Patterson-uti Energy, Inc. · NASDAQ:PTEN
Patterson-uti Energy — UBS Global Oil and Gas Conference 2012
38 slides from Patterson-uti Energy's conference presentation, May 22, 2012
Slide 1: UBS Global Oil and Gas Conference
UBS Global Oil and Gas Conference Exhibit 99.1 Patterson-UTI Energy, Inc. Patterson-UTI Energy, Inc. UBS Global Oil and Gas Conference May 23, 2012 May 23, 2012
Slide 2: Forward Looking Statements
2 2 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, beliefs, expectations
Slide 3: A Transformation in the Energy Industry
3 PTEN Overview The Energy Environment PTEN’s Land Drilling Business PTEN’s Well Stimulation Business PTEN Investment Highlights Conclusions A Transformation in the Energy Industry… Presentation • • • • • • A Transformation in the Energy Industry… …A Transformation at PTEN
Slide 4: Overview of Patterson-UTI Energy, Inc.
4 One of the “Big 3” US land drillers (drilling ~65% of total 2011 revenues) One of the top pressure pumping companies in the US (pressure pumping ~33% of total 2011 revenues) Substantial investment in new drilling and pressure pumping equipment Strong history of creating shareholder equity Trading
Slide 5: Changing Energy Environment
5 Source: US Energy Information Administration, Short-Term Energy Outlook, May 8, 2012 Decades of Declining US Crude Oil Production… Reversed in 2009 Changing Energy Environment
Slide 6: Changing Energy Environment
6 Source: US Energy Information Administration, Short-Term Energy Outlook, May 8, 2012 Petroleum Imports as a Percent of Total Consumption… More Demand Being Satisfied With US Production Changing Energy Environment
Slide 7: Changing Energy Environment – North America Land-Based Energy
7 Unconventional drilling and well completion has evolved: A “manufacturing” approach to drilling and well completion Focus on oil & liquids rich plays Unconventional drilling and well completion techniques being applied to historically conventional basins Changing Energy Environment – North America
Slide 8: PTEN's Drilling Business
PTEN’s Drilling Business Changing Energy Environment – Land-Based Drilling PTEN’s Drilling Business
Slide 9: Strong US Rig Count 2010 - Current
9 Strong US Rig Count 2010 - Current PTEN’s Drilling Business
Slide 10: PTEN's Drilling Business: Oil & Liquids Focus
10 Increasing focus on oil & liquids rich plays Horizontal drilling techniques developed for shale gas have been a “game changer” for oil and liquids rich shales Approximately 68% of PTEN operating rigs are drilling for oil or liquids “Fit-for-purpose” rigs are very active in oil & liquids rich play
Slide 11: PTEN's Active U.S. Land Drilling Rigs as of May 2012
11 PTEN’s Active U.S. Land Drilling Rigs as of May 2012 East Texas Appalachian Basin North Texas Rockies South Texas 38 Rigs 32 Rigs 25 Rigs 45 Rigs 16 Rigs 15 Rigs Permian Basin Mid-Continent 56 Rigs PTEN’s Drilling Business
Slide 12: New APEX Rigs Have Significantly Increased Fleet Quality
12 New APEX ™ Rigs Have Significantly Increased Fleet Quality. PTEN’s Drilling Business 24 New Rigs expected to be added in 2012
Slide 13: Three Types of Land Rigs for New Wells
13 PTEN has designed three types of land rigs for these “new wells”: Each designed to meet customer demands in different markets Each has specific applications for which it is “most suitable” Significance: Drilling is an integral part of the well “manufacturing” business rig moves APEX Walking ™ rig
Slide 14: APEX 1000, APEX 1500, APEX Walking
14 APEX 1000™ APEX 1500™ APEX Walking™ PTEN’s Drilling Business •1000 HP drawworks •Small footprint, big rig capability •Fast move & rig-up •Walking system is an optional feature •1500 HP drawworks •Great all purpose rig •Fast move & rig-up •Ideal for Eagle Ford, Barnett, and Haynesville •1000 to 20
Slide 15: Rig Fleet Composition 2012
…and Expected as of December 31, 2012 APEX 1500 APEX 1000 APEX Walking Other Electric Rigs 15 Preferred Rigs as of March 31, 2012 54 15 46 54 ~170 by the end of 2012 40 13 43 54 TM TM TM Total New Rigs Class PTEN’s Drilling Business 12/31/2012 24 new rigs planned in 2012 3/31/2012 PTEN has approxima
Slide 16: Video of Walking Rig Moving
PTEN’s Drilling Business Video of Walking Rig Moving Video of Walking Rig Moving
Slide 17: Other Rigs in the Fleet and Upgrade Program
17 PTEN has approximately 180 other rigs in the fleet of which approximately 90 are active Major upgrade program has provided: PTEN commitment to customers and service PTEN’s large fleet provides substantial “upside” if drilling continues to increase Improved mud systems Iron roughnecks and other au
Slide 18: Term Contracts
18 Term contracts* PTEN expects to average 153 rigs under term contract in the second quarter of 2012 and 132 during the last three quarters of 2012 Approximately 68% of active rigs in the US are committed under term contracts Provides estimated future dayrate drilling revenue stream of approximatel
Slide 19: PTEN's Pressure Pumping Business
PTEN’s Pressure Pumping Business Changing Energy Environment – Well Stimulation PTEN’s Pressure Pumping Business
Slide 20: Continuing Significance of Well Stimulation
20 Continuing Significance of Well Stimulation Shale and other unconventional plays changed the business increases in horizontal completions number of stages per well higher HP requirements pressures and higher volumes Changing equipment (“quints”) and crew competencies Key to unlocking long lateral
Slide 21: A Significant Player in Growing Markets
21 Fracturing horsepower: 313,500 Other horsepower: 20,270 Frac Crews under contract : 3 Fracturing horsepower: 265,500 Other horsepower: 61,300 Frac Crews under contract: 2 A Significant Player in Growing Markets Approximately 155,000 HP under term contract 46% 54% Fracturing Horsepower PTEN’s Pres
Slide 22: Recent Investments in Pressure Pumping
22 Recent Investments in Pressure Pumping… … Have Increased Fleet Size and Quality * Includes acquisition of pressure pumping assets from Key Energy PTEN’s Pressure Pumping Business
Slide 23: Strong Growth in Pressure Pumping
23 Strong Growth in Pressure Pumping PTEN’s Pressure Pumping Business
Slide 24: Service Intensity By Region
24 Service Intensity By Region Average Horsepower Per Well (000s HP)* *Source: Simmons & Company Equity Research PTEN’s Pressure Pumping Business
Slide 25: Increasing Service Intensity Eagle Ford Shale
25 Increasing Service Intensity Eagle Ford Shale *Source: Simmons & Company Equity Research Lateral Length* Frac Stages* PTEN’s Pressure Pumping Business
Slide 26: Increasing Service Intensity Marcellus Shale
26 Increasing Service Intensity Marcellus Shale *Source: Simmons & Company Equity Research PTEN’s Pressure Pumping Business
Slide 27: PTEN Pressure Pumping Fleet by Age
27 PTEN Pressure Pumping Fleet by Age as of December 2011 >10 Years 14% 5 - 10 Years 19% < 5 Years 67% PTEN’s Pressure Pumping Business More than two-thirds of fracturing horsepower is less than five years old
Slide 28: PTEN Investment Highlights
PTEN Investment Highlights
Slide 29: Strategic Approach
29 Concentrate on two core businesses Plan to continue to grow organically PTEN has the balance sheet and expected cash flow to support continued organic growth in both businesses Acquisitions and dispositions only when the price is right PTEN Investment Highlights - Strategic Approach • • – –
Slide 30: Components of Total Revenue and EBITDA
30 Components of Total Revenue EBITDA Contract Drilling 65% Pressure Pumping 33% Oil & Natural Gas 2% Contract Drilling $690,395 Pressure Pumping 266,719 Oil & Natural Gas 40,944 Corporate & Other (34,596) Discontinued Operations (576) PTEN Investment Highlights EBITDA Segment ($ in 000’s) Total $96
Slide 31: History of Returning Capital to Investors
31 No equity sales in more than 11 years History of returning capital to investors Stock Buyback Total of $592 million in 2006 through 2008 Cash Dividend Initiated cash dividend in 2004 Quarterly dividend currently $0.05 per share PTEN Investment Highlights • • – • – • •
Slide 32: PTEN Investment Highlights
32 Leading market position One of the “Big 3” US land drillers One of the largest pressure pumping companies in the US Well positioned to grow organically and through opportunistic acquisition Diverse asset base Drilling rigs well-matched to customers’ needs Well stimulation assets that meet custome
Slide 33: Flexible Operating Model and Financial Strength
33 Flexible operating model Maximizes earnings growth during periods of increased activity Minimizes costs during periods of low activity Strong cash flow generation Strong management team Prudent financial management Operational management that is customer responsive Proven track record through num
Slide 34: Low Valuation Relative to Peers and Historical Multiples
34 Low valuation relative to both peers and historical trading multiples Source: Thomson One Financial PTEN Investment Highlights 25 – 25 – 40% discount to both peers 40% discount to both peers and historical trading multiples and historical trading multiples
Slide 35: Growth in Shareholder Equity
0 500 1,000 1,500 2,000 2,500 3,000 Thousands 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Growth in Shareholder Equity The Warren Buffett Standard 35 PTEN Investment Highlights 1,000 1,500 2,000 2,500 3,000 Thousands 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20
Slide 36: Conclusions
36 Favorable trends are likely to persist in North American oil and natural gas markets US Land Drilling and Pressure Pumping are major beneficiaries of the new trends Patterson-UTI has the right assets: Drilling rigs well-matched to the customers’ needs Well stimulation assets that meet customers’
Slide 37: UBS Global Oil and Gas Conference
UBS Global Oil and Gas Conference Patterson-UTI Energy, Inc. UBS Global Oil and Gas Conference May 23, 2012 May 23, 2012
Slide 38: EBITDA Reconciliation
38 Patterson-UTI Energy, Inc. EBITDA Reconciliation (dollars in thousands) 2011 2010 2009 2008 2007 2006 Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA): Net income (loss) $ 322,413 $ 116,942 $ (38,290) $ 347,069 $ 438,639 $ 673,254 Income tax expense (benefit) 187,938 72,856
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