From Global Hunter Securities
Patterson-UTI Energy Inc. (NASDAQ: PTEN; $15.83; Accumulate; $28.00 PT) Slight beat on its 3Q11 rig count guidance
· Today, PTEN disclosed relatively in-line 3Q11 rig count results. Details:
o September’s rig count averaged 225 (212 US, 13 Canada), +2 m/m (+2 US) and +41 y/y (+37 US, +4 Canada).
o Its 3Q11 rig count averaged 221 rigs (209 US, 12 Canada), +19 q/q (+10 US, +9 Canada) and 1 rig above its 220 guidance (+1 Canada) [I used 223 in my Q3 forecast. - Dan]
o As of this morning it had 228 rigs drilling, including 50 in W. TX, 38 in S. TX, 36 in the Rockies, 31 in Appalachia, 25 in E. TX, 22 in the MidCon, 18 in N. TX and 8 in Canada. [I'm using 235 in my Q4 forecast. - Dan]
o Relative to this time a month ago, it put rigs to work in S. TX (+3), W. TX (+2), the Rockies (+1), and Appalachia (+1), but lost a rig in the MidCon and 5 in Canada.
· Takeaway: Neutral to our 3Q11 EPS estimate of 64c (consensus: 63c). Beating its drilling margin guidance (+$350-$400/day q/q) and hitting its pressure pumping margin guidance (37% vs. 35.6% in 2Q11) will be the focus for the quarter, although company specific performance will likely be overshadowed by commodity price trends and E&P sentiment for 2012.
EPS per my forecast:
Q3 = $0.62
Q4 = $0.67
PTEN
Re: PTEN
Patterson-UTI Comments on Third Quarter 2011 Results
PTEN 18.74 0.00
Press Release Source: PATTERSON-UTI ENERGY, INC. On Wednesday October 12, 2011, 6:00 am EDT
HOUSTON, Oct. 12, 2011 /PRNewswire/ -- PATTERSON-UTI ENERGY, INC. (NASDAQ:PTEN - News) today announced that it currently expects third quarter of 2011 earnings per share to be similar to the second quarter of 2011.
Revenues for the third quarter of 2011 increased by 12% to $674 million, compared to $600 million for the second quarter of 2011. This increase includes approximately $50 million from our drilling segment and $25 million from our pressure pumping segment, partially offset by a decrease in revenue from the sale of oil and natural gas. The improved drilling revenue results from both higher rig count and average revenue per operating day. Pressure pumping revenue increased more than 12% sequentially despite the interruption of operations caused by hurricane related flooding in Appalachia.
Increases in operating expenses and non-cash costs (depreciation, depletion, amortization and impairment) are largely expected to offset the revenue improvements described above. Operating expenses for both drilling and pressure pumping increased as a result of higher activity levels and some cost inflation. Sequentially, average costs per operating day in the drilling segment also increased primarily as a result of higher repairs, maintenance and labor costs. Unusually high levels of repairs and maintenance expenses were incurred during the quarter in connection with operating the Company's conventional rig fleet. Improvements were made to allow these rigs to continue to operate at high utilization and to perform efficiently in the current environment. Labor costs increased primarily as a result of higher wages and additional training costs for field personnel in certain of the markets in which we operate. Operating expenses as a percentage of revenue for pressure pumping were higher primarily as a result of the weather delays in Appalachia.
The Company also said that it is retiring twenty-two of its mechanical drilling rigs. Components of twenty-one of these rigs will be transferred to spare parts inventory to support other rigs in the fleet. One rig was destroyed as a result of a well fire and has been retired. Our third quarter 2011 current expectation discussed above includes the financial impact of these retirements.
PTEN 18.74 0.00
Press Release Source: PATTERSON-UTI ENERGY, INC. On Wednesday October 12, 2011, 6:00 am EDT
HOUSTON, Oct. 12, 2011 /PRNewswire/ -- PATTERSON-UTI ENERGY, INC. (NASDAQ:PTEN - News) today announced that it currently expects third quarter of 2011 earnings per share to be similar to the second quarter of 2011.
Revenues for the third quarter of 2011 increased by 12% to $674 million, compared to $600 million for the second quarter of 2011. This increase includes approximately $50 million from our drilling segment and $25 million from our pressure pumping segment, partially offset by a decrease in revenue from the sale of oil and natural gas. The improved drilling revenue results from both higher rig count and average revenue per operating day. Pressure pumping revenue increased more than 12% sequentially despite the interruption of operations caused by hurricane related flooding in Appalachia.
Increases in operating expenses and non-cash costs (depreciation, depletion, amortization and impairment) are largely expected to offset the revenue improvements described above. Operating expenses for both drilling and pressure pumping increased as a result of higher activity levels and some cost inflation. Sequentially, average costs per operating day in the drilling segment also increased primarily as a result of higher repairs, maintenance and labor costs. Unusually high levels of repairs and maintenance expenses were incurred during the quarter in connection with operating the Company's conventional rig fleet. Improvements were made to allow these rigs to continue to operate at high utilization and to perform efficiently in the current environment. Labor costs increased primarily as a result of higher wages and additional training costs for field personnel in certain of the markets in which we operate. Operating expenses as a percentage of revenue for pressure pumping were higher primarily as a result of the weather delays in Appalachia.
The Company also said that it is retiring twenty-two of its mechanical drilling rigs. Components of twenty-one of these rigs will be transferred to spare parts inventory to support other rigs in the fleet. One rig was destroyed as a result of a well fire and has been retired. Our third quarter 2011 current expectation discussed above includes the financial impact of these retirements.
Re: PTEN
My Q3 EPS forecast was $0.62, so their average dayrate must be under what I used in the model.
Regardless, PTEN and all of the onshore drillers should report earnings and outlooks that support higher prices from where they are trading today.
We will be putting out a company profile on Unit Corp. (UNT) right after we see their 3rd quarter results. We are also working on HP.
Regardless, PTEN and all of the onshore drillers should report earnings and outlooks that support higher prices from where they are trading today.
We will be putting out a company profile on Unit Corp. (UNT) right after we see their 3rd quarter results. We are also working on HP.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: PTEN
Citi on PTEN:
Patterson-UTI Energy (Buy, Target Price $24)
On October 12, PTEN pre-announced 3Q11 earnings coming in "similar to" the
2Q11 reported EPS of $0.52 (vs. consensus of $0.63 and our previous estimate of
$0.63). The earnings shortfall was attributed to higher operating costs and noncash
expenses, including DD&A and impairments. Cost drivers for both drilling and
pressure pumping included higher activity levels, cost inflation, "unusually high"
R&M expenses on the conventional fleet, and higher wages and training costs in
certain markets. Pressure pumping margins were also negatively impacted by
weather delays in Appalachia. We have reduced our margin assumptions in both
segments, lowering 3Q11 EPS to $0.54 from $0.63, and 2011 EPS estimates to
$2.22 from $2.30.
Drilling and completion activity remained robust, as revenues came in slightly higher
than expected at $674M (vs. our $672M and $669M consensus). Drilling revenues
increased q/q by ~$50M to ~$436M (vs. our $434M estimate), and pressure
pumping revenues grew q/q by ~$25M to ~$225M (vs. our $227M estimate) in
3Q11. The company is retiring 22 mechanical rigs, and the costs incurred in the
quarter are inclusive of the financial impacts of these retirements.
Land drilling rig counts for PTEN appear to be tracking with our expectations of an
average of 220 rigs in 3Q11 based on its monthly activity reports. Despite the
macro economic concerns, the company appears to have continued to expand its
working rig count, benefiting from the Canadian rebound, with its North American rig
count trending higher from 202 rigs in 2Q11 to an average of approximately 221 rigs
operating in 3Q11 (216 in July, 223 in August, and 225 in September).
Given the sources of margin pressure and strong demand, the profit warning
suggest more growing pains associated with refurbishing the conventional fleet as
rigs are readied to operate at higher levels of efficiency in the field. We would not
consider this announcement a cause of concern, although margins are likely to face
additional pressures as cold-stacked or otherwise idle rigs are reactivated.
Patterson-UTI Energy (Buy, Target Price $24)
On October 12, PTEN pre-announced 3Q11 earnings coming in "similar to" the
2Q11 reported EPS of $0.52 (vs. consensus of $0.63 and our previous estimate of
$0.63). The earnings shortfall was attributed to higher operating costs and noncash
expenses, including DD&A and impairments. Cost drivers for both drilling and
pressure pumping included higher activity levels, cost inflation, "unusually high"
R&M expenses on the conventional fleet, and higher wages and training costs in
certain markets. Pressure pumping margins were also negatively impacted by
weather delays in Appalachia. We have reduced our margin assumptions in both
segments, lowering 3Q11 EPS to $0.54 from $0.63, and 2011 EPS estimates to
$2.22 from $2.30.
Drilling and completion activity remained robust, as revenues came in slightly higher
than expected at $674M (vs. our $672M and $669M consensus). Drilling revenues
increased q/q by ~$50M to ~$436M (vs. our $434M estimate), and pressure
pumping revenues grew q/q by ~$25M to ~$225M (vs. our $227M estimate) in
3Q11. The company is retiring 22 mechanical rigs, and the costs incurred in the
quarter are inclusive of the financial impacts of these retirements.
Land drilling rig counts for PTEN appear to be tracking with our expectations of an
average of 220 rigs in 3Q11 based on its monthly activity reports. Despite the
macro economic concerns, the company appears to have continued to expand its
working rig count, benefiting from the Canadian rebound, with its North American rig
count trending higher from 202 rigs in 2Q11 to an average of approximately 221 rigs
operating in 3Q11 (216 in July, 223 in August, and 225 in September).
Given the sources of margin pressure and strong demand, the profit warning
suggest more growing pains associated with refurbishing the conventional fleet as
rigs are readied to operate at higher levels of efficiency in the field. We would not
consider this announcement a cause of concern, although margins are likely to face
additional pressures as cold-stacked or otherwise idle rigs are reactivated.
Re: PTEN
MARKET TALK: BMO Downgrades Oil-Service Names As 2012 Looms 10/14 07:33 AM
--------------------------------------------------------------------------------
8:33 (Dow Jones) When Halliburton (HAL) kicks off earnings season for oil- services companies Monday, BMO says watchers won't be paying attention to 3Q results--at least much. "At the very least, there is rising evidence that expected growth for 2012 requires trimming." BMO downgrades Baker Hughes (BHI:$53.3800,$-0.1000,-0.19%) , Patterson-UTI (PTEN), Nabors (NBR), Noble (NE) and Rowan (RDC) to market perform while cutting next year's profit estimates broadly as "we expect upstream activity in North America to slow with reduced oil-price outlook." Shares in the space have already fell sharply the past several months amid slowdown concerns. (kevin.kingsbury@dowjones.com)
Call us at (212) 416-2354 or email kevin.kingsbury@dowjones.com
reckon BMO is w/o any outside news???????
Utica 1 com Shale Drilling Permits Skyrocket In September
ments | by: Investment U October 14, 2011 | includes: APC, CHK, CNX, CRZO, CVX, DVN, EVEP, GPOR, HES, MRO, PETD, REXX, RRC
By Justin Dove
On Tuesday, the U.S. Energy Information Agency (EIA) released a report about the sharp increase in Ohio shale drilling permits. Steve McDonald recently wrote about the land value increases occurring in the region.
As seen in the graph below, there were 20 times the permits granted in just September of 2011 as in the full year of 2010.
--------------------------------------------------------------------------------
8:33 (Dow Jones) When Halliburton (HAL) kicks off earnings season for oil- services companies Monday, BMO says watchers won't be paying attention to 3Q results--at least much. "At the very least, there is rising evidence that expected growth for 2012 requires trimming." BMO downgrades Baker Hughes (BHI:$53.3800,$-0.1000,-0.19%) , Patterson-UTI (PTEN), Nabors (NBR), Noble (NE) and Rowan (RDC) to market perform while cutting next year's profit estimates broadly as "we expect upstream activity in North America to slow with reduced oil-price outlook." Shares in the space have already fell sharply the past several months amid slowdown concerns. (kevin.kingsbury@dowjones.com)
Call us at (212) 416-2354 or email kevin.kingsbury@dowjones.com
reckon BMO is w/o any outside news???????
Utica 1 com Shale Drilling Permits Skyrocket In September
ments | by: Investment U October 14, 2011 | includes: APC, CHK, CNX, CRZO, CVX, DVN, EVEP, GPOR, HES, MRO, PETD, REXX, RRC
By Justin Dove
On Tuesday, the U.S. Energy Information Agency (EIA) released a report about the sharp increase in Ohio shale drilling permits. Steve McDonald recently wrote about the land value increases occurring in the region.
As seen in the graph below, there were 20 times the permits granted in just September of 2011 as in the full year of 2010.