Attached files
| file | filename |
|---|---|
| 8-K - 8-K - PATTERSON UTI ENERGY INC | d118251d8k.htm |
 J.P. Morgan Inaugural Energy Equity Investor Conference June 28, 2016 Exhibit 99.1 |
 Forward Looking Statements 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/or at the end of this presentation.
The Red Circular Rig Logo, the Universal Logo, and the terms
PATTERSON UTI, and APEX are registered trademarks
of Patterson–UTI Energy, Inc. 2
|
 Contract Drilling • High quality fleet of land drilling rigs including 161 APEX ® rigs • Leader in walking rig technology for pad drilling applications • Large footprint across North American drilling markets Pressure Pumping 36% Oil & Natural Gas 1% Contract Drilling 63% Components of Revenue Patterson-UTI reported results for the three months ended March 31, 2016
3 |
 Pressure Pumping • High quality fleet of modern pressure pumping equipment • Strong reputation for regional knowledge and efficient operations • Concentrated footprint provides economies of scale 4 Pressure Pumping 36% Oil & Natural Gas 1% Contract Drilling 63% Components of Revenue Patterson-UTI reported results for the three months ended March 31, 2016 |
 Scaling The Business Scaling our business effectively is key to our success…
…both in upturns and downturns
5
Patterson-UTI U.S. rig count and U.S. drilling staff size
through June 15, 2016 Patterson-UTI U.S. Rig
Count vs. U.S. Drilling Staff Size Rig
Count Drilling Staff Size
|
 Managing Supply Chain 6 • Sourcing and Supply Security – Negotiated critical cost elements for both Drilling and Pressure Pumping – Solidified availability of strategic commodities • Reduced Costs in 2015 – Sand costs down 25% - 35% – Sand hauling costs down 25% - 35% – Pump parts costs down 15% - 20% – Chemical costs down as much as 40% |
 Contract Drilling |
 High Quality Drilling Rigs 128 30 3 APEX ® Rig Fleet by Drawworks Horsepower 1500hp 1000hp 2000hp 8 161 APEX ® Rigs |
 Majority of Adjusted EBITDA from APEX ® Rigs APEX ® Other Electric Mechanical Adjusted EBITDA Contribution by Rig Class *Adjusted EBITDA contribution by rig class excluding early termination revenues for the three months ended March 31,
2016. 9 |
 The APEX-XK ® • Enhanced X-Y mobility – Walk with full set-back of pipe in mast – More efficient rig up / rig down – Walking times average 45 minutes for 10’ – 15’ well spacing • Advanced environmental spill control integrated into drilling floor • Reduced number of truck loads for rig moves • 53 APEX-XK 1500 ® and four APEX- XK 1000 ® rigs in fleet http://patenergy.com/drilling/technology 10 |
 APEX-XK ® Integrated Walking System 11 |
 APEX-XK ® Rig Walking on Pad 12 http://patenergy.com/drilling/technology/apexwalk/ Video of APEX-XK ® Rig 12 |
 West Texas 12 Rigs Large Geographic Footprint PTEN’s Active Rig Count by Region as of June 22, 2016 Appalachia 18 Rigs East Texas 5 Rigs Mid-Continent 6 Rigs Rockies 3 Rigs South Texas 4 Rigs North Dakota 6 Rigs 13 Canada 1 Rig http://patenergy.com/ |
 Pressure Pumping |
 Modern Pumping Equipment < 5 Years 69% 5 - 10 Years 26% >10 Years 5% Frac Horsepower by Age 4 Years Average Age 15 |
 Modern Pumping Equipment Quintuplex 80% Modern Triplex 14% Legacy Triplex 6% Frac Horsepower by Pump Type 1Million Horsepower 16 Modern triplex pumps defined as being placed in service within the last seven years. |
 Southwest Region: Northeast Region: 35% 65% Frac Horsepower Fracturing horsepower: 663,800 Other horsepower: 32,165 Fracturing horsepower: 353,800 Other horsepower: 55,400 Market Focus Provides Economies of Scale Pressure Pumping Areas Horsepower distribution as of March 31, 2016 17 |
 Technology Focused PropLogic™ Sand Management System 18 • Fully enclosed well-site sand management system • More accurate than conventional sand trailers/bins • More efficient use of proppant as less sand is wasted |
 Technology Focused PowderStim ® Dry Friction Reducer 19 • System hydrates powder form of friction reducer directly into the fluid stream • Logistically safer and more efficient compared to liquefied friction reducers • Successful with both fresh water and heavy brines • More cost effective by utilizing produced water |
 Technology Focused Comprehensive Lab Services 20 • Ability to test vendors’ chemicals enhances quality controls • Unique in-house friction flow loop test assembly for faster test results • In-house lab services are faster and more cost efficient than outsourcing |
 Strong Financial Position |
 Investing in Our Company 22 $598 $637 $445 $453 $976 $1,012 $974 $662 $1,229 $744 $170 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016E Year End Capital Expenditures and Acquisitions ($ in millions) 2016 Capital expenditure forecast as of April 28, 2016 |
 Strong Financial Position $300 $300 $245 $2,489 Capital Structure ($ in Millions) 25% Debt/ Total Cap Stockholder’s Equity 4.97% Series A notes Due October 5, 2020 4.27% Series B notes Due June 14, 2022 Bank Term Loans Maturing September 27, 2017 23 * Debt and equity balances as of March 31, 2016. Total debt balance of $845 million includes $3.5 million of
debt issuance costs. The $245 million of
bank term loans includes quarterly principal payments totaling $54 million during the remainder of 2016. Principal payments in 2017 include two quarterly payments totaling $47
million and payments at the maturity date of $144
million. |
 Total Liquidity $500 $187 $ in Millions Line of Credit Availability Cash 24 • $187 million cash • $500 million revolver availability • Of $845 million debt – $245 million matures September 2017 – $300 million matures October 2020 – $300 million matures June 2022 * Debt and equity balances as of March 31, 2016. Total debt balance of $845 million includes $3.5 million of
debt issuance costs. The $245 million of
bank term loans includes quarterly principal payments totaling $54 million during the remainder of 2016. Principal payments in 2017 include two quarterly payments totaling $47
million and payments at the maturity date of $144
million. |
 Why Invest in Patterson-UTI Energy? • High Quality Assets – 161 APEX ® rigs comprised primarily of 1500 horsepower and pad capable rigs – Creating value through focus on well site execution • Technology leader – Leader in walking rigs for pad drilling – Innovator in deploying latest technologies for pressure pumping • Financially flexible – Strong balance sheet – History of share buybacks – Dividends – Scalable business structure 25 |
 J.P. Morgan Inaugural Energy Equity Investor Conference June 28, 2016 |
 Additional References |
 Three Months Ended March 31, Three Months Ended December 31, 2016 2015 2015 Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization
(Adjusted EBITDA)(1):
Net income (loss)
$
(70,503)
$
9,125
$
(58,658)
Income tax expense (benefit)
(35,430)
6,720
(27,511)
Net interest expense
10,690
8,258
9,391
Depreciation, depletion, amortization and
impairment 176,770
175,382
175,302
Impairment
of
goodwill
-
-
-
Adjusted EBITDA
$
81,527
$
199,485
$
98,524
Total revenue
$
268,939
$
657,699
$
338,566
Adjusted EBITDA margin (Adjusted EBITDA / Total
Revenue) 30.3%
30.3%
29.1%
Adjusted EBITDA by operating segment:
Contract drilling
$
86,003
$
187,230
$
95,681
Pressure pumping
5,611
31,903
10,904
Oil and natural gas
1,877
3,702
1,184
Corporate and other
(11,964)
(23,350)
(9,245)
Consolidated Adjusted EBITDA
$
81,527
$
199,485
$
98,524
(1)
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). PATTERSON-UTI ENERGY,
INC. Non-GAAP Financial Measures (Unaudited)
(dollars in thousands)
Non-GAAP Financial Measures
28 |