Patterson-uti Energy, Inc. · NASDAQ:PTEN
Patterson-uti Energy — Cowen and Company Annual Ultimate Energy Conference 2014
50 slides from Patterson-uti Energy's conference presentation, Dec 3, 2014
Slide 1: Cowen and Company Annual Ultimate Energy Conference
Cowen and Company th Annual Ultimate Energy Conference December 3, 2014 Exhibit 99.1
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: Patterson-UTI Energy is a leading provider of contract drilling and pressure pumping services
Patterson-UTI Energy is a leading provider of contract drilling and pressure pumping services
Slide 4: Contract Drilling
Pressure Pumping 39% Contract Drilling 59% Contract Drilling • High quality fleet of land drilling rigs including 143 APEX ® rigs • Leader in walking rig technology for pad drilling applications • Large footprint across North American drilling markets Patterson-UTI reported results for the nine mont
Slide 5: Pressure Pumping
Pressure Pumping 39% Contract Drilling 59% Pressure Pumping • High quality fleet of modern pressure pumping equipment • A leader in natural gas bi-fuel technology • Strong reputation for regional knowledge and efficient operations Patterson-UTI reported results for the nine months ended September 30
Slide 6: Contract Drilling
Contract Drilling
Slide 7: Investing in Our Drilling Rig Fleet
More than $5 billion invested since 2005 Contract Drilling Capital Expenditures and Acquisitions ($ in millions) Investing in Our Drilling Rig Fleet 2014 Capital expenditure forecast as of October 23, 2014 $531 $540 $361 $395 $656 $785 $745 $505 $785 2014E
Slide 8: A Rig Fleet Transformation
Other Electric APEX® Other Electric APEX® A Rig Fleet Transformation Mechanical Patterson-UTI Energy Total Rig Fleet Mechanical December 2009 Projected September 2015
Slide 9: A leader in high specification drilling rigs
9/30/2015 A leader in high specification drilling rigs 12/3/2014 Class …and Expected as of September 30, 2015 APEX ® Rigs as of December 3, 2014 APEX ® Rig Fleet APEX-XK 1500 ™ APEX-XK 1000 ™ APEX WALKING ® APEX 1500 ® APEX 1000 ® Total APEX ® Rigs
Slide 10: Large Geographic Footprint
Permian Basin 53 Rigs Large Geographic Footprint PTEN’s Active U.S. Land Drilling Rigs as of December 2014 East Texas 15 Rigs Appalachia 38 Rigs North Texas 6 Rigs Mid-Continent 28 Rigs Rockies 33 Rigs South Texas 38 Rigs
Slide 11: Why invest in APEX rigs? The impact has been transformative
Why invest in APEX ® rigs? …the impact has been transformative!
Slide 12: Increasing APEX Drilling Activity
Increasing APEX ® Drilling Activity Active APEX ® Rig Count
Slide 13: PTEN Relative Active Rig Count by Rig Class
PTEN Relative Active Rig Count by Rig Class 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% APEX® Other Electric Mechanical
Slide 14: Greater Stability of Utilization
Greater Stability of Utilization APEX ® Rig Utilization 0% 20% 40% 60% 80% 100% 120%
Slide 15: Improving Average Rig Revenue Per Day
Improving Average Rig Revenue Per Day Patterson-UTI Total Average Rig Revenue Per Day Excludes early-termination revenues during the third and fourth quarter of of $3,600 per day and $130 per day, respectively. 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 26,000
Slide 16: Preferred rigs account for approximately 89% of Adjusted EBITDA in Contract Drilling
Preferred rigs account for approximately 89% of Adjusted EBITDA in Contract Drilling Adjusted EBITDA Contribution from High Specification Rigs Excludes early-termination revenues during the third and fourth quarter of of $62.8 million and $2.4 million, respectively. APEX® & Other Electric Mechanical
Slide 17: Why invest in APEX rigs? The outlook remains strong
Why invest in APEX ® rigs? …the outlook remains strong!
Slide 18: U.S. Rig Count % by Drilling Type
U.S. Rig Count % by Drilling Type Continued Demand for APEX ® Rigs Source: Baker Hughes North America Rotary Rig Count 0% 10% 20% 30% 40% 50% 60% 70% 80% % Horizontal % Vertical
Slide 19: AC-powered rigs represent only half of the horizontal rig count
AC-powered rigs represent only half of the horizontal rig count SCR AC Total U.S. Horizontal Rig Count by Power Type Continued Demand for APEX ® Rigs Analysis from Patterson-UTI Energy based on data from RigData and company filings. Mechanical
Slide 20: Why invest in APEX rigs? Patterson-UTI is a technology leader
Why invest in APEX ® rigs? …Patterson-UTI is a technology leader!
Slide 21: APEX WALKING Rigs
21 APEX WALKING ® Rigs • Capable of walking with drill pipe and collars racked in derrick • Full multi-directional walking capability • Walking times average 45 minutes for 10’ – 15’ well spacing http://patenergy.com/drilling/technology/apexwalk
Slide 22: Strong Demand for Pad Drilling
22 Strong Demand for Pad Drilling • Pad drilling is contributing to increasing rig efficiency • Pad drilling capable rigs are highly utilized • Most new APEX ® rigs completed in 2014 are expected to have walking systems http://patenergy.com/drilling/technology
Slide 23: Video of APEX-XK Rig
23 Video of APEX-XK ™ Rig APEX-XK ™ Rig Walking on Pad http://patenergy.com/drilling/technology/apexwalk/
Slide 24: The APEX-XK
24 The APEX-XK ™ • Enhanced mobility including more efficient rig up and rig down • Greater clearance under rig floor for optional walking system • Advanced environmental spill control integrated into drilling floor • Minimized number of truck loads for rig moves • Available in both 1500 HP and 1000
Slide 25: Enhancing our Position in Pad Drilling
25 Enhancing our Position in Pad Drilling Walking Systems Can be Added to Any Rig in Our Fleet… …Allowing for True Multi-Directional Pad Drilling Capabilities
Slide 26: Enhancing our Position in Pad Drilling
26 Enhancing our Position in Pad Drilling http://patenergy.com/drilling/technology
Slide 27: Early Adopter of Natural Gas Engines
27 Early Adopter of Natural Gas Engines http://patenergy.com/drilling/technology
Slide 28: Using Natural Gas as a Fuel Source
28 Using Natural Gas as a Fuel Source • First contract driller to use GE’s Waukesha natural gas engines on a modern land rig • 49 rigs currently configured to use natural gas as the primary fuel source including 9 natural gas powered rigs and 40 bi-fuel capable rigs • We plan to add GE Waukesha engi
Slide 29: Pressure Pumping
Pressure Pumping
Slide 30: Investing in Pressure Pumping
More Than $1 billion invested since 2005 Investing in Pressure Pumping Pressure Pumping Capital Expenditures and Acquisitions ($ in millions) 2014 Capital expenditure forecast as of October 23, 2014 $41 $48 $61 $43 $289 $198 $194 $123 $430 2014E
Slide 31: Growing Pressure Pumping Business
Growing Pressure Pumping Business Investments in Pressure Pumping… …Have Increased Fleet Size and Quality 1,100 2014E June 2015E Fracturing Horsepower Other Horsepower Year End
Slide 32: A Significant Player in Regional Markets
33% 67% Southwest Region: Northeast Region: Fracturing horsepower: 614,000 Other horsepower: 31,500 Fracturing horsepower: 304,000 Other horsepower: 55,300 A Significant Player in Regional Markets Pressure Pumping Areas Horsepower distribution as of October 23, 2014 Fracturing Horsepower
Slide 33: A Leader in Bi-Fuel Technology
A Leader in Bi-Fuel Technology • Engines can burn a fuel mix comprised of up to 70% natural gas • Comparable torque and horsepower to an all diesel engine • Reduces operating costs by lowering fuel costs • Good for environmental sustainability http://patenergy.com/pressurepumping/services
Slide 34: A Leader in Bi-Fuel Technology
34 A Leader in Bi-Fuel Technology http://patenergy.com/pressurepumping/services
Slide 35: A Leader in Bi-Fuel Technology
35 A Leader in Bi-Fuel Technology • One of the largest bi-fuel frac fleets in the Marcellus • Approximately 1,700 stages completed using natural gas as a fuel source • Replaced more than 983,000 gallons of diesel with cleaner burning natural gas • Eliminated 7.4 million pounds of transportation load
Slide 36: Comprehensive Lab Services
Comprehensive Lab Services http://patenergy.com/pressurepumping/services
Slide 37: Financial Flexibility
Financial Flexibility
Slide 38: Investing in Our Company
Investing in Our Company Capital Expenditures and Acquisitions ($ in millions) 2014 Capital expenditure forecast as of October 23, 2014 $598 $637 $445 $453 $976 $1,012 $974 $662 $1,300 2014E
Slide 39: Strong Financial Position
Strong Financial Position • History of returning capital to investors – Cash Dividend • Initiated cash dividend in 2004 • Doubled quarterly cash dividend to $0.10 per share in February – Stock Buyback • Total of $857 million repurchased since 2005 • Repurchased $85.8 million of stock in 2013 at an a
Slide 40: Strong Financial Position: Total Liquidity
Strong Financial Position Total Liquidity ($ in millions) Liquidity defined as end of period cash plus availability under revolving line of credit * From September 30, through October 23, 2014, the Company borrowed $170 million under the revolving credit facility, leaving approximately $290 million
Slide 41: $600 million of debt not due until at least 2020
$600 million of debt not due until at least 2020 Strong Financial Position Net Debt to Capital Ratio * From September 30, 2014 through October 23, 2014, the Company borrowed $170 million under the revolving credit facility, leaving approximately $290 million available as of October 23, 2014. 6% 2% -
Slide 42: Strong Financial Returns
Strong Financial Returns Growth in Per-Share Book Value
Slide 43: Why Invest in Patterson-UTI Energy?
Why Invest in Patterson-UTI Energy? • Continuing Transformation – Committed to high-spec land rigs where demand remains strong – Creating value through focus on well site execution • Technology leader – Leader in walking rigs for pad drilling – Innovator in use of natural gas as a fuel source for bo
Slide 44: Cowen and Company Annual Ultimate Energy Conference
Cowen and Company th Annual Ultimate Energy Conference December 3, 2014
Slide 45: Additional References
Additional References
Slide 46: Active in Unconventional Plays
Active in Unconventional Plays PTEN’s Active Rigs in Unconventional Areas as of December 2014 Bakken Piceance Haynesville Marcellus Barnett 19 Rigs Eagle Ford 3 Rigs 20 Rigs 2 Rigs 35 Rigs 5 Rigs Utica 17 Rigs Woodford 2 Rigs Pinedale 4 Rigs
Slide 47: Improving earnings visibility and returns stability
Improving earnings visibility and returns stability Term Contract Coverage • Based on term contracts in place as of October 23, 2014 – An average of 157 rigs expected under term contract in the fourth quarter of 2014 – An average of 93 rigs expected under term contract during • PTEN expects to conti
Slide 48: Strong Financial Position
Strong Financial Position • Total liquidity of approximately $499 million* – $38.6 million of cash at September 30, 2014 – $460 million revolver availability at September 30, 2014* • $646 million net debt at September 30, 2014* – 18.4% Net Debt/Total Capitalization* – $300 million of 4.97% Series A
Slide 49: Non-GAAP Financial Measures
PATTERSON-UTI ENERGY, INC. Non-GAAP Financial Measures (Unaudited) (dollars in thousands) Non-GAAP Financial Measures Three Months Ended September 30, Nine Months Ended September 30, Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA)(1): Net income $ 15,976 $ 7
Slide 50: Non-GAAP Financial Measures
Non-GAAP Financial Measures PATTERSON-UTI ENERGY, INC. Non-GAAP Financial Measures (Unaudited) (dollars in thousands) Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA)(1): Net income (loss) $ 188,009 $ 299,477 $ 322,413 $ 116,942 $ (38,290) Income tax expense
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