Attached files
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| 8-K - 8-K - PATTERSON UTI ENERGY INC | d724269d8k.htm |
 Citi
2014 Global Energy and Utilities Conference
May 14, 2014
Exhibit 99.1 |
 Forward Looking Statements
2
This
material
and
any
oral
statements
made
in
connection
with
this
material
include
"forward-looking
statements"
within
the
meaning
of
the
Securities
Act
of 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
future
are
forward-looking
statements
and
are
inherently
uncertain.
The
opinions,
forecasts,
projections
or
other
statements
other
than
statements
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
results
could
differ
materially
from
those
discussed
in
such
forward-looking
statements.
Important
factors
that
could
cause
actual
results
to
differ
materially
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
Company
or
the
SEC.
These
filings
are
also
available
through
the
Company’s
website
at
http://www.patenergy.com
or
through
the
SEC’s
Electronic
Data
Gathering
and
Analysis
Retrieval
System
(EDGAR)
at
http://www.sec.gov.
We
undertake
no
obligation
to
publicly
update
or
revise
any
forward-looking
statement.
Statements
made
in
this
presentation
include
non-GAAP
financial
measures.
The
required
reconciliation
to
GAAP
financial
measures
are
included
on
our
website
and
at
the
end
of
this
presentation. |
 Patterson-UTI Energy is a leading
provider of contract drilling and
pressure pumping services |
 Contract Drilling |
 …and Expected as of March 31, 2015
APEX-XK
1500™
APEX-XK
1000™ APEX
WALKING ®
APEX 1500
®
APEX 1000
®
Total APEX
®
Rigs
Class
APEX
®
Rigs as of May 14, 2014
42
4
49
44
11
150
3/31/2015
A leader in high specification drilling rigs
22
4
49
44
11
130
5/14/2014
APEX
®
Rig Fleet
5 |
 Permian Basin
54 Rigs
Large Geographic Footprint
6
PTEN’s Active U.S. Land Drilling Rigs
as of May 2014
East Texas
Appalachia
& Midwest
North Texas
Mid-Continent
Rockies
South Texas
33 Rigs
34 Rigs
24 Rigs
37 Rigs
6 Rigs
14 Rigs |
 Improving Average Revenue Per Day
7
Patterson-UTI Total Average Revenue Per Day
Excludes
early-termination
revenues
during
the
third
and
fourth
quarter
of
2013
of
$3,600
per
day
and
$130
per day, respectively.
10,000
12,000
14,000
16,000
18,000
20,000
22,000
24,000
26,000 |
 Pressure Pumping |
 Growing Pressure Pumping Business
9
Investments in Pressure Pumping…
…Have Increased Fleet Size and Quality
65
800
*
Includes
acquisition
of
approximately
210,000
pressure
pumping
horsepower
in
October
2010
0
200
400
600
800
1000
2006
2007
2008
2009
2010*
2011
2012
2013
2014E
Year End
Fracturing Horsepower
Other Horsepower |
 Southwest Region:
Northeast Region:
Fracturing horsepower: 350,000
Other horsepower: 28,000
Fracturing horsepower: 320,000
Other horsepower: 54,000
A Significant Player in Regional Markets
Pressure Pumping Areas
10
48%
52%
Fracturing Horsepower |
 A Leader in Bi-Fuel Technology
11
•
One of the largest bi-fuel frac
fleets in the Marcellus
•
Approximately 700 stages
completed using natural gas as a
fuel source
•
Replaced more than 358,000
gallons of diesel with cleaner
burning natural gas
•
Eliminated 2.6 million pounds of
transportation loads on local
roads
http://patenergy.com/pressurepumping/services
11 |
 Why Invest in Patterson-UTI Energy?
•
Continuing Transformation
–
Committed to high-spec land rigs where
demand remains strong
–
Creating value through focus on well
site execution
•
Technology leader
–
Leader in walking rigs for pad drilling
–
Innovator in use of natural gas as a fuel
source for both drilling and pressure
pumping
•
Financially flexible
–
Strong balance sheet
–
History of share buybacks
–
Dividends
12 |
 Citi
2014 Global Energy and Utilities Conference
May 14, 2014 |
 Additional References |
 Contract Drilling
•
High quality fleet of land drilling
rigs including 130 APEX
®
rigs
•
Leader in walking rig technology for
pad drilling applications
•
Large footprint across North
American drilling markets
Patterson-UTI reported results for the year ended December 31, 2013
15
Pressure
Pumping
36%
Oil &
Natural
Gas
2%
Contract
Drilling
62%
Components of Revenue |
 Pressure Pumping
•
High quality fleet of modern pressure
pumping equipment
•
A leader in natural gas bi-fuel
technology
•
Strong reputation for regional
knowledge and efficient operations
Patterson-UTI reported results for the year ended December 31, 2013
16
Pressure
Pumping
36%
Oil &
Natural
Gas
2%
Contract
Drilling
62%
Components of Revenue |
 17
Contract Drilling Capital Expenditures and Acquisitions
($ in millions)
Investing in Our Drilling Rig Fleet
More than $4.5 billion invested since 2005
2006
2007
2008
2009
2010
2011
2012
2013
2014E
$531
$540
$361
$395
$656
$785
$745
$505
$700 |
 Why invest in APEX
®
rigs?
…the impact has been transformative! |
 Greater Consistency in Rig Activity
19
Active APEX
®
Rig Count
0
20
40
60
80
100
120
140 |
 Rig Count by Rig Class
20
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
APEX®
Other Electric
Mechanical |
 Greater Stability of Utilization
21
APEX
®
Rig Utilization
0%
20%
40%
60%
80%
100%
120% |
 Contribution from High Specification Rigs
22
Preferred rigs account for approximately
87% of Contract Drilling EBITDA
2010
2011
2012
2013
APEX®
& Other Electric
Mechanical
Excludes early-termination revenues during the third and fourth quarter of
2013 of $62.8 million and $2.4 million, respectively. |
 Why invest in APEX
®
rigs?
…the outlook remains strong! |
 24
U.S. Rig Count % by Drilling Type
High-Spec rigs account
for less than half of the
total horizontal rig count
Continued Demand for APEX
®
Rigs
0%
10%
20%
30%
40%
50%
60%
70%
80%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
% Horizontal
% Vertical |
 25
High-Specification Rigs by Owner Type
Consolidated Segment of Industry
Big 3 U.S. land drillers control almost
70% of the high specification rigs in the U.S.
Next 5
Largest
Public
Drillers
Big 3
U.S.
Land
Drillers
Others |
 Why invest in APEX
®
rigs?
…Patterson-UTI is a technology leader!
|
 APEX WALKING
®
Rigs
27
•
Capable of walking with drill pipe
and collars racked in derrick
•
Full multi-directional walking
capability
•
Walking times average 45 minutes
for
10’
–
15’
well
spacing
http://patenergy.com/drilling/technology/apexwalk
27 |
 Strong Demand for Pad Drilling
28
•
Pad drilling is contributing to
increasing rig efficiency
•
Pad drilling capable rigs are
highly utilized
•
All new APEX
®
rigs
completed in 2014 are
expected to have walking
systems
http://patenergy.com/drilling/technology
28 |
 APEX-XK™
Rig Walking on Pad
29
http://patenergy.com/drilling/technology/apexwalk/
Video of
APEX-XK™
Rig
29 |
 The APEX-XK
™
30
•
Enhanced mobility including more
efficient rig up and rig down
•
Greater clearance under rig floor for
optional walking system
•
Advanced environmental spill
control integrated into drilling floor
•
Optimized number of truck loads for
rig moves
•
Available in both 1500 HP and 1000
HP
http://patenergy.com/drilling/technology
30 |
 Enhancing our Position in Pad Drilling
31
Walking Systems Can be Added to Any Rig in Our Fleet…
…Allowing for True Multi-Directional Pad Drilling Capabilities
31 |
 Enhancing our Position in Pad Drilling
32
http://patenergy.com/drilling/technology
32 |
 Early Adopter of Natural Gas Engines
33
http://patenergy.com/drilling/technology
33 |
 Using Natural Gas as a Fuel Source
34
•
First contract driller to use GE’s
Waukesha natural gas engines on
a modern land rig
•
34 rigs currently configured to use
natural gas as the primary fuel
source including 7 natural gas
powered rigs and 27 bi-fuel
capable rigs
•
We plan to add GE Waukesha
engines to two additional rigs and
upgrade 11 additional rigs with bi-
fuel systems during the remainder
of 2014
•
Natural gas powered rigs can
result in up to 80% lower fuel
costs
http://patenergy.com/drilling/technology
34 |
 Active in Unconventional Plays
35
PTEN’s Active Rigs in Unconventional Areas
as of May 2014
Bakken
Piceance
Haynesville
Marcellus
Barnett
20 Rigs
Eagle Ford
2 Rigs
20 Rigs
2 Rigs
35 Rigs
5 Rigs
Utica
13 Rigs
Woodford
2 Rigs |
 AC-powered rigs represent less than half
of the horizontal rig count
Total U.S. Horizontal Rig Count by Power Type
Continued Demand for APEX
®
Rigs
Analysis from Patterson-UTI Energy based on IHS drilling data
36
SCR
AC
Mechanical |
 Term Contract Coverage
•
Based on term contracts in place as of April 24, 2014
–
An average of 137 rigs expected under term contract in the
second quarter of 2014
–
An average of 111 rigs expected under term contract during
the remaining three quarters of 2014
•
PTEN expects to continue signing term contracts
Improving earnings visibility and returns stability
37
•
Drilling term contract revenue backlog of $1.04 billion at
March 31, 2014 |
 Investing in Pressure Pumping
38
Pressure Pumping Capital Expenditures and Acquisitions
($ in millions)
Approximately $1 billion invested since 2005
$41
$48
$61
$43
$289
$198
$194
$123
$210
2006
2007
2008
2009
2010
2011
2012
2013
2014E |
 A Leader in Bi-Fuel Technology
•
Engines can burn a fuel mix
comprised of up to 70% natural
gas
•
Comparable torque and
horsepower as an all diesel engine
•
Reduces operating costs by
lowering fuel costs
•
Good for environmental
sustainability
http://patenergy.com/pressurepumping/services
39 |
 A Leader in Bi-Fuel Technology
40
http://patenergy.com/pressurepumping/services
40 |
 Comprehensive Lab Services
http://patenergy.com/pressurepumping/services
41 |
 Financial Flexibility |
 $598
$637
$445
$453
$976
$1,012
$974
$662
$950
2006
2007
2008
2009
2010
2011
2012
2013
2014E
Investing in Our Company
43
Capital Expenditures and Acquisitions
($ in millions) |
 Strong Financial Position
44
•
History of returning capital to investors
–
Cash Dividend
•
Initiated cash dividend in 2004
•
Recently announced doubling of quarterly cash dividend to
$0.10 per share
–
Stock Buyback
•
Total of $843 million repurchased since 2005
•
Repurchased $85.8 million of stock in 2013 at an average
price of $20.83
•
Approximately $187 million remaining authorization as of
March 31, 2014
•
Returned approximately $1.2 billion to shareholders since
2005 |
 Strong Financial Position
45
Total Liquidity
($ in millions)
Liquidity defined as end of period cash plus availability under revolving line
of credit 208
283
398
244
387
273
571
710
718
0
100
200
300
400
500
600
700
800
2006
2007
2008
2009
2010
2011
2012
2013
1Q14
Year End
Line of Credit Availability
Cash |
 Strong Financial Position
46
Net Debt to Capital Ratio
$600 million of debt not due until at least 2020
6%
2%
-4%
-2%
15%
13%
18%
14%
13%
-10%
0%
10%
20%
30%
40%
50%
2006
2007
2008
2009
2010
2011
2012
2013
1Q14
Year End |
 Strong Financial Returns
47
Growth in Per-Share Book Value
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013 |
 Strong Financial Position
•
Total liquidity of approximately $718 million
–
$258 million of cash at March 31, 2014
–
$460 million revolver availability at March 31, 2014
•
$432 million net debt at March 31, 2014
–
13.4% Net Debt/Total Capitalization
–
$300 million of 4.97% Series A notes due October 5, 2020
–
$300 million of 4.27% Series B notes due June 14, 2022
–
$90 million of 5-year term loan
•
No equity sales in last 13 years
•
Reduced share count by 27.9 million shares since
2005
48 |
 PATTERSON-UTI ENERGY, INC.
Non-GAAP Financial Measures (Unaudited)
(dollars in thousands)
Non-GAAP Financial Measures
49
Three Months Ended
March 31,
2014
2013
Earnings Before Interest, Taxes, Depreciation and Amortization
(EBITDA)(1):
Net income
$
34,822
$
56,230
Income tax expense
16,942
32,128
Net interest expense
7,012
6,593
Depreciation, depletion, amortization and impairment
147,322
136,435
EBITDA
$
206,098
$
231,386
Total revenue
$
678,168
$
667,039
EBITDA margin
30.4%
34.7%
EBITDA by operating segment:
Contract drilling
$
173,196
$
170,171
Pressure pumping
35,585
58,751
Oil and natural gas
8,730
13,863
Corporate and other
(11,413)
(11,399)
Consolidated EBITDA
$
206,098
$
231,386
(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. |
 Non-GAAP Financial Measures
50
PATTERSON-UTI ENERGY, INC.
Non-GAAP Financial Measures (Unaudited)
(dollars in thousands)
(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.
2013
2012
2011
2010
2009
2008
Net income (loss)
$
188,009
$
299,477
$
322,413
$
116,942
$
(38,290)
$
347,069
Income tax expense (benefit)
108,432
176,196
187,938
72,856
(17,595)
193,490
Net interest expense (income)
27,441
22,196
15,465
11,098
3,767
(923)
Depreciation, depletion, amortization and impairment
597,469
526,614
437,279
333,493
289,847
275,990
Net
impact of discontinued operations
-
-
(209)
1,778
1,979
15,190
EBITDA
$
921,351
$1,024,483
$
962,886
$
536,167
$
239,708
$
830,816
Total revenue
$2,716,034
$2,723,414
$2,565,943
$1,462,931
$
781,946
$2,063,880
EBITDA margin
33.9%
37.6%
37.5%
36.7%
30.7%
40.3%
Earnings
Before
Interest,
Taxes,
Depreciation
and
Amortization
(EBITDA)(1): |