A Leader in Bi-Fuel Technology
21
http://patenergy.com/pressurepumping/services
http://patenergy.com/pressurepumping/services


A Leader in Bi-Fuel Technology
A Leader in Bi-Fuel Technology
One of the largest bi-fuel frac
One of the largest bi-fuel frac
fleets in the Marcellus
fleets in the Marcellus
More than 400 stages
More than 400 stages
completed using natural gas as
completed using natural gas as
a fuel source
a fuel source
Replaced more than 112,000
Replaced more than 112,000
gallons of diesel with cleaner
gallons of diesel with cleaner
burning natural gas
burning natural gas
Eliminated 800,000 pounds of
Eliminated 800,000 pounds of
transportation loads on local
transportation loads on local
roads
roads
22
http://patenergy.com/pressurepumping/services
http://patenergy.com/pressurepumping/services


Comprehensive Lab Services
Comprehensive Lab Services
23
http://patenergy.com/pressurepumping/services
http://patenergy.com/pressurepumping/services


Financial
Financial
Flexibility
Flexibility


25
Capital Expenditures and Acquisitions
Capital Expenditures and Acquisitions
($ in millions)
($ in millions)
Investing in Our Company
Investing in Our Company
2006
2007
2008
2009
2010
2011
2012
2013E
$598
$637
$445
$453
$976
$1,012
$974
$750


26
History of returning capital to investors
History of returning capital to investors
Stock Buyback
Stock Buyback
Repurchased $256 million of our common stock between
Repurchased $256 million of our common stock between
2Q12 and 3Q13 at an average price of $17.33
2Q12 and 3Q13 at an average price of $17.33
Approximately $188 million remaining authorization as of
Approximately $188 million remaining authorization as of
September 30, 2013
September 30, 2013
Total of $843 million repurchased since 2005
Total of $843 million repurchased since 2005
Cash Dividend
Cash Dividend
Initiated cash dividend in 2004
Initiated cash dividend in 2004
Quarterly dividend currently $0.05 per share
Quarterly dividend currently $0.05 per share
Returned approximately $1.2 billion to shareholders
Returned approximately $1.2 billion to shareholders
since 2005
since 2005
Strong Financial Position
Strong Financial Position


Total liquidity of approximately $665 million
Total liquidity of approximately $665 million
$205 million of cash at September 30, 2013
$205 million of cash at September 30, 2013
$460 million revolver availability at September 30, 2013
$460 million revolver availability at September 30, 2013
$490 million net debt at September 30, 2013
$490 million net debt at September 30, 2013
15% Net Debt/Total Capitalization
15% Net Debt/Total Capitalization
$300 million of 4.97% Series A notes due October 5, 2020
$300 million of 4.97% Series A notes due October 5, 2020
$300 million of 4.27% Series B notes due June 14, 2022
$300 million of 4.27% Series B notes due June 14, 2022
$95 million of 5-year term loan
$95 million of 5-year term loan
No equity sales in last 13 years
No equity sales in last 13 years
Reduced share count by 28.4 million shares since
Reduced share count by 28.4 million shares since
2005
2005
Strong Financial Position
Strong Financial Position
27


Patterson-UTI Energy, Inc.
Patterson-UTI Energy, Inc.
Jefferies
Jefferies
2013 Global Energy Conference
2013 Global Energy Conference
November 2013
November 2013


Additional References
Additional References


30
PTEN’s Active Rigs in Unconventional Areas
PTEN’s Active Rigs in Unconventional Areas
as of November 2013
as of November 2013
Bakken
Piceance
Haynesville
Marcellus
Barnett
16 Rigs
Eagle Ford
4 Rigs
23 Rigs
1 Rig
30 Rigs
8 Rigs
Utica  
9 Rigs
Active in Unconventional Plays
Active in Unconventional Plays
Woodford 
1 Rig


31
PTEN’s Active U.S. Land Drilling Rigs
PTEN’s Active U.S. Land Drilling Rigs
as of November 2013
as of November 2013
East Texas
Appalachia 
& Midwest
North Texas
Mid-Continent
Rockies
South Texas
29 Rigs
32 Rigs
21 Rigs
36 Rigs
3 Rigs
12 Rigs
Permian Basin
52 Rigs
Large Geographic Footprint
Large Geographic Footprint


Based on term contracts in place as of October 24, 2013
Based on term contracts in place as of October 24, 2013
An average of 116 rigs expected under term contract in the
An average of 116 rigs expected under term contract in the
fourth quarter of 2013
fourth quarter of 2013
An average of 58 rigs expected under term contract for 2014
An average of 58 rigs expected under term contract for 2014
PTEN expects to continue signing term contracts
PTEN expects to continue signing term contracts
Term Contract Coverage
Term Contract Coverage
Improving earnings visibility and returns stability
Improving earnings visibility and returns stability
32
Drilling term contract revenue backlog of $967 million at
Drilling term contract revenue backlog of $967 million at
September 30, 2013
September 30, 2013


Mechanical Rigs
Mechanical Rigs
147 mechanical rigs in fleet
147 mechanical rigs in fleet
Most are upgraded to meet customers’
Most are upgraded to meet customers’
diverse
diverse
needs
needs
Improved mud systems
Improved mud systems
Iron roughnecks and other automation
Iron roughnecks and other automation
Enhanced mobility
Enhanced mobility
Ideally suited for certain markets and wells
Ideally suited for certain markets and wells
Favorable return profiles given low book values
Favorable return profiles given low book values
Even better returns if drilling activity accelerates
Even better returns if drilling activity accelerates
Mechanical Rigs
Mechanical Rigs
33
http://patenergy.com/drilling/technology/conventional
http://patenergy.com/drilling/technology/conventional
Mechanical rigs are an option on higher drilling activity
Mechanical rigs are an option on higher drilling activity


34
Recent Investments in Pressure Pumping…
Recent Investments in Pressure Pumping…
…Have Increased Fleet Size and Quality
…Have Increased Fleet Size and Quality
65
760
Growing Pressure Pumping Business
Growing Pressure Pumping Business
2006
2007
2008
2009
2010*
2011
2012
2013E
Year End
Other Horsepower
Fracturing Horsepower
0
200
400
600
800
*
Includes acquisition of approximately 210,000 pressure pumping horsepower in October 2010


35
Fracturing horsepower: 343,000
Fracturing horsepower: 343,000
Other horsepower: 26,000
Other horsepower: 26,000
Fracturing horsepower: 332,000
Fracturing horsepower: 332,000
Other horsepower: 61,500
Other horsepower: 61,500
A Significant Player in Regional Markets
A Significant Player in Regional Markets
Pressure Pumping Areas of Operation
Pressure Pumping Areas of Operation
49%
51%
Fracturing Horsepower
Southwest
Region:
Northeast
Region:


36
Average age of only three years
Average age of only three years
PTEN Fracturing Horsepower by Age
PTEN Fracturing Horsepower by Age
As of September 30, 2013
As of September 30, 2013
Modern Pressure Pumping Fleet
>10
Years
6%
5 -
10
Years
23%
< 5
Years
71%


Strong Financial Returns
Strong Financial Returns
Growth in Per-Share Book Value
Growth in Per-Share Book Value
The Warren Buffett Standard
The Warren Buffett Standard
37
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012


Non-GAAP Financial Measures
38
PATTERSON-UTI ENERGY, INC.
Non-GAAP Financial Measures (Unaudited)
(dollars in thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2013
2012
2013
2012
Earnings Before Interest, Taxes, Depreciation and Amortization
(EBITDA)(1):
Net income
$
74,420
$
50,806
$
171,418
$
240,618
Income tax expense
43,301
31,354
98,957
140,611
Net interest expense
7,210
7,058
20,494
16,458
Depreciation, depletion, amortization and impairment
140
,734
142,393
414,351
393,823
EBITDA
$
265,665
$
231,611
$
705,220
$
791,510
Total revenue
$
730
,907
$
643
,631
$2,057,262
$
2,070,664
EBITDA margin
36.3%
36.0%
34.3%
38.2%
EBITDA by operating segment:
Contract drilling
$
217,289
$
178,987
$
532
,812
$
570,727
Pressure pumping
50,677
48,633
171,471
183,001
Oil and natural gas
10,225
12,229
35,591
36,323
Corporate and other
(12,526)
(8,238)
(34,654)
1,459
Consolidated EBITDA
$
265,665
$
231,611
$
705,220
$
791,510
(1)  EBITDA is not defined by generally accepted accounting principles (“GAAP”).  We present EBITDA (a non-GAAP measure)
because we believe it provides additional information with respect to both the performance of our fundamental business
activities and our ability to meet our capital expenditures and working capital requirements.  EBITDA should not be
construed as an alternative to the GAAP measures of net income or operating cash flow.