pten-8k_20200722.htm
false 0000889900 true 0000889900 2020-07-22 2020-07-22 0000889900 us-gaap:CommonStockMember 2020-07-22 2020-07-22 0000889900 pten:PreferredStockPurchaseRightsFirstMember 2020-07-22 2020-07-22

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 22, 2020

 

Patterson-UTI Energy, Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware

1-39270

75-2504748

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

 

 

 

10713 W. Sam Houston Pkwy N, Suite 800, Houston, Texas

 

77064

(Address of Principal Executive Offices)

 

(Zip Code)

Registrant’s Telephone Number, Including Area Code: 281-765-7100

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol

 

Name of each exchange on which registered

Common Stock, $0.01 Par Value

 

PTEN

 

The Nasdaq Global Select Market

Preferred Stock Purchase Rights

 

 

 

The Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

 


 

Item 1.01 Entry into a Material Definitive Agreement.

The information set forth in Item 3.03 of this report is incorporated into this Item 1.01 by reference.

Item 2.02 Results of Operations and Financial Condition.

On July 23, 2020, Patterson-UTI Energy, Inc. (the “Company”) announced financial results for the three and six months ended June 30, 2020. The press release, dated July 23, 2020, is furnished as Exhibit 99.1 to this report and incorporated by reference herein.

The information furnished pursuant to Item 2.02, including Exhibit 99.1 shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, shall not otherwise be subject to the liabilities of that section and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.

Item 3.03. Material Modification to Rights of Security Holders.

The Company and Continental Stock Transfer & Trust Company (the “Rights Agent”) entered into an amendment, effective as of July 22, 2020 (the “Amendment”), to the Stockholder Rights Agreement, dated as of April 22, 2020 (the “Rights Agreement”), by and between the Company and the Rights Agent.

The Amendment revises the definition of “Acquiring Person” in the Rights Agreement to exclude Excluded Persons. The Amendment defines “Excluded Persons” as BlackRock, Inc. (collectively with the investment funds and accounts for which it acts or may act as manager and/or investment advisor, “BlackRock”) and The Vanguard Group, Inc. (together with the investment funds and accounts for which it acts or may act as manager and/or investment advisor, “Vanguard”). The Board of Directors of the Company may determine, in its sole discretion, that BlackRock or Vanguard is no longer an “Excluded Person” if any of the representations, warranties, conditions or provisions in letter agreements between the Company and BlackRock or Vanguard, respectively, are breached or cease to true, correct and complete in all material respects. Under each letter agreement, BlackRock and Vanguard represent, respectively, among other things, that:

 

Such investor will not acquire 20% or more of the then-outstanding common stock of the Company (the “Common Stock”);

 

No single fund of such investor holds or will hold an economic interest (taking into account the ownership rules of Section 382 of the Internal Revenue Code) of 4.9% or more of the Common Stock, other than as disclosed to the Company; and

 

Such investor will only acquire beneficial ownership of Common Stock in the ordinary course of business and not with the purpose or effect of changing or influencing control of the Company.

The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the Amendment, a copy of which is filed as Exhibit 4.1 to this report and which is incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits:

 

4.1

 

First Amendment to Stockholder Rights Agreement, dated as of July 22, 2020, by and between Patterson-UTI Energy, Inc. and Continental Stock Transfer & Trust Company, as rights agent.

 

 

 

99.1

 

Press Release dated July 23, 2020 announcing financial results for the three and six months ended June 30, 2020.

 

 

 

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

Patterson-UTI Energy, Inc.

 

 

 

 

 

July 23, 2020

 

By:

 

/s/ C. Andrew Smith

 

 

 

 

Name: C. Andrew Smith

 

 

 

 

Title: Executive Vice President and Chief Financial Officer

 

 

 

pten-ex41_89.htm

Exhibit 4.1

FIRST AMENDMENT TO

STOCKHOLDER RIGHTS AGREEMENT

THIS FIRST AMENDMENT TO STOCKHOLDER RIGHTS AGREEMENT, dated as of July 22, 2020 (this “Amendment”), is by and between Patterson-UTI Energy, Inc., a Delaware corporation (the “Company”), and Continental Stock Transfer & Trust Company as rights agent (the “Rights Agent”). This Amendment amends that certain Stockholder Rights Agreement, dated as of April 22, 2020 (the “Rights Agreement”), by and between the Company and the Rights Agent. All capitalized terms used in this Amendment but not otherwise defined herein shall have the meanings ascribed to such terms in the Rights Agreement.

RECITALS

WHEREAS, pursuant to Section 27 of the Rights Agreement, prior to the Stock Acquisition Date, the Company, by action of the Board, may from time to time and in its sole and absolute discretion, supplement or amend the Rights Agreement in any respect without the approval of any holders of Rights;

WHEREAS, pursuant to Section 27 of the Rights Agreement, any supplement or amendment to the Rights Agreement must be duly executed by the Company and the Rights Agent in order to be effective;

WHEREAS, to the knowledge of the Company, the Stock Acquisition Date has not yet occurred;

 

WHEREAS, the Company has delivered to the Rights Agent a certificate from an appropriate officer of the Company that states that this Amendment complies with the terms of the Rights Agreement and has requested that the Rights Agent execute this Amendment.

NOW, THEREFORE, in consideration of the premises and the mutual agreements set forth herein, the parties hereby agree as follows:

Section 1.Amendments to Rights Agreement. The Rights Agreement is hereby amended as follows:

(a)The first sentence in the definition of “Acquiring Person” in Section 1 of the Rights Agreement is hereby deleted and replaced with the following:

Acquiring Person” shall mean any Person which, together with all of its Related Persons, is the Beneficial Owner of the Specified Percentage or more of the shares of Common Stock then outstanding, but shall exclude (x) Exempt Persons, (y) Grandfathered Persons and (z) Excluded Persons.

(b)The following is added as a new definition to Section 1 of the Rights Agreement:

 

Excluded Person” shall mean (x) BlackRock, Inc. (collectively with all of  the investment funds and accounts for which it acts or may in the future act, as manager and/or investment advisor, “BlackRock”) and (y) The Vanguard Group, Inc. (collectively with all of the investment funds and accounts for which it acts or may in the future act, as manager and/or investment advisor, “Vanguard”); provided, however, that the Board may determine, in its sole and absolute discretion, that BlackRock or Vanguard will cease to be an “Excluded Person” immediately upon such determination if any of the representations, warranties, conditions or provisions contained in the Rights Agreement Reliance Letter dated July 22, 2020 by and between the Company and BlackRock, Inc. (and any amendments thereto) or the Rights Agreement Reliance Letter dated July 22, 2020 by and between the Company and The Vanguard Group, Inc. (and any amendments thereto), respectively, are breached or cease to be true, correct and complete in all material respects.

 

Section 2.Remaining Terms; Controlling Agreement. All other provisions of the Rights Agreement that are not expressly amended hereby shall continue in full force and effect. From and after the execution and delivery of this Amendment, any references to the Rights Agreement in the Rights Agreement and

 

 


 

other agreements or instruments shall be deemed to refer to the Rights Agreement as amended pursuant to this Amendment. In the event of any conflict between the terms of this Amendment and the Rights Agreement, this Amendment shall control.

Section 3.Severability. If any term, provision, covenant or restriction of this Amendment is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Amendment shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

Section 4.Governing Law. This Amendment shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts made and to be performed entirely within such State.

Section 5.Descriptive Headings. Descriptive headings of the several Sections of this Amendment are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

Section 6.Counterparts. This Amendment may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. Delivery of an executed signature page of the Amendment by facsimile or other customary means of electronic transmission (e.g., “pdf”) shall be as effective as delivery of a manually executed counterpart hereof.

 

[Signature page follows]

2

 


 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.

 

Patterson-UTI Energy, Inc.


By:/s/ C. Andrew Smith
Name: C. Andrew Smith
Title:
Executive Vice President and Chief

Financial Officer

Continental Stock Transfer & Trust Company


By:/s/ Erika Young
Name: Erika Young
Title:
Vice President

 

Signature Page to First Amendment to Stockholder Rights Agreement

pten-ex991_6.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.  


 


 

About Patterson-UTI

 

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.


 


 

PATTERSON-UTI ENERGY, INC.

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

 

 


 

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

 

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

 

 


 

PATTERSON-UTI ENERGY, INC.

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