PTEN

[dan_s]

Updated company profiles for both HP and PTEN, including my forecast models and Fair Value estimates, will be sent to all EPG members on Monday, February 6th via "EPG Flash Alert". My updated forecasts (Excel spreadsheets) are already posted under the Sweet 16 Tab. - Dan

NOTE: PTEN average drilling rigs operating in Q4 was 232. They have yet to see a decline in their rig utilization rate due to the decline in natural gas prices. They are moving more rigs into the oil and "wet gas" plays where economics are much stronger for new wells.

HOUSTON, Feb. 3, 2012 /PRNewswire/ -- PATTERSON-UTI ENERGY, INC. (NASDAQ: PTEN - News) today reported that for the month of January 2012, the Company had an average of 241 drilling rigs operating, including 225 rigs in the United States and 16 rigs in Canada.

Average drilling rigs operating reported in the Company's monthly announcements represent the average number of the Company's drilling rigs that were operating under a drilling contract. The Company cautioned that numerous factors in addition to average drilling rigs operating can impact the Company's operating results and that a particular trend in the number of drilling rigs operating may or may not indicate a trend in or be indicative of the Company's financial performance. The Company intends to continue providing monthly updates on drilling rigs operating shortly after the end of each month.

About Patterson-UTI

Patterson-UTI Energy, Inc. subsidiaries provide onshore contract drilling and pressure pumping services to exploration and production companies in North America. Patterson-UTI Drilling Company LLC has approximately 330 marketable land-based drilling rigs and operates primarily in the oil and natural gas producing regions of Texas, New Mexico, Oklahoma, Arkansas, Louisiana, Mississippi, Colorado, Utah, Wyoming, Montana, North Dakota, Pennsylvania, West Virginia, Ohio and western Canada. Universal Pressure Pumping, Inc. and Universal Well Services, Inc. provide pressure pumping services primarily in Texas and the Appalachian region.

[cviller]

Dan,
Do you have any feel for whether PTEN's management is concerned for the shareholder's interest in a higher stock price? If it's trading for less than three times cash flow... where does it make sense to buy back shares instead of more rigs? Thanks.

[dan_s]

I do think they have a share buyback program and I know they have done it in the past. PTEN also pays a dividend and they could increase it.

They should keep building Apex rigs as long as they can get them out on long-term contracts. The higher the number of Apex rigs out working, the higher their average dayrate. There is a waiting list for these high quality / high horsepower rigs. They are perfect for drilling the long horizontal wells in the shale plays. Check this out

Period, # of rigs working, Average Dayrate
2011 - Actual
Q1, 207, $20,240
Q2, 202, $21,000 < Always a dip in rig count in Q2 due to Spring Break-up
Q3, 221, $21,440
Q4, 232, $21,980
2012 - Forecast
Q1, 242, $22,300
Q2, 235, $22,500
Q3, 245, $23,000
Q4, 250, $23,500

Average Dayrate continues to climb with each Apex rig that leaves the yard.

[setliff]

if you want pten under 20, today maybe your last chance. we've got a breakout occuring.

jim