Attached files
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| 8-K - 8-K - PATTERSON UTI ENERGY INC | d924221d8k.htm |
 Morgan Stanley
E&P and Oil Services Conference
May 12, 2015
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 web
site 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
3 |
 Contract Drilling
•
High quality fleet of land drilling
rigs including 155 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, 2014
4
Pressure
Pumping
41%
Oil &
Natural
Gas
1%
Contract
Drilling
58%
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, 2014
5
Pressure
Pumping
41%
Oil &
Natural
Gas
1%
Contract
Drilling
58%
Components of Revenue |
 Contract Drilling |
 Improved Performance
2008 -
2009
Total Baker Hughes U.S. Land Rig Count: -45%
Total PTEN U.S. Rig Count: -68%
2014 -
2015
Total PTEN U.S. Rig Count: -42%
Total Baker Hughes U.S. Land Rig Count: -54%
Baker Hughes and Patterson-UTI U.S. Land Rig Counts as of May 8, 2015
7
U.S. Rig Count Downturn
0%
20%
40%
60%
80%
100%
120%
0%
20%
40%
60%
80%
100%
120% |
 A Rig Fleet Transformation
8
Mechanical
Patterson-UTI Energy Total Rig Fleet
Mechanical
December 2009
Projected December 2015
APEX®
Other
Electric
APEX®
Other
Electric |
 …and Expected as of December 31, 2015
APEX-XK
1500™
APEX-XK
1000™ APEX
WALKING ®
APEX 1500
®
APEX 1000
®
Total APEX
®
Rigs
Class
APEX
®
Rigs as of May 12, 2015
53
49
161
12/31/2015
A leader in high specification drilling rigs
A leader in high specification drilling rigs
47
4
49
44
11
155
5/12/2015
APEX
®
Rig Fleet
9
4
44
11 |
 Permian Basin
26 Rigs
Large Geographic Footprint
10
PTEN’s Active U.S. Land Drilling Rigs
as of May 8, 2015
Appalachia
29 Rigs
East Texas
14 Rigs
Mid-Continent
8 Rigs
Rockies
22 Rigs
South Texas
25 Rigs |
 Patterson-UTI Energy
…the impact of APEX®
rigs has been transformative! |
 Increasing APEX
®
Drilling Activity
12
Active APEX
®
Rig Count
0
20
40
60
80
100
120
140
160 |
 PTEN Relative Active Rig Count by Rig Class
13
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
APEX®
Other Electric
Mechanical |
 Greater Stability of Utilization
14
APEX
®
Rig Utilization
0%
20%
40%
60%
80%
100%
120% |
 Improving Average Rig Revenue Per Day
15
Patterson-UTI Total Average Rig 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, and early-termination revenues during the first
quarter of 2015 of $1,020 per day. 10,000
12,000
14,000
16,000
18,000
20,000
22,000
24,000
26,000 |
 Adjusted EBITDA Contribution from High
Specification Rigs
16
Preferred rigs account for approximately
91% of Adjusted EBITDA in Contract Drilling
Excludes
early-termination
revenues
during
the
third
and
fourth
quarter
of
2013
of
$62.8
million
and
$2.4
million,
respectively, and early-termination revenue during the first quarter of
2015 of $15.8 million. 2010
2011
2012
2013
2014
2015
APEX®
& Other Electric
Mechanical |
 Patterson-UTI Energy
…the APEX®
rig outlook remains strong! |
 18
U.S. Rig Count % by Drilling Type
Continued Demand for APEX
®
Rigs
Source: Baker Hughes North America Rotary Rig Count
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
% Horizontal
% Vertical |
 AC-powered rigs have increased as a
percentage 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 data from RigData and company
filings. 19
Mechanical
SCR
AC |
 Patterson-UTI Energy
…Patterson-UTI is a technology leader!
|
 APEX WALKING
®
Rigs
21
•
Capable of walking with drill pipe
and collars racked in the mast
•
Full multi-directional walking
capability
•
Walking times average 45 minutes
for 10’
–
15’
well spacing
http://patenergy.com/drilling/technology/apexwalk
21 |
 Strong Demand for Pad Drilling
22
•
Pad drilling is contributing to
increasing rig efficiency
•
Pad drilling capable rigs are
highly utilized
•
Most new APEX
®
rigs are
expected to have walking
systems
http://patenergy.com/drilling/technology
22 |
 The APEX-XK
™
23
•
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
•
Minimized number of truck loads for
rig moves
•
Available in both 1500 HP and 1000
HP
http://patenergy.com/drilling/technology
23 |
 Enhancing our Position in Pad Drilling
24
Walking Systems Can be Added to Any Rig in Our Fleet…
…Allowing for True Multi-Directional Pad Drilling Capabilities
24 |
 Enhancing our Position in Pad Drilling
25
http://patenergy.com/drilling/technology
25 |
 Early Adopter of Natural Gas Engines
26
http://patenergy.com/drilling/technology
26 |
 Pressure Pumping |
 Growing Pressure Pumping Business
28
Investments in Pressure Pumping…
…Have Increased Fleet Size and Quality
65
1,100
0
200
400
600
800
1000
1200
2006
2007
2008
2009
2010
2011
2012
2013
2014
June
2015E
Fracturing Horsepower
Other Horsepower
Period End |
 Southwest Region:
Northeast Region:
Fracturing horsepower: 663,800
Other horsepower: 32,165
Fracturing horsepower: 326,300
Other horsepower: 55,400
A Significant Player in Regional Markets
Pressure Pumping Areas
29
Horsepower distribution as of March 31, 2015
Fracturing Horsepower
33%
67% |
 A Leader in Bi-Fuel Technology
•
Engines can burn a fuel mix
comprised of up to 70% natural
gas
•
Comparable torque and
horsepower to an all diesel engine
•
Reduces operating costs by
lowering fuel costs
•
Good for environmental
sustainability
http://patenergy.com/pressurepumping/services
30 |
 A Leader in Bi-Fuel Technology
31
http://patenergy.com/pressurepumping/services
31 |
 Comprehensive Lab Services
http://patenergy.com/pressurepumping/services
32 |
 Financial Flexibility |
 Investing in Our Company
34
Capital Expenditures and Acquisitions
($ in millions)
2015 Capital expenditure forecast as of April 23, 2015
$598
$637
$445
$453
$976
$1,012
$974
$662
$1,229
$710
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015E
Year End |
 Strong Financial Position
35
•
History of returning capital to investors
–
Cash Dividend
•
Initiated cash dividend in 2004
•
Doubled quarterly cash dividend to $0.10 per share in
February 2014
–
Stock Buyback
•
Total of $857 million repurchased since 2005
•
Approximately $187 million remaining authorization as of
March 31, 2015
•
Returned approximately $1.3 billion to shareholders
since 2005 |
 Strong Financial Position
36
Total Liquidity
($ in millions)
Liquidity defined as end of period cash plus availability under revolving line
of credit 2006
2007
2008
2009
2010
2011
2012
2013
2014
1Q15
Period End
Line of Credit Availability
Cash |
 Strong Financial Position
37
Net Debt to Capital Ratio
$600 million of debt not due until at least 2020
-10%
0%
10%
20%
30%
40%
50%
2006
2007
2008
2009
2010
2011
2012
2013
2014
1Q15
Period End
6%
2%
-
4%
-2%
15%
13%
18%
14%
24%
21% |
 Why Invest in Patterson-UTI Energy?
•
Continuing Transformation
–
Committed to high-spec land rigs where
demand remains strong
–
Creating value through focus on well
site execution
•
Technology leader
–
Leader in walking rigs for pad drilling
–
Innovator in use of natural gas as a fuel
source for both drilling and pressure
pumping
•
Financially flexible
–
Strong balance sheet
–
History of share buybacks
–
Dividends
38 |
 Additional References |
 40
Contract Drilling Capital Expenditures and Acquisitions
($ in millions)
Investing in Our Drilling Rig Fleet
More than $5 billion invested since 2005
2015 Capital expenditure forecast as of April 23, 2015
$531
$540
$361
$395
$656
$785
$745
$505
$772
$520
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015E |
 Investing in Pressure Pumping
41
Pressure Pumping Capital Expenditures and Acquisitions
($ in millions)
More Than $1.4 billion invested since 2005
2015 Capital expenditure forecast as of April 23, 2015
$41
$48
$61
$43
$289
$198
$194
$123
$418
$165
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015E |
 Term Contract Coverage
•
Based on term contracts in place as of April 23, 2015
–
An average of 101 rigs expected under term contract in the
second quarter of 2015
–
An average of 83 rigs expected under term contract during
the last three quarters of 2015
42
•
Drilling term contract revenue backlog of $1.24 billion
at March 31, 2015
•
As previously disclosed on April 23, 2015, we expect 12
rigs to be early terminated during the second quarter of
2015. We also expect approximately $19 million of
early-termination revenue during the second quarter.
|
 •
Total liquidity of approximately $587million
–
$86.9 million of cash at March 31, 2015
–
$500 million revolver availability at April 27, 2015
•
$793.1 million net debt at March 31, 2015
–
21.5% 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
–
$280 million of term loans maturing September 27, 2017
•
No equity sales in last 14 years
•
Reduced share count by 25.6 million shares since 2005
43
Strong Financial Position |
 PATTERSON-UTI ENERGY, INC.
Non-GAAP Financial Measures (Unaudited)
(dollars in thousands)
Non-GAAP Financial Measures
44
The company makes use of financial measures that are not calculated in
accordance with U.S. generally accepted accounting principles (“GAAP”) to help
in the assessment of ongoing operating performance. These non-GAAP
financial measures are reconciled to their most directly comparable GAAP
measures in the tables above. We define Adjusted EBITDA as net income plus net
interest expense, income tax expense and depreciation, depletion,
amortization and impairment expense. We present Adjusted EBITDA 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. Adjusted EBITDA
is not defined by GAAP and, as such, should not be construed as an alternative
to net income (loss) or operating cash flow. We define margin as revenues
less direct operating costs. We present margin because we believe it to
be the component of our earnings most impacted by the variability in our contract
drilling and pressure pumping operations. Margin is not defined by GAAP and, as
such, should not be construed as an alternative to net income (loss).
(1)
Three Months Ended
March 31,
Twelve Months Ended
December 31,
2015
2014
2014
2013
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization
(Adjusted EBITDA)(1):
Net income
$
9,125
$
34,822
$
162,664
$
188,009
Income tax expense
6,720
16,942
91,619
108,432
Net interest expense
8,258
7,012
28,846
27,441
Depreciation, depletion, amortization and impairment
175,382
147,322
718,730
597,469
Adjusted EBITDA
$
199,485
$
206,098
$
1,001,859
$
921,351
Total revenue
$
657,699
$
678,168
$3,182,291
$2,716,034
Adjusted EBITDA margin
30.3%
30.4%
31.5%
33.9%
Adjusted EBITDA by operating segment:
Contract drilling
$
174,970
$
173,196
$
765,874
$
704,990
Pressure pumping
31,903
35,585
236,676
217,228
Oil and natural gas
3,702
8,730
37,094
44,348
Corporate and other
(11,090)
(11,413)
(37,785)
(45,215)
Consolidated Adjusted EBITDA
$
199,485
$
206,098
$
1,001,859
$
921,351 |
 Non-GAAP Financial Measures
45
2014
2013
2012
2011
2010
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization
(Adjusted EBITDA)(1):
Net income (loss)
162,664
188,009
299,477
322,413
116,942
Income tax expense (benefit)
91,619
108,432
176,196
187,938
72,856
Net interest expense (income)
28,846
27,441
22,196
15,465
11,098
Depreciation, depletion, amortization and impairment
718,730
597,469
526,614
437,279
333,493
Net impact of discontinued operations
-
-
-
(209)
1,778
Adjusted EBITDA
1,001,859
921,351
1,024,483
962,886
536,167
Total revenue
3,182,291
2,716,034
2,723,414
2,565,943
1,462,931
Adjusted EBITDA margin
PATTERSON-UTI ENERGY, INC.
Non-GAAP Financial Measures (Unaudited)
(dollars in thousands)
$
$
$
$
$
The company makes use of financial measures that are not calculated in
accordance with U.S. generally accepted accounting principles (“GAAP”) to help in the
assessment of ongoing operating performance. These non-GAAP financial
measures are reconciled to their most directly comparable GAAP measures in the tables
above. We define Adjusted EBITDA as net income plus net interest
expense, income tax expense and depreciation, depletion, amortization and
impairment expense. We present Adjusted EBITDA 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.
Adjusted EBITDA is not defined by GAAP and, as such, should not
be construed as an
alternative
to
net
income
(loss)
or
operating
cash
flow.
We
define
margin
as
revenues
less
direct
operating
costs.
We
present
margin
because
we
believe
it
to
be
the
component of our earnings most impacted by the variability in our contract
drilling and pressure pumping operations. Margin is not defined by GAAP and, as such,
should not be construed as an alternative to net income (loss).
(1)
$
$
$
$
$
$
$
$
$
$
37.6%
37.5%
36.7%
33.9%
31.5% |