Patterson-uti Energy, Inc. · NASDAQ:PTEN
Patterson-uti Energy — Barclays CEO Energy-Power Conference 2023
30 slides from Patterson-uti Energy's conference presentation, Sep 5, 2023
Slide 1: Barclays CEO Energy-Power Conference
Patterson-UTI Energy, Inc. Barclays CEO Energy-Power Conference September 5-7, 2023
Slide 2: Forward Looking Statements
Forward Looking Statements This material and any oral statements made in connection with this material include "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Statements made which provide the Company’s or management’s intentions
Slide 3: Market Update
Patterson-UTI rig count expected to start increasing in October 2023 Four to possibly eight rigs currently expected to be reactivated during the fourth quarter Low-to-Mid-$30,000 revenue per day, including ancillary revenue, on recent contracts In conversations with customers for additional rig reac
Slide 4: Capital Allocation
Capital Allocation1 Prioritizing returns to shareholders through moderate growth capex Drilling Services Capital Allocation Capex for Contract Drilling is primarily focused on maintenance, where annual maintenance is just over $1 million per rig Growth capex is moderate and includes drill pipe renta
Slide 5: Patterson-UTI Energy
Patterson-UTI Energy The addition of NexTier Oilfield Solutions and Ulterra Drilling Technologies advances our strategy to enhance our positions in both drilling and completions, areas where Patterson-UTI has a strong 45-year history of operations and innovation.
Slide 6: Leading Provider of Critical Path Services
35% of total shale well cost1 Drilling 60% of total shale well cost1 Completions 1. Estimated well cost based on management estimates Leading Provider of Critical Path Services ~50% of E&P total well spend includes services provided by Patterson-UTI
Slide 7: The Combined Company
A leading provider of drilling and completions services in the U.S. Strong cash generation Focused on shareholder returns A leading revenue generator in North America >$7 billion of combined enterprise value Increased stock trading liquidity $2.0 billion of combined 1H23 annualized Adjusted EBITDA $
Slide 8: Key Highlights
Key Highlights Transformational Combinations Create the Premier Provider of Drilling and Completion Products and Services in U.S. Land Greater Size and Scale Provides for More Stable and Sustainable Financial Profile Best-in-Class Operational Execution and Technology Portfolio to Maximize Returns an
Slide 9: Conservative Capital Allocation and Balance Sheet Strategy
Conservative Capital Allocation and Balance Sheet Strategy Commitment to maintain a full investment grade profile Full Investment Grade Profile Senior Rating Baa3 BBB- BBB- Outlook Stable Stable Stable Rating date 9/16/2022 9/1/2023 9/1/2023 Existing Senior Notes Revolver Outstanding No Near-Term Bo
Slide 10: A New Industry Leader with Significant Size
A New Industry Leader with Significant Size Source: Company filings and Bloomberg. Data as of August 31, 2023. Note: $ in billions. * Implied enterprise value for Patterson-UTI on a combined basis using implied purchase price of Ulterra. *
Slide 11: NAM Revenue Generation Among the Industry Leaders
NAM Revenue Generation Among the Industry Leaders * Source: Company filings. Note: $ in billions. Data as of June 30, 2023, represents 1H23 annualized revenue. * 1H23 Annualized Revenue for Patterson-UTI on a combined basis
Slide 12: Strong Cash Flow Generation
Strong Cash Flow Generation Combination of Patterson-UTI, NexTier, and Ulterra expected to be accretive to earnings per share and free cash flow in 2024 $200 million of annual synergies expected within 18 months $2.0 billion of combined 1H23 annualized Adjusted EBITDA
Slide 13: Leading Provider of Contract Drilling Services
Leading Provider of Contract Drilling Services A super-spec rig is defined as at least a 1,500 horsepower, AC-powered rig that has at least a 750,000-pound hookload, a 7,500-psi circulating system, and is pad-capable. A Tier-1, super-spec rig is defined as a super-spec rig that also has a third mud
Slide 14: Patterson-UTI Active Rig Count
Patterson-UTI Active Rig Count 116 TOTAL By Region As of August 31, 2023 60 WEST TEXAS 17 NORTHEAST 11 MID-CONTINENT 9 EAST TEXAS 7 SOUTH TEXAS 6 ROCKIES 6 NORTH DAKOTA Broad Geographic Footprint Leveraged to the strongest drilling markets
Slide 15: A Leader in U.S. Land Completions Services
A Leader in U.S. Land Completions Services Patterson-UTI combined with NexTier is the second largest pressure pumping company in the U.S., owning a total of 3.3 million horsepower Nearly 2/3 of the combined company’s fleet is dual-fuel capable, reducing fuel costs and lowering emissions and making t
Slide 16: Pumping Hour Comparison
Pumping Hour Comparison 2022 Results, NexTier Frac with Integrated P&P vs. 3rd Party vs. w/ Non-NEX Wireline Crew Integrated w/ NexTier Wireline Increase in Daily Frac Operating Efficiency1 18% Source: 1NexTier 2022 Regional Case Study Integrated Wireline Plug & Perforation Spare Wireline Capacity H
Slide 17: Truckloads per Well
Truckloads per Well* Estimated for a 12,500 ton well w/ Lowest Carbon Footprint Maximum Payload = Fewest Trucks 27 Tons per load means up to 30% fewer truck trips to location 75% less NPT with NexMile™ Logistics Logistics NPT per Fleet* NexMile Logistics vs. 3rd Party Logistics Digital Integration =
Slide 18: Power Solutions Natural Gas Fueling
Power Solutions consistently increases natural gas consumption The Power Solutions Bottom Line… Every 10% of increased diesel displacement reduces fuel costs by more than $1.5 million annually per fleet 3rd Party Provider 3rd Party could not blend with CNG Power Solutions Natural Gas Fueling Elevati
Slide 19: NexHub Equipment Health Management
NexHub™ Equipment Health Management Drives higher equipment performance at lower operating costs +110% Engine Lifecycle +125% Power End Lifecycle +65% Transmission Lifecycle Annual CapEx reduced by more than $1.5 million annually, per fleet NexHub Implementation
Slide 20: Ulterra's Global Expansion
Competes in major drilling regions with dedicated sales teams and repair facilities supporting customers in over 30 countries Ulterra international revenue outside of NAM represents a significant growth opportunity Improving Saudi Arabia competitive position with increased Saudization targets (achie
Slide 21: Drill Bit Market Characteristics
Drill Bit Market Characteristics PDC Drill Bit Overview Polycrystalline Diamond Compact (PDC) Drill Bits Represent ~90% of the bits used in the U.S. oil & gas industry Drill bits drive drilling speed (ROP), duration (footage drilled) and tool face control (staying in the pay zone), resulting in mate
Slide 22: Comprehensive PDC Drill Bit Offering
Comprehensive PDC Drill Bit Offering Ulterra innovates and introduces key drill bit technologies that solve customer problems Oil and gas drill bit market only. Source: Company provided information Matrix is tungsten carbide CounterForce® Split Blade® RipSaw® WaveCut® Lateral Vibration 2013 Cuttings
Slide 23: Ulterra: Mission-Critical Technology Delivering Significant Value
Ulterra: Mission-Critical Technology Delivering Significant Value Ulterra’s bits represent a small fraction of well costs but deliver substantial value through higher ROP Bits represent <1% of well cost Sub-optimal bit selection results in excess cost and operator rig time Ulterra captures value for
Slide 24: Advanced Manufacturing & Repair Capabilities
Advanced Manufacturing & Repair Capabilities Source: Management records 1 Estimated sq. ft. upon completion of new facility estimated to be online by 2025 with full manufacturing capabilities Leduc, Alberta (40,800 sq. ft.) Saudi Arabia (~80,000 sq. ft.) 1 Fort Worth, Texas (114,000 sq. ft.) Global
Slide 25: Data Driven Designs Improve Drilling Efficiency
Data Driven Designs Improve Drilling Efficiency E&P operators require a partner that can keep pace with their rapid innovation cycle Constantly pushing the limits of drilling parameters (more weight-on-bit, higher flow-rates and extended laterals) Ulterra’s large scale, de-centralized engineering te
Slide 26: Ulterra's proprietary database of bit runs
Ulterra’s proprietary database of bit runs that houses ~80% of all bit runs on U.S. land Engineers analyze data to compare bit design specifics relative to downhole performance (rate of penetration) and repairs and maintenance damage data Data drives rapid product innovation and bit performance – co
Slide 27: Ulterra's Attractive Organic Growth Channels to New Markets
Ulterra’s Attractive Organic Growth Channels to New Markets Source: Ulterra management records Downhole Tools Geothermal Engineered in-house Uniquely placed in the Bottom Hole Assembly (“BHA”) to provide maximum protection of the mud motor or rotary steerable, Measurement-While-Drilling tool (“MWD”)
Slide 28: Appendix
Appendix @\ PATTERSON-UTI . 4
Slide 29: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted EBITDA on a pro forma basis taking into account the Ulterra and NexTier transactions as if they occurred on January 1, 2023. Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) is not defined by accounting principles genera
Slide 30: @ PATTERSON-UTI
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