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Patterson-Uti Energy Reports Financial Results For Three And Nine

The following excerpt is from the company's SEC filing.

HOUSTON, Texas – October 22, 2015 – PATTERSON-UTI ENERGY, INC.

(NASDAQ: PTEN) today reported financial results for the three and nine months ended September 30, 2015. Including the non-cash charges discussed below, the Company reported a net loss of $226 million, or $1.54 per share, for the third quarter of 2015, compared to net income of $16.0 million, or $0.11 per share, for the quarter ended September 30, 2014. Revenues for the third quarter of 2015 were $422 million, compared to $846 million for the third quarter of 2014.

For the nine months ended Septemb er 30, 2015, the Company reported a net loss of $236 million, or $1.61 per share, compared to net income of $105 million, or $0.71 per share, for the nine months ended September 30, 2014. Revenues for the nine months ended September 30, 2015, were $1.6 billion, compared to $2.3 billion for the same period in 2014.

The financial results for the three months ended September 30, 2015 include pretax non-cash charges totaling $280 million ($187 million after-tax, or $1.28 per share). These charges include $125 million from the impairment of all goodwill associated with the Company’s pressure pumping business, $131 million from the write-down of drilling equipment primarily related to mechanical rigs and spare rig components, $22.0 million from the write-down of pressure pumping equipment and closed facilities and $1.9 million related to the impairment of certain oil and natural gas properties. For the nine months ended September 30, 2015, the financial results also include pretax charges of $19.8 million related to a legal settlement and the impairment of certain oil and natural gas properties during the first six months of 2015.

Last year’s financial results for the three and nine months ended September 30, 2014, include a pretax non-cash charge of $77.9 million related to the retirement of mechanical rigs and the write-off of excess spare rig components.

Andy Hendricks, Patterson-UTI’s Chief Executive Officer, stated, “During the third quarter, our rig count averaged 105 rigs in the United States and four rigs in Canada, compared to the second quarter average of 122 rigs in the United States and two in Canada. Current commodity prices are, of course, negatively impacting drilling activity. For the month of October, we expect our average rig count will be 92 in the United States and four in Canada.”

Mr. Hendricks added, “We recognized $28.9 million of revenues related to early contract terminations in contract drilling during the third quarter. These early termination revenues positively impacted our total average rig revenue per day of $26,010 by $2,870. Excluding early termination revenue, total average rig revenue per day during the third quarter would have been $23,140, compared to $24,330 per day in the second quarter.

“Total average rig operating costs per day during the third quarter decreased $140 to $13,580 from $13,720 in the second quarter. Excluding the positive impact from early termination revenues in both the second and third quarters, total average rig margin per day was $9,560 during the third quarter, compared to $10,600 during the second quarter.

“At the end of the third quarter our rig fleet included 160 APEX

rigs. During the fourth quarter we expect to add one additional new APEX

rig under contract to our fleet. We currently have no plans for additional newbuild rigs in 2016.

“As of September 30, 2015, we had term contracts for drilling rigs providing for more than $800 million of future dayrate drilling revenue. Based on contracts currently in place, we expect an average of 71 rigs operating under term contracts during the fourth quarter, and an average of 45 rigs operating under term contracts during 2016.

“We have reduced our mechanical rig fleet to 19 rigs with a combined net book value of $13.1 million. We currently believe there is value to keeping these rigs in our fleet, although we do not expect these rigs to generate meaningful future cash flow.

“In pressure pumping, activity and pricing were lower than we expected during the third quarter. Pressure pumping revenue during the third quarter was $154 million compared to $177 million in the second quarter. Importantly, while pressure pumping Adjusted EBITDA declined in the third quarter to $11.8 million from $29.5 million in the second quarter, we generated positive Adjusted EBITDA,” he concluded.

Mark S. Siegel, Chairman of Patterson-UTI, stated, “Industry conditions remain challenging. Low commodity prices are impacting E&P spending, thereby reducing demand and pricing for drilling and pressure pumping services. We believe that pricing in the pressure

pumping industry has...


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