PTEN, HP, PDS

[dan_s]

Patterson-UTI beats by $0.04, beats on revs (PTEN) 16.85 : Reports Q1 (Mar) earnings of $0.62 per share, $0.04 better than the Capital IQ Consensus Estimate of $0.58; revenues rose 31.6% year/year to $746 mln vs the $733.16 mln consensus. With regard to its outlook, co states: "Based on contracts currently in place with an initial duration of at least six months, we expect to have an average of 153 rigs operating under term contract during the second quarter, and 132 rigs during the last three quarters of 2012. The comparable numbers for term contracts with an initial duration of at least one year are 136 in the second quarter, and 124 during the last three quarters of 2012."

HP came in slightly lower than forecast due to lots of rig moving expenses. Chairman and CEO Hans Helmerich commented, "The U.S. land market transition towards oil and liquids-rich-gas directed drilling continues, along with a clear trend towards more complex well designs and higher performance rig requirements. Our FlexRigs(R)*, combined with our premium service offering, are well positioned to make the transition. We are fortunate to have a customer roster with substantial multi-year drilling inventory that is capable of shifting targets and taking advantage of strong oil prices.
> HP has four more Flex Rigs going out on long-term contracts this quarter, so I would use today's weakness to add HP to your portfolio.

Precision Drilling misses by $0.06, misses on revs (PDS) 9.81 : Reports Q1 (Mar) earnings of CDN$0.39 per share, CDN$0.06 worse than the Capital IQ Consensus Estimate of CDN$0.45; revenues rose 21.9% year/year to CDN$640 mln vs the CDN$651.35 mln consensus. Co has an average of 136 rigs committed under term contracts for the second quarter of 2012, an average of 106 rigs contracted for the third quarter of 2012 and 97 for the fourth quarter of 2012. In Canada, term contracted rigs normally generate 250 utilization days per rig year due to the seasonal nature of well access, whereas in the United States and international they usually generate 365 utilization days per rig year in most regions. For 2012, based on current drilling rig contracts, Precision currently has an average of 54 rigs in Canada under term contract, 63 in the United States and five internationally. For 2013, Precision currently has term contracts in place for an average of 79 rigs, with 28 in Canada and 45 in the United States and six internationally. Capital expenditures are expected to be ~$975 mln for 2012, of which $222 mln was expended during the first quarter.

[setliff]

dan, did you listen to pten cc? there was a lot of big time selling during the call. am wondering why? it appears to be recovering.

[bearcatbob]

My take was that they are moving assets to the SW from the NE and that they are hoping the Utica will revive action in the NE (Ohio/Pa).

Bob

[setliff]

i just listened and apparently its all about pressure pumping and the over capacity there. pten doesn't see any relief there until 4q.

[dan_s]

I was tied up in meeting all afternoon. I will update the HP and PTEN forecast models tomorrow.