Patterson-UTI Energy Reports Financial Results for Three and Six Months Ended June 30, 2012
Repurchased 4.7 Million Shares 07/26 05:00 AM
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HOUSTON, July 26, 2012 /PRNewswire/ -- PATTERSON-UTI ENERGY, INC. (PTEN:$15.8235,$0.9435,6.34%) today reported financial results for the three months ended June 30, 2012. The Company reported net income of $92.5 million, or $0.60 per share, for the second quarter of 2012, an increase of 13% compared to net income of $81.6 million, or $0.52 per share, for the quarter ended June 30, 2011. Revenues for the second quarter of 2012 were $681 million, compared to $600 million for the second quarter of 2011, an increase of 14%.
The Company reported net income of $190 million, or $1.22 per share, for the six months ended June 30, 2012, compared to net income of $153 million, or $0.98 per share, for the six months ended June 30, 2011. Revenues for the six months ended June 30, 2012 were $1.4 billion, compared to $1.2 billion for 2011.
The financial results for the three months ended June 30, 2012 include a pretax gain on the sale of assets of $27.2 million ($0.11 per share) related to the sale of the Company's flowback operations and the auction sale of certain excess drilling assets.
During the quarter, the Company repurchased approximately 4.7 million shares, or more than 3% of its outstanding shares, for $70 million under the existing share repurchase program. Yesterday, the Board of Directors increased the Company's authorization for share repurchases, which now stands at $150 million.
Douglas J. Wall, Patterson-UTI's Chief Executive Officer, stated, "Our drilling activity during the second quarter was negatively impacted by the seasonal slowdown in Canadian activity and to a lesser extent by the U.S. market conditions. Our average number of rigs operating was 224, including 224 in the United States and less than 1 rig in Canada. This compares to an average of 237 rigs operating in the first quarter of 2012, including 224 in the United States and 13 in Canada."
Mr. Wall added, "In the United States, average revenue per operating day increased sequentially by $270. In Canada, the seasonal slowdown negatively impacted our overall average revenue per operating day for the second quarter of 2012, which decreased by $80 to $22,570, compared to $22,650 for the first quarter of 2012.
"Average direct costs per operating day for the second quarter of 2012 increased to $13,370 from $13,080 for the first quarter of 2012. Costs associated with the movement of rigs between markets and customers contributed to the increase.
"As of the end of the second quarter, we had term contracts providing for approximately $1.5 billion of dayrate drilling revenue. Based on contracts currently in place with an initial duration of at least six months, we expect to have an average of 141 rigs operating under term contracts during the third quarter, and 131 rigs during the second half of 2012. At the end of the quarter, we had 6 rigs under term contracts that were on standby rates.
"We completed 4 new Apex™ rigs during the second quarter, achieving the significant milestone of completing our 100th Apex™ rig. We remain on track to build 24 new Apex™ rigs during 2012, of which 17 are currently under contract. We remain confident in the demand for advanced technology rigs, the returns to be achieved from building these rigs and plan to continue upgrading our rig fleet.
"Our pressure pumping activity during the second quarter was better than we expected. Although our revenues declined by 15% sequentially to $206 million, we fared well given the difficult market conditions. In this environment, we focused our efforts on cutting costs, which positively impacted our margins during the quarter and EBITDA decreased by only 10%. Market conditions remain challenging and we continue to be vigilant with respect to costs.
"Based on new equipment orders that were placed in mid-2011, we are still taking delivery of new pressure pumping equipment, but we do not intend to increase our active fleet until market conditions warrant," he concluded.
Mark S. Siegel, Chairman of Patterson-UTI, stated, "Our industry entered the second quarter with substantial optimism respecting drilling and fracing in oil and liquids regions, and considerable pessimism respecting the prospects for the natural gas markets. As the quarter unfolded, oil prices declined, and more importantly, our customers became more concerned about the direction of oil prices. In turn, operators took an increasingly cautious outlook towards long-term capital commitments for oil projects.
"Faced with these market conditions, our drilling and pressure pumping operations both had successful operating quarters reflecting their strong ability to adapt quickly to fast-changing circumstances. Equipment and labor were moved efficiently between customers and regions with only minimal losses of revenue.
"Our nimble operations were complemented by the financial transactions we completed during the quarter, including the sales of non-core assets, the repurchase of more than 3% of our Company's common stock and the previously announced private placement of $300 million of unsecured 10-year senior notes at a rate of 4.27%. The result of these operational and financial achievements increased our financial flexibility and strengthened our balance sheet, so that at June 30, 2012, we had $75.3 million in cash and $360 million available under our revolving credit facility.
"Our operational and financial flexibility provides a base upon http://finance.yahoo.com/news/patterson ... .htmlwhich to further build shareholder value. We will continue to weigh opportunistic share repurchases, acquisitions and the further newbuild additions to our rig fleet; all in order to seek the best returns for our shareholders.
"Although we expect some decline in activity levels and downward pricing pressure, with oil prices now near $90, and with natural gas prices above $3 – far better than the sub-$2 price that had been widely predicted for the end of summer, we are seeing some customers start to consider modest increases in their drilling and fracing programs," he concluded.
The Company declared a quarterly cash dividend on its common stock of $0.05 per share, to be paid on September 28, 2012 to holders of record as of September 14, 2012.
All references to "net income 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, 2012 is scheduled for July 26, 2012 at 9:00 a.m. Central Time. The dial-in information for participants is 866-277-1181 (Domestic) and 617-597-5358 (International). The Passcode for both numbers is 79128262. The call is also being webcast and can be accessed through the Investor Relations section at www.patenergy.com. Webcast participants should log on 10-15 minutes prior to the scheduled start time. Replay of the conference call will be available at www.patenergy.com through August 9, 2012 and at 888-286-8010 (Domestic) and 617-801-6888 (International) through August 30, 2012. The Passcode for both telephone numbers is 61564948.
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6:26AM Patterson-UTI beats by $0.16, beats on revs (PTEN) 14.88 : Reports Q2 (Jun) earnings of $0.60 per share, $0.16 better than the Capital IQ Consensus Estimate of $0.44; revenues rose 13.5% year/year to $681 mln vs the $665.37 mln consensus. During the quarter, the Company repurchased ~4.7 million shares, or more than 3% of its outstanding shares, for $70 million under the existing share repurchase program. Yesterday, the Board of Directors increased the Company's authorization for share repurchases, which now stands at $150 million. "Our drilling activity during the second quarter was negatively impacted by the seasonal slowdown in Canadian activity and to a lesser extent by the U.S. market conditions. Our average number of rigs operating was 224, including 224 in the United States and less than 1 rig in Canada. This compares to an average of 237 rigs operating in the first quarter of 2012, including 224 in the United States and 13 in Canada."