Attached files
| file | filename |
|---|---|
| EX-4.1 - EX-4.1 - PATTERSON UTI ENERGY INC | pten-ex41_89.htm |
| 8-K - 8-K Q2 - PATTERSON UTI ENERGY INC | pten-8k_20200722.htm |
Exhibit 99.1
Contact: Mike Drickamer
Vice President, Investor Relations
Patterson-UTI Energy, Inc.
(281) 765-7170
Patterson-UTI Energy Reports Financial Results for the Three and Six Months Ended June 30, 2020
HOUSTON, Texas – July 23, 2020 – PATTERSON-UTI ENERGY, INC. (NASDAQ: PTEN) today reported financial results for the three and six months ended June 30, 2020. The Company reported a net loss of $150 million, or $0.81 per share, for the second quarter of 2020, compared to a net loss of $49.4 million, or $0.24 per share, for the second quarter of 2019. Excluding items discussed below, the net loss for the second quarter would have been $105 million, or $0.56 per share. Revenues for the second quarter of 2020 were $250 million, compared to $676 million for the second quarter of 2019.
For the six months ended June 30, 2020, the Company reported a net loss of $585 million, or $3.10 per share, compared to a net loss of $78.1 million, or $0.37 per share, for the six months ended June 30, 2019. Revenues for the six months ended June 30, 2020 were $696 million, compared to $1.4 billion for the same period in 2019.
Financial results for the three and six months ended June 30, 2020 include second quarter, pre-tax charges totaling $55.8 million ($49.4 million after-tax, or $0.26 per share), consisting of $38.3 million of restructuring costs and impairment charges totaling $17.5 million. The impairment charges include a $9.2 million charge in other operating expense to reduce the carrying value on our balance sheet of a deposit for future sand purchases and an $8.3 million impairment charge related to the closing of the Company’s Canadian drilling operations. Partially offsetting these charges is a pre-tax gain of $4.2 million ($3.7 million after-tax or $0.02 per share) included in other operating income from the realization of insurance proceeds.
Andy Hendricks, Patterson-UTI’s Chief Executive Officer, stated, “We are very pleased with our performance during the second quarter in both contract drilling and pressure pumping. With our largest business, contract drilling, we are especially pleased with our results, as we were able to act quickly to reduce costs and increase margins. We greatly appreciate our strong customer base for their support, and we believe we have seen improvements in market share in active contract drilling rigs and in pressure pumping spreads as a result of the strength of our commercial relationships. Additionally, we were able to increase our cash on hand at the end of the quarter by $95 million to $247 million.
We have acted decisively to scale down our business in order to reduce indirect support costs by what we estimate will be approximately $100 million annually. On a quarterly run rate basis, we expect to recognize substantially all of the cost savings in the third quarter.”
Mr. Hendricks continued, “In contract drilling, our average rig count for the second quarter was 82 rigs, which was in line with our expectation. Recently, the rate of decline in the industry rig count has slowed, and we believe our rig count has stabilized. We expect that our rig count for the third quarter will average 59 rigs, in line with our current rig count.
“Profitability within our contract drilling segment exceeded our expectations during the second quarter. Average rig revenue per day of $22,970 and average rig margin per day of $11,280 both include the benefit of $8.6 million of lump-sum early-termination revenue during the quarter.
“Given our longer-term outlook for the western Canadian market, we closed our Canadian drilling operations during the second quarter. We are currently marketing those assets for sale.
“As of June 30, 2020, we had term contracts for drilling rigs providing for approximately $335 million of future dayrate drilling revenue. Based on contracts currently in place, we expect an average of 51 rigs operating under term contracts during the third quarter and an average of 38 rigs operating under term contracts during the four quarters ending June 30, 2021.
“In pressure pumping, despite challenging market conditions during the second quarter, both activity and profitability were in line with our expectations. Pressure pumping revenues were $59.5 million and gross margin was $3.3 million during the second quarter.
“Pressure pumping restructuring costs during the second quarter were $31.3 million and included expenses for closing and consolidating facilities, severance, and exiting contracts with vendors that we no longer intend to utilize. We believe these changes are structural to the business and will result in significant cost savings, making our pressure pumping segment leaner and more competitive.
“In directional drilling, revenues were $11.7 million and operating costs were $12.3 million. Directional drilling restructuring costs during the second quarter were $3.2 million, and we expect to reduce annual directional drilling operating expenses by approximately $10 million.”
Mr. Hendricks concluded, “While oilfield services activity declined at a record pace, I am pleased with our team’s response to align our structure with the changing activity levels, our better than expected margin results, and our continued strong liquidity position. Our liquidity at June 30, 2020 improved to $847 million, including $247 million of cash and $600 million of availability under our undrawn revolver. Patterson-UTI is well positioned to emerge from this downturn even stronger.”
The Company declared a quarterly dividend on its common stock of $0.02 per share, payable on September 17, 2020, to holders of record as of September 3, 2020.
Financial results for the six months ended June 30, 2020 also include pre-tax, non-cash impairment charges totaling $406 million that were incurred during the first quarter.
All references to "per share" in this press release are diluted earnings per common share as defined within Accounting Standards Codification Topic 260.
The Company's quarterly conference call to discuss the operating results for the quarter ended June 30, 2020, is scheduled for today, July 23, 2020, at 9:00 a.m. Central Time. The dial-in information for participants is (844) 494-0002 (Domestic) and (647) 253-8640 (International). The conference ID for both numbers is 2556839. The call is also being webcast and can be accessed through the Investor Relations section of the Company’s website at https://investor.patenergy.com. A replay of the conference call will be on the Company’s website for two weeks.
Patterson-UTI is a leading provider of oilfield services and products to oil and natural gas exploration and production companies in the United States, including contract drilling, pressure pumping and directional drilling services. For more information, visit www.patenergy.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements which are protected as forward-looking statements under the Private Securities Litigation Reform Act of 1995 that are not limited to historical facts, but reflect Patterson-UTI’s current beliefs, expectations or intentions regarding future events. Words such as “anticipate,” “believe,” “budgeted,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “potential,” “project,” “pursue,” “should,” “strategy,” “target,” or “will,” and similar expressions are intended to identify such forward-looking statements. The statements in this press release that are not historical statements, including statements regarding Patterson-UTI’s future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts, are forward-looking statements within the meaning of the federal securities laws. These statements are subject to numerous risks and uncertainties, many of which are beyond Patterson-UTI's control, which could cause actual results to differ materially from the results expressed or implied by the statements. These risks and uncertainties include, but are not limited to: adverse oil and natural gas industry conditions, including the rapid decline in crude oil prices as a result of economic repercussions from the recent COVID-19 pandemic; volatility in customer spending and in oil and natural gas prices, which could adversely affect demand for Patterson-UTI’s services and their associated effect on rates, utilization, margins and planned capital expenditures; global economic conditions; excess availability of land drilling rigs and pressure pumping equipment, including as a result of low commodity prices, reactivation, improvement or construction; liabilities from operations; weather; decline in, and ability to realize, backlog; equipment specialization and new technologies, including the ability to develop and obtain satisfactory returns from new technology; shortages, delays in delivery and interruptions of supply of equipment and materials; ability to hire and retain personnel; loss of, or reduction in business with, key customers; cybersecurity risk; difficulty with growth and in integrating acquisitions and new technology; governmental regulation; perception of sustainability practices; product liability; legal proceedings, including technology disputes, and actions by governmental or other regulatory agencies; political, economic and social instability risk; ability to effectively identify and enter new markets; dependence on our subsidiaries to meet our long-term debt obligations; variable rate indebtedness risk; ability to maintain credit rating and service debt; stock price volatility; anti-takeover measures in our charter documents; contingent tax liabilities; and ability to use net operating losses.
Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in Patterson-UTI’s SEC filings. Patterson-UTI’s filings may be obtained by contacting Patterson-UTI or the SEC or through Patterson-UTI’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. Patterson-UTI undertakes no obligation to publicly update or revise any forward-looking statement.
Condensed Consolidated Statements of Operations
(unaudited, in thousands, except per share data)
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
|
REVENUES |
|
$ |
250,380 |
|
|
$ |
675,765 |
|
|
$ |
696,307 |
|
|
$ |
1,379,936 |
|
|
COSTS AND EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct operating costs |
|
|
164,746 |
|
|
|
467,643 |
|
|
|
491,374 |
|
|
|
956,968 |
|
|
Depreciation, depletion, amortization and impairment |
|
|
173,085 |
|
|
|
208,688 |
|
|
|
359,882 |
|
|
|
423,098 |
|
|
Impairment of goodwill |
|
|
— |
|
|
|
— |
|
|
|
395,060 |
|
|
|
— |
|
|
Selling, general and administrative |
|
|
23,991 |
|
|
|
34,894 |
|
|
|
54,337 |
|
|
|
67,449 |
|
|
Credit loss expense |
|
|
4,551 |
|
|
|
3,594 |
|
|
|
5,606 |
|
|
|
3,594 |
|
|
Restructuring expenses |
|
|
38,338 |
|
|
|
— |
|
|
|
38,338 |
|
|
|
— |
|
|
Other operating expenses (income), net |
|
|
4,753 |
|
|
|
9,071 |
|
|
|
5,204 |
|
|
|
335 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and expenses |
|
|
409,464 |
|
|
|
723,890 |
|
|
|
1,349,801 |
|
|
|
1,451,444 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING LOSS |
|
|
(159,084 |
) |
|
|
(48,125 |
) |
|
|
(653,494 |
) |
|
|
(71,508 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
334 |
|
|
|
1,756 |
|
|
|
991 |
|
|
|
2,788 |
|
|
Interest expense, net of amount capitalized |
|
|
(10,984 |
) |
|
|
(13,298 |
) |
|
|
(22,208 |
) |
|
|
(26,282 |
) |
|
Other |
|
|
85 |
|
|
|
92 |
|
|
|
170 |
|
|
|
209 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other expense |
|
|
(10,565 |
) |
|
|
(11,450 |
) |
|
|
(21,047 |
) |
|
|
(23,285 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE INCOME TAXES |
|
|
(169,649 |
) |
|
|
(59,575 |
) |
|
|
(674,541 |
) |
|
|
(94,793 |
) |
|
INCOME TAX BENEFIT |
|
|
(19,317 |
) |
|
|
(10,128 |
) |
|
|
(89,487 |
) |
|
|
(16,732 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS |
|
$ |
(150,332 |
) |
|
$ |
(49,447 |
) |
|
$ |
(585,054 |
) |
|
$ |
(78,061 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS PER COMMON SHARE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.81 |
) |
|
$ |
(0.24 |
) |
|
$ |
(3.10 |
) |
|
$ |
(0.37 |
) |
|
Diluted |
|
$ |
(0.81 |
) |
|
$ |
(0.24 |
) |
|
$ |
(3.10 |
) |
|
$ |
(0.37 |
) |
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
186,633 |
|
|
|
207,499 |
|
|
|
188,654 |
|
|
|
209,671 |
|
|
Diluted |
|
|
186,633 |
|
|
|
207,499 |
|
|
|
188,654 |
|
|
|
209,671 |
|
|
CASH DIVIDENDS PER COMMON SHARE |
|
$ |
0.02 |
|
|
$ |
0.04 |
|
|
$ |
0.06 |
|
|
$ |
0.08 |
|
|
PATTERSON-UTI ENERGY, INC. |
|
||||||||||||||||||||||||||||
|
Additional Financial and Operating Data |
|
||||||||||||||||||||||||||||
|
(unaudited, dollars in thousands) |
|
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|||||||||||||||||||||||
|
|
|
June 30, |
|
|
June 30, |
|
|||||||||||||||||||||||
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|||||||||||||||||
|
Contract Drilling: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Revenues |
|
$ |
171,134 |
|
|
$ |
348,138 |
|
|
$ |
438,498 |
|
|
$ |
720,530 |
|
|||||||||||||
|
Direct operating costs |
|
$ |
87,127 |
|
|
$ |
201,792 |
|
|
$ |
250,547 |
|
|
$ |
420,994 |
|
|||||||||||||
|
Margin (1) |
|
$ |
84,007 |
|
|
$ |
146,346 |
|
|
$ |
187,951 |
|
|
$ |
299,536 |
|
|||||||||||||
|
Restructuring expenses |
|
$ |
2,430 |
|
|
$ |
— |
|
|
$ |
2,430 |
|
|
$ |
— |
|
|||||||||||||
|
Other operating expenses (income), net |
|
$ |
(4,155 |
) |
|
$ |
— |
|
|
$ |
(4,155 |
) |
|
$ |
— |
|
|||||||||||||
|
Selling, general and administrative |
|
$ |
1,344 |
|
|
$ |
1,450 |
|
|
$ |
2,808 |
|
|
$ |
3,106 |
|
|||||||||||||
|
Depreciation, amortization and impairment |
|
$ |
115,130 |
|
|
$ |
128,402 |
|
|
$ |
226,568 |
|
|
$ |
258,719 |
|
|||||||||||||
|
Impairment of goodwill |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
395,060 |
|
|
$ |
— |
|
|||||||||||||
|
Operating income (loss) |
|
$ |
(30,742 |
) |
|
$ |
16,494 |
|
|
$ |
(434,760 |
) |
|
$ |
37,711 |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Operating days – United States |
|
|
7,450 |
|
|
|
14,323 |
|
|
|
18,638 |
|
|
|
29,982 |
|
|||||||||||||
|
Operating days – Canada |
|
|
— |
|
|
|
62 |
|
|
|
47 |
|
|
|
190 |
|
|||||||||||||
|
Operating days – Total |
|
|
7,450 |
|
|
|
14,385 |
|
|
|
18,685 |
|
|
|
30,172 |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Average revenue per operating day – United States |
|
$ |
22.96 |
|
|
$ |
24.23 |
|
|
$ |
23.47 |
|
|
$ |
23.92 |
|
|||||||||||||
|
Average direct operating costs per operating day – United States |
|
$ |
11.65 |
|
|
$ |
14.00 |
|
|
$ |
13.36 |
|
|
$ |
13.92 |
|
|||||||||||||
|
Average margin per operating day – United States (1) |
|
$ |
11.32 |
|
|
$ |
10.23 |
|
|
$ |
10.11 |
|
|
$ |
9.99 |
|
|||||||||||||
|
Average rigs operating – United States |
|
|
82 |
|
|
|
157 |
|
|
|
102 |
|
|
|
166 |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Average revenue per operating day – Canada |
|
$ |
— |
|
|
$ |
17.74 |
|
|
$ |
21.11 |
|
|
$ |
18.23 |
|
|||||||||||||
|
Average direct operating costs per operating day – Canada |
|
$ |
— |
|
|
$ |
20.55 |
|
|
$ |
33.04 |
|
|
$ |
18.59 |
|
|||||||||||||
|
Average margin per operating day – Canada (1) |
|
$ |
— |
|
|
$ |
(2.81 |
) |
|
$ |
(11.94 |
) |
|
$ |
(0.37 |
) |
|||||||||||||
|
Average rigs operating – Canada |
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Average revenue per operating day – Total |
|
$ |
22.97 |
|
|
$ |
24.20 |
|
|
$ |
23.47 |
|
|
$ |
23.88 |
|
|||||||||||||
|
Average direct operating costs per operating day – Total |
|
$ |
11.69 |
|
|
$ |
14.03 |
|
|
$ |
13.41 |
|
|
$ |
13.95 |
|
|||||||||||||
|
Average margin per operating day – Total (1) |
|
$ |
11.28 |
|
|
$ |
10.17 |
|
|
$ |
10.06 |
|
|
$ |
9.93 |
|
|||||||||||||
|
Average rigs operating – Total |
|
|
82 |
|
|
|
158 |
|
|
|
103 |
|
|
|
167 |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Capital expenditures |
|
$ |
42,501 |
|
|
$ |
47,664 |
|
|
$ |
91,946 |
|
|
$ |
123,389 |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Pressure Pumping: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Revenues |
|
$ |
59,533 |
|
|
$ |
251,008 |
|
|
$ |
184,640 |
|
|
$ |
498,609 |
|
|||||||||||||
|
Direct operating costs |
|
$ |
56,268 |
|
|
$ |
206,137 |
|
|
$ |
171,123 |
|
|
$ |
408,885 |
|
|||||||||||||
|
Margin (2) |
|
$ |
3,265 |
|
|
$ |
44,871 |
|
|
$ |
13,517 |
|
|
$ |
89,724 |
|
|||||||||||||
|
Restructuring expenses |
|
$ |
31,331 |
|
|
$ |
— |
|
|
$ |
31,331 |
|
|
$ |
— |
|
|||||||||||||
|
Selling, general and administrative |
|
$ |
1,677 |
|
|
$ |
3,094 |
|
|
$ |
4,744 |
|
|
$ |
6,580 |
|
|||||||||||||
|
Depreciation, amortization and impairment |
|
$ |
38,811 |
|
|
$ |
56,185 |
|
|
$ |
81,482 |
|
|
$ |
116,320 |
|
|||||||||||||
|
Operating loss |
|
$ |
(68,554 |
) |
|
$ |
(14,408 |
) |
|
$ |
(104,040 |
) |
|
$ |
(33,176 |
) |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Fracturing jobs |
|
|
35 |
|
|
|
122 |
|
|
|
124 |
|
|
|
286 |
|
|||||||||||||
|
Other jobs |
|
|
152 |
|
|
|
193 |
|
|
|
361 |
|
|
|
456 |
|
|||||||||||||
|
Total jobs |
|
|
187 |
|
|
|
315 |
|
|
|
485 |
|
|
|
742 |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Average revenue per fracturing job |
|
$ |
1,549.71 |
|
|
$ |
2,028.33 |
|
|
$ |
1,413.11 |
|
|
$ |
1,711.92 |
|
|||||||||||||
|
Average revenue per other job |
|
$ |
34.82 |
|
|
$ |
18.40 |
|
|
$ |
26.08 |
|
|
$ |
19.73 |
|
|||||||||||||
|
Average revenue per total job |
|
$ |
318.36 |
|
|
$ |
796.85 |
|
|
$ |
380.70 |
|
|
$ |
671.98 |
|
|||||||||||||
|
Average costs per total job |
|
$ |
300.90 |
|
|
$ |
654.40 |
|
|
$ |
352.83 |
|
|
$ |
551.06 |
|
|||||||||||||
|
Average margin per total job (2) |
|
$ |
17.46 |
|
|
$ |
142.45 |
|
|
$ |
27.87 |
|
|
$ |
120.92 |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Margin as a percentage of revenues (2) |
|
|
5.5 |
% |
|
|
17.9 |
% |
|
|
7.3 |
% |
|
|
18.0 |
% |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Capital expenditures |
|
$ |
1,947 |
|
|
$ |
38,802 |
|
|
$ |
16,227 |
|
|
$ |
70,202 |
|
|||||||||||||
|
|
|||||||||||||||||||||||||||||
|
Additional Financial and Operating Data |
|
||||||||||||||||||||||||||||
|
(unaudited, dollars in thousands) |
|
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|||||||||||||||||||||||
|
|
|
June 30, |
|
|
June 30, |
|
|||||||||||||||||||||||
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|||||||||||||||||
|
Directional Drilling: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Revenues |
|
$ |
11,742 |
|
|
$ |
50,218 |
|
|
$ |
46,227 |
|
|
$ |
103,177 |
|
|||||||||||||
|
Direct operating costs |
|
$ |
12,265 |
|
|
$ |
42,102 |
|
|
$ |
44,594 |
|
|
$ |
87,704 |
|
|||||||||||||
|
Margin (3) |
|
$ |
(523 |
) |
|
$ |
8,116 |
|
|
$ |
1,633 |
|
|
$ |
15,473 |
|
|||||||||||||
|
Restructuring expenses |
|
$ |
3,175 |
|
|
$ |
— |
|
|
$ |
3,175 |
|
|
$ |
— |
|
|||||||||||||
|
Selling, general and administrative |
|
$ |
1,010 |
|
|
$ |
2,536 |
|
|
$ |
3,340 |
|
|
$ |
5,193 |
|
|||||||||||||
|
Depreciation, amortization and impairment |
|
$ |
9,677 |
|
|
$ |
10,870 |
|
|
$ |
20,098 |
|
|
$ |
21,237 |
|
|||||||||||||
|
Operating loss |
|
$ |
(14,385 |
) |
|
$ |
(5,290 |
) |
|
$ |
(24,980 |
) |
|
$ |
(10,957 |
) |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Margin as a percentage of revenues (3) |
|
|
(4.5 |
%) |
|
|
16.2 |
% |
|
|
3.5 |
% |
|
|
15.0 |
% |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Capital expenditures |
|
$ |
2,044 |
|
|
$ |
3,450 |
|
|
$ |
4,052 |
|
|
$ |
5,562 |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Other Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Revenues |
|
$ |
7,971 |
|
|
$ |
26,401 |
|
|
$ |
26,942 |
|
|
$ |
57,620 |
|
|||||||||||||
|
Direct operating costs |
|
$ |
9,086 |
|
|
$ |
17,612 |
|
|
$ |
25,110 |
|
|
$ |
39,385 |
|
|||||||||||||
|
Margin (4) |
|
$ |
(1,115 |
) |
|
$ |
8,789 |
|
|
$ |
1,832 |
|
|
$ |
18,235 |
|
|||||||||||||
|
Restructuring expenses |
|
$ |
501 |
|
|
$ |
— |
|
|
$ |
501 |
|
|
$ |
— |
|
|||||||||||||
|
Selling, general and administrative |
|
$ |
763 |
|
|
$ |
4,649 |
|
|
$ |
2,222 |
|
|
$ |
7,511 |
|
|||||||||||||
|
Depreciation, depletion, amortization and impairment |
|
$ |
7,976 |
|
|
$ |
11,457 |
|
|
$ |
28,235 |
|
|
$ |
23,245 |
|
|||||||||||||
|
Operating loss |
|
$ |
(10,355 |
) |
|
$ |
(7,317 |
) |
|
$ |
(29,126 |
) |
|
$ |
(12,521 |
) |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Capital expenditures |
|
$ |
2,808 |
|
|
$ |
6,230 |
|
|
$ |
8,072 |
|
|
$ |
14,003 |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Corporate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Selling, general and administrative |
|
$ |
19,197 |
|
|
$ |
23,165 |
|
|
$ |
41,223 |
|
|
$ |
45,059 |
|
|||||||||||||
|
Restructuring expenses |
|
$ |
901 |
|
|
$ |
— |
|
|
$ |
901 |
|
|
$ |
— |
|
|||||||||||||
|
Depreciation |
|
$ |
1,491 |
|
|
$ |
1,774 |
|
|
$ |
3,499 |
|
|
$ |
3,577 |
|
|||||||||||||
|
Credit loss expense |
|
$ |
4,551 |
|
|
$ |
3,594 |
|
|
$ |
5,606 |
|
|
$ |
3,594 |
|
|||||||||||||
|
Other operating expenses (income), net |
|
$ |
8,908 |
|
|
$ |
9,071 |
|
|
$ |
9,359 |
|
|
$ |
335 |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Capital expenditures |
|
$ |
373 |
|
|
$ |
773 |
|
|
$ |
1,304 |
|
|
$ |
2,104 |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Total capital expenditures |
|
$ |
49,673 |
|
|
$ |
96,919 |
|
|
$ |
121,601 |
|
|
$ |
215,260 |
|
|||||||||||||
|
|
(1) |
For Contract Drilling, margin is defined as revenues less direct operating costs and excludes restructuring expenses, depreciation, amortization and impairment, impairment of goodwill, other operating expenses (income), net and selling, general and administrative expenses. Average margin per operating day is defined as margin divided by operating days. |
|
|
|
(2) |
For Pressure Pumping, margin is defined as revenues less direct operating costs and excludes restructuring expenses, depreciation, amortization and impairment and selling, general and administrative expenses. Average margin per total job is defined as margin divided by total jobs. Margin as a percentage of revenues is defined as margin divided by revenues. |
|
|
|
(3) |
For Directional Drilling, margin is defined as revenues less direct operating costs and excludes restructuring expenses, depreciation, amortization and impairment and selling, general and administrative expenses. Margin as a percentage of revenues is defined as margin divided by revenues. |
|
|
|
(4) |
For Other Operations, margin is defined as revenues less direct operating costs and excludes restructuring expenses, depreciation, depletion, amortization and impairment, and selling, general and administrative expenses. |
|
|
|
|
June 30, |
|
|
December 31, |
|
||||
|
Selected Balance Sheet Data (unaudited, in thousands): |
|
2020 |
|
|
2019 |
|
||||
|
Cash and cash equivalents |
|
$ |
|
246,781 |
|
|
$ |
|
174,185 |
|
|
Current assets |
|
$ |
|
517,535 |
|
|
$ |
|
631,815 |
|
|
Current liabilities |
|
$ |
|
272,139 |
|
|
$ |
|
400,602 |
|
|
Working capital |
|
$ |
|
245,396 |
|
|
$ |
|
231,213 |
|
|
Long-term debt |
|
$ |
|
967,140 |
|
|
$ |
|
966,540 |
|
Non-U.S. GAAP Financial Measures
(unaudited, dollars in thousands)
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
|
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA) (1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(150,332 |
) |
|
$ |
(49,447 |
) |
|
$ |
(585,054 |
) |
|
$ |
(78,061 |
) |
|
Income tax benefit |
|
|
(19,317 |
) |
|
|
(10,128 |
) |
|
|
(89,487 |
) |
|
|
(16,732 |
) |
|
Net interest expense |
|
|
10,650 |
|
|
|
11,542 |
|
|
|
21,217 |
|
|
|
23,494 |
|
|
Depreciation, depletion, amortization and impairment |
|
|
173,085 |
|
|
|
208,688 |
|
|
|
359,882 |
|
|
|
423,098 |
|
|
Impairment of goodwill |
|
|
— |
|
|
|
— |
|
|
|
395,060 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
14,086 |
|
|
$ |
160,655 |
|
|
$ |
101,618 |
|
|
$ |
351,799 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
$ |
250,380 |
|
|
$ |
675,765 |
|
|
$ |
696,307 |
|
|
$ |
1,379,936 |
|
|
Adjusted EBITDA margin |
|
|
5.6 |
% |
|
|
23.8 |
% |
|
|
14.6 |
% |
|
|
25.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA by operating segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract drilling |
|
$ |
84,388 |
|
|
$ |
144,896 |
|
|
$ |
186,868 |
|
|
$ |
296,430 |
|
|
Pressure pumping |
|
|
(29,743 |
) |
|
|
41,777 |
|
|
|
(22,558 |
) |
|
|
83,144 |
|
|
Directional drilling |
|
|
(4,708 |
) |
|
|
5,580 |
|
|
|
(4,882 |
) |
|
|
10,280 |
|
|
Other operations |
|
|
(2,379 |
) |
|
|
4,140 |
|
|
|
(891 |
) |
|
|
10,724 |
|
|
Corporate |
|
|
(33,472 |
) |
|
|
(35,738 |
) |
|
|
(56,919 |
) |
|
|
(48,779 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Adjusted EBITDA |
|
$ |
14,086 |
|
|
$ |
160,655 |
|
|
$ |
101,618 |
|
|
$ |
351,799 |
|
|
|
(1) |
Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) is not defined by accounting principles generally accepted in the United States of America (“U.S. GAAP”). We define Adjusted EBITDA as net income (loss) plus net interest expense, income tax benefit and depreciation, depletion, amortization and impairment expense (including impairment of goodwill). We present Adjusted EBITDA because we believe it provides to both management and investors additional information with respect to the performance of our fundamental business activities and a comparison of the results of our operations from period to period and against our peers without regard to our financing methods or capital structure. We exclude the items listed above from net income (loss) in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be construed as an alternative to the U.S. GAAP measure of net income (loss). Our computations of Adjusted EBITDA may not be the same as similarly titled measures of other companies. |
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||
|
|
|
June 30, |
|
|
June 30, |
|
||
|
|
|
2020 |
|
|
2020 |
|
||
|
Adjusted EBITDA |
|
$ |
14,086 |
|
|
$ |
101,618 |
|
|
|
|
|
|
|
|
|
|
|
|
Reverse certain items: |
|
|
|
|
|
|
|
|
|
Impairment of capacity reservation contract |
|
|
9,207 |
|
|
|
9,207 |
|
|
Restructuring expenses |
|
|
38,338 |
|
|
|
38,338 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA, excluding certain charges (2) |
|
$ |
61,631 |
|
|
$ |
149,163 |
|
|
|
(2) |
We present Adjusted EBITDA, excluding certain charges, in order to convey to investors our performance on a basis that, by excluding certain items, is more comparable to our Adjusted EBITDA performance information reported in previous periods. Adjusted EBITDA, excluding certain charges, should not be construed as an alternative to the U.S. GAAP measure of net income (loss). |
|
Pro Forma Net Loss Per Share
(unaudited, dollars in thousands)
|
|
Three Months Ended June 30, 2020 |
|
|||||||||||||
|
|
As Reported |
|
|
Pro Forma |
|
||||||||||
|
|
Total |
|
|
Per Share |
|
|
Total |
|
|
Per Share (1) |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss as reported |
$ |
(150,332 |
) |
|
$ |
(0.81 |
) |
|
$ |
(150,332 |
) |
|
$ |
(0.81 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reverse certain items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring expenses |
|
|
|
|
|
|
|
|
|
38,338 |
|
|
|
|
|
|
Income tax benefit |
|
|
|
|
|
|
|
|
|
(4,371 |
) |
|
|
|
|
|
After tax amount |
|
|
|
|
|
|
|
|
|
33,967 |
|
|
$ |
0.18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of property and equipment related to Canadian drilling operations (2) |
|
|
|
|
|
|
|
|
|
8,255 |
|
|
|
|
|
|
Income tax benefit |
|
|
|
|
|
|
|
|
|
(941 |
) |
|
|
|
|
|
After tax amount |
|
|
|
|
|
|
|
|
|
7,314 |
|
|
$ |
0.04 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gain from the realization of insurance proceeds (3) |
|
|
|
|
|
|
|
|
|
(4,172 |
) |
|
|
|
|
|
Income tax expense |
|
|
|
|
|
|
|
|
|
476 |
|
|
|
|
|
|
After tax amount |
|
|
|
|
|
|
|
|
|
(3,696 |
) |
|
$ |
(0.02 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of capacity reservation contract (4) |
|
|
|
|
|
|
|
|
|
9,207 |
|
|
|
|
|
|
Income tax benefit |
|
|
|
|
|
|
|
|
|
(1,050 |
) |
|
|
|
|
|
After tax amount |
|
|
|
|
|
|
|
|
|
8,157 |
|
|
$ |
0.04 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total, after tax |
|
|
|
|
|
|
|
|
|
45,742 |
|
|
$ |
0.25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributed to common shareholders |
$ |
(150,332 |
) |
|
$ |
(0.81 |
) |
|
$ |
(104,590 |
) |
|
$ |
(0.56 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
outstanding, excluding non-vested shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of restricted stock |
|
186,633 |
|
|
|
|
|
|
|
186,633 |
|
|
|
|
|
|
Add dilutive effect of potential common shares |
|
— |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
Weighted average number of diluted common |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
shares outstanding |
|
186,633 |
|
|
|
|
|
|
|
186,633 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective income tax rate |
|
11.4 |
% |
|
|
|
|
|
|
11.4 |
% |
|
|
|
|
|
|
(1) |
We present pro forma net loss per share in order to convey to investors our performance on a basis that, by excluding certain items, is more comparable to our earnings per share information reported in previous periods. Pro Forma Net Loss per Share should not be construed as an alternative to U.S. GAAP earnings per share. |
|
|
|
(2) |
Impairment of property and equipment related to Canadian drilling operations for the three months ended June 30, 2020 was included in “Depreciation, depletion, amortization and impairment” in the Condensed Consolidated Statements of Operations. |
|
|
|
(3) |
Net gain from the realization of insurance proceeds for the three months ended June 30, 2020 was included in “Other operating expenses (income), net” in the Condensed Consolidated Statements of Operations. |
|
|
|
(4) |
Impairment of capacity reservation contract for the three months ended June 30, 2020 was included in “Other operating expenses (income), net” in the Condensed Consolidated Statements of Operations. |
|
Contract Drilling Per Day Successive Quarters
(unaudited, dollars in thousands)
|
|
|
2020 |
|
|
2020 |
|
|
|
|
|
||
|
|
|
Second |
|
|
First |
|
|
|
|
|
||
|
|
|
Quarter |
|
|
Quarter |
|
|
Change |
|
|||
|
Contract drilling revenues |
|
$ |
171,134 |
|
|
$ |
267,364 |
|
|
$ |
(96,230 |
) |
|
Operating days - Total |
|
|
7,450 |
|
|
|
11,235 |
|
|
|
(3,785 |
) |
|
Average rigs operating - Total |
|
|
82 |
|
|
|
123 |
|
|
|
(41 |
) |
|
Average revenue per operating day - Total |
|
$ |
22.97 |
|
|
$ |
23.80 |
|
|
$ |
(0.83 |
) |
|
Early termination revenues - Total |
|
$ |
8,612 |
|
|
$ |
2,087 |
|
|
$ |
6,525 |
|
|
Early termination revenues per operating day - Total |
|
$ |
1.16 |
|
|
$ |
0.19 |
|
|
$ |
0.97 |
|
|
Average revenue per operating day excluding early termination revenues - Total |
|
$ |
21.82 |
|
|
$ |
23.61 |
|
|
$ |
(1.79 |
) |
|
Direct operating costs - Total |
|
$ |
87,127 |
|
|
$ |
163,420 |
|
|
$ |
(76,293 |
) |
|
Average direct operating costs per operating day - Total |
|
$ |
11.69 |
|
|
$ |
14.55 |
|
|
$ |
(2.86 |
) |
|
Average margin per operating day - Total |
|
$ |
11.28 |
|
|
$ |
9.25 |
|
|
$ |
2.03 |
|
PATTERSON-UTI ENERGY, INC.
Directional Drilling Margin
(unaudited, in thousands)
|
|
|
2020 |
|
|
2020 |
|
|
|
|
|
||
|
|
|
Second |
|
|
First |
|
|
|
|
|
||
|
|
|
Quarter |
|
|
Quarter |
|
|
Change |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Directional drilling revenues |
|
$ |
11,742 |
|
|
$ |
34,485 |
|
|
$ |
(22,743 |
) |
|
Direct operating costs |
|
|
12,265 |
|
|
|
32,329 |
|
|
|
(20,064 |
) |
|
Margin |
|
$ |
(523 |
) |
|
$ |
2,156 |
|
|
$ |
(2,679 |
) |