10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2012

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to            

Commission file number 0-22664

Patterson-UTI Energy, Inc.

(Exact name of registrant as specified in its charter)

DELAWARE	75-2504748
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
450 GEARS ROAD, SUITE 500 HOUSTON, TEXAS	77067
(Address of principal executive offices)	(Zip Code)

(281) 765-7100

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year,

if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

151,762,648 shares of common stock, $0.01 par value, as of July 27, 2012

PATTERSON-UTI ENERGY, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION
		Page
ITEM 1.	Financial Statements
	Unaudited consolidated balance sheets		1
	Unaudited consolidated statements of operations		2
	Unaudited consolidated statements of comprehensive income		3
	Unaudited consolidated statements of changes in stockholders’ equity		4
	Unaudited consolidated statements of cash flows		5
	Notes to unaudited consolidated financial statements		6
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		18
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk		27
ITEM 4.	Controls and Procedures		28
PART II — OTHER INFORMATION
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds		28
ITEM 5.	Other Information		28
ITEM 6.	Exhibits		28
Signature			30

PART I — FINANCIAL INFORMATION

ITEM 1. Financial Statements

The following unaudited consolidated financial statements include all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented.

PATTERSON-UTI ENERGY, INC. AN D SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands, except share data)

	June 30, 2012			December 31, 2011
ASSETS
Current assets:
Cash and cash equivalents	$	75,299		$	23,946
Accounts receivable, net of allowance for doubtful accounts of $4,734 and $4,887 at June 30, 2012 and December 31, 2011, respectively		528,808			518,109
Federal and state income taxes receivable		1,905			—
Inventory		27,390			31,306
Deferred tax assets, net		81,932			142,725
Other		45,231			48,864
Total current assets		760,565			764,950
Property and equipment, net		3,402,413			3,167,266
Goodwill and intangible assets		173,518			175,573
Deposits on equipment purchases		88,573			99,543
Other		17,546			14,569
Total assets	$	4,442,615		$	4,221,901
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	224,917		$	241,610
Federal and state income taxes payable		—			2,473
Accrued expenses		153,382			164,629
Current portion of long-term debt		—			10,000
Total current liabilities		378,299			418,712
Borrowings under revolving credit facility		—			110,000
Other long-term debt		600,000			382,500
Deferred tax liabilities, net		828,415			786,632
Other		6,618			7,426
Total liabilities		1,813,332			1,705,270
Commitments and contingencies (see Note 10)
Stockholders’ equity:
Preferred stock, par value $.01; authorized 1,000,000 shares, no shares issued		—			—
Common stock, par value $.01; authorized 300,000,000 shares with 184,053,434 and 183,295,350 issued and 151,773,850 and 155,807,779 outstanding at June 30, 2012 and December 31, 2011, respectively		1,840			1,833
Additional paid-in capital		850,951			840,731
Retained earnings		2,453,741			2,279,367
Accumulated other comprehensive income		18,847			19,459
Treasury stock, at cost, 32,279,584 shares and 27,487,571 shares at June 30, 2012 and December 31, 2011, respectively		(696,096	)		(624,759	)
Total stockholders’ equity		2,629,283			2,516,631
Total liabilities and stockholders’ equity	$	4,442,615		$	4,221,901

The accompanying notes are an integral part of these unaudited consolidated financial statements.

1

PATTERSON-UTI ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June  30,
	2012			2011			2012			2011
Operating revenues:
Contract drilling	$	460,249		$	386,479		$	949,731		$	763,837
Pressure pumping		206,173			200,131			447,895			379,790
Oil and natural gas		14,690			13,454			29,407			23,841
Total operating revenues		681,112			600,064			1,427,033			1,167,468
Operating costs and expenses:
Contract drilling		272,720			218,754			555,369			437,453
Pressure pumping		138,051			128,866			304,908			247,441
Oil and natural gas		2,583			2,103			5,313			4,100
Depreciation, depletion, amortization and impairment		128,477			102,749			251,430			198,964
Selling, general and administrative		16,719			16,749			30,587			32,724
Net gain on asset disposals		(28,332	)		(1,017	)		(30,732	)		(2,621	)
Provision for bad debts		—			—			1,600			—
Total operating costs and expenses		530,218			468,204			1,118,475			918,061
Operating income		150,894			131,860			308,558			249,407
Other income (expense):
Interest income		179			45			233			88
Interest expense		(5,051	)		(3,514	)		(9,633	)		(7,403	)
Other		(144	)		78			(89	)		197
Total other expense		(5,016	)		(3,391	)		(9,489	)		(7,118	)
Income from continuing operations before income taxes		145,878			128,469			299,069			242,289
Income tax expense (benefit):
Current		(829	)		15,449			6,681			19,031
Deferred		54,169			31,382			102,576			70,001
Total income tax expense		53,340			46,831			109,257			89,032
Income from continuing operations		92,538			81,638			189,812			153,257
Loss from discontinued operations, net of income taxes		—			—			—			(367	)
Net income	$	92,538		$	81,638		$	189,812		$	152,890
Basic income (loss) per common share:
Income from continuing operations	$	0.60		$	0.53		$	1.22		$	0.99
Loss from discontinued operations, net of income taxes	$	0.00		$	0.00		$	0.00		$	0.00
Net income	$	0.60		$	0.53		$	1.22		$	0.99
Diluted income (loss) per common share:
Income from continuing operations	$	0.60		$	0.52		$	1.22		$	0.98
Loss from discontinued operations, net of income taxes	$	0.00		$	0.00		$	0.00		$	0.00
Net income	$	0.60		$	0.52		$	1.22		$	0.98
Weighted average number of common shares outstanding:
Basic		153,269			153,556			153,947			153,340
Diluted		153,655			155,581			154,544			155,252
Cash dividends per common share	$	0.05		$	0.05		$	0.10		$	0.10

The accompanying notes are an integral part of these unaudited consolidated financial statements.

2

PATTERSON-UTI ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited, in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Net income	$	92,538		$	81,638		$	189,812		$	152,890
Other comprehensive income, net of taxes of $0 for all periods:
Foreign currency translation adjustment		(3,166	)		(538	)		(612	)		2,160
Total comprehensive income	$	89,372		$	81,100		$	189,200		$	155,050

The accompanying notes are an integral part of these unaudited consolidated financial statements.

3

PATTERSON-UTI ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

(unaudited, in thousands)

	Common Stock						Additional			Retained Earnings			Accumulated Other			Treasury Stock			Total
	Number of Shares			Amount			Paid-in Capital						Comprehensive Income
Balance, December 31, 2011		183,295		$	1,833		$	840,731		$	2,279,367		$	19,459		$	(624,759	)	$	2,516,631
Net income		—			—			—			189,812			—			—			189,812
Foreign currency translation adjustment		—			—			—			—			(612	)		—			(612	)
Issuance of restricted stock		788			8			(8	)		—			—			—			—
Vesting of stock unit awards		8			—			—			—			—			—			—
Forfeitures of restricted stock		(51	)		(1	)		1			—			—			—			—
Exercise of stock options		13			—			195			—			—			—			195
Stock-based compensation		—			—			11,240			—			—			—			11,240
Tax expense related to stock-based compensation		—			—			(1,208	)		—			—			—			(1,208	)
Payment of cash dividends		—			—			—			(15,438	)		—			—			(15,438	)
Purchase of treasury stock		—			—			—			—			—			(71,337	)		(71,337	)
Balance, June 30, 2012		184,053		$	1,840		$	850,951		$	2,453,741		$	18,847		$	(696,096	)	$	2,629,283

The accompanying notes are an integral part of these unaudited consolidated financial statements.

4

PATTERSON-UTI ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

	Six Months Ended June 30,
	2012			2011
Cash flows from operating activities:
Net income	$	189,812		$	152,890
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, amortization and impairment		251,430			198,964
Provision for bad debts		1,600			—
Dry holes and abandonments		85			150
Deferred income tax expense		102,576			70,001
Stock-based compensation expense		11,240			9,850
Tax expense related to stock-based compensation		(1,208	)		—
Net gain on asset disposals		(30,732	)		(2,621	)
Changes in operating assets and liabilities:
Accounts receivable		(10,448	)		(71,416	)
Income taxes receivable/payable		(4,458	)		73,749
Inventory and other assets		6,108			(13,719	)
Accounts payable		(8,466	)		10,649
Accrued expenses		(11,262	)		11,863
Other liabilities		(808	)		(4,748	)
Net cash used in operating activities of discontinued operations		—			(339	)
Net cash provided by operating activities		495,469			435,273
Cash flows from investing activities:
Purchases of property and equipment		(512,065	)		(427,618	)
Proceeds from disposal of assets		58,945			7,474
Net cash provided by investing activities of discontinued operations		—			25,500
Net cash used in investing activities		(453,120	)		(394,644	)
Cash flows from financing activities:
Purchases of treasury stock		(71,337	)		(4,216	)
Dividends paid		(15,438	)		(15,480	)
Tax benefit related to stock-based compensation		—			5,241
Proceeds from senior notes		300,000			—
Proceeds from borrowing under revolving credit facility		123,400			—
Repayment of borrowing under revolving credit facility		(233,400	)		—
Repayment of other long-term debt		(92,500	)		(2,500	)
Debt issuance costs		(1,549	)		—
Proceeds from exercise of stock options		195			13,008
Net cash provided by (used in) financing activities		9,371			(3,947	)
Effect of foreign exchange rate changes on cash		(367	)		290
Net increase in cash and cash equivalents		51,353			36,972
Cash and cash equivalents at beginning of period		23,946			27,612
Cash and cash equivalents at end of period	$	75,299		$	64,584
Supplemental disclosure of cash flow information:
Net cash (paid) received during the period for:
Interest, net of capitalized interest of $4,065 in 2012 and $4,468 in 2011	$	(8,153	)	$	(6,207	)
Income taxes	$	(7,250	)	$	61,351
Supplemental investing and financing information:
Net increase (decrease) in payables for purchases of property and equipment	$	(8,333	)	$	57,808
Net (increase) decrease in deposits on equipment purchases	$	10,970		$	(15,219	)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

5

PATTERSON-UTI ENERGY, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Consolidation and Presentation

The unaudited interim consolidated financial statements include the accounts of Patterson-UTI Energy, Inc. (the “Company”) and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. Except for wholly-owned subsidiaries, the Company has no controlling financial interests in any entity which would require consolidation.

The unaudited interim consolidated financial statements have been prepared by management of the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations, although the Company believes the disclosures included either on the face of the financial statements or herein are sufficient to make the information presented not misleading. In the opinion of management, all adjustments which are of a normal recurring nature considered necessary for a fair statement of the information in conformity with accounting principles generally accepted in the United States of America have been included. The Unaudited Consolidated Balance Sheet as of December 31, 2011, as presented herein, was derived from the audited consolidated balance sheet of the Company, but does not include all disclosures required by accounting principles generally accepted in the United States of America. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011. The results of operations for the three and six months ended June 30, 2012 are not necessarily indicative of the results to be expected for the full year.

The U.S. dollar is the functional currency for all of the Company’s operations except for its Canadian operations, which uses the Canadian dollar as its functional currency. The effects of exchange rate changes are reflected in accumulated other comprehensive income, which is a separate component of stockholders’ equity.

The carrying values of cash and cash equivalents, trade receivables and accounts payable approximate fair value.

The Company provides a dual presentation of its net income (loss) per common share in its unaudited consolidated statements of operations: Basic net income (loss) per common share (“Basic EPS”) and diluted net income (loss) per common share (“Diluted EPS”).

Basic EPS excludes dilution and is computed by first allocating earnings between common stockholders and holders of non-vested shares of restricted stock. Basic EPS is then determined by dividing the earnings attributable to common stockholders by the weighted average number of common shares outstanding during the period, excluding non-vested shares of restricted stock.

Diluted EPS is based on the weighted average number of common shares outstanding plus the dilutive effect of potential common shares, including stock options, non-vested shares of restricted stock and restricted stock units. The dilutive effect of stock options and restricted stock units is determined using the treasury stock method. The dilutive effect of non-vested shares of restricted stock is based on the more dilutive of the treasury stock method or the two-class method, assuming a reallocation of undistributed earnings to common stockholders after considering the dilutive effect of potential common shares other than non-vested shares of restricted stock.

6

The following table presents information necessary to calculate income from continuing operations per share, loss from discontinued operations per share and net income per share for the three and six months ended June 30, 2012 and 2011 as well as potentially dilutive securities excluded from the weighted average number of diluted common shares outstanding, as their inclusion would have been anti-dilutive (in thousands, except per share amounts):

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
BASIC EPS:
Income from continuing operations	$	92,538		$	81,638		$	189,812		$	153,257
Adjust for income attributed to holders of non-vested restricted stock		(806	)		(648	)		(1,550	)		(1,145	)
Income from continuing operations attributed to common stockholders	$	91,732		$	80,990		$	188,262		$	152,112
Loss from discontinued operations, net	$	—		$	—		$	—		$	(367	)
Adjust for loss attributed to holders of non-vested restricted stock		—			—			—			3
Loss from discontinued operations attributed to common stockholders	$	—		$	—		$	—		$	(364	)
Weighted average number of common shares outstanding, excluding non-vested shares of restricted stock		153,269			153,556			153,947			153,340
Basic income from continuing operations per common share	$	0.60		$	0.53		$	1.22		$	0.99
Basic loss from discontinued operations per common share	$	0.00		$	0.00		$	0.00		$	0.00
Basic net income per common share	$	0.60		$	0.53		$	1.22		$	0.99
DILUTED EPS:
Income from continuing operations attributed to common stockholders	$	91,732		$	80,990		$	188,262		$	152,112
Add incremental earnings related to potential common shares		—			8			—			—
Adjusted income from continuing operations attributed to common stockholders	$	91,732		$	80,998		$	188,262		$	152,112
Weighted average number of common shares outstanding, excluding non-vested shares of restricted stock		153,269			153,556			153,947			153,340
Add dilutive effect of potential common shares		386			2,025			597			1,912
Weighted average number of diluted common shares outstanding		153,655			155,581			154,544			155,252
Diluted income from continuing operations per common share	$	0.60		$	0.52		$	1.22		$	0.98
Diluted loss from discontinued operations per common share	$	0.00		$	0.00		$	0.00		$	0.00
Diluted net income per common share	$	0.60		$	0.52		$	1.22		$	0.98
Potentially dilutive securities excluded as anti-dilutive		5,969			380			5,529			1,796

2. Discontinued Operations

On January 27, 2011, the stock of the Company’s electric wireline subsidiary, Universal Wireline, Inc., was sold in a cash transaction for $25.5 million. Except for inventory, the working capital of Universal Wireline, Inc. was excluded from the sale and retained by a subsidiary of the Company. Universal Wireline, Inc. was formed in 2010 to acquire the electric wireline business of Key Energy Services, Inc. The results of operations of this business have been presented as results of discontinued operations in these consolidated financial statements. Upon being classified as held for sale, the carrying value of the assets to be disposed of were reduced to fair value less estimated costs to sell resulting in a charge of $2.2 million in 2010. Due to the fact that the carrying value of the assets had been adjusted to net realizable value during 2010, no significant additional gain or loss was recognized in connection with the sale in 2011.

7

Summarized operating results from discontinued operations for the three and six months ended June 30, 2012, and 2011 are shown below (in thousands):

	Three Months Ended June  30,				Six Months Ended June  30,
	2012		2011		2012		2011
Electric wireline revenues	$	—	$	—	$	—	$	1,104
Loss before income taxes	$	—	$	—	$	—	$	(576	)
Income tax benefit		—		—		—		209
Loss from discontinued operations, net of income tax	$	—	$	—	$	—	$	(367	)

3. Stock-based Compensation

The Company uses share-based payments to compensate employees and non-employee directors. The Company recognizes the cost of share-based payments under the fair-value-based method. Share-based awards consist of equity instruments in the form of stock options, restricted stock or restricted stock units and have included service and, in certain cases, performance conditions. The Company’s share-based awards have also included both cash-settled and share-settled performance unit awards. Cash-settled performance unit awards were accounted for as liability awards. Share-settled performance unit awards are accounted for as equity awards. The Company issues shares of common stock when vested stock options are exercised, when restricted stock is granted and when restricted stock units and share-settled performance unit awards vest.

Stock Options. The Company estimates the grant date fair values of stock options using the Black-Scholes-Merton valuation model. Volatility assumptions are based on the historic volatility of the Company’s common stock over the most recent period equal to the expected term of the options as of the date the options are granted. The expected term assumptions are based on the Company’s experience with respect to employee stock option activity. Dividend yield assumptions are based on the expected dividends at the time the options are granted. The risk-free interest rate assumptions are determined by reference to United States Treasury yields. Weighted-average assumptions used to estimate the grant date fair values for stock options granted in the three and six month periods ended June 30, 2012 and 2011 follow:

	Three Months Ended June  30,						Six Months Ended June  30,
	2012			2011			2012			2011
Volatility		48.86	%		45.82	%		48.85	%		45.97	%
Expected term (in years)		5.00			5.00			5.00			5.00
Dividend yield		1.22	%		0.64	%		1.21	%		0.67	%
Risk-free interest rate		0.88	%		2.38	%		0.88	%		2.34	%

Stock option activity from January 1, 2012 to June 30, 2012 follows:

	Underlying Shares			Weighted Average Exercise Price
Outstanding at January 1, 2012		7,081,295		$	20.73
Granted		780,000		$	16.53
Exercised		(13,300	)	$	14.64
Outstanding at June 30, 2012		7,847,995		$	20.33
Exercisable at June 30, 2012		6,548,510		$	20.64

Restricted Stock. For all restricted stock awards to date, shares of common stock were issued when the awards were made. Non-vested shares are subject to forfeiture for failure to fulfill service conditions and, in certain cases, performance conditions. Non-forfeitable dividends are paid on non-vested shares of restricted stock. The Company uses the straight-line method to recognize periodic compensation cost over the vesting period.

8

Restricted stock activity from January 1, 2012 to June 30, 2012 follows:

	Shares			Weighted Average Grant Date Fair Value
Non-vested restricted stock outstanding at January 1, 2012		1,213,799		$	24.13
Granted		788,650		$	15.60
Vested		(524,010	)	$	22.16
Forfeited		(51,696	)	$	21.89
Non-vested restricted stock outstanding at June 30, 2012		1,426,743		$	20.22

Restricted Stock Units. For all restricted stock unit awards made to date, shares of common stock are not issued until the units vest. Restricted stock units are subject to forfeiture for failure to fulfill service conditions. Non-forfeitable cash dividend equivalents are paid on non-vested restricted stock units. The Company uses the straight-line method to recognize periodic compensation cost over the vesting period.

Restricted stock unit activity from January 1, 2012 to June 30, 2012 follows:

	Shares			Weighted Average Grant Date Fair Value
Non-vested restricted stock units outstanding at January 1, 2012		17,501		$	23.47
Granted		9,000		$	14.91
Vested		(7,830	)	$	21.08
Forfeited		—		$	—
Non-vested restricted stock units outstanding at June 30, 2012		18,671		$	20.35

Performance Unit Awards. In 2009, the Company granted cash-settled performance unit awards to certain executive officers (the “2009 Performance Units”). The 2009 Performance Units provided for those executive officers to receive a cash payment upon the achievement of certain performance goals established by the Compensation Committee during a specified period. The performance period for the 2009 Performance Units was the period from April 1, 2009 through March 31, 2012. The performance goals for the 2009 Performance Units were tied to the Company’s total shareholder return for the performance period as compared to total shareholder return for a peer group determined by the Compensation Committee. These goals were considered to be market conditions under the relevant accounting standards and the market conditions were factored into the determination of the fair value of the performance units. Generally, the recipients would receive a target payment if the Company’s total shareholder return was positive and, when compared to the peer group, was at or above the 50^th percentile but less than the 75^th percentile and two times the target if at the 75^th percentile or higher. The total target amount with respect to the 2009 Performance Units was approximately $3.4 million. If the Company’s total shareholder return was positive, and, when compared to the peer group, was at or above the 25^th percentile but less than the 50^th percentile, the recipients would only receive one-half of the target payment. Because the 2009 Performance Units were settled in cash at the end of the performance period, they were accounted for as liability awards and the Company’s pro-rated obligation was measured at estimated fair value at the end of each reporting period using a Monte Carlo simulation model. The performance period ended on March 31, 2012 and the Company’s total shareholder return was at the 46^th percentile. The resulting cash payments totaling $1.7 million were paid in April 2012. A compensation benefit associated with the 2009 Performance Units of approximately $1.9 million was recognized for the six months ended June 30, 2012. Compensation expense associated with the 2009 Performance Units was approximately $1.0 million and $2.2 million for the three and six month periods ended June 30, 2011, respectively.

In 2010, 2011 and 2012, the Company granted stock-settled performance unit awards to certain executive officers (the “Stock-Settled Performance Units”). The Stock-Settled Performance Units provide for the recipients to receive a grant of shares of stock upon the achievement of certain performance goals established by the Compensation Committee during the performance period. The performance period for the Stock-Settled Performance Units is the three year period commending on April 1 of the year of grant, but can extend for an additional two years in certain circumstances. The performance goals for the Stock-Settled Performance Units are tied to the Company’s total shareholder return for the performance period as compared to total shareholder return for a peer group determined by the Compensation Committee. These goals are considered to be market conditions under the relevant accounting standards and the market conditions were factored into the determination of the fair value of the performance units. Generally, the recipients will receive a target number of shares if the Company’s total shareholder return is positive and, when compared to the peer group, is at the 50^th percentile and two times the target if at the 75^th percentile or higher. If the Company’s total shareholder return is

9

positive, and, when compared to the peer group, is at or above the 25^th percentile, but less than the 50^th percentile, the recipients will only receive one-half of the target number of shares. The grant of shares when achievement is between the 25^th and 75^th percentile will be determined on a pro-rata basis. The total target number of shares with respect to the Stock-Settled Performance Units is set forth below:

	2012 Performance Unit Awards		2011 Performance Unit Awards		2010 Performance Unit Awards
Target number of shares		192,000		144,375		178,750

Because the Stock-Settled Performance Units are stock-settled awards, they are accounted for as equity awards and measured at fair value on the date of grant using a Monte Carlo simulation model. The fair value of the Stock-Settled Performance Units is set forth below (in thousands):

	2012 Performance Unit Awards		2011 Performance Unit Awards		2010 Performance Unit Awards
Fair value at date of grant	$	3,065	$	5,569	$	3,117

These fair value amounts are charged to expense on a straight-line basis over the performance period. Compensation expense associated with the Stock-Settled Performance Units is shown below (in thousands):

	Three Months Ended June  30,				Six Months Ended June  30,
	2012		2011		2012		2011
Stock-based compensation expense associated with Stock-Settled Performance Units	$	979	$	724	$	1,703	$	983

4. Property and Equipment

Property and equipment consisted of the following at June 30, 2012 and December 31, 2011 (in thousands):

	June 30, 2012			December 31, 2011
Equipment	$	5,029,295		$	4,730,925
Oil and natural gas properties		145,303			131,812
Buildings		62,418			64,090
Land		10,411			11,467
		5,247,427			4,938,294
Less accumulated depreciation and depletion		(1,845,014	)		(1,771,028	)
Property and equipment, net	$	3,402,413		$	3,167,266

On April 23, 2012, the Company sold its flowback operations to a subsidiary of TETRA Technologies, Inc. in a cash transaction. The sale price was $42.5 million, and the Company recognized a gain of approximately $22.6 million in the second quarter of 2012 as a result of this transaction.

10

5. Business Segments

The Company’s revenues, operating profits and identifiable assets are primarily attributable to three business segments: (i) contract drilling of oil and natural gas wells, (ii) pressure pumping services and (iii) the investment, on a working interest basis, in oil and natural gas properties. Each of these segments represents a distinct type of business. These segments have separate management teams which report to the Company’s chief operating decision maker. The results of operations in these segments are regularly reviewed by the chief operating decision maker for purposes of determining resource allocation and assessing performance. As discussed in Note 2, included in discontinued operations for the six months ended June 30, 2011 are the operating results for an electric wireline business that was acquired on October 1, 2010 and sold in January 2011. Separate financial data for each of our business segments is provided in the table below (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Revenues:
Contract drilling	$	461,798		$	387,622		$	952,501		$	765,647
Pressure pumping		206,173			200,131			447,895			379,790
Oil and natural gas		14,690			13,454			29,407			23,841
Total segment revenues		682,661			601,207			1,429,803			1,169,278
Elimination of intercompany revenues (a)		(1,549	)		(1,143	)		(2,770	)		(1,810	)
Total revenues	$	681,112		$	600,064		$	1,427,033		$	1,167,468
Income before income taxes:
Contract drilling	$	90,536		$	85,135		$	202,307		$	165,654
Pressure pumping		36,846			50,340			83,633			91,718
Oil and natural gas		7,224			7,129			14,742			11,947
		134,606			142,604			300,682			269,319
Corporate and other		(12,044	)		(11,761	)		(22,856	)		(22,533	)
Net gain on asset disposals (b)		28,332			1,017			30,732			2,621
Interest income		179			45			233			88
Interest expense		(5,051	)		(3,514	)		(9,633	)		(7,403	)
Other income (expense)		(144	)		78			(89	)		197
Income from continuing operations before income taxes	$	145,878		$	128,469		$	299,069		$	242,289

	June 30, 2012		December 31, 2011
Identifiable assets:
Contract drilling	$	3,466,902	$	3,252,116
Pressure pumping		774,924		748,643
Oil and natural gas		50,860		44,990
Corporate and other (c)		149,929		176,152
Total assets	$	4,442,615	$	4,221,901

(a) Consists of contract drilling intercompany revenues for drilling services provided to the oil and natural gas exploration and production segment.

(b) Net gains or losses associated with the disposal of assets relate to corporate strategy decisions of the executive management group. Accordingly, the related gains or losses have been separately presented and excluded from the results of specific segments.

(c) Corporate and other assets primarily include cash on hand, income taxes receivable and certain deferred tax assets.

11

6. Goodwill and Intangible Assets

Goodwill — Goodwill by operating segment as of June 30, 2012 and changes for the six months then ended are as follows (in thousands):

	Contract Drilling		Pressure Pumping		Total
Balance December 31, 2011	$	86,234	$	67,575	$	153,809
Changes to goodwill		—		—		—
Balance June 30, 2012	$	86,234	$	67,575	$	153,809

There were no accumulated impairment losses as of June 30, 2012 or December 31, 2011.

Goodwill is evaluated at least annually on December 31 to determine if the fair value of recorded goodwill has decreased below its carrying value. For purposes of impairment testing, goodwill is evaluated at the reporting unit level. The Company’s reporting units for impairment testing have been determined to be its operating segments. Goodwill impairment is measured using a two-step impairment test. The first step is to compare the fair value of an entity’s reporting units to the respective carrying value of those reporting units. If the carrying value of a reporting unit exceeds its fair value the second step of the impairment test is performed whereby the fair value of the reporting unit is allocated to its identifiable tangible and intangible assets and liabilities with any remaining fair value representing the fair value of goodwill. If this resulting fair value of goodwill is less than the carrying value of goodwill, an impairment loss would be recognized in the amount of the shortfall.

Intangible Assets — Intangible assets were recorded in the pressure pumping operating segment in connection with the fourth quarter 2010 acquisition of the assets of a pressure pumping business. As a result of the purchase price allocation, the Company recorded intangible assets related to a non-compete agreement and the customer relationships acquired. These intangible assets were recorded at fair value on the date of acquisition.

The non-compete agreement has a term of three years from October 1, 2010. The value of this agreement was estimated using a with and without scenario where cash flows were projected through the term of the agreement assuming the agreement is in place and compared to cash flows assuming the non-compete agreement was not in place. The intangible asset associated with the non-compete agreement is being amortized on a straight-line basis over the three-year term of the agreement. Amortization expense of approximately $117,000 was recorded in the three months ended June 30, 2012 and 2011 and amortization expense of approximately $233,000 was recorded in the six months ended June 30, 2012 and 2011 associated with the non-compete agreement.

The value of the customer relationships was estimated using a multi-period excess earnings model to determine the present value of the projected cash flows associated with the customers in place at the time of the acquisition and taking into account a contributory asset charge. The resulting intangible asset is being amortized on a straight-line basis over seven years. Amortization expense of approximately $911,000 was recorded in the three months ended June 30, 2012 and 2011 and amortization expense of approximately $1.8 million was recorded in the six months ended June 30, 2012 and 2011 associated with customer relationships.

The following table presents the gross carrying amount and accumulated amortization of intangible assets as of June 30, 2012 (in thousands):

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Non-compete agreement	$	1,400	$	(816	)	$	584
Customer relationships		25,500		(6,375	)		19,125
Total intangible assets	$	26,900	$	(7,191	)	$	19,709

12

7. Accrued Expenses

Accrued expenses consisted of the following at June 30, 2012 and December 31, 2011 (in thousands):

	June 30, 2012		December 31, 2011
Salaries, wages, payroll taxes and benefits	$	49,198	$	58,692
Workers’ compensation liability		66,214		66,121
Property, sales, use and other taxes		13,776		11,850
Insurance, other than workers’ compensation		8,789		6,012
Accrued interest payable		5,196		4,937
Deferred revenue - current		5,137		7,229
2009 Performance Unit Awards		—		3,640
Other		5,072		6,148
	$	153,382	$	164,629

Deferred revenue was recorded in the fourth quarter of 2010 in the purchase price allocation associated with the Company’s acquisition of a pressure pumping business. The deferred revenue relates to out-of-market pricing agreements that were in place at the acquired business at the time of the acquisition. The deferred revenue will be recognized as pressure pumping revenue over the remaining term of the pricing agreements. Deferred revenue of approximately $1.8 million and $3.6 million was recognized in the three and six months ended June 30, 2012, respectively, related to these pricing agreements. Deferred revenue of approximately $1.8 million and $4.7 million was recognized in the three and six months ended June 30, 2011, respectively, related to these pricing agreements.

8. Asset Retirement Obligation

The Company records a liability for the estimated costs to be incurred in connection with the abandonment of oil and natural gas properties in the future. This liability is included in the caption “other” in the liabilities section of the consolidated balance sheet. The following table describes the changes to the Company’s asset retirement obligations during the six months ended June 30, 2012 and 2011 (in thousands):

	Six Months Ended June 30,
	2012			2011
Balance at beginning of year	$	3,455		$	3,063
Liabilities incurred		182			152
Liabilities settled		(83	)		(80	)
Accretion expense		79			70
Revision in estimated costs of plugging oil and natural gas wells		536			(2	)
Asset retirement obligation at end of period	$	4,169		$	3,203

9. Long Term Debt

Credit Facilities - On August 19, 2010, the Company entered into a Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, N.A., as administrative agent, letter of credit issuer, swing line lender and lender, and each of the other letter of credit issuer and lender parties thereto. The Credit Agreement is a committed senior unsecured credit facility that includes a revolving credit facility and a term loan facility.

The revolving credit facility permits aggregate borrowings of up to $400 million and contains a letter of credit facility that is limited to $150 million and a swing line facility that is limited to $40 million. Subject to customary conditions, the Company may request that the lenders’ aggregate commitments with respect to the revolving credit facility be increased by up to $100 million, not to exceed total commitments of $500 million. The maturity date for the revolving facility is August 19, 2013.

The term loan facility provided for a loan of $100 million which was funded on August 19, 2010. The term loan facility was payable in quarterly principal installments commencing November 19, 2010. The installment amounts were scheduled to vary from 1.25% of the original principal amount for each of the first four quarterly installments, 2.50% of the original principal amount for each of the subsequent eight quarterly installments and 5.00% of the original principal amount for the next subsequent three quarterly installments, with the remainder becoming due at maturity. The maturity date for the term loan facility was August 19, 2014. The outstanding balance of the term loan facility was paid in full on June 14, 2012.

13

Loans under the Credit Agreement bear interest by reference, at the Company’s election, to the LIBOR rate or base rate. The applicable margin on LIBOR rate loans varies from 2.75% to 3.75% and the applicable margin on base rate loans varies from 1.75% to 2.75%, in each case determined based upon the Company’s debt to capitalization ratio. As of June 30, 2012, the applicable margin on LIBOR rate loans was 2.75% and the applicable margin on base rate loans was 1.75%. A letter of credit fee is payable by the Company equal to the applicable margin for LIBOR rate loans times the daily amount available to be drawn under outstanding letters of credit. The commitment fee payable to the lenders for the unused portion of the revolving credit facility varies from 0.50% to 0.75% based upon the Company’s debt to capitalization ratio and was 0.50% as of June 30, 2012.

Each domestic subsidiary of the Company other than any immaterial subsidiary has unconditionally guaranteed all existing and future indebtedness and liabilities of the Company and the other guarantors arising under the Credit Agreement and other loan documents. Such guarantees also cover obligations of the Company and any subsidiary of the Company arising under any interest rate swap contract with any person while such person is a lender or affiliate of a lender under the Credit Agreement.

The Credit Agreement contains customary representations, warranties, indemnities and affirmative and negative covenants. The Credit Agreement also requires compliance with two financial covenants. The Company must not permit its debt to capitalization ratio to exceed 45% at any time. The Credit Agreement generally defines the debt to capitalization ratio as the ratio of (a) total borrowed money indebtedness to (b) the sum of such indebtedness plus consolidated net worth, with consolidated net worth determined as of the last day of the most recently ended fiscal quarter. The Company also must not permit the interest coverage ratio as of the last day of a fiscal quarter to be less than 3.00 to 1.00. The Credit Agreement generally defines the interest coverage ratio as the ratio of earnings before interest, taxes, depreciation and amortization (“EBITDA”) of the four prior fiscal quarters to interest charges for the same period. The Company was in compliance with these covenants at June 30, 2012.

As of June 30, 2012, the outstanding balance under the term loan facility had been paid in full, and there were no borrowings outstanding under the revolving credit facility. The Company had $39.8 million in letters of credit outstanding at June 30, 2012 and, as a result, had available borrowing capacity of approximately $360 million at that date.

Senior Notes – On October 5, 2010, the Company completed the issuance and sale of $300 million in aggregate principal amount of its 4.97% Series A Senior Notes due October 5, 2020 (the “Series A Notes”) in a private placement. The Series A Notes bear interest at a rate of 4.97% per annum. The Company will pay interest on the Series A Notes on April 5 and October 5 of each year. The Series A Notes will mature on October 5, 2020.

On June 14, 2012, the Company completed the issuance and sale of $300 million in aggregate principal amount of its 4.27% Series B Senior Notes due June 14, 2022 (the “Series B Notes”) in a private placement. The Series B Notes bear interest at a rate of 4.27% per annum. The Company will pay interest on the Series A Notes on April 5 and October 5 of each year beginning October 5, 2012. The Series B Notes will mature on June 14, 2022.

The Series A Notes and Series B Notes are senior unsecured obligations of the Company which rank equally in right of payment with all other unsubordinated indebtedness of the Company. The Series A Notes and Series B Notes are guaranteed on a senior unsecured basis by each of the existing domestic subsidiaries of the Company other than immaterial subsidiaries.

The Series A Notes and Series B Notes are prepayable at the Company’s option, in whole or in part, provided that in the case of a partial prepayment, prepayment must be in an amount not less than 5% of the aggregate principal amount of the notes then outstanding, at any time and from time to time at 100% of the principal amount prepaid, plus accrued and unpaid interest to the prepayment date, plus a “make-whole” premium as specified in the note purchase agreement. The Company must offer to prepay the notes upon the occurrence of any change of control. In addition, the Company must offer to prepay the notes upon the occurrence of certain asset dispositions if the proceeds therefrom are not timely reinvested in productive assets. If any offer to prepay is accepted, the purchase price of each prepaid note is 100% of the principal amount thereof, plus accrued and unpaid interest thereon to the prepayment date.

The respective note purchase agreements require compliance with two financial covenants. The Company must not permit its debt to capitalization ratio to exceed 50% at any time. The note purchase agreements generally define the debt to capitalization ratio as the ratio of (a) total borrowed money indebtedness to (b) the sum of such indebtedness plus consolidated net worth, with consolidated net worth determined as of the last day of the most recently ended fiscal quarter. The

14

Company also must not permit the interest coverage ratio as of the last day of a fiscal quarter to be less than 2.50 to 1.00. The note purchase agreements generally define the interest coverage ratio as the ratio for the four prior quarters of EBITDA to interest charges for that same period. The Company was in compliance with these covenants at June 30, 2012.

Events of default under the note purchase agreements and the Credit Agreement include failure to pay principal or interest when due, failure to comply with the financial and operational covenants, a cross default event, a judgment in excess of a threshold event, the guaranty agreement ceasing to be enforceable, the occurrence of certain ERISA events, a change of control event and bankruptcy and other insolvency events. If an event of default under a note purchase agreement occurs and is continuing, then holders of a majority in principal amount of the respective notes have the right to declare all the notes then-outstanding to be immediately due and payable. In addition, if the Company defaults in payments on any note, then until such defaults are cured, the holder thereof may declare all the notes held by it pursuant to the note purchase agreement to be immediately due and payable.

The Company incurred approximately $10.8 million in debt issuance costs during 2010 in connection with the Credit Agreement and the Series A Notes. The Company incurred approximately $1.5 million in debt issuance costs during 2012 in connection with the Series B Notes. These costs were deferred and are being recognized as interest expense over the term of the underlying debt. Interest expense related to the amortization of debt issuance costs was approximately $617,000 and 604,000 for the three months ended June 30, 2012 and 2011, respectively. Interest expense related to the amortization of debt issuance costs was approximately $1.2 million for the six months ended June 30, 2012 and 2011.

Presented below is a schedule of the principal repayment requirements of long-term debt by fiscal year as of June 30, 2012 (in thousands):

Year ending December 31,
2012	$	—
2013		—
2014		—
2015		—
2016		—
Thereafter		600,000
Total	$	600,000

10. Commitments, Contingencies and Other Matters

As of June 30, 2012, the Company maintained letters of credit in the aggregate amount of $39.8 million for the benefit of various insurance companies as collateral for retrospective premiums and retained losses which could become payable under the terms of the underlying insurance contracts. These letters of credit expire annually at various times during the year and are typically renewed. As of June 30, 2012, no amounts had been drawn under the letters of credit.

As of June 30, 2012, the Company had commitments to purchase approximately $220 million of major equipment for its drilling and pressure pumping businesses.

The Company’s pressure pumping business has entered into agreements to purchase minimum quantities of proppants from certain vendors. These agreements expire in 2013 and 2016. As of June 30, 2012, the remaining obligation under these agreements is approximately $33.7 million, of which materials with a total purchase price of approximately $4.7 million are expected to be delivered during the last half of 2012. In the event that the required minimum quantities are not purchased during any contract year, the Company would be required to make a liquidated damages payment to the respective vendor for any shortfall.

In November of 2011, the Company’s pressure pumping business entered into an agreement with a proppant vendor to advance up to $12.0 million to such vendor to finance the construction of certain processing facilities. This advance is secured by the underlying processing facilities and bears interest at an annual rate of 5.0%. Repayment of the advance is to be made through discounts applied to purchases from the vendor and repayment of all amounts advanced must be made no later than October 1, 2017. As of June 30, 2012, advances of approximately $5.7 million had been made under this agreement and repayments of approximately $239,000 had been received resulting in a balance outstanding of approximately $5.5 million.

15

The Company is party to various legal proceedings arising in the normal course of its business. The Company does not believe that the outcome of these proceedings, either individually or in the aggregate, will have a material adverse effect on its financial condition, results of operations or cash flows.

11. Stockholders’ Equity

Cash Dividends - The Company paid cash dividends during the six months ended June 30, 2011 and 2012 as follows:

2011:	Per Share		Total
			(in thousands)
Paid on March 30, 2011	$	0.05	$	7,708
Paid on June 30, 2011		0.05		7,772
Total cash dividends	$	0.10	$	15,480

2012:	Per Share		Total
			(in thousands)
Paid on March 30, 2012	$	0.05	$	7,788
Paid on June 29, 2012		0.05		7,650
Total cash dividends	$	0.10	$	15,438

On July 25, 2012, the Company’s Board of Directors approved a cash dividend on its common stock in the amount of $0.05 per share to be paid on September 28, 2012 to holders of record as of September 14, 2012. The amount and timing of all future dividend payments, if any, is subject to the discretion of the Board of Directors and will depend upon business conditions, results of operations, financial condition, terms of the Company’s credit facilities and other factors.

On August 1, 2007, the Company’s Board of Directors approved a stock buyback program authorizing purchases of up to $250 million of the Company’s common stock in open market or privately negotiated transactions. During the six months ended June 30, 2012, approximately 4.7 million shares were purchased under the program at a cost of approximately $70.1 million. As of June 30, 2012, the Company was authorized to purchase approximately $42.8 million of the Company’s outstanding common stock under the program. On July 25, 2012, the Company’s Board of Directors terminated the remaining authority under the 2007 stock buyback program and approved a new stock buyback program authorizing purchases of up to $150 million of the Company’s common stock in open market or privately negotiated transactions. Shares purchased under the buyback programs are accounted for as treasury stock.

The Company purchased 83,229 shares of treasury stock from employees during the six months ended June 30, 2012. These shares were purchased at fair market value upon the vesting of restricted stock to provide the employees with the funds necessary to satisfy payroll tax withholding obligations. The total purchase price for these shares was approximately $1.2 million. These purchases were made pursuant to the terms of the Patterson-UTI Energy, Inc. 2005 Long-Term Incentive Plan and not pursuant to the stock buyback program.

12. Income Taxes

On January 1, 2010, the Company converted its Canadian operations from a Canadian branch to a controlled foreign corporation for Federal income tax purposes. Because the statutory tax rates in Canada are lower than those in the United States, this transaction triggered a $5.1 million reduction in the Company’s deferred tax liabilities, which is being amortized as a reduction to deferred income tax expense over the weighted average remaining useful life of the Canadian assets.

As a result of the above conversion, the Company’s Canadian assets are no longer subject to United States taxation, provided that the related unremitted earnings are permanently reinvested in Canada. Effective January 1, 2010, the Company has elected to permanently reinvest these unremitted earnings in Canada, and intends to do so for the foreseeable future. As a result, no deferred United States federal or state income taxes have been provided on such unremitted foreign earnings, which totaled approximately $23.5 million as of June 30, 2012.

13. Fair Values of Financial Instruments

The carrying values of cash and cash equivalents, trade receivables and accounts payable approximate fair value due to the short-term maturity of these items. These fair value estimates are considered Level 1 fair value estimates in the fair value hierarchy of fair value accounting.

16

The estimated fair value of the Company’s outstanding debt balances (including current portion) as of June 30, 2012 and December 31, 2011 is set forth below (in thousands):

	June 30, 2012				December 31, 2011
	Carrying Value		Fair Value		Carrying Value		Fair Value
Borrowings under Credit Agreement:
Revolving credit facility	$	—	$	—	$	110,000	$	110,000
Term loan facility		—		—		92,500		92,500
4.97% Series A Senior Notes		300,000		321,345		300,000		315,942
4.27% Series B Senior Notes		300,000		300,000		—		—
Total debt	$	600,000	$	621,345	$	502,500	$	518,442

The carrying values of the balances outstanding under the term loan facility and revolving credit facility at December 31, 2011 approximated their fair values as both facilities have a floating interest rate. The fair value of the 4.97% Series A Senior Notes at June 30, 2012 and December 31, 2011 was measured based on discounted cash flows associated with the Series A Senior Notes using current market rates of interest at those respective dates. The current market rates used in measuring this fair value were 3.78% at June 30, 2012 and 4.07% at December 31, 2011. The fair value of the 4.27% Series B Senior Notes at June 30, 2012 approximated carrying value due to the fact that these notes were priced and issued at a date in close proximity to June 30, 2012. These fair value estimates are based on observable market inputs and are considered Level 2 fair value estimates in the fair value hierarchy of fair value accounting.

14. Recently Issued Accounting Standards

In June 2011, the FASB issued an accounting standard update that requires that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In the two-statement approach, the first statement should present total net income and its components followed consecutively by a second statement that should present total other comprehensive income, the components of other comprehensive income, and the total of comprehensive income. Historically, these components of other comprehensive income and total comprehensive income have been presented in the statement of changes in stockholders’ equity by many companies, including the Company. This requirement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, and became effective for the Company in the quarter ending March 31, 2012. The adoption of this update has resulted in the addition of a new consolidated statement of comprehensive income being added to the Company’s consolidated financial statements.

In May 2011, the FASB issued an accounting standard update to improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with United States GAAP and International Financial Reporting Standards. The amendments in this update do not require additional fair value measurements, but provide additional guidance as to measuring fair value as well as certain additional disclosure requirements. The requirements in this update are effective during interim and annual periods beginning after December 15, 2011 and became effective for the Company in the quarter ending March 31, 2012. The adoption of this update did not have a material impact on the Company’s disclosures included in its consolidated financial statements.

17

DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Report”) and other public filings and press releases by us contain “forward-looking statements” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995, as amended. These “forward-looking statements” involve risk and uncertainty. These forward-looking statements include, without limitation, statements relating to: liquidity; revenue expectations and backlog; financing of operations; continued volatility of oil and natural gas prices; source and sufficiency of funds required for building new equipment and additional acquisitions (if further opportunities arise); impact of inflation; demand for our services; and other matters. Our forward-looking statements can be identified by the fact that they do not relate strictly to historic or current facts and often use words such as “believes,” “budgeted,” “continue,” “expects,” “estimates,” “project,” “will,” “could,” “may,” “plans,” “intends,” “strategy,” or “anticipates,” or the negative thereof and other words and expressions of similar meaning. The forward-looking statements are based on certain assumptions and analyses we make in light of our experience and our perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate in the circumstances. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to have been correct. Forward-looking statements may be made orally or in writing, including, but not limited to, Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this Report and other sections of our filings with the United States Securities and Exchange Commission (the “SEC”) under the Exchange Act and the Securities Act.

Forward-looking statements are not guarantees of future performance and a variety of factors could cause actual results to differ materially from the anticipated or expected results expressed in or suggested by these forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, global economic conditions, volatility in customer spending and in oil and natural gas prices that could adversely affect demand for our services and their associated effect on day rates, utilization, margins and planned capital expenditures, excess availability of land drilling rigs and pressure pumping equipment, including as a result of reactivation or construction, adverse industry conditions, adverse credit and equity market conditions, difficulty in integrating acquisitions, shortages of labor, equipment, supplies and materials, weather, loss of key customers, liabilities from operations for which we do not have and receive full indemnification or insurance, governmental regulation and ability to retain management and field personnel. Refer to “Risk Factors” contained in Part 1 of our Annual Report on Form 10-K for the year ended December 31, 2011 for a more complete discussion of these and other factors that might affect our performance and financial results. You are cautioned not to place undue reliance on any of our forward-looking statements. These forward-looking statements are intended to relay our expectations about the future, and speak only as of the date they are made. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, changes in internal estimates or otherwise, except as required by law.

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management Overview — We are a leading provider of services to the North American oil and natural gas industry. Our services primarily involve the drilling, on a contract basis, of land-based oil and natural gas wells and pressure pumping services. In addition to the aforementioned services, we also invest, on a non-operating working interest basis, in oil and natural gas properties. We acquired an electric wireline business on October 1, 2010 and sold the business on January 27, 2011. Due to our exit from the electric wireline business, we have presented the results of that business as discontinued operations in this Report.

As of June 30, 2012, we had a drilling fleet that consisted of more than 330 marketable land-based drilling rigs. Although there continued to be uncertainty with respect to the global economic environment and a decrease in commodity prices, activity in our drilling business increased during the second quarter of 2012 compared to the second quarter of 2011. In the second quarter of 2012, our average number of rigs operating was 224, including 224 in the United States and none in Canada, as compared to an average of 202 drilling rigs operating, including 199 rigs in the United States and 3 rigs in Canada during the same period in 2011.

While conventional wells remain an important source of natural gas and oil, this increased activity results, in part, from addressing our customers’ needs for drilling wells in the newer horizontal shale and other unconventional resource plays by expanding our areas of operation and improving the capabilities of our drilling fleet during the last several years. As of June 30, 2012, we have completed 100 new APEX^TM rigs and made performance and safety improvements to existing high capacity rigs. We expect to complete 24 new APEX^TM rigs in 2012. In connection with the newer horizontal shale and other unconventional resource plays, we have added equipment to perform service intensive fracturing jobs. As of June 30, 2012, we have added approximately 500,000 hydraulic horsepower to our pressure pumping fleet since the end of 2009, and we had a total of approximately 660,000 hydraulic horsepower in our pressure pumping fleet at June 30, 2012. High oil prices have resulted in increased drilling and pressure pumping activity in the oil and liquids rich areas, although unusually low natural gas prices and the addition of new pressure pumping equipment to the marketplace has led to an excess supply of pressure pumping equipment in North America.

18

We maintain a backlog of commitments for contract drilling revenues under term contracts, which we define as contracts with an original fixed term of six months or more. Our backlog as of June 30, 2012 was approximately $1.5 billion. We expect approximately $526 million of our backlog to be realized in the remainder of 2012. We calculate our backlog by multiplying the day rate under our term drilling contracts by the number of days remaining under the contract. The calculation does not include any revenues related to other fees such as for mobilization, demobilization and customer reimbursables, nor does it include potential reductions in rates during periods in which the rig is moving, on standby or incurring maintenance and repair time in excess of what is permitted under the drilling contract. In addition, generally our term drilling contracts are subject to termination by the customer on short notice and provide for the payment of an early termination payment to us in the event that the contract is terminated by the customer.

For the three and six months ended June 30, 2012 and 2011, our operating revenues from continuing operations consisted of the following (in thousands):

	Three Months Ended June 30,								Six Months Ended June 30,
	2012				2011				2012				2011
Contract drilling	$	460,249	68	%	$	386,479	65	%	$	949,731	67	%	$	763,837	65	%
Pressure pumping		206,173	30			200,131	33			447,895	31			379,790	33
Oil and natural gas		14,690	2			13,454	2			29,407	2			23,841	2
	$	681,112	100	%	$	600,064	100	%	$	1,427,033	100	%	$	1,167,468	100	%

Generally, the profitability of our business is impacted most by two primary factors in our contract drilling segment: our average number of rigs operating and our average revenue per operating day. During the second quarter of 2012, our average number of rigs operating was 224 compared to 202 in the second quarter of 2011. Our average revenue per operating day was $22,570 in the second quarter of 2012 compared to $21,000 in the second quarter of 2011. We had consolidated net income of $92.5 million for the second quarter of 2012 compared to consolidated net income of $81.6 million for the second quarter of 2011. The increase in consolidated net income was primarily due to our contract drilling segment experiencing an increase in the average number of rigs operating and an increase in the average revenue per operating day as well as a gain on the disposal of our flowback operations in 2012.

Our revenues, profitability and cash flows are highly dependent upon prevailing prices for oil and natural gas. During periods of improved commodity prices, the capital spending budgets of oil and natural gas operators tend to expand, which generally results in increased demand for our services. Conversely, in periods when these commodity prices deteriorate, the demand for our services generally weakens and we experience downward pressure on pricing for our services. After reaching a peak in June 2008, there was a significant decline in oil and natural gas prices and a substantial deterioration in the global economic environment. As part of this deterioration, there was substantial uncertainty in the capital markets and access to financing was reduced. Due to these conditions, our customers reduced or curtailed their drilling programs, which resulted in a decrease in demand for our services, as evidenced by the decline in our monthly average number of rigs operating from a high of 283 in October 2008 to a low of 60 in June 2009. Our monthly average number of rigs operating has subsequently increased from the mid-year low of 60 in 2009 to 222 in June 2012 and our profitability has improved.

We are highly impacted by competition, the availability of excess equipment, labor issues, weather and various other factors that could materially adversely affect our business, financial condition, cash flows and results of operations. Please see “Risk Factors” included in Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

We believe that our liquidity as of June 30, 2012, which includes approximately $382 million in working capital and approximately $360 million available under our $400 million revolving credit facility, together with cash expected to be generated from operations, should provide us with sufficient ability to fund our current plans to build new equipment, make improvements to our existing equipment, service our debt and pay cash dividends. If we pursue opportunities for growth that require capital, we believe we would be able to satisfy these needs through a combination of working capital, cash flows from operating activities, borrowing capacity under our revolving credit facility or additional debt or equity financing. However, there can be no assurance that such capital will be available on reasonable terms, if at all.

Commitments and Contingencies — As of June 30, 2012, we maintained letters of credit in the aggregate amount of $39.8 million for the benefit of various insurance companies as collateral for retrospective premiums and retained losses which could become payable under the terms of the underlying insurance contracts. These letters of credit expire annually at various times during the year and are typically renewed. As of June 30, 2012, no amounts had been drawn under the letters of credit.

19

As of June 30, 2012, we had commitments to purchase approximately $220 million of major equipment for our drilling and pressure pumping businesses.

Our pressure pumping business has entered into agreements to purchase minimum quantities of proppants from certain vendors. These agreements expire in 2013 and 2016. As of June 30, 2012, the remaining obligation under these agreements is approximately $33.7 million, of which materials with a total purchase price of approximately $4.7 million are expected to be delivered during the last half of 2012. In the event that the required minimum quantities are not purchased during any contract year, we could be required to make a liquidated damages payment to the respective vendor for any shortfall.

In November 2011, our pressure pumping business entered into an agreement with a proppant vendor to advance up to $12.0 million to such vendor to finance its construction of certain processing facilities. This advance is secured by the underlying processing facilities and other assets and bears interest at an annual rate of 5.0%. Repayment of the advance is to be made through discounts applied to purchases from the vendor and repayment of all amounts advanced must be made no later than October 1, 2017. As of June 30, 2012, advances of approximately $5.7 million had been made under this agreement and repayments of approximately $239,000 had been received resulting in a balance outstanding of approximately $5.5 million.

Trading and Investing — We have not engaged in trading activities that include high-risk securities, such as derivatives and non-exchange traded contracts. We invest cash primarily in highly liquid, short-term investments such as overnight deposits and money market accounts.

Description of Business — We conduct our contract drilling operations primarily in Texas, New Mexico, Oklahoma, Kansas, Arkansas, Louisiana, Mississippi, Colorado, Utah, Wyoming, Montana, North Dakota, Pennsylvania, West Virginia, Ohio and western Canada. As of June 30, 2012, we had more than 330 marketable land-based drilling rigs. We provide pressure pumping services to oil and natural gas operators primarily in Texas and the Appalachian Basin. Pressure pumping services are primarily well stimulation and cementing for completion of new wells and remedial work on existing wells. We also invest in oil and natural gas assets as a non-operating working interest owner. Our oil and natural gas working interests are located primarily in Texas and New Mexico.

The North American oil and natural gas services industry has experienced downturns in demand during the last decade. During these periods, there have been substantially more drilling rigs and pressure pumping equipment available than necessary to meet demand. As a result, drilling and pressure pumping contractors have had difficulty sustaining profit margins and, at times, have incurred losses during the downturn periods.

In addition, unconventional resource plays have substantially increased and some drilling rigs are not capable of drilling these wells efficiently. Accordingly, the utilization of some older technology drilling rigs may be hampered by their lack of capability to efficiently compete for this work. Other ongoing factors which could continue to adversely affect utilization rates and pricing, even in an environment of high oil and natural gas prices and increased drilling activity, include:

• movement of drilling rigs from region to region,

• reactivation of land-based drilling rigs, or

• construction of new technology drilling rigs.

Construction of new technology drilling rigs increased in recent years. The addition of new technology drilling rigs to the market, combined with a reduction in the drilling of vertical wells, has resulted in excess capacity of conventional drilling rigs. Similarly, the substantial recent increase in unconventional resource plays has led to higher demand for pressure pumping services, and there has been a significant increase in the construction of new pressure pumping equipment. As a result of low natural gas prices and the construction of new equipment, there is currently an excess of pressure pumping equipment available. In circumstances of excess capacity, providers of pressure pumping services will have difficulty sustaining profit margins and may sustain losses during downturn periods. We cannot predict either the future level of demand for our contract drilling or pressure pumping services or future conditions in the oil and natural gas contract drilling or pressure pumping businesses.

20

Critical Accounting Policies

In addition to established accounting policies, our consolidated financial statements are impacted by certain estimates and assumptions made by management. No changes in our critical accounting policies have occurred since the filing of our Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

Liquidity and Capital Resources

As of June 30, 2012, we had working capital of $382 million, including cash and cash equivalents of $75.3 million compared to working capital of $346 million and cash and cash equivalents of $23.9 million at December 31, 2011.

During the six months ended June 30, 2012, our sources of cash flow included:

• $495 million from operating activities,

• $300 million in proceeds from the issuance of our Series B Senior Notes,

• $123 million in borrowings under our revolving credit facility,

• $58.9 million in proceeds from the disposal of property and equipment, including $42.5 million in proceeds from the sale of our flowback operations, and

• $195,000 from the exercise of stock options and related tax benefits associated with stock-based compensation.

During the six months ended June 30, 2012, we used $15.4 million to pay dividends on our common stock, $326 million to repay long-term debt, $71.3 million to repurchase shares of our common stock and $512 million:

• to build new drilling rigs and pressure pumping equipment,

• to make capital expenditures for the betterment and refurbishment of our drilling rigs and pressure pumping equipment,

• to acquire and procure equipment and facilities to support our drilling and pressure pumping operations, and

• to fund investments in oil and natural gas properties on a working interest basis.

We paid cash dividends during the six months ended June 30, 2012 as follows:

	Per Share		Total
			(in thousands)
Paid on March 30, 2012	$	0.05	$	7,788
Paid on June 29, 2012	$	0.05	$	7,650
Total cash dividends	$	0.10	$	15,438

On July 25, 2012, our Board of Directors approved a cash dividend on our common stock in the amount of $0.05 per share to be paid on September 28, 2012 to holders of record as of September 14, 2012. The amount and timing of all future dividend payments, if any, is subject to the discretion of the Board of Directors and will depend upon business conditions, results of operations, financial condition, terms of our credit facilities and other factors.

On August 1, 2007, our Board of Directors approved a stock buyback program, authorizing purchases of up to $250 million of our common stock in open market or privately negotiated transactions. During the six months ended June 30, 2012, we purchased approximately 4.7 million shares of our common stock under this program at a cost of approximately $70.1 million. As of June 30, 2012, we were authorized to purchase approximately $42.8 million of our outstanding common stock under the program. On July 25, 2012, our Board of Directors terminated the remaining authority under the 2007 stock buyback program and approved a new stock buyback program authorizing purchases of up to $150 million of our common stock in open market or privately negotiated transactions.

On August 19, 2010, we entered into a Credit Agreement (the “Credit Agreement”). The Credit Agreement is a committed senior unsecured credit facility that includes a revolving credit facility and a term loan facility.

21

The revolving credit facility permits aggregate borrowings of up to $400 million and contains a letter of credit facility that is limited to $150 million and a swing line facility that is limited to $40 million. Subject to customary conditions, we may request that the lenders’ aggregate commitments with respect to the revolving credit facility be increased by up to $100 million, not to exceed total commitments of $500 million. The maturity date for the revolving facility is August 19, 2013.

The term loan facility provided for a loan of $100 million which was funded on August 19, 2010. The term loan facility was payable in quarterly principal installments commencing November 19, 2010. The installment amounts were scheduled to vary from 1.25% of the original principal amount for each of the first four quarterly installments, 2.50% of the original principal amount for each of the subsequent eight quarterly installments, 5.00% of the original principal amount for the next subsequent three quarterly installments, with the remainder becoming due at maturity. The maturity date for the term loan facility was August 19, 2014. The outstanding balance of the term loan facility was paid in full on June 14, 2012.

Loans under the Credit Agreement bear interest by reference, at our election, to the LIBOR rate or base rate. The applicable margin on LIBOR rate loans varies from 2.75% to 3.75% and the applicable margin on base rate loans varies from 1.75% to 2.75%, in each case determined based upon our debt to capitalization ratio. As of June 30, 2012, the applicable margin on LIBOR rate loans was 2.75% and the applicable margin on base rate loans was 1.75%. A letter of credit fee is payable by us equal to the applicable margin for LIBOR rate loans times the daily amount available to be drawn under outstanding letters of credit. The commitment fee payable to the lenders for the unused portion of the revolving credit facility varies from 0.50% to 0.75% based upon our debt to capitalization ratio and was 0.50% as of June 30, 2012.

The Credit Agreement contains customary representations, warranties, indemnities and affirmative and negative covenants. The Credit Agreement also requires compliance with two financial covenants. We must not permit our debt to capitalization ratio to exceed 45% at any time. The Credit Agreement generally defines the debt to capitalization ratio as the ratio of (a) total borrowed money indebtedness to (b) the sum of such indebtedness plus consolidated net worth, with consolidated net worth determined as of the last day of the most recently ended fiscal quarter. We also must not permit the interest coverage ratio as of the last day of a fiscal quarter to be less than 3.00 to 1.00. The Credit Agreement generally defines the interest coverage ratio as the ratio of EBITDA of the four prior fiscal quarters to interest charges for the same period. We were in compliance with these financial covenants as of June 30, 2012. We do not expect that the restrictions and covenants will impair, in any material respect, our ability to operate or react to opportunities that might arise.

As of June 30, 2012, the outstanding balance under the term loan facility had been paid in full and there were no borrowings outstanding under the revolving credit facility. We had $39.8 million in letters of credit outstanding at June 30, 2012 and, as a result, we had available borrowing capacity under the revolving credit facility of approximately $360 million at that date.

On October 5, 2010, we completed the issuance and sale of $300 million in aggregate principal amount of our 4.97% Series A Senior Notes due October 5, 2020 (the “Series A Notes”) in a private placement. The Series A Notes bear interest at a rate of 4.97% per annum. We pay interest on the Series A Notes on April 5 and October 5 of each year. The Series A Notes will mature on October 5, 2020.

On June 14, 2012, we completed the issuance and sale of $300 million in aggregate principal amount of our 4.27% Series B Senior Notes due June 14, 2022 (the “Series B Notes”) in a private placement. The Series B Notes bear interest at a rate of 4.27% per annum. We will pay interest on the Series B Notes on April 5 and October 5 of each year beginning October 5, 2012. The Series B Notes will mature on June 14, 2022.

The Series A and Series B Notes are prepayable at our option, in whole or in part, provided that in the case of a partial prepayment, prepayment must be in an amount not less than 5% of the aggregate principal amount of the notes then outstanding, at any time and from time to time at 100% of the principal amount prepaid, plus accrued and unpaid interest to the prepayment date, plus a “make-whole” premium as specified in the note purchase agreement. We must offer to prepay the notes upon the occurrence of any change of control. In addition, we must offer to prepay the notes upon the occurrence of certain asset dispositions if the proceeds therefrom are not timely reinvested in productive assets. If any offer to prepay is accepted, the purchase price of each prepaid note is 100% of the principal amount thereof, plus accrued and unpaid interest thereon to the prepayment date.

The respective note purchase agreements require compliance with two financial covenants. We must not permit our debt to capitalization ratio to exceed 50% at any time. The note purchase agreements generally define the debt to capitalization ratio as the ratio of (a) total borrowed money indebtedness to (b) the sum of such indebtedness plus consolidated net worth, with consolidated net worth determined as of the last day of the most recently ended fiscal quarter. We also must not permit the interest coverage ratio as of

22

the last day of a fiscal quarter to be less than 2.50 to 1.00. The note purchase agreements generally define the interest coverage ratio as the ratio for the four prior quarters of EBITDA to interest charges for the same period. We were in compliance with these financial covenants as of June 30, 2012. We do not expect that the restrictions and covenants will impair, in any material respect, our ability to operate or react to opportunities that might arise.

Events of default under the note purchase agreements and the Credit Agreement include failure to pay principal or interest when due, failure to comply with the financial and operational covenants, a cross default event, a judgment in excess of a threshold event, the guaranty agreement ceasing to be enforceable, the occurrence of certain ERISA events, a change of control event and bankruptcy and other insolvency events. If an event of default under a note purchase agreement occurs and is continuing, then holders of a majority in principal amount of the notes have the right to declare all the notes then-outstanding to be immediately due and payable. In addition, if we default in payments on any note, then until such defaults are cured, the holder thereof may declare all the notes held by it pursuant to the note purchase agreement to be immediately due and payable.

We believe that our liquidity as of June 30, 2012, which included approximately $382 million in working capital and approximately $360 million available under our $400 million revolving credit facility, together with cash expected to be generated from operations, should provide us with sufficient ability to fund our current plans to build new equipment, make improvements to our existing equipment, service our debt and pay cash dividends. If we pursue opportunities for growth that require capital, we believe we would be able to satisfy these needs through a combination of working capital, cash flows from operating activities, borrowing capacity under our revolving credit facility or additional debt or equity financing. However, there can be no assurance that such capital will be available on reasonable terms, if at all.

Results of Operations

The following tables summarize operations by business segment for the three months ended June 30, 2012 and 2011:

Contract Drilling	2012		2011		% Change
	(Dollars in thousands)
Revenues	$	460,249	$	386,479		19.1	%
Direct operating costs	$	272,720	$	218,754		24.7	%
Selling, general and administrative	$	1,286	$	1,308		(1.7	)%
Depreciation and impairment	$	95,707	$	81,282		17.7	%
Operating income	$	90,536	$	85,135		6.3	%
Operating days		20,392		18,406		10.8	%
Average revenue per operating day	$	22.57	$	21.00		7.5	%
Average direct operating costs per operating day	$	13.37	$	11.88		12.5	%
Average rigs operating		224		202		10.9	%
Capital expenditures	$	181,685	$	196,726		(7.6	)%

Revenues and direct operating costs increased in 2012 compared to 2011 as a result of an increase in the number of operating days and increases in average revenue and direct operating costs per operating day. Average revenue per operating day increased in 2012 primarily due to increases in contractual dayrates. Average direct operating costs per operating day increased in 2012 due primarily to higher labor and related costs as well as higher maintenance and repair costs. The increase in operating days was largely due to increased demand resulting from higher oil prices and the addition of newbuild APEX^TM rigs into our drilling fleet. Capital expenditures were incurred in 2012 and 2011 to build new drilling rigs, to modify and upgrade our drilling rigs and to acquire additional related equipment such as top drives, drill pipe, drill collars, engines, fluid circulating systems, rig hoisting systems and safety enhancement equipment. Depreciation expense increased as a result of capital expenditures.

23

Pressure Pumping	2012		2011		% Change
	(Dollars in thousands)
Revenues	$	206,173	$	200,131		3.0	%
Direct operating costs	$	138,051	$	128,866		7.1	%
Selling, general and administrative	$	4,344	$	4,456		(2.5	)%
Depreciation and amortization	$	26,932	$	16,469		63.5	%
Operating income	$	36,846	$	50,340		(26.8	)%
Fracturing jobs		326		349		(6.6	)%
Other jobs		1,425		1,636		(12.9	)%
Total jobs		1,751		1,985		(11.8	)%
Average revenue per fracturing job	$	542.52	$	484.21		12.0	%
Average revenue per other job	$	20.57	$	19.03		8.1	%
Average revenue per total job	$	117.75	$	100.82		16.8	%
Average direct operating costs per total job	$	78.84	$	64.92		21.4	%
Capital expenditures	$	57,525	$	41,435		38.8	%

Our customers have increased their activities in the development of unconventional reservoirs resulting in an increase in larger multi-stage fracturing jobs associated therewith. We have added additional equipment through construction and acquisition to meet this demand and expand our area of operations. As a result, although total fracturing jobs have decreased, we have experienced an increase in the number of these larger multi-stage fracturing jobs as a proportion of the total fracturing jobs we performed. Average revenue per fracturing job increased as a result of this increase in the number of larger multi-stage fracturing jobs in 2012 as compared to 2011, as well as increased pricing. Average revenue per other job increased as a result of increased pricing for the services provided and a change in job mix. Average direct operating costs per total job increased primarily as a result of increased costs of materials and higher labor and related costs. These increases in direct operating costs were greater than the increased revenue in 2012 resulting in lower operating income in 2012 as compared to 2011. Significant capital expenditures have been incurred in recent years to add capacity in our pressure pumping segment. The increase in depreciation and amortization expense in 2012 was a result of our recent capital expenditures.

Oil and Natural Gas Production and Exploration	2012		2011		% Change
	(Dollars in thousands)
Revenues - Oil	$	13,509	$	12,000		12.6	%
Revenues – Natural gas and liquids	$	1,181	$	1,454		(18.8	)%
Revenues - Total	$	14,690	$	13,454		9.2	%
Direct operating costs	$	2,583	$	2,103		22.8	%
Depletion and impairment	$	4,883	$	4,222		15.7	%
Operating income	$	7,224	$	7,129		1.3	%
Capital expenditures	$	7,875	$	5,078		55.1	%

Total revenues increased as a result of increased production of oil. Oil production increased primarily due to the addition of new wells. Depletion and impairment expense in 2012 includes approximately $92,000 of oil and natural gas property impairments compared to approximately $759,000 of oil and natural gas property impairments in 2011. Depletion expense increased approximately $1.3 million in 2012 compared to 2011 primarily due to increased oil production.

Corporate and Other	2012			2011		% Change
	(Dollars in thousands)
Selling, general and administrative	$	11,089		$	10,985		0.9	%
Depreciation	$	955		$	776		23.1	%
Net gain on asset disposals	$	28,332		$	1,017		N/M
Interest income	$	179		$	45		297.8	%
Interest expense	$	5,051		$	3,514		43.7	%
Other income (expense)	$	(144	)	$	78		N/M
Capital expenditures	$	1,577		$	1,827		(13.7	)%

Gains and losses on the disposal of assets are treated as part of our corporate activities because such transactions relate to corporate strategy decisions of our executive management group. The gain on the disposal of assets in 2012 includes a gain of approximately $22.6 million associated with the sale of our flowback operations in April 2012. Interest expense increased in 2012 due primarily to interest charges on increased borrowings under our revolving credit facility.

24

The following tables summarize operations by business segment for the six months ended June 30, 2012 and 2011:

Contract Drilling	2012		2011		% Change
	(Dollars in thousands)
Revenues	$	949,731	$	763,837		24.3	%
Direct operating costs	$	555,369	$	437,453		27.0	%
Selling, general and administrative	$	2,622	$	2,593		1.1	%
Depreciation and impairment	$	189,433	$	158,137		19.8	%
Operating income	$	202,307	$	165,654		22.1	%
Operating days		42,002		37,052		13.4	%
Average revenue per operating day	$	22.61	$	20.62		9.7	%
Average direct operating costs per operating day	$	13.22	$	11.81		11.9	%
Average rigs operating		231		205		12.7	%
Capital expenditures	$	382,292	$	331,975		15.2	%

Revenues and direct operating costs increased in 2012 compared to 2011 as a result of an increase in the number of operating days and increases in average revenue and direct operating costs per operating day. Average revenue per operating day increased in 2012 primarily due to increases in contractual dayrates. Average direct operating costs per operating day increased in 2012 due primarily to higher labor and related costs as well as higher maintenance and repair costs. The increase in operating days was largely due to increased demand resulting from higher oil prices and the addition of newbuild APEX^TM rigs into our drilling fleet. Capital expenditures were incurred in 2012 and 2011 to build new drilling rigs, to modify and upgrade our drilling rigs and to acquire additional related equipment such as top drives, drill pipe, drill collars, engines, fluid circulating systems, rig hoisting systems and safety enhancement equipment. Depreciation expense increased as a result of capital expenditures.

Pressure Pumping	2012		2011		% Change
	(Dollars in thousands)
Revenues	$	447,895	$	379,790		17.9	%
Direct operating costs	$	304,908	$	247,441		23.2	%
Selling, general and administrative	$	8,619	$	8,795		(2.0)	%
Depreciation and amortization	$	50,735	$	31,836		59.4	%
Operating income	$	83,633	$	91,718		(8.8)	%
Fracturing jobs		656		734		(10.6)	%
Other jobs		3,084		3,081		0.1	%
Total jobs		3,740		3,815		(2.0)	%
Average revenue per fracturing job	$	584.50	$	440.48		32.7	%
Average revenue per other job	$	20.90	$	18.33		14.0	%
Average revenue per total job	$	119.76	$	99.55		20.3	%
Average direct operating costs per total job	$	81.53	$	64.86		25.7	%
Capital expenditures	$	112,099	$	82,616		35.7	%

Our customers have increased their activities in the development of unconventional reservoirs resulting in an increase in larger multi-stage fracturing jobs associated therewith. We have added additional equipment through construction and acquisition to meet this demand and expand our area of operations. As a result, although total fracturing jobs have decreased, we have experienced an increase in the number of these larger multi-stage fracturing jobs as a proportion of the total fracturing jobs we performed. Average revenue per fracturing job increased as a result of this increase in the number of larger multi-stage fracturing jobs in 2012 as compared to 2011, as well as increased pricing. Average revenue per other job increased as a result of increased pricing for the services provided and a change in job mix. Average direct operating costs per total job increased primarily as a result of increased costs of materials and higher labor and related costs. These increases in direct operating costs were greater than the increased revenue in 2012 resulting in lower operating income in 2012 as compared to 2011. Significant capital expenditures have been incurred in recent years to add capacity in our pressure pumping segment. The increase in depreciation and amortization expense in 2012 was a result of our recent capital expenditures.

25

Oil and Natural Gas Production and Exploration	2012		2011		% Change
	(Dollars in thousands)
Revenues - Oil	$	27,322	$	21,087		29.6	%
Revenues – Natural gas and liquids	$	2,085	$	2,754		(24.3)	%
Revenues - Total	$	29,407	$	23,841		23.3	%
Direct operating costs	$	5,313	$	4,100		29.6	%
Depletion and impairment	$	9,352	$	7,794		20.0	%
Operating income	$	14,742	$	11,947		23.4	%
Capital expenditures	$	15,304	$	9,746		57.0	%

Total revenues increased as a result of increased production and higher prices for oil. Oil production increased primarily due to the addition of new wells. Depletion and impairment expense in 2012 includes approximately $384,000 of oil and natural gas property impairments compared to approximately $1.4 million of oil and natural gas property impairments in 2011. Depletion expense increased approximately $2.6 million in 2012 compared to 2011 primarily due to increased production.

Corporate and Other	2012		2011		% Change
	(Dollars in thousands)
Selling, general and administrative	$	19,346	$	21,336		(9.3)	%
Depreciation	$	1,910	$	1,197		59.6	%
Net gain on asset disposals	$	30,732	$	2,621		N/M
Provision for bad debts	$	1,600	$	—		N/M
Interest income	$	233	$	88		164.8	%
Interest expense	$	9,633	$	7,403		30.1	%
Other income (expense)	$	(89)	$	197		N/M
Capital expenditures	$	2,370	$	3,281		(27.8)	%

Selling, general and administrative expense decreased in 2012 primarily as a result of decreased personnel costs related to the final determination of payouts under the 2009 Performance Units upon the completion of the performance period. Gains and losses on the disposal of assets are treated as part of our corporate activities because such transactions relate to corporate strategy decisions of our executive management group. The gain on the disposal of assets in 2012 includes a gain of approximately $22.6 million associated with the sale of our flowback operations in April 2012. A provision for bad debts was recognized in 2012 with respect to accounts receivable balances that are estimated to be uncollectible. Interest expense increased in 2012 due primarily to interest charges on increased borrowings under our revolving credit facility.

Income Taxes

On January 1, 2010, we converted our Canadian operations from a Canadian branch to a controlled foreign corporation for federal income tax purposes. Because the statutory tax rates in Canada are lower than those in the United States, this transaction triggered a $5.1 million reduction in deferred tax liabilities, which is being amortized as a reduction to deferred income tax expense over the weighted average remaining useful life of the Canadian assets.

As a result of the above conversion, our Canadian assets are no longer directly subject to United States taxation, provided that the related unremitted earnings are permanently reinvested in Canada. Effective January 1, 2010, we have elected to permanently reinvest these unremitted earnings in Canada, and we intend to do so for the foreseeable future. As a result, no deferred United States federal or state income taxes have been provided on such unremitted foreign earnings, which totaled approximately $23.5 million as of June 30, 2012.

Recently Issued Accounting Standards

In June 2011, the FASB issued an accounting standard update that requires that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In the two-statement approach, the first statement should present total net income and its components followed consecutively by a second statement that should present total other comprehensive income, the components of other comprehensive income, and the total of comprehensive income. Historically, these components of other comprehensive income and total comprehensive income have been presented in the statement of changes in stockholders’ equity by many companies, including the Company. This requirement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, and became effective for us in the quarter ending March 31, 2012. The adoption of this update has resulted in the addition of a new consolidated statement of comprehensive income being added to our consolidated financial statements.

26

In May 2011, the FASB issued an accounting standard update to improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with United States GAAP and International Financial Reporting Standards. The amendments in this update do not require additional fair value measurements, but provide additional guidance as to measuring fair value as well as certain additional disclosure requirements. The requirements in this update are effective during interim and annual periods beginning after December 15, 2011 and became effective for us in the quarter ending March 31, 2012. The adoption of this update did not have a material impact on the disclosures included in our consolidated financial statements.

Volatility of Oil and Natural Gas Prices and its Impact on Operations and Financial Condition

Our revenue, profitability and cash flows are highly dependent upon prevailing prices for oil and natural gas and expectations about future prices. For many years, oil and natural gas prices and markets have been extremely volatile. Prices are affected by factors such as market supply and demand, international military, political and economic conditions, the ability of OPEC to set and maintain production and price targets, technical advances affecting energy consumption and the price and availability of alternative fuels. All of these factors are beyond our control. During the second quarter of 2008, the quarterly average market price of natural gas (Henry Hub spot price as reported by the United States Energy Information Administration) was $11.74 per Mcf and the quarterly average market price of oil (WTI spot price as reported by the Energy Information Administration) was $123.95 per barrel. In the last half of 2008, commodity prices rapidly declined and averaged $6.60 per Mcf for natural gas and $58.35 per barrel for oil in the fourth quarter of 2008. In 2009, the price of natural gas declined further and averaged $4.06 per Mcf for the year. These declines in the market price of natural gas and oil resulted in our customers significantly reducing their drilling activities beginning in the fourth quarter of 2008, and drilling activities remained low throughout 2009. Drilling activities increased in 2010 as did the prices for oil and natural gas. The increased drilling activity was largely attributed to increased development of unconventional oil and natural gas reservoirs and an improvement in the price of oil which averaged $79.40 per barrel in 2010. Drilling for oil and liquids rich targets continued to increase in 2011 as oil averaged $94.86 per barrel for the year. Natural gas prices decreased in 2011 to an average of $4.00 per Mcf. The 2011 decrease in natural gas prices was most significant in the fourth quarter where the average price dropped to $3.32 per Mcf and this decrease has continued into 2012 where natural gas prices fell below $2.00 per Mcf in April and averaged $2.28 per Mcf for the second quarter resulting in reduced drilling for natural gas in 2012. The increase in drilling activity in oil rich basins has absorbed the decrease in demand for natural gas drilling activities in 2012 and our total rig count has increased. Our average number of rigs operating remains well below the number of our available rigs. Construction of new land drilling rigs in the United States during the last ten years has significantly contributed to excess capacity. As a result of decreased drilling activity and excess capacity, our average number of rigs operating has declined from historic highs. We expect oil and natural gas prices to continue to be volatile and to affect our financial condition, operations and ability to access sources of capital. Low market prices for oil and natural gas would likely result in lower demand for our drilling rigs and pressure pumping services and could adversely affect our operating results, financial condition and cash flows. Even during periods of high prices for oil and natural gas, companies exploring for oil and natural gas may cancel or curtail programs, or reduce their levels of capital expenditures for exploration and production for a variety of reasons, which could reduce demand for our drilling and pressure pumping services.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

We currently have exposure to interest rate market risk associated with any borrowings that we have under our revolving credit facility. Interest is paid on the outstanding principal amount of borrowings at a floating rate based on, at our election, LIBOR or a base rate. The margin on LIBOR loans ranges from 2.75% to 3.75% and the margin on base rate loans ranges from 1.75% to 2.75%, based on our debt to capitalization ratio. At June 30, 2012, the margin on LIBOR loans was 2.75% and the margin on base rate loans was 1.75%. As of June 30, 2012, we had no balance outstanding under our revolving credit facility. The interest rate on the borrowings outstanding under our credit facilities is variable and adjusts at each interest payment date based on our election of LIBOR or the base rate.

We conduct a portion of our business in Canadian dollars through our Canadian land-based drilling operations. The exchange rate between Canadian dollars and U.S. dollars has fluctuated during the last several years. If the value of the Canadian dollar against the U.S. dollar weakens, revenues and earnings of our Canadian operations will be reduced and the value of our Canadian net assets will decline when they are translated to U.S. dollars. This currency risk is not material to our results of operations or financial condition.

The carrying values of cash and cash equivalents, trade receivables and accounts payable approximate fair value due to the short-term maturity of these items.

27

ITEM 4. Controls and Procedures

Disclosure Controls and Procedures — We maintain disclosure controls and procedures (as such terms are defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act), designed to ensure that the information required to be disclosed in the reports that we file with the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our CEO and CFO, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of June 30, 2012.

Changes in Internal Control Over Financial Reporting —There were no changes in our internal control over financial reporting during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, as defined in Rule 13a-15(f) under the Exchange Act.

PART II — OTHER INFORMATION

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

The table below sets forth the information with respect to purchases of our common stock made by us during the quarter ended June 30, 2012.

Period Covered	Total Number of  Shares Purchased		Average Price Paid per Share		Total Number  of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (in thousands)(1)
April 1-30, 2012 (2)		57	$	16.32		—	$	112,868
May 1-31, 2012		2,342,126	$	15.37		2,342,126	$	76,879
June 1-30, 2012 (2)		2,449,147	$	14.43		2,366,658	$	42,777
Total		4,791,330	$	14.89		4,708,784	$	42,777	(3)

(1) On August 2, 2007, we announced that our Board of Directors approved a stock buyback program authorizing purchases of up to $250 million of our common stock in open market or privately negotiated transactions. The remaining authority under this buyback program was terminated on July 25, 2012.

(2) We purchased 57 shares in April and 82,489 shares in June from employees with respect to their tax withholding obligations with respect to the vesting of restricted shares. The price paid was the closing price of our common stock on the last business day prior to the date the shares vested. These purchases were made pursuant to the terms of the Patterson-UTI Energy, Inc. 2005 Long-Term Incentive Plan and not pursuant to the stock buyback program.

(3) On July 25, 2012, our Board of Directors terminated the remaining authority under the 2007 stock buyback program, and approved a new stock buyback program authorizing purchases of up to $150 million of our common stock in open market or privately negotiated transactions.

ITEM 5. Other Information

On July 25, 2012, Mr. Pipkin, the Company’s Chief Accounting Officer and Assistant Secretary, informed the Board that he will resign his employment with the Company effective as of August 10, 2012 so that he could accept a Chief Financial Officer position with a privately-owned company. The Company’s Chief Financial Officer will assume Mr. Pipkin’s responsibilities as principal accounting officer.

ITEM 6. Exhibits

The following exhibits are filed herewith or incorporated by reference, as indicated:

3.1	Restated Certificate of Incorporation, as amended (filed August 9, 2004 as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004 and incorporated herein by reference).
3.2	Amendment to Restated Certificate of Incorporation, as amended (filed August 9, 2004 as Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004 and incorporated herein by reference).
3.3	Second Amended and Restated Bylaws (filed August 6, 2007 as Exhibit 3.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007 and incorporated herein by reference).
10.1	Form of Indemnification Agreement entered into by Patterson-UTI Energy, Inc. with William Andrew Hendricks, Jr. (filed April 28, 2004 as Exhibit 10.11 to the Company’s Annual Report on Form 10-K, as amended, for the year ended December 31, 2003 and incorporated herein by reference).

28

10.2*	Severance Agreement, effective as of April 2, 2012, by and between Patterson-UTI Energy, Inc. and William Andrew Hendricks, Jr.
10.3*	Change of Control Agreement, effective as of April 2, 2012, by and between Patterson-UTI Energy, Inc. and William Andrew Hendricks, Jr.
10.4	Note Purchase Agreement, dated June 14, 2012, by and among Patterson-UTI Energy, Inc. and the purchasers named therein (filed June 18, 2012 as Exhibit 10.1 to the Company’s Current Report on Form 8-K and incorporated herein by reference).
31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1*	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	The following materials from Patterson-UTI Energy, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statement of Changes in Stockholders’ Equity, (v) the Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements.

* filed herewith

29

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

PATTERSON-UTI ENERGY, INC.
By:	/s/ Gregory W. Pipkin
	Gregory W. Pipkin
	Chief Accounting Officer and Assistant Secretary
	(Principal Accounting Officer and Duly Authorized Officer)

DATE: July 30, 2012

30

EX-10.2

Exhibit 10.2

PATTERSON-UTI ENERGY, INC.

SEVERANCE AGREEMENT

THIS SEVERANCE AGREEMENT (this “Agreement”) is entered this 16th day of April 2012, to be effective as of April 2, 2012 (the “Effective Date”), by and between Patterson-UTI Energy, Inc., a Delaware corporation (the “Company”) and William Andrew Hendricks, Jr. (the “Employee”). Certain capitalized terms used herein are defined in Section 18.

WHEREAS, the Employee was hired on April 2, 2012 as the chief operating officer of the Company;

WHEREAS, as an inducement for the Employee to accept the Company’s offer of employment, the Company agreed to provide the Employee a severance benefit under certain circumstances; and

WHEREAS, the Company considers it to be in the best interests of the Company to enter into a severance agreement with the Employee;

NOW, THEREFORE, the Company and the Employee agree as follows:

1. Term of this Agreement. The term of this Agreement shall begin on the Effective Date and shall terminate on the third anniversary of the Effective Date; provided, however, following the Employee’s termination by reason of a Qualifying Termination that occurs prior to the third anniversary of the Effective Date, this Agreement shall continue in effect with respect to all rights and obligations accruing as a result of Employee’s termination by reason of such Qualifying Termination.

2. Payments Upon a Qualifying Termination of Employment.

(a) If during the term of this Agreement the employment of Employee shall terminate by reason of a Qualifying Termination, then the Company shall pay to Employee (or Employee’s beneficiary or estate) as compensation for services rendered to the Company a lump-sum cash amount equal to $750,000 less any amounts received by or payable to Employee under Section 7(a)(iii)(3) of the CIC Agreement or any similar payments under any other change in control agreement entered into between the Employee and the Company.

(b) The amount payable under Section 2(a), if any, shall be paid on the seventieth (70th) day following the Date of Qualifying Termination; provided, however, that if, for purposes of section 409A of the Code, the Employee is determined to be a “specified employee” for the year in which such Date of Qualifying Termination occurs, such amount shall be paid on the first business day following the six-month anniversary of the Date of Qualifying Termination.

-1-

3. Notices. Notices required or permitted to be given by either party pursuant to this Agreement shall be in writing and shall be deemed to have been given when delivered personally to the other party or when deposited with the United States Postal Service as certified or registered mail with postage prepaid and addressed:

(i) if to the Employee, at the Employee’s address last shown on the Company’s records, and

(ii) if to the Company, at 450 Gears Road, Suite 500, Houston, Texas 77067, directed to the attention of the General Counsel;

(iii) or, in either case, to such other address as the party to whom or which such notice is to be given shall have specified by notice given to the other party.

4. Release of Claims. Notwithstanding anything to the contrary contained herein, Employee’s right to receive severance payments under this Agreement is conditioned on, on or prior to the sixtieth (60th) day following the Date of Qualifying Termination, (i) the execution and delivery by the Employee (or Employee’s beneficiary) of a general release in favor of Company and its successors and affiliates, and their officers, directors and employees, in such form as the Company shall specify and (ii) the expiration of any period during which the Employee may revoke the general release pursuant to applicable law.

5. Costs; Breach. If it is necessary for the Company to commence litigation against Employee for breach of this Agreement or for Employee to enforce his rights under this Agreement by reason of a dispute, breach or default by Company hereunder, then, the losing party will in all cases be responsible for the prevailing party’s and his or its reasonable attorneys fees, costs and expenses incurred in connection with the litigation or arbitration.

6. Binding Effect; Successors. This Agreement shall be binding upon and shall inure to the benefit of the Company and its successors and assigns, and shall inure to the benefit of and be binding upon Employee and his executors, administrators, heirs, and legal representatives. The Employee may not transfer, sell or otherwise assign his rights, obligations, or benefits under this Agreement.

7. Withholding Taxes. The Company may withhold from all payments to be paid to the Employee pursuant to this Agreement all taxes that, by applicable federal or state law, the Company is required to so withhold.

8. Amendment and Waiver. No provision of this Agreement may be amended or waived (whether by act or course of conduct or omission or otherwise) unless that amendment or waiver is by written instrument signed by the parties hereto. No waiver by either party of any breach of this Agreement shall be deemed a waiver of any other or subsequent breach.

-2-

9. Governing Law. The validity, interpretation, construction and enforceability of this Agreement shall be governed by the laws of the State of Texas, exclusive of the conflict of laws provisions thereof.

10. Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

11. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute the same instrument.

12. Other Employment Arrangements.

(a) This Agreement does not affect the Employee’s existing or future employment arrangements with the Company, except as specifically provided herein. The Employee’s employment with the Company shall continue to be governed by the Employee’s existing or future employment agreements with the Company, if any, or, in the absence of any employment agreement, shall continue to be at the will of the Board of Directors of the Company or, if the Employee is not an officer of the Company at the time of the termination of the Employee’s employment with the Company, the will of the Chief Executive Officer of the Company, except that if the Employee’s employment with the Company is terminated (whether by the Employee or the Company), then the Employee shall be entitled to receive certain benefits, if any, as provided in this Agreement.

(b) Nothing in this Agreement shall prevent or limit the Employee’s continuing or future participation in any plan, program, policy or practice of or provided by the Company or any of its affiliates and for which the Employee may qualify, nor shall anything herein limit or otherwise affect such rights as the Employee may have under any other contract or agreement with the Company or any of its affiliates. Amounts which are vested benefits or which the Employee is otherwise entitled to receive under any plan, program, policy or practice of or provided by, or any contract or agreement with, the Company or any of its affiliates at or subsequent to the date of termination of the Employee’s employment with the Company shall be payable or otherwise provided in accordance with such plan, program, policy or practice or contract or agreement except as explicitly modified by this Agreement.

13. Survival. Except as otherwise set forth herein, all obligations of the parties under this Agreement which expressly, or by their nature, survive the expiration or termination of this Agreement shall continue in full force and effect subsequent to and notwithstanding the expiration or termination of the Employee’s employment until they are satisfied in full or by their nature expire.

-3-

14. Arbitration. Any dispute between the parties arising out of this Agreement, whether as to this Agreement’s construction, interpretation or enforceability or as to any party’s breach or alleged breach of any provision of this Agreement, shall be submitted to arbitration in accordance with the following procedures:

(i) Either party may demand such arbitration by giving notice of that demand to the other party. The notice shall state (x) the matter in controversy, and (y) the name of the arbitrator selected by the party giving the notice.

(ii) Not more than 15 days after such notice is given, the other party shall give notice to the party who demanded arbitration of the name of the arbitrator selected by the other party. If the other party shall fail to timely give such notice, the arbitrator that the other party was entitled to select shall be named by the Arbitration Committee of the American Arbitration Association. Not more than 15 days after the second arbitrator is so named, the two arbitrators shall select a third arbitrator. If the two arbitrators shall fail to timely select a third arbitrator, the third arbitrator shall be named by the Arbitration Committee of the American Arbitration Association.

(iii) The dispute shall be arbitrated at a hearing that shall be concluded within ten days immediately following the date the dispute is submitted to arbitration unless a majority of the arbitrators shall elect to extend the period of arbitration. Any award made by a majority of the arbitrators (x) shall be made within ten days following the conclusion of the arbitration hearing, (y) shall be conclusive and binding on the parties, and (z) may be made the subject of a judgment of any court having jurisdiction.

(iv) All expenses of the arbitration shall be borne by the losing party.

The agreement of the parties contained in the foregoing provisions of this Section 14 shall be a complete defense to any action, suit or other proceeding instituted in any court or before any administrative tribunal with respect to any dispute between the parties arising out of this Agreement.

15. Deferred Compensation—Section 409A of the Code.

This Agreement is intended to meet the requirements of section 409A of the Code and shall be administered in a manner that is intended to meet those requirements and shall be construed and interpreted in accordance with such intent. To the extent that a payment hereunder is subject to section 409A of the Code, except as the Board of Directors of the Company and Employee otherwise determine in writing, the payment shall be paid in a manner that will meet the requirements of section 409A of the Code, including regulations or other guidance issued with respect thereto, such that the payment shall not be subject to the additional tax or interest applicable under section 409A of the Code.

16. Offer Letter. The Employee and the Company hereby acknowledge that this Agreement is the severance agreement contemplated by the offer letter provided to the Employee in connection with his employment by the Company.

-4-

17. Section Headings. Section headings are for convenience only and shall not define or limit the provisions of this Agreement.

18. Definitions.

(a) “Cause” means the occurrence of any of the following events:

(i) gross negligence or willful misconduct in connection with his duties or in the course of his employment with the Company;

(ii) an act of fraud, embezzlement or theft in connection with his duties or in the course of his employment with the Company;

(iii) intentional wrongful damage to property of the Company;

(iv) intentional wrongful disclosure of secret processes or confidential information of the Company;

(v) an act leading to a conviction of a felony or a misdemeanor involving moral turpitude; or

(vi) a material breach by Employee of any agreement with the Company.

For purposes of this definition, no act, or failure to act, on the part of the Employee shall be deemed “intentional” if it was due primarily to an error in judgment or negligence, but shall be deemed “intentional” only if done, or omitted to be done, by the Employee not in good faith and without reasonable belief that his action or omission was in the best interest of the Company.

(b) “CIC Agreement” means the Patterson-UTI Energy, Inc. Change in Control Agreement, dated the date hereof, by and between Employee and Company.

(c) “Code” means the Internal Revenue Code of 1986, as amended from time to time.

(d) “Date of Qualifying Termination” means the effective date on which Employee’s employment by the Company terminates due to a Qualifying Termination as specified in a prior written notice by the Company or Employee, as the case may be, to the other, delivered pursuant to Section 3.

(e) “Qualifying Termination” means a termination of Employee’s Employment (1) by the Company for any reason other than Cause or (2) by the Employee due to the Company reducing his annual base salary to an amount that is less than $450,000 per year; provided, however, that a termination by the Employee due to a reduction in his annual base salary shall not be a Qualifying Termination unless (A) Employee gives the Board of Directors of the Company written notice of his objection to such reduction within thirty (30) days after the later of the approval or occurrence of the reduction, (B) such reduction is not corrected by the Company within thirty (30) days of its receipt of such notice and (C) Employee resigns his employment

-5-

with the Company and its subsidiaries not more than thirty (30) days following the expiration of the 30-day period described in the foregoing clause (B). For the avoidance of doubt, the following do not constitute a Qualifying Termination under this Agreement: a termination of Employee’s employment (1) by the Company for Cause, (2) as a result of Employee’s death or (3) by the Company due to Employee’s inability to discharge his duties to the Company for a period of ninety (90) or more consecutive days by reason of physical or mental illness, injury, or incapacity, which illness, injury or incapacity is reasonably expected to (or does in fact) continue for six (6) months or more, or (4) by Employee for any reason other than due to the Company reducing his annual base salary to an amount that is less than $450,000.

[SIGNATURE PAGE TO FOLLOW]

-6-

THIS AGREEMENT CONTAINS PROVISIONS REQUIRING ARBITRATION OF DISPUTES. BY SIGNING THIS AGREEMENT, EMPLOYEE ACKNOWLEDGES THAT: he has read the entire Agreement; he has received a copy of the Agreement; he has had the opportunity to ask questions and consult counsel or other advisors about its terms; and he agrees to be bound by it.

IN WITNESS WHEREOF, the Company and Employee have executed this Agreement this 16th day of April 2012, to be effective as of the Effective Date.

PATTERSON-UTI ENERGY, INC.

/s/ Douglas J. Wall

Douglas J. Wall

President and Chief Executive Officer

WILLIAM ANDREW HENDRICKS, JR.

/s/ William Andrew Hendricks, Jr.

-7-

EX-10.3

Exhibit 10.3

PATTERSON-UTI ENERGY, INC.

CHANGE IN CONTROL AGREEMENT

THIS AGREEMENT between Patterson-UTI Energy, Inc., a Delaware corporation (the “Company”), and William Andrew Hendricks, Jr. (the “Employee”) is effective as of April 2, 2012 (the “Effective Date”). Certain capitalized terms used herein are defined in Section 22.

W I T N E S S E T H:

WHEREAS, the Company considers it to be in the best interests of its stockholders to encourage the continued employment of certain key employees of the Company and its Wholly Owned Entities notwithstanding the possibility, threat or occurrence of a Change in Control of the Company (as that phrase is defined in Section 2);

WHEREAS, the Employee is a key employee of the Company and/or one or more of its Wholly Owned Entities;

WHEREAS, the Company believes that the possibility of the occurrence of a Change in Control of the Company may result in the termination of the Employee’s employment by the Company or in the distraction of the Employee from the performance of his duties to the Company, in either case to the detriment of the Company and its stockholders;

WHEREAS, the Company recognizes that the Employee could suffer adverse financial and professional consequences if a Change in Control of the Company were to occur; and

WHEREAS, the Company wishes to enter into this Agreement to protect the Employee if a Change in Control of the Company occurs, thereby encouraging the Employee to remain in the employ of the Company and not to be distracted from the performance of his duties to the Company by the possibility of a Change in Control of the Company;

NOW, THEREFORE, the parties agree as follows:

Section 1. Other Employment Arrangements.

(a) This Agreement does not affect the Employee’s existing or future employment arrangements with the Company unless a Change in Control of the Company shall have occurred before the expiration of the term of this Agreement. The Employee’s employment with the Company shall continue to be governed by the Employee’s existing or future employment agreements with the Company, if any, or, in the absence of any employment agreement, shall continue to be at the will of the Board of Directors or, if the Employee is not an officer of the Company at the time of the termination of the Employee’s employment with the Company, the will of the Chief Executive Officer of the Company, except that if (i) a Change in Control of the Company shall have occurred before the expiration of the term of this Agreement, and (ii) the Employee’s employment with the Company is terminated (whether by the Employee or

-1-

the Company or automatically as provided in Section 3) after the occurrence of that Change in Control of the Company, then the Employee shall be entitled to receive certain benefits as provided in this Agreement.

(b) Notwithstanding anything contained in this Agreement to the contrary, if following the commencement of any discussion with a third person that ultimately results in a written agreement or agreements to which the Company is a party and which, if the transactions contemplated by such agreement or agreements were consummated, would result in a Change in Control of the Company, the Employee’s employment with the Company is terminated by the Company for any reason other than as a result of the occurrence of an event described in any of clauses (i) through (v) of Section 4, then for all purposes of this Agreement, a Change in Control of the Company shall be deemed to have occurred on the date immediately prior to the date of such termination, removal, or reduction regardless of whether any Change in Control of the Company actually occurs.

(c) Nothing in this Agreement shall prevent or limit the Employee’s continuing or future participation in any plan, program, policy or practice of or provided by the Company or any of its Affiliates and for which the Employee may qualify, nor shall anything herein limit or otherwise affect such rights as the Employee may have under any contract or agreement with the Company or any of its Affiliates. Amounts which are vested benefits or which the Employee is otherwise entitled to receive under any plan, program, policy or practice of or provided by, or any contract or agreement with, the Company or any of its Affiliates at or subsequent to the date of termination of the Employee’s employment with the Company shall be payable or otherwise provided in accordance with such plan, program, policy or practice or contract or agreement except as explicitly modified by this Agreement.

Section 2. Change in Control of the Company. For purposes of this Agreement, a “Change in Control of the Company” shall mean the occurrence of any of the following after the Effective Date:

(a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Covered Person”) of beneficial ownership (within the meaning of rule 13d-3 promulgated under the Exchange Act) of 35% or more of either (i) the then outstanding shares of the common stock of the Company (the “Outstanding Company Common Stock”), or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a) of this Section 2, the following acquisitions shall not constitute a Change in Control of the Company: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company, or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Section 2; or

-2-

(b) Individuals who, as of the Effective Date, constitute the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Covered Person other than the Board; or

(c) Consummation of (xx) a reorganization, merger or consolidation or sale of the Company or any subsidiary of the Company, or (yy) a disposition of all or substantially all of the assets of the Company (a “Business Combination”), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, direct or indirectly, more than 65% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Covered Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 35% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation, except to the extent that such ownership existed prior to the Business Combination, and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board of Directors, providing for such Business Combination.

Section 3. Term of this Agreement. The term of this Agreement shall begin on the Effective Date and, unless automatically extended pursuant to the second sentence of this Section 3, shall expire on the first to occur of:

(i) the Employee’s death, the Employee’s Disability or the Employee’s Retirement, which events shall also be deemed automatically to terminate the Employee’s employment by the Company;

-3-

(ii) the termination by the Employee or the Company of the Employee’s employment by the Company; or

(iii) the end of the last day (the “Expiration Date”) of:

(x) the period beginning on the Effective Date and ending on January 29, 2013 (or any period for which the term of this Agreement shall have been automatically extended pursuant to the second sentence of this Section 3) if no Change in Control of the Company shall have occurred during that period (or any period for which the term of this Agreement shall have been automatically extended pursuant to the second sentence of this Section 3); or

(y) if one or more Changes in Control of the Company shall have occurred during the period beginning on the Effective Date and ending on January 29, 2013 (or any period for which the term of this Agreement shall have been automatically extended pursuant to the second sentence of this Section 3), the two-year period beginning on the date on which the last Change in Control of the Company occurred.

If (i) the term of this Agreement shall not have expired as a result of the occurrence of one of the events described in clause (i) or (ii) of the immediately preceding sentence, and (ii) the Company shall not have given notice to the Employee at least ninety (90) days before the Expiration Date that the term of this Agreement will expire on the Expiration Date, then the term of this Agreement shall be automatically extended for successive one-year periods (the first such period to begin on the day immediately following the Expiration Date) unless the Company shall have given notice to the Employee at least ninety (90) days before the end of any one-year period for which the term of this Agreement shall have been automatically extended that such term will expire at the end of that one-year period. The expiration of the term of this Agreement shall not terminate this Agreement itself or affect the right of the Employee or the Employee’s legal representatives to enforce the payment of any amount or other benefit to which the Employee was entitled before the expiration of the term of this Agreement or to which the Employee became entitled as a result of the event (including the termination, whether by the Employee or the Company or automatically as provided in this Section 3, of the Employee’s employment by the Company) that caused the term of this Agreement to expire.

Section 4. Event of Termination for Cause. An “Event of Termination for Cause” shall have occurred if, after a Change in Control of the Company, the Employee shall have committed:

(i) gross negligence or willful misconduct in connection with his duties or in the course of his employment with the Company;

(ii) an act of fraud, embezzlement or theft in connection with his duties or in the course of his employment with the Company;

(iii) intentional wrongful damage to property of the Company;

-4-

(iv) intentional wrongful disclosure of secret processes or confidential information of the Company; or

(v) an act leading to a conviction of a felony or a misdemeanor involving moral turpitude.

For purposes of this Agreement, no act, or failure to act, on the part of the Employee shall be deemed “intentional” if it was due primarily to an error in judgment or negligence, but shall be deemed “intentional” only if done, or omitted to be done, by the Employee not in good faith and without reasonable belief that his action or omission was in the best interest of the Company. Notwithstanding the foregoing, the Employee shall not be deemed to have been terminated as a result of an “Event of Termination for Cause” hereunder unless and until there shall have been delivered to the Employee a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the Board of Directors then in office at a meeting of the Board of Directors called and held for such purpose (after reasonable notice to the Employee and an opportunity for the Employee, together with his counsel, to be heard before the Board of Directors), finding that, in the good faith opinion of the Board of Directors, the Employee had committed an act set forth above in this Section 4 and specifying the particulars thereof in detail. Nothing herein shall limit the right of the Employee or his legal representatives to contest the validity or propriety of any such determination.

Section 5. An Event of Termination for Good Reason. An “Event of Termination for Good Reason” shall have occurred if, after a Change in Control of the Company, the Company shall:

(i) assign to the Employee any duties inconsistent with the Employee’s position (including offices, titles and reporting requirements), authority, duties, status or responsibilities with the Company in effect immediately before the occurrence of the first Change in Control of the Company or otherwise make any change in any such position, authority, duties or responsibilities;

(ii) remove the Employee from, or fail to re-elect or appoint the Employee to, any duties or position with the Company or any of its Affiliates that were assigned or held by the Employee immediately before the occurrence of the first Change in Control of the Company, except that a nominal change in the Employee’s title that is merely descriptive and does not affect rank or status shall not constitute such an event;

(iii) take any other action that results in a material diminution in such position, authority, duties or responsibilities or otherwise take any action that materially interferes therewith;

(iv) reduce the Employee’s annual base salary as in effect immediately before the occurrence of the first Change in Control of the Company or as the Employee’s annual base salary may be increased from time to time after that occurrence (the “Base Salary”);

-5-

(v) reduce the Employee’s annual bonus to an amount less than (x) $800,000, if the first Change in Control of the Company occurred prior to the Employee earning an annual bonus with respect to the fiscal year ended December 31, 2012, (y) the amount of the annual bonus earned by the Employee with respect to the fiscal year ended December 31, 2012, if the first Change in Control of the Company occurred after the Employee earned an annual bonus with respect to the fiscal year ended December 31, 2012, but prior to the Employee earning an annual bonus with respect to the fiscal year ended December 31, 2013 or (z) the average of the two annual bonuses earned by the Employee with respect to the two fiscal years of the Company immediately preceding the fiscal year of the Company in which the first Change in Control of the Company occurred (the applicable amount is referred to herein as the “Benchmark Bonus”);

(vi) relocate the Employee’s principal place of employment to a location outside of a 50-mile radius from the Employee’s principal place of employment immediately prior to the first Change in Control of the Company;

(vii) fail to (x) continue in effect any bonus, incentive, profit sharing, performance, savings, retirement or pension policy, plan, program or arrangement (such policies, plans, programs and arrangements collectively being referred to herein as “Basic Benefit Plans”), including, but not limited to, any deferred compensation, supplemental executive retirement or other retirement income, stock option, stock purchase, stock appreciation, or similar policy, plan, program or arrangement of the Company, in which the Employee was a participant immediately before the occurrence of the first Change in Control of the Company, or any substitute plan adopted by the Board of Directors and in which the Employee was a participant immediately before the occurrence of the last Change in Control of the Company, unless an equitable and reasonably comparable arrangement (embodied in a substitute or alternative benefit or plan) shall have been made with respect to such Basic Benefit Plan promptly following the occurrence of the last Change in Control of the Company, or (y) continue the Employee’s participation in any Basic Benefit Plan (or any substitute or alternative plan) on substantially the same basis, both in terms of the amount of benefits provided to the Employee (which are in any event always subject to the terms of any applicable Basic Benefit Plan) and the level of the Employee’s participation relative to other participants, as existed immediately before the occurrence of the first Change in Control of the Company;

(viii) fail to continue to provide the Employee with benefits substantially similar to those enjoyed by the Employee under any of the Company’s other employee benefit plans, policies, programs and arrangements (the “Other Benefit Plans”), including, but not limited to, life insurance, medical, dental, health, hospital, accident or disability plans, in which the Employee was a participant immediately before the occurrence of the first Change in Control of the Company;

-6-

(ix) fail to provide the Employee with the number of paid vacation days to which the Employee was entitled in accordance with the Company’s vacation policy in effect immediately before the occurrence of the first Change in Control of the Company;

(x) fail to continue to provide the Employee with office space, related facilities and support personnel (including, but not limited to, administrative and secretarial assistance) (y) that are both commensurate with the Employee’s responsibilities to and position with the Company immediately before the occurrence of the first Change in Control of the Company and not materially dissimilar to the office space, related facilities and support personnel provided to other employees of the Company having comparable responsibility to the Employee, or (z) that are physically located at the Company’s principal executive offices; or

(xi) purport to terminate the Employee’s employment by the Company unless notice of that termination shall have been given to the Employee pursuant to, and that notice shall meet the requirements of, Section 6.

Section 6. Notice of Termination. If a Change in Control of the Company shall have occurred before the expiration of the term of this Agreement, any subsequent termination by the Employee or the Company of the Employee’s employment by the Company, or any determination of the Employee’s Disability, shall be communicated by notice to the other party that shall indicate the specific paragraph of Section 7 pursuant to which the Employee is to receive benefits as a result of the termination. If the notice states that the Employee’s employment by the Company has been automatically terminated as a result of the Employee’s Disability, the notice shall (i) specifically describe the basis for the determination of the Employee’s Disability, and (ii) state the date of the determination of the Employee’s Disability, which date shall be not more than ten (10) days before the date such notice is given. If the notice is from the Company and states that the Employee’s employment by the Company is terminated by the Company as a result of the occurrence of an Event of Termination for Cause, the notice shall specifically describe the action or inaction of the Employee that the Company believes constitutes an Event of Termination for Cause and shall be accompanied by a copy of the resolution satisfying Section 4. If the notice is from the Employee and states that the Employee’s employment by the Company is terminated by the Employee as a result of the occurrence of an Event of Termination for Good Reason, the notice shall specifically describe the action or inaction of the Company that the Employee believes constitutes an Event of Termination for Good Reason. Each notice given pursuant to this Section 6 (other than a notice stating that the Employee’s employment by the Company has been automatically terminated as a result of the Employee’s Disability) shall state a date, which shall be not fewer than thirty (30) days nor more than sixty (60) days after the date such notice is given, on which the termination of the Employee’s employment by the Company is effective. The date so stated in accordance with this Section 6 shall be the “Termination Date”. If a Change in Control of the Company shall have occurred before the expiration of the term of this Agreement, any subsequent purported termination by the Company of the Employee’s employment by the Company, or any subsequent purported determination by the Company of the Employee’s Disability, shall be ineffective unless that termination or determination shall have been communicated by the Company to the Employee by notice that meets the requirements of the foregoing provisions of this Section 6 and the provisions of Section 9.

-7-

Section 7. Benefits Payable on Change in Control of the Company and Termination.

(a) If (x) a Change in Control of the Company shall have occurred before the expiration of the term of this Agreement, and (y) the Employee’s employment by the Company is terminated (whether by the Employee or the Company or automatically as provided in Section 3) after the occurrence of that Change in Control of the Company, the Employee shall be entitled to the following benefits:

(i) If the Employee’s employment by the Company is terminated (x) by the Company as a result of the occurrence of an Event of Termination for Cause, or (y) by the Employee before the occurrence of an Event of Termination for Good Reason, then the Company shall pay to the Employee the Base Salary accrued through the Termination Date but not previously paid to the Employee, and the Employee shall be entitled to any other amounts or benefits provided under any plan, policy, practice, program, contract or arrangement of or with the Company, including, but not limited to, the Basic Benefit Plans and the Other Benefit Plans, which shall be governed by the terms thereof (except as explicitly modified by this Agreement).

(ii) If the Employee’s employment by the Company is automatically terminated as a result of the Employee’s death, the Employee’s Disability or the Employee’s Retirement, then (x) the Company shall pay to the Employee the Base Salary accrued through the date of the occurrence of that event but not previously paid to the Employee, and (y) the Employee shall be entitled to any other amounts or benefits provided under any plan, policy, practice, program, contract or arrangement of or with the Company, including, but not limited to, the Basic Benefit Plans and the Other Benefit Plans, which shall be governed by the terms thereof (except as explicitly modified by this Agreement).

(iii) If the Employee’s employment by the Company is terminated (x) by the Company otherwise than as a result of the occurrence of an Event of Termination for Cause, or (y) by the Employee after the occurrence of an Event of Termination for Good Reason, then the Employee shall be entitled to the following:

(1) the Company shall pay to the Employee the Base Salary and compensation for earned but unused vacation time accrued through the Termination Date but not previously paid to the Employee;

(2) the Company shall pay to the Employee an amount equal to the product of (A) the greater of (I) the highest aggregate annual bonus, incentive or other payment of cash compensation in addition to annual base salary pursuant to any bonus, incentive, profit-sharing, performance,

-8-

discretionary pay or similar policy, plan, program or arrangement of the Company paid or payable to the Employee (including any deferred portion thereof) for any fiscal year (or portion thereof) of the Company paid after the Effective Date, and (II) the Benchmark Bonus, multiplied by (B) a fraction, the numerator of which is the number of days in the current fiscal year of the Company through the Termination Date and the denominator of which is 365;

(3) the Company shall pay to the Employee, as a lump sum, an amount (the “Severance Payment”) equal to two and one-half (2.5) times the sum of:

A. the amount (including any deferred portion thereof) of the Base Salary that would have been paid to the Employee during the fiscal year of the Company in which the Termination Date occurs based on the assumption that the Employee’s employment by the Company had continued throughout that fiscal year at the Base Salary at the highest rate in effect at any time during the term of this Agreement; plus

B. the amount equal to (I) $800,000, if the Termination Date occurs prior to the Employee earning an annual bonus with respect to the fiscal year ended December 31, 2012, (II) the amount of the annual bonus earned by the Employee with respect to the fiscal year ended December 31, 2012, if the Termination Date occurs after the Employee earned an annual bonus with respect to the fiscal year ended December 31, 2012, but prior to the Employee earning an annual bonus with respect to the fiscal year ended December 31, 2013, (III) the average of the two annual bonuses earned by the Employee with respect to the fiscal years ended December 31, 2012 and 2013 if the Termination Date occurs after the Employee earned an annual bonus with respect to the fiscal year ended December 31, 2013, but prior to the Employee earning an annual bonus with respect to the fiscal year ended December 31, 2014, or (IV) the average of the three annual bonuses earned by the Employee with respect to the three fiscal years preceding the year in which the Termination Date occurs;

(4) the Company (at its sole expense) shall take the following actions:

A. throughout the Relevant Period, the Company shall maintain in effect, and not materially reduce the benefits provided by, each of the Other Benefit Plans in which the Employee was a participant immediately before the Termination Date; and

-9-

B. the Company shall arrange for the Employee’s uninterrupted participation throughout the Relevant Period in each of such Other Benefit Plans,

provided that if the Employee’s participation after the Termination Date in any such Other Benefit Plan is not permitted by the terms of that Other Benefit Plan, then throughout the Relevant Period, the Company (at its sole expense) shall provide the Employee with substantially the same benefits that were provided to the Employee by that Other Benefit Plan immediately before the Termination Date; and

(5) the Employee shall be entitled to any other amounts or benefits provided under any plan, policy, practice, program, contract or arrangement of or with the Company, including, but not limited to, the Basic Benefit Plans and the Other Benefit Plans, which shall be governed by the terms thereof (except as explicitly modified by this Agreement).

(b) Each payment required to be made to the Employee pursuant to the foregoing provisions of Section 7(a) above shall be subject to the following rules:

(i) such payments shall be made by check drawn on an account of the Company at a bank located in the United States of America;

(ii) such payments shall be paid (x) if the Employee’s employment by the Company was terminated as a result of the Employee’s death or Disability not more than thirty (30) days immediately following the date of the occurrence of that event or (y) if the Employee’s employment by the Company was terminated for any other reason, not more than ten (10) days immediately following the Termination Date; and

(iii) notwithstanding any provision of this Agreement to the contrary, in accordance with Section 409A of the Code, (x) any payments due with respect to Employee’s (or his dependents’) COBRA continuation coverage following the first 18 months of such coverage shall be paid on or before the last day of each month thereafter and (y) if the Employee is determined to be a “specified employee” (as defined in Section 409A of the Code) for the year in which such Termination Date occurs, any payments due under Section 7(a) above that are not permitted to be paid on such date without the imposition of additional taxes, interest and penalties under Section 409A of the Code shall be paid on the first business day following the six-month anniversary of the Termination Date or, if earlier, Employee’s death; provided, however, that to the extent such six (6) month delay is imposed by Section 409A of the Code, such payments shall be irrevocably contributed into a rabbi trust established by the Company for the benefit of Employee with an independent bank trustee as selected by the Employee not more than ten (10) days immediately following the Termination Date and distributed to Employee as soon as permissible under Section 409A of the Code; and provided further, that to the extent any payments are paid into a rabbi trust such amounts shall be invested in a short-term oriented fund invested in U.S. government securities and repurchase agreements for those securities, as well as obligations of U.S. government agencies (e.g., a money market fund).

-10-

Section 8. Successors. If a Change in Control of the Company shall have occurred before the expiration of the term of this Agreement,

(i) the Company shall not, directly or indirectly, consolidate with, merge into or sell or otherwise transfer its assets as an entirety or substantially as an entirety to, any person, or permit any person to consolidate with or merge into the Company, unless immediately after such consolidation, merger, sale or transfer, the Successor shall have assumed in writing the Company’s obligations under this Agreement; and

(ii) not fewer than ten (10) days before the consummation of any consolidation of the Company with, merger by the Company into, or sale or other transfer by the Company of its assets as an entirety or substantially as an entirety to, any person, the Company shall give the Employee notice of that proposed transaction.

Section 9. Notice. Notices required or permitted to be given by either party pursuant to this Agreement shall be in writing and shall be deemed to have been given when delivered personally to the other party or when deposited with the United States Postal Service as certified or registered mail with postage prepaid and addressed:

(a) if to the Employee, at the Employee’s address last shown on the Company’s records, and

(b) if to the Company, at 450 Gears Road, Suite 500, Houston, Texas 77067, directed to the attention of the Chief Executive Officer.

or, in either case, to such other address as the party to whom or which such notice is to be given shall have specified by notice given to the other party.

Section 10. Withholding Taxes. The Company may withhold from all payments to be paid to the Employee pursuant to this Agreement all taxes that, by applicable federal or state law, the Company is required to so withhold.

Section 11. Certain Excise Taxes. Notwithstanding anything to the contrary in this Agreement, if the Employee is a “disqualified individual” (as defined in Section 280G(c) of the Code), and the payments and benefits provided for under this Agreement, together with any other payments and benefits which the Employee has the right to receive from the Company, any of its Affiliates or a party to a transaction with the Company or any of its Affiliates, would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), then the payments and benefits provided for under this Agreement shall be either (a) reduced (but not below zero) so that the present value of such total amounts and benefits received by the Employee from the Company and its Affiliates will be one dollar ($1.00) less than three times the Employee’s “base amount”(as defined in Section 280G(b)(3) of the Code) and so that no portion of such amounts

-11-

and benefits received by the Employee shall be subject to the excise tax imposed by Section 4999 of the Code or (b) paid in full, whichever produces the better net after-tax position to the Employee (taking into account any applicable excise tax under Section 4999 of the Code and any other applicable taxes). The reduction of payments and benefits hereunder, if applicable, shall be made by reducing, first, payments or benefits to be paid in cash hereunder in the order in which such payment or benefit would be paid or provided (beginning with such payment or benefit that would be made last in time and continuing, to the extent necessary, through to such payment or benefit that would be made first in time) and, then, reducing any benefit to be provided in kind hereunder in a similar order. The determination as to whether any such reduction in the amount of the payments and benefits provided hereunder is necessary shall be made by the Company in good faith in reliance on the advice of nationally recognized tax counsel mutually acceptable to the Company and the Employee. If a reduced payment or benefit is made or provided and through error or otherwise that payment or benefit, when aggregated with other payments and benefits from the Company (or its Affiliates) used in determining if a parachute payment exists, exceeds one dollar ($1.00) less than three times the Employee’s base amount, then the Employee shall immediately repay such excess to the Company upon notification that an overpayment has been made. Nothing in this Section 11 shall require the Company (or any of its Affiliates) to be responsible for, or have any liability or obligation with respect to, the Employee’s excise tax liabilities under Section 4999 of the Code.

Section 12. Deferred Compensation—Section 409A of the Code. This Agreement is intended to meet the requirements of Section 409A of the Code and shall be administered in a manner that is intended to meet those requirements and shall be construed and interpreted in accordance with such intent. To the extent that a payment, or the settlement or deferral thereof, is subject to Section 409A of the Code, except as the Board of Directors and Employee otherwise determine in writing, the payment shall be paid, settled or deferred in a manner that will meet the requirements of Section 409A of the Code, including regulations or other guidance issued with respect thereto, such that the payment, settlement or deferral shall not be subject to the additional tax or interest applicable under Section 409A of the Code. Any provision of this Agreement that would cause the payment, settlement or deferral thereof to fail to satisfy Section 409A of the Code shall be amended (in a manner that as closely as practicable achieves the original intent of this Agreement) to comply with Section 409A of the Code on a timely basis, which may be made on a retroactive basis, if permitted under the regulations and other guidance issued under Section 409A of the Code. In the event additional regulations or other guidance is issued under Section 409A of the Code or a court of competent jurisdiction provides additional authority concerning the application of Section 409A with respect to the payments described hereunder, then the provisions regarding such payments shall be amended to permit such payments to be made at the earliest time allowed under such additional regulations, guidance or authority that is practicable and achieves the original intent of this Agreement.

Section 13. Expenses of Enforcement. If a Change in Control of the Company shall have occurred before the expiration of the term of this Agreement, then, upon demand by the Employee made to the Company, the Company shall reimburse the Employee for the reasonable expenses (including attorneys’ fees and expenses) incurred by the Employee in enforcing or seeking to enforce the payment of any amount or other benefit to which the Employee shall have become entitled pursuant to this Agreement, including those incurred in connection with any arbitration initiated pursuant to Section 21. To the extent that any such reimbursement would be subject to an excise tax under Section 4999 of the Code, then the provisions of Section 11 hereof shall apply to such circumstance unless the context thereof otherwise indicates.

-12-

Section 14. Employment by Wholly Owned Entities. If, at or after the Effective Date, the Employee is or becomes an employee of one or more corporations, partnerships, limited liability companies or other entities that are, directly or indirectly, wholly owned by the Company (“Wholly Owned Entities”), references in this Agreement to the Employee’s employment by the Company shall include the Employee’s employment by any such Wholly Owned Entity.

Section 15. No Obligation to Mitigate; No Rights of Offset.

(a) The Employee shall not be required to mitigate the amount of any payment or other benefit required to be paid or provided to the Employee pursuant to this Agreement, whether by seeking other employment or otherwise, nor shall the amount of any such payment or other benefit be reduced on account of any compensation earned by the Employee as a result of employment by another person.

(b) The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Employee or others.

Section 16. Amendment and Waiver. No provision of this Agreement may be amended or waived (whether by act or course of conduct or omission or otherwise) unless that amendment or waiver is by written instrument signed by the parties hereto. No waiver by either party of any breach of this Agreement shall be deemed a waiver of any other or subsequent breach.

Section 17. Governing Law. The validity, interpretation, construction and enforceability of this Agreement shall be governed by the laws of the State of Texas.

Section 18. Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

Section 19. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute the same instrument.

Section 20. Assignment. This Agreement shall inure to the benefit of and be enforceable by the Employee’s legal representative. The Company may not assign any of its obligations under this Agreement unless (i) such assignment is to a Successor and (ii) the requirements of Section 8 are fulfilled.

Section 21. Arbitration. Any dispute between the parties arising out of this Agreement, whether as to this Agreement’s construction, interpretation or enforceability or as to any party’s breach or alleged breach of any provision of this Agreement, shall be submitted to arbitration in accordance with the following procedures:

(i) Either party may demand such arbitration by giving notice of that demand to the other party. The notice shall state (x) the matter in controversy, and (y) the name of the arbitrator selected by the party giving the notice.

-13-

(ii) Not more than 15 days after such notice is given, the other party shall give notice to the party who demanded arbitration of the name of the arbitrator selected by the other party. If the other party shall fail to timely give such notice, the arbitrator that the other party was entitled to select shall be named by the Arbitration Committee of the American Arbitration Association. Not more than 15 days after the second arbitrator is so named, the two arbitrators shall select a third arbitrator. If the two arbitrators shall fail to timely select a third arbitrator, the third arbitrator shall be named by the Arbitration Committee of the American Arbitration Association.

(iii) The dispute shall be arbitrated at a hearing that shall be concluded within ten days immediately following the date the dispute is submitted to arbitration unless a majority of the arbitrators shall elect to extend the period of arbitration. Any award made by a majority of the arbitrators (x) shall be made within ten days following the conclusion of the arbitration hearing, (y) shall be conclusive and binding on the parties, and (z) may be made the subject of a judgment of any court having jurisdiction.

(iv) All expenses of the arbitration shall be borne by the Company.

The agreement of the parties contained in the foregoing provisions of this Section 21 shall be a complete defense to any action, suit or other proceeding instituted in any court or before any administrative tribunal with respect to any dispute between the parties arising out of this Agreement.

Section 22. Interpretation.

(a) As used in this Agreement, the following terms and phrases have the indicated meanings:

(i) “Affiliate” and “Affiliates” mean, when used with respect to any entity, individual, or other person, any other entity, individual, or other person which, directly or indirectly, through one or more intermediaries controls, or is controlled by, or is under common control with such entity, individual or person.

(ii) “Base Salary” has the meaning assigned to that term in Section 5.

(iii) “Basic Benefit Plans” has the meaning assigned to that term in Section 5.

(iv) “Benchmark Bonus” has the meaning assigned to that term in Section 5.

-14-

(v) “Board of Directors” means the Board of Directors of the Company.

(vi) “Business Combination” has the meaning assigned to that term in Section 2.

(vii) “Change in Control of the Company” has the meaning assigned to that phrase in Section 2.

(viii) “Code” means the Internal Revenue Code of 1986, as amended from time to time.

(ix) “Company” has the meaning assigned to that term in the preamble to this Agreement. The term “Company” shall also include any Successor, whether the liability of such Successor under this Agreement is established by contract or occurs by operation of law.

(x) “Covered Person” has the meaning assigned to that term in Section 2.

(xi) “Effective Date” has the meaning assigned to that term in the preamble to this Agreement.

(xii) “Employee” has the meaning assigned to such term in the preamble to this Agreement.

(xiii) “Employee’s Disability” means:

(1) if no Change in Control of the Company shall have occurred before the date of determination, the physical or mental disability of the Employee determined in accordance with the disability policy of the Company at the time in effect and generally applicable to its salaried employees; and

(2) if a Change in Control of the Company shall have occurred at that date, the physical or mental disability of the Employee determined in accordance with the disability policy of the Company in effect immediately before the occurrence of the first Change in Control of the Company and generally applicable to its salaried employees.

The Employee’s Disability, and the automatic termination of the Employee’s employment by the Company by reason of the Employee’s Disability, shall be deemed to have occurred on the date of determination, provided that if (1) a Change in Control of the Company shall have occurred before the expiration of the term of this Agreement, (2) the Company shall have subsequently given notice pursuant to Section 6 of the Company’s determination of the Employee’s Disability, and (3) the Employee shall have given notice to the Company that the Employee

-15-

disagrees with that determination, then (A) whether the Employee’s Disability shall have occurred shall be submitted to arbitration pursuant to Section 21, and (B) if a majority of the arbitrators decide that the Employee’s Disability had not occurred, at the date of determination by the Company, then (I) the Employee’s Disability, and the automatic termination of the Employee’s employment by the Company by reason of the Employee’s Disability, shall be deemed not to have occurred, and (II) on demand by the Employee made to the Company, the Company shall reimburse the Employee for the reasonable expenses (including attorneys’ fees and expenses) incurred by the Employee in obtaining that decision.

(xiv) “Employee’s Retirement” means (x) if no Change in Control of the Company shall have occurred before the date of the Employee’s proposed retirement, the retirement of the Employee in accordance with the retirement policy of the Company at the time in effect and generally applicable to its salaried employees, and (y) if a Change in Control of the Company shall have occurred at that date, the retirement of the Employee from the employ of the Company in accordance with the retirement policy of the Company in effect immediately before the occurrence of the first Change in Control of the Company and generally applicable to its salaried employees.

(xv) “Event of Termination for Cause” has the meaning assigned to that phrase in Section 4.

(xvi) “Event of Termination for Good Reason” has the meaning assigned to that phrase in Section 5.

(xvii) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

(xviii) “Expiration Date” has the meaning assigned to that term in Section 3.

(xix) “Other Benefit Plans” has the meaning assigned to that term in Section 5.

(xx) “Outstanding Company Common Stock” has the meaning assigned to that term in Section 2.

(xxi) “Outstanding Company Voting Securities” has the meaning assigned to that term in Section 2.

(xxii) “person” means any individual, corporation, partnership, joint venture, association, joint-stock company, limited partnership, limited liability company, trust, unincorporated organization, government, or agency or political subdivision of any government.

-16-

(xxiii) “Relevant Period” means a period beginning on the Termination Date and ending on the first to occur of (x) the third anniversary of the Termination Date, (y) the date on which the Employee becomes a full time employee of another person, and (z) the Employee’s normal retirement date, determined in accordance with the retirement policy of the Company in effect on the Termination Date.

(xxiv) “Severance Payment” has the meaning assigned to that term in Section 7.

(xxv) “Successor” means a person with or into which the Company shall have been merged or consolidated or to which the Company shall have transferred its assets as an entirety or substantially as an entirety.

(xxvi) “Termination Date” has the meaning assigned to that term in Section 6.

(xxvii) “this Agreement” means this Change in Control Agreement as it may be amended from time to time in accordance with Section 16.

(xxviii) “Wholly Owned Entities” has the meaning assigned to that term in Section 14.

(b) In the event of the enactment of any successor provision to any statute or rule cited in this Agreement, references in this Agreement to such statute or rule shall be to such successor provision.

(c) The headings of Sections of this Agreement shall not control the meaning or interpretation of this Agreement.

(d) References in this Agreement to any Section are to the corresponding Section of this Agreement unless the context otherwise indicates.

IN WITNESS WHEREOF, the Company and the Employee have executed this Agreement as of the Effective Date.

PATTERSON-UTI ENERGY, INC.

/s/ Douglas J. Wall

Douglas J. Wall

President and Chief Executive Officer

/s/ William Andrew Hendricks, Jr.

William Andrew Hendricks, Jr.

-17-

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Douglas J. Wall, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of Patterson-UTI Energy, Inc;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Douglas J. Wall

Douglas J. Wall

President and Chief Executive Officer

Date: July 30, 2012

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, John E. Vollmer III, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of Patterson-UTI Energy, Inc;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ John E. Vollmer III

John E. Vollmer III

Senior Vice President — Corporate

Development, Chief Financial Officer and Treasurer

Date: July 30, 2012

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

NOT FILED PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934

In connection with the quarterly report of Patterson-UTI Energy, Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Douglas J. Wall, Chief Executive Officer, and John E. Vollmer III, Chief Financial Officer, of the Company, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission upon request. The foregoing is being furnished solely pursuant to said Section 906 and Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and is not being filed as part of the Report or as a separate disclosure document.

/s/ Douglas J. Wall

Douglas J. Wall

Chief Executive Officer

July 30, 2012

/s/ John E. Vollmer III

John E. Vollmer III

Chief Financial Officer

July 30, 2012

XML

Stock Option Activity (Detail) (USD $)	6 Months Ended
	Jun. 30, 2012
Underlying Shares
Outstanding at beginning of period	7,081,295
Granted	780,000
Exercised	(13,300)
Outstanding at end of period	7,847,995
Exercisable at end of period	6,548,510
Weighted Average Exercise Price
Outstanding at beginning of period	$ 20.73
Granted	$ 16.53
Exercised	$ 14.64
Outstanding at end of period	$ 20.33
Exercisable at end of period	$ 20.64

XML

Gross Carrying Amount and Accumulated Amortization of Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 26,900
Accumulated Amortization	(7,191)
Net Carrying Amount	19,709
Non-compete agreement
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,400
Accumulated Amortization	(816)
Net Carrying Amount	584
Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	25,500
Accumulated Amortization	(6,375)
Net Carrying Amount	$ 19,125

XML

Business Segments - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2012 Segment
Segment Reporting Disclosure [Line Items]
Number of reportable business segments	3

XML

Summary of Accrued Expenses (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Schedule of Accrued Liabilities [Line Items]
Salaries, wages, payroll taxes and benefits	$ 49,198	$ 58,692
Workers' compensation liability	66,214	66,121
Property, sales, use and other taxes	13,776	11,850
Insurance, other than workers' compensation	8,789	6,012
Accrued interest payable	5,196	4,937
Deferred revenue - current	5,137	7,229
2009 Performance Unit Awards		3,640
Other	5,072	6,148
Accrued expenses	$ 153,382	$ 164,629

XML

Property and Equipment (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Property, Plant and Equipment [Line Items]
Equipment	$ 5,029,295	$ 4,730,925
Oil and natural gas properties	145,303	131,812
Buildings	62,418	64,090
Land	10,411	11,467
Property, Plant and Equipment, Gross, Total	5,247,427	4,938,294
Less accumulated depreciation and depletion	(1,845,014)	(1,771,028)
Property and equipment, net	$ 3,402,413	$ 3,167,266

XML

Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2012

Cash Dividends

Cash Dividends - The Company paid cash dividends during the six months ended June 30, 2011 and 2012 as follows:

2011:	Per Share		Total
			(in thousands)
Paid on March 30, 2011	$	0.05	$	7,708
Paid on June 30, 2011		0.05		7,772
Total cash dividends	$	0.10	$	15,480

2012:	Per Share		Total
			(in thousands)
Paid on March 30, 2012	$	0.05	$	7,788
Paid on June 29, 2012		0.05		7,650
Total cash dividends	$	0.10	$	15,438

XML

Changes to Company's Asset Retirement Obligations (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Reconciliation of Changes in Asset Retirement Obligations [Line Items]
Balance at beginning of year	$ 3,455	$ 3,063
Liabilities incurred	182	152
Liabilities settled	(83)	(80)
Accretion expense	79	70
Revision in estimated costs of plugging oil and natural gas wells	536	(2)
Asset retirement obligation at end of period	$ 4,169	$ 3,203

XML

Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2012

Summary of Operating Results from Discontinued Operations

Summarized operating results from discontinued operations for the three and six months ended June 30, 2012, and 2011 are shown below (in thousands):

	Three Months Ended June  30,				Six Months Ended June  30,
	2012		2011		2012		2011
Electric wireline revenues	$	—	$	—	$	—	$	1,104
Loss before income taxes	$	—	$	—	$	—	$	(576	)
Income tax benefit		—		—		—		209
Loss from discontinued operations, net of income tax	$	—	$	—	$	—	$	(367	)

XML

Business Segments - Income (loss) from Continuing Operations Before Income Taxes (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2012		Jun. 30, 2011		Jun. 30, 2012		Jun. 30, 2011
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating income (loss)	$ 150,894		$ 131,860		$ 308,558		$ 249,407
Net gain on asset disposals	28,332	[1]	1,017	[1]	30,732	[1]	2,621	[1]
Interest income	179		45		233		88
Interest expense	(5,051)		(3,514)		(9,633)		(7,403)
Other	(144)		78		(89)		197
Income from continuing operations before income taxes	145,878		128,469		299,069		242,289
Operating Segments
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating income (loss)	134,606		142,604		300,682		269,319
Operating Segments | Contract Drilling
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating income (loss)	90,536		85,135		202,307		165,654
Operating Segments | Pressure Pumping
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating income (loss)	36,846		50,340		83,633		91,718
Operating Segments | Oil and Natural Gas
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating income (loss)	7,224		7,129		14,742		11,947
Corporate and other
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating income (loss)	$ (12,044)		$ (11,761)		$ (22,856)		$ (22,533)

[1] Net gains or losses associated with the disposal of assets relate to corporate strategy decisions of the executive management group. Accordingly, the related gains or losses have been separately presented and excluded from the results of specific segments.

XML

Stock-based Compensation - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Performance Unit Awards 2009
Compensation Related Costs Share Based Payments Disclosure [Line Items]
Performance period		The performance period for the 2009 Performance Units was the period from April 1, 2009 through March 31, 2012.
Award description		Generally, the recipients would receive a target payment if the Company’s total shareholder return was positive and, when compared to the peer group, was at or above the 50th percentile but less than the 75th percentile and two times the target if at the 75th percentile or higher. The total target amount with respect to the 2009 Performance Units was approximately $3.4 million. If the Company’s total shareholder return was positive, and, when compared to the peer group, was at or above the 25th percentile but less than the 50th percentile, the recipients would only receive one-half of the target payment.
Base payment		$ 1.7
Pro-rated obligation		3.4
Compensation expense (benefit)	$ 1.0	$ (1.9)	$ 2.2
Performance Unit Awards 2009 | Minimum
Compensation Related Costs Share Based Payments Disclosure [Line Items]
Performance period		April 1, 2009
Performance Unit Awards 2009 | Maximum
Compensation Related Costs Share Based Payments Disclosure [Line Items]
Performance period		March 31, 2012
Performance Unit Awards
Compensation Related Costs Share Based Payments Disclosure [Line Items]
Performance period		The performance period for the Stock-Settled Performance Units is the three year period commending on April 1 of the year of grant, but can extend for an additional two years in certain circumstances.
Performance Unit Awards 2010
Compensation Related Costs Share Based Payments Disclosure [Line Items]
Award description		Generally, the recipients will receive a target number of shares if the Company's total shareholder return is positive and, when compared to the peer group, is at the 50thpercentile and two times the target if at the 75thpercentile or higher.If the Company's total shareholder return is positive, and, when compared to the peer group, is at or above the 25thpercentile, but less than the 50thpercentile, the recipients will only receive one-half of the target number of shares. The grant of shares when achievement is between the 25thand 75thpercentile will be determined on a pro-rata basis.

XML

Summary of Operating Results from Discontinued Operations (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2011
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss before income taxes	$ (576)
Income tax benefit	209
Loss from discontinued operations, net of income tax	(367)
Electric wireline revenues
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Operating revenues from discontinued operations	$ 1,104

XML

Goodwill by Operating Segment (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
Goodwill [Line Items]
Beginning Balance	$ 153,809
Changes to goodwill
Ending Balance	153,809
Contract Drilling
Goodwill [Line Items]
Beginning Balance	86,234
Changes to goodwill
Ending Balance	86,234
Pressure Pumping
Goodwill [Line Items]
Beginning Balance	67,575
Changes to goodwill
Ending Balance	$ 67,575

XML

Cash Dividends (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2012	Mar. 31, 2012	Jun. 30, 2011	Mar. 31, 2011	Jun. 30, 2012	Jun. 30, 2011
Stockholders Equity Note [Line Items]
Cash dividends paid, date	Jun. 29, 2012	Mar. 30, 2012	Jun. 30, 2011	Mar. 30, 2011
Cash dividends paid, per share	$ 0.05	$ 0.05	$ 0.05	$ 0.05	$ 0.10	$ 0.10
Cash dividends paid	$ 7,650	$ 7,788	$ 7,772	$ 7,708	$ 15,438	$ 15,480

XML

Property and Equipment - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	1 Months Ended	6 Months Ended
	Apr. 23, 2012	Jun. 30, 2012
Property, Plant, and Equipment Disclosure [Line Items]
Disposition of operations	$ 42.5
Gain from Disposition of operations		$ 22.6

XML

Consolidated Statements Of Cash Flows (Parenthetical) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Interest expense, capitalized interest	$ 4,065	$ 4,468

XML

Stockholders' Equity - Additional Information (Detail) (USD $)	3 Months Ended				6 Months Ended	1 Months Ended	6 Months Ended		1 Months Ended
	Jun. 30, 2012	Mar. 31, 2012	Jun. 30, 2011	Mar. 31, 2011	Jun. 30, 2012	Aug. 01, 2007 Maximum	Jun. 30, 2012 Employees	Jun. 30, 2012 Stock Repurchase Plan	Jul. 25, 2012 Dividend Declared	Jul. 25, 2012 Subsequent Event Maximum
Stockholders Equity Note [Line Items]
Dividend declaration date									Jul. 25, 2012
Dividend per share, declared									$ 0.05
Dividend payment date	Jun. 29, 2012	Mar. 30, 2012	Jun. 30, 2011	Mar. 30, 2011					Sep. 28, 2012
Dividend record date									Sep. 14, 2012
Amount approved for repurchases under stock buyback program						$ 250,000,000				$ 150,000,000
Treasury stock shares acquired, Shares								4,700,000
Treasury stock shares acquired, Value								70,100,000
Amount authorized to purchase the Company's outstanding common stock under the program	42,800,000				42,800,000
Treasury stock shares acquired							83,229
Purchase price for treasury stock acquired					$ 71,337,000		$ 1,200,000

XML

Stock-Settled Performance Units (Detail)	6 Months Ended
	Jun. 30, 2012
Performance Unit Awards 2012
Schedule of Share based Compensation Arrangements by Share based Payment Award, Performance Options [Line Items]
Target number of shares	192,000
Performance Unit Awards 2011
Schedule of Share based Compensation Arrangements by Share based Payment Award, Performance Options [Line Items]
Target number of shares	144,375
Performance Unit Awards 2010
Schedule of Share based Compensation Arrangements by Share based Payment Award, Performance Options [Line Items]
Target number of shares	178,750

XML

Goodwill and Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2012

Goodwill by Operating Segment

Goodwill — Goodwill by operating segment as of June 30, 2012 and changes for the six months then ended are as follows (in thousands):

	Contract Drilling		Pressure Pumping		Total
Balance December 31, 2011	$	86,234	$	67,575	$	153,809
Changes to goodwill		—		—		—
Balance June 30, 2012	$	86,234	$	67,575	$	153,809

Gross Carrying Amount and Accumulated Amortization of Intangible Assets

The following table presents the gross carrying amount and accumulated amortization of intangible assets as of June 30, 2012 (in thousands):

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Non-compete agreement	$	1,400	$	(816	)	$	584
Customer relationships		25,500		(6,375	)		19,125
Total intangible assets	$	26,900	$	(7,191	)	$	19,709

XML

Business Segments (Tables)

6 Months Ended

Jun. 30, 2012

Business Segments - Financial Information

January 2011. Separate financial data for each of our business segments is provided in the table below (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Revenues:
Contract drilling	$	461,798		$	387,622		$	952,501		$	765,647
Pressure pumping		206,173			200,131			447,895			379,790
Oil and natural gas		14,690			13,454			29,407			23,841
Total segment revenues		682,661			601,207			1,429,803			1,169,278
Elimination of intercompany revenues (a)		(1,549	)		(1,143	)		(2,770	)		(1,810	)
Total revenues	$	681,112		$	600,064		$	1,427,033		$	1,167,468
Income before income taxes:
Contract drilling	$	90,536		$	85,135		$	202,307		$	165,654
Pressure pumping		36,846			50,340			83,633			91,718
Oil and natural gas		7,224			7,129			14,742			11,947
		134,606			142,604			300,682			269,319
Corporate and other		(12,044	)		(11,761	)		(22,856	)		(22,533	)
Net gain on asset disposals (b)		28,332			1,017			30,732			2,621
Interest income		179			45			233			88
Interest expense		(5,051	)		(3,514	)		(9,633	)		(7,403	)
Other income (expense)		(144	)		78			(89	)		197
Income from continuing operations before income taxes	$	145,878		$	128,469		$	299,069		$	242,289

	June 30, 2012		December 31, 2011
Identifiable assets:
Contract drilling	$	3,466,902	$	3,252,116
Pressure pumping		774,924		748,643
Oil and natural gas		50,860		44,990
Corporate and other (c)		149,929		176,152
Total assets	$	4,442,615	$	4,221,901

(a) Consists of contract drilling intercompany revenues for drilling services provided to the oil and natural gas exploration and production segment.

(b) Net gains or losses associated with the disposal of assets relate to corporate strategy decisions of the executive management group. Accordingly, the related gains or losses have been separately presented and excluded from the results of specific segments.

(c) Corporate and other assets primarily include cash on hand, income taxes receivable and certain deferred tax assets.

XML

Accrued Expenses - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Schedule of Accrued Liabilities [Line Items]
Deferred revenue recognized	$ 1.8	$ 1.8	$ 3.6	$ 4.7

XML

Fair Value of the Stock-Settled Performance Units (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
Performance Unit Awards 2012
Schedule of Share based Compensation Arrangements by Share based Payment Award, Performance Options [Line Items]
Fair value at date of grant	$ 3,065
Performance Unit Awards 2011
Schedule of Share based Compensation Arrangements by Share based Payment Award, Performance Options [Line Items]
Fair value at date of grant	5,569
Performance Unit Awards 2010
Schedule of Share based Compensation Arrangements by Share based Payment Award, Performance Options [Line Items]
Fair value at date of grant	$ 3,117

XML

Accrued Expenses (Tables)

6 Months Ended

Jun. 30, 2012

Accrued Expenses

Accrued expenses consisted of the following at June 30, 2012 and December 31, 2011 (in thousands):

	June 30, 2012		December 31, 2011
Salaries, wages, payroll taxes and benefits	$	49,198	$	58,692
Workers’ compensation liability		66,214		66,121
Property, sales, use and other taxes		13,776		11,850
Insurance, other than workers’ compensation		8,789		6,012
Accrued interest payable		5,196		4,937
Deferred revenue - current		5,137		7,229
2009 Performance Unit Awards		—		3,640
Other		5,072		6,148
	$	153,382	$	164,629

XML

Asset Retirement Obligation (Tables)

6 Months Ended

Jun. 30, 2012

Changes to Company's Asset Retirement Obligations

the consolidated balance sheet. The following table describes the changes to the Company’s asset retirement obligations during the six months ended June 30, 2012 and 2011 (in thousands):

	Six Months Ended June 30,
	2012			2011
Balance at beginning of year	$	3,455		$	3,063
Liabilities incurred		182			152
Liabilities settled		(83	)		(80	)
Accretion expense		79			70
Revision in estimated costs of plugging oil and natural gas wells		536			(2	)
Asset retirement obligation at end of period	$	4,169		$	3,203

XML

Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012		Jun. 30, 2011
Cash flows from operating activities:
Net income	$ 189,812		$ 152,890
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, amortization and impairment	251,430		198,964
Provision for bad debts	1,600
Dry holes and abandonments	85		150
Deferred income tax expense	102,576		70,001
Stock-based compensation expense	11,240		9,850
Tax expense related to stock-based compensation	(1,208)
Net gain on asset disposals	(30,732)	[1]	(2,621)	[1]
Changes in operating assets and liabilities:
Accounts receivable	(10,448)		(71,416)
Income taxes receivable/payable	(4,458)		73,749
Inventory and other assets	6,108		(13,719)
Accounts payable	(8,466)		10,649
Accrued expenses	(11,262)		11,863
Other liabilities	(808)		(4,748)
Net cash used in operating activities of discontinued operations			(339)
Net cash provided by operating activities	495,469		435,273
Cash flows from investing activities:
Purchases of property and equipment	(512,065)		(427,618)
Proceeds from disposal of assets	58,945		7,474
Net cash provided by investing activities of discontinued operations			25,500
Net cash used in investing activities	(453,120)		(394,644)
Cash flows from financing activities:
Purchases of treasury stock	(71,337)		(4,216)
Dividends paid	(15,438)		(15,480)
Tax benefit related to stock-based compensation			5,241
Proceeds from senior notes	300,000
Proceeds from borrowing under revolving credit facility	123,400
Repayment of borrowing under revolving credit facility	(233,400)
Repayment of other long-term debt	(92,500)		(2,500)
Debt issuance costs	(1,549)
Proceeds from exercise of stock options	195		13,008
Net cash provided by (used in) financing activities	9,371		(3,947)
Effect of foreign exchange rate changes on cash	(367)		290
Net increase in cash and cash equivalents	51,353		36,972
Cash and cash equivalents at beginning of period	23,946		27,612
Cash and cash equivalents at end of period	75,299		64,584
Net cash (paid) received during the period for:
Interest, net of capitalized interest of $4,065 in 2012 and $4,468 in 2011	(8,153)		(6,207)
Income taxes	(7,250)		61,351
Supplemental investing and financing information:
Net increase (decrease) in payables for purchases of property and equipment	(8,333)		57,808
Net (increase) decrease in deposits on equipment purchases	$ 10,970		$ (15,219)

[1] Net gains or losses associated with the disposal of assets relate to corporate strategy decisions of the executive management group. Accordingly, the related gains or losses have been separately presented and excluded from the results of specific segments.

XML

Long Term Debt (Tables)

6 Months Ended

Jun. 30, 2012

Schedule of Principal Repayment Requirements of Long Term Debt

Presented below is a schedule of the principal repayment requirements of long-term debt by fiscal year as of June 30, 2012 (in thousands):

Year ending December 31,
2012	$	—
2013		—
2014		—
2015		—
2016		—
Thereafter		600,000
Total	$	600,000

XML

Restricted Stock Activity (Detail) (Restricted Stock Awards, USD $)	6 Months Ended
	Jun. 30, 2012
Restricted Stock Awards
Shares
Outstanding at beginning of period	1,213,799
Granted	788,650
Vested	(524,010)
Forfeited	(51,696)
Outstanding at end of period	1,426,743
Weighted Average Grant Date Fair Value
Outstanding at beginning of period	$ 24.13
Granted	$ 15.60
Vested	$ 22.16
Forfeited	$ 21.89
Outstanding at end of period	$ 20.22

XML

Goodwill and Intangible Assets - Additional Information (Detail) (USD $)			1 Months Ended	3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended
	Jun. 30, 2012	Dec. 31, 2011	Oct. 31, 2010 Non-compete agreement	Jun. 30, 2012 Non-compete agreement	Jun. 30, 2011 Non-compete agreement	Jun. 30, 2012 Non-compete agreement	Jun. 30, 2011 Non-compete agreement	Jun. 30, 2012 Customer relationships	Jun. 30, 2011 Customer relationships	Jun. 30, 2012 Customer relationships	Jun. 30, 2011 Customer relationships
Goodwill and Intangible Assets Disclosure [Line Items]
Goodwill impairment loss	$ 0	$ 0
Contract term			3 years
Amortization period (in years)						3 years				7 years
Amortization expense				$ 117,000	$ 117,000	$ 233,000	$ 233,000	$ 911,000.0	$ 911,000.0	$ 1,800,000	$ 1,800,000

XML

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 75,299	$ 23,946
Accounts receivable, net of allowance for doubtful accounts of $4,734 and $4,887 at June 30, 2012 and December 31, 2011, respectively	528,808	518,109
Federal and state income taxes receivable	1,905
Inventory	27,390	31,306
Deferred tax assets, net	81,932	142,725
Other	45,231	48,864
Total current assets	760,565	764,950
Property and equipment, net	3,402,413	3,167,266
Goodwill and intangible assets	173,518	175,573
Deposits on equipment purchases	88,573	99,543
Other	17,546	14,569
Total assets	4,442,615	4,221,901
Current liabilities:
Accounts payable	224,917	241,610
Federal and state income taxes payable		2,473
Accrued expenses	153,382	164,629
Current portion of long-term debt		10,000
Total current liabilities	378,299	418,712
Borrowings under revolving credit facility		110,000
Other long-term debt	600,000	382,500
Deferred tax liabilities, net	828,415	786,632
Other	6,618	7,426
Total liabilities	1,813,332	1,705,270
Commitments and contingencies (see Note 10)
Stockholders' equity:
Preferred stock, par value $.01; authorized 1,000,000 shares, no shares issued
Common stock, par value $.01; authorized 300,000,000 shares with 184,053,434 and 183,295,350 issued and 151,773,850 and 155,807,779 outstanding at June 30, 2012 and December 31, 2011, respectively	1,840	1,833
Additional paid-in capital	850,951	840,731
Retained earnings	2,453,741	2,279,367
Accumulated other comprehensive income	18,847	19,459
Treasury stock, at cost, 32,279,584 shares and 27,487,571 shares at June 30, 2012 and December 31, 2011, respectively	(696,096)	(624,759)
Total stockholders' equity	2,629,283	2,516,631
Total liabilities and stockholders' equity	$ 4,442,615	$ 4,221,901

XML

Compensation Expense Associated with the Stock-Settled Performance Units (Detail) (Stock Settled Performance Units, USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Stock Settled Performance Units
Unrecognized Share Based Compensation Expense [Line Items]
Stock-based compensation expense associated with Stock-Settled Performance Units	$ 979	$ 724	$ 1,703	$ 983

XML

Consolidated Statements Of Comprehensive Income (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Other comprehensive income, taxes	$ 0	$ 0	$ 0	$ 0

XML

Schedule of Principal Repayment Requirements of Long Term Debt (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012
Long Term Debt Maturities Repayments Of Principal [Line Items]
2012
2013
2014
2015
2016
Thereafter	600,000
Total	$ 600,000

XML

Calculation of Income (Loss) Per Share From Continuing and Discontinued Operations (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
BASIC EPS:
Income from continuing operations	$ 92,538	$ 81,638	$ 189,812	$ 153,257
Adjust for income attributed to holders of non-vested restricted stock	(806)	(648)	(1,550)	(1,145)
Income from continuing operations attributed to common stockholders	91,732	80,990	188,262	152,112
Loss from discontinued operations, net				(367)
Adjust for loss attributed to holders of non-vested restricted stock				3
Loss from discontinued operations attributed to common stockholders				(364)
Weighted average number of common shares outstanding, excluding non-vested shares of restricted stock	153,269	153,556	153,947	153,340
Basic income from continuing operations per common share	$ 0.60	$ 0.53	$ 1.22	$ 0.99
Basic loss from discontinued operations per common share	$ 0.00	$ 0.00	$ 0.00	$ 0.00
Basic net income per common share	$ 0.60	$ 0.53	$ 1.22	$ 0.99
DILUTED EPS:
Income from continuing operations attributed to common stockholders	91,732	80,990	188,262	152,112
Add incremental earnings related to potential common shares		8
Adjusted income from continuing operations attributed to common stockholders	$ 91,732	$ 80,998	$ 188,262	$ 152,112
Weighted average number of common shares outstanding, excluding non-vested shares of restricted stock	153,269	153,556	153,947	153,340
Add dilutive effect of potential common shares	386	2,025	597	1,912
Weighted average number of diluted common shares outstanding	153,655	155,581	154,544	155,252
Diluted income from continuing operations per common share	$ 0.60	$ 0.52	$ 1.22	$ 0.98
Diluted loss from discontinued operations per common share	$ 0.00	$ 0.00	$ 0.00	$ 0.00
Diluted net income per common share	$ 0.60	$ 0.52	$ 1.22	$ 0.98
Potentially dilutive securities excluded as anti-dilutive	5,969	380	5,529	1,796

XML

Fair Values of Financial Instruments - Additional Information (Detail)	6 Months Ended	12 Months Ended
	Jun. 30, 2012	Dec. 31, 2011
Series A, Senior Notes, 4.97 Percent, Due October 5th 2020
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt interest rate	4.97%	4.97%
Current market rates used in measuring fair value	3.78%	4.07%
Series B, Senior Notes, 4.27 Percent, Due June 14th 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt interest rate	4.27%

XML

Fair Values of Financial Instruments

6 Months Ended

Jun. 30, 2012

Fair Values of Financial Instruments

13. Fair Values of Financial Instruments

The carrying values of cash and cash equivalents, trade receivables and accounts payable approximate fair value due to the short-term maturity of these items. These fair value estimates are considered Level 1 fair value estimates in the fair value hierarchy of fair value accounting.

The estimated fair value of the Company’s outstanding debt balances (including current portion) as of June 30, 2012 and December 31, 2011 is set forth below (in thousands):

	June 30, 2012				December 31, 2011
	Carrying Value		Fair Value		Carrying Value		Fair Value
Borrowings under Credit Agreement:
Revolving credit facility	$	—	$	—	$	110,000	$	110,000
Term loan facility		—		—		92,500		92,500
4.97% Series A Senior Notes		300,000		321,345		300,000		315,942
4.27% Series B Senior Notes		300,000		300,000		—		—
Total debt	$	600,000	$	621,345	$	502,500	$	518,442

The carrying values of the balances outstanding under the term loan facility and revolving credit facility at December 31, 2011 approximated their fair values as both facilities have a floating interest rate. The fair value of the 4.97% Series A Senior Notes at June 30, 2012 and December 31, 2011 was measured based on discounted cash flows associated with the Series A Senior Notes using current market rates of interest at those respective dates. The current market rates used in measuring this fair value were 3.78% at June 30, 2012 and 4.07% at December 31, 2011. The fair value of the 4.27% Series B Senior Notes at June 30, 2012 approximated carrying value due to the fact that these notes were priced and issued at a date in close proximity to June 30, 2012. These fair value estimates are based on observable market inputs and are considered Level 2 fair value estimates in the fair value hierarchy of fair value accounting.

XML

Discontinued Operations - Additional Information (Detail) (USD $)	6 Months Ended	1 Months Ended
	Jun. 30, 2011	Jan. 27, 2011 Universal Wireline, Inc.	Dec. 31, 2010 Universal Wireline, Inc.
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net cash provided by investing activities of discontinued operations	$ 25,500,000	$ 25,500,000
Impairment of the assets to be disposed			$ 2,200,000

XML

Basis of Consolidation and Presentation (Tables)

6 Months Ended

Jun. 30, 2012

Calculation of Income Per Share From Continuing and Discontinued Operations

The following table presents information necessary to calculate income from continuing operations per share, loss from discontinued operations per share and net income per share for the three and six months ended June 30, 2012 and 2011 as well as potentially dilutive securities excluded from the weighted average number of diluted common shares outstanding, as their inclusion would have been anti-dilutive (in thousands, except per share amounts):

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
BASIC EPS:
Income from continuing operations	$	92,538		$	81,638		$	189,812		$	153,257
Adjust for income attributed to holders of non-vested restricted stock		(806	)		(648	)		(1,550	)		(1,145	)
Income from continuing operations attributed to common stockholders	$	91,732		$	80,990		$	188,262		$	152,112
Loss from discontinued operations, net	$	—		$	—		$	—		$	(367	)
Adjust for loss attributed to holders of non-vested restricted stock		—			—			—			3
Loss from discontinued operations attributed to common stockholders	$	—		$	—		$	—		$	(364	)
Weighted average number of common shares outstanding, excluding non-vested shares of restricted stock		153,269			153,556			153,947			153,340
Basic income from continuing operations per common share	$	0.60		$	0.53		$	1.22		$	0.99
Basic loss from discontinued operations per common share	$	0.00		$	0.00		$	0.00		$	0.00
Basic net income per common share	$	0.60		$	0.53		$	1.22		$	0.99
DILUTED EPS:
Income from continuing operations attributed to common stockholders	$	91,732		$	80,990		$	188,262		$	152,112
Add incremental earnings related to potential common shares		—			8			—			—
Adjusted income from continuing operations attributed to common stockholders	$	91,732		$	80,998		$	188,262		$	152,112
Weighted average number of common shares outstanding, excluding non-vested shares of restricted stock		153,269			153,556			153,947			153,340
Add dilutive effect of potential common shares		386			2,025			597			1,912
Weighted average number of diluted common shares outstanding		153,655			155,581			154,544			155,252
Diluted income from continuing operations per common share	$	0.60		$	0.52		$	1.22		$	0.98
Diluted loss from discontinued operations per common share	$	0.00		$	0.00		$	0.00		$	0.00
Diluted net income per common share	$	0.60		$	0.52		$	1.22		$	0.98
Potentially dilutive securities excluded as anti-dilutive		5,969			380			5,529			1,796

XML

Consolidated Statement Of Changes In Stockholders' Equity (USD $) In Thousands, except Share data	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income	Treasury Stock
Balance at Dec. 31, 2011	$ 2,516,631	$ 1,833	$ 840,731	$ 2,279,367	$ 19,459	$ (624,759)
Balance (in shares) at Dec. 31, 2011	183,295,350	183,295,000
Net income	189,812			189,812
Foreign currency translation adjustment	(612)				(612)
Issuance of restricted stock (in shares)		788,000
Issuance of restricted stock		8	(8)
Vesting of stock unit awards		8,000
Forfeitures of restricted stock (in shares)		(51,000)
Forfeitures of restricted stock		(1)	1
Exercise of stock options (in shares)	13,300	13,000
Exercise of stock options	195		195
Stock-based compensation	11,240		11,240
Tax expense related to stock-based compensation	(1,208)		(1,208)
Payment of cash dividends	(15,438)			(15,438)
Purchase of treasury stock	(71,337)					(71,337)
Balance at Jun. 30, 2012	$ 2,629,283	$ 1,840	$ 850,951	$ 2,453,741	$ 18,847	$ (696,096)
Balance (in shares) at Jun. 30, 2012	184,053,434	184,053,000

XML

Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Accounts receivable, allowance for doubtful accounts	$ 4,734	$ 4,887
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, authorized	300,000,000	300,000,000
Common stock, issued	184,053,434	183,295,350
Common stock, outstanding	151,773,850	155,807,779
Treasury stock, shares	32,279,584	27,487,571

XML

Asset Retirement Obligation

6 Months Ended

Jun. 30, 2012

Asset Retirement Obligation

8. Asset Retirement Obligation

The Company records a liability for the estimated costs to be incurred in connection with the abandonment of oil and natural gas properties in the future. This liability is included in the caption “other” in the liabilities section of the consolidated balance sheet. The following table describes the changes to the Company’s asset retirement obligations during the six months ended June 30, 2012 and 2011 (in thousands):

	Six Months Ended June 30,
	2012			2011
Balance at beginning of year	$	3,455		$	3,063
Liabilities incurred		182			152
Liabilities settled		(83	)		(80	)
Accretion expense		79			70
Revision in estimated costs of plugging oil and natural gas wells		536			(2	)
Asset retirement obligation at end of period	$	4,169		$	3,203

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2012	Jul. 27, 2012
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Trading Symbol	PTEN
Entity Registrant Name	PATTERSON UTI ENERGY INC
Entity Central Index Key	0000889900
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		151,762,648

XML

Long Term Debt

6 Months Ended

Jun. 30, 2012

Long Term Debt

9. Long Term Debt

Credit Facilities - On August 19, 2010, the Company entered into a Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, N.A., as administrative agent, letter of credit issuer, swing line lender and lender, and each of the other letter of credit issuer and lender parties thereto. The Credit Agreement is a committed senior unsecured credit facility that includes a revolving credit facility and a term loan facility.

The revolving credit facility permits aggregate borrowings of up to $400 million and contains a letter of credit facility that is limited to $150 million and a swing line facility that is limited to $40 million. Subject to customary conditions, the Company may request that the lenders’ aggregate commitments with respect to the revolving credit facility be increased by up to $100 million, not to exceed total commitments of $500 million. The maturity date for the revolving facility is August 19, 2013.

The term loan facility provided for a loan of $100 million which was funded on August 19, 2010. The term loan facility was payable in quarterly principal installments commencing November 19, 2010. The installment amounts were scheduled to vary from 1.25% of the original principal amount for each of the first four quarterly installments, 2.50% of the original principal amount for each of the subsequent eight quarterly installments and 5.00% of the original principal amount for the next subsequent three quarterly installments, with the remainder becoming due at maturity. The maturity date for the term loan facility was August 19, 2014. The outstanding balance of the term loan facility was paid in full on June 14, 2012.

Loans under the Credit Agreement bear interest by reference, at the Company’s election, to the LIBOR rate or base rate. The applicable margin on LIBOR rate loans varies from 2.75% to 3.75% and the applicable margin on base rate loans varies from 1.75% to 2.75%, in each case determined based upon the Company’s debt to capitalization ratio. As of June 30, 2012, the applicable margin on LIBOR rate loans was 2.75% and the applicable margin on base rate loans was 1.75%. A letter of credit fee is payable by the Company equal to the applicable margin for LIBOR rate loans times the daily amount available to be drawn under outstanding letters of credit. The commitment fee payable to the lenders for the unused portion of the revolving credit facility varies from 0.50% to 0.75% based upon the Company’s debt to capitalization ratio and was 0.50% as of June 30, 2012.

Each domestic subsidiary of the Company other than any immaterial subsidiary has unconditionally guaranteed all existing and future indebtedness and liabilities of the Company and the other guarantors arising under the Credit Agreement and other loan documents. Such guarantees also cover obligations of the Company and any subsidiary of the Company arising under any interest rate swap contract with any person while such person is a lender or affiliate of a lender under the Credit Agreement.

The Credit Agreement contains customary representations, warranties, indemnities and affirmative and negative covenants. The Credit Agreement also requires compliance with two financial covenants. The Company must not permit its debt to capitalization ratio to exceed 45% at any time. The Credit Agreement generally defines the debt to capitalization ratio as the ratio of (a) total borrowed money indebtedness to (b) the sum of such indebtedness plus consolidated net worth, with consolidated net worth determined as of the last day of the most recently ended fiscal quarter. The Company also must not permit the interest coverage ratio as of the last day of a fiscal quarter to be less than 3.00 to 1.00. The Credit Agreement generally defines the interest coverage ratio as the ratio of earnings before interest, taxes, depreciation and amortization (“EBITDA”) of the four prior fiscal quarters to interest charges for the same period. The Company was in compliance with these covenants at June 30, 2012.

As of June 30, 2012, the outstanding balance under the term loan facility had been paid in full, and there were no borrowings outstanding under the revolving credit facility. The Company had $39.8 million in letters of credit outstanding at June 30, 2012 and, as a result, had available borrowing capacity of approximately $360 million at that date.

Senior Notes – On October 5, 2010, the Company completed the issuance and sale of $300 million in aggregate principal amount of its 4.97% Series A Senior Notes due October 5, 2020 (the “Series A Notes”) in a private placement. The Series A Notes bear interest at a rate of 4.97% per annum. The Company will pay interest on the Series A Notes on April 5 and October 5 of each year. The Series A Notes will mature on October 5, 2020.

On June 14, 2012, the Company completed the issuance and sale of $300 million in aggregate principal amount of its 4.27% Series B Senior Notes due June 14, 2022 (the “Series B Notes”) in a private placement. The Series B Notes bear interest at a rate of 4.27% per annum. The Company will pay interest on the Series A Notes on April 5 and October 5 of each year beginning October 5, 2012. The Series B Notes will mature on June 14, 2022.

The Series A Notes and Series B Notes are senior unsecured obligations of the Company which rank equally in right of payment with all other unsubordinated indebtedness of the Company. The Series A Notes and Series B Notes are guaranteed on a senior unsecured basis by each of the existing domestic subsidiaries of the Company other than immaterial subsidiaries.

The Series A Notes and Series B Notes are prepayable at the Company’s option, in whole or in part, provided that in the case of a partial prepayment, prepayment must be in an amount not less than 5% of the aggregate principal amount of the notes then outstanding, at any time and from time to time at 100% of the principal amount prepaid, plus accrued and unpaid interest to the prepayment date, plus a “make-whole” premium as specified in the note purchase agreement. The Company must offer to prepay the notes upon the occurrence of any change of control. In addition, the Company must offer to prepay the notes upon the occurrence of certain asset dispositions if the proceeds therefrom are not timely reinvested in productive assets. If any offer to prepay is accepted, the purchase price of each prepaid note is 100% of the principal amount thereof, plus accrued and unpaid interest thereon to the prepayment date.

The respective note purchase agreements require compliance with two financial covenants. The Company must not permit its debt to capitalization ratio to exceed 50% at any time. The note purchase agreements generally define the debt to capitalization ratio as the ratio of (a) total borrowed money indebtedness to (b) the sum of such indebtedness plus consolidated net worth, with consolidated net worth determined as of the last day of the most recently ended fiscal quarter. The Company also must not permit the interest coverage ratio as of the last day of a fiscal quarter to be less than 2.50 to 1.00. The note purchase agreements generally define the interest coverage ratio as the ratio for the four prior quarters of EBITDA to interest charges for that same period. The Company was in compliance with these covenants at June 30, 2012.

Events of default under the note purchase agreements and the Credit Agreement include failure to pay principal or interest when due, failure to comply with the financial and operational covenants, a cross default event, a judgment in excess of a threshold event, the guaranty agreement ceasing to be enforceable, the occurrence of certain ERISA events, a change of control event and bankruptcy and other insolvency events. If an event of default under a note purchase agreement occurs and is continuing, then holders of a majority in principal amount of the respective notes have the right to declare all the notes then-outstanding to be immediately due and payable. In addition, if the Company defaults in payments on any note, then until such defaults are cured, the holder thereof may declare all the notes held by it pursuant to the note purchase agreement to be immediately due and payable.

The Company incurred approximately $10.8 million in debt issuance costs during 2010 in connection with the Credit Agreement and the Series A Notes. The Company incurred approximately $1.5 million in debt issuance costs during 2012 in connection with the Series B Notes. These costs were deferred and are being recognized as interest expense over the term of the underlying debt. Interest expense related to the amortization of debt issuance costs was approximately $617,000 and 604,000 for the three months ended June 30, 2012 and 2011, respectively. Interest expense related to the amortization of debt issuance costs was approximately $1.2 million for the six months ended June 30, 2012 and 2011.

Presented below is a schedule of the principal repayment requirements of long-term debt by fiscal year as of June 30, 2012 (in thousands):

Year ending December 31,
2012	$	—
2013		—
2014		—
2015		—
2016		—
Thereafter		600,000
Total	$	600,000

XML

Consolidated Statements Of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2012		Jun. 30, 2011		Jun. 30, 2012		Jun. 30, 2011
Operating revenues:
Oil and natural gas	$ 14,690		$ 13,454		$ 29,407		$ 23,841
Total operating revenues	681,112		600,064		1,427,033		1,167,468
Operating costs and expenses:
Contract drilling	272,720		218,754		555,369		437,453
Pressure pumping	138,051		128,866		304,908		247,441
Oil and natural gas	2,583		2,103		5,313		4,100
Depreciation, depletion, amortization and impairment	128,477		102,749		251,430		198,964
Selling, general and administrative	16,719		16,749		30,587		32,724
Net gain on asset disposals	(28,332)	[1]	(1,017)	[1]	(30,732)	[1]	(2,621)	[1]
Provision for bad debts					1,600
Total operating costs and expenses	530,218		468,204		1,118,475		918,061
Operating income	150,894		131,860		308,558		249,407
Other income (expense):
Interest income	179		45		233		88
Interest expense	(5,051)		(3,514)		(9,633)		(7,403)
Other	(144)		78		(89)		197
Total other expense	(5,016)		(3,391)		(9,489)		(7,118)
Income from continuing operations before income taxes	145,878		128,469		299,069		242,289
Income tax expense (benefit):
Current	(829)		15,449		6,681		19,031
Deferred	54,169		31,382		102,576		70,001
Total income tax expense	53,340		46,831		109,257		89,032
Income from continuing operations	92,538		81,638		189,812		153,257
Loss from discontinued operations, net of income taxes							(367)
Net income	92,538		81,638		189,812		152,890
Basic income (loss) per common share:
Income from continuing operations	$ 0.60		$ 0.53		$ 1.22		$ 0.99
Loss from discontinued operations, net of income taxes	$ 0.00		$ 0.00		$ 0.00		$ 0.00
Net income	$ 0.60		$ 0.53		$ 1.22		$ 0.99
Diluted income (loss) per common share:
Income from continuing operations	$ 0.60		$ 0.52		$ 1.22		$ 0.98
Loss from discontinued operations, net of income taxes	$ 0.00		$ 0.00		$ 0.00		$ 0.00
Net income	$ 0.60		$ 0.52		$ 1.22		$ 0.98
Weighted average number of common shares outstanding:
Basic	153,269		153,556		153,947		153,340
Diluted	153,655		155,581		154,544		155,252
Cash dividends per common share	$ 0.05		$ 0.05		$ 0.10		$ 0.10
Contract Drilling
Operating revenues:
Oil and gas services	460,249		386,479		949,731		763,837
Pressure Pumping
Operating revenues:
Oil and gas services	$ 206,173		$ 200,131		$ 447,895		$ 379,790

[1] Net gains or losses associated with the disposal of assets relate to corporate strategy decisions of the executive management group. Accordingly, the related gains or losses have been separately presented and excluded from the results of specific segments.

XML

Stock-based Compensation

6 Months Ended

Jun. 30, 2012

Stock-based Compensation

3. Stock-based Compensation

The Company uses share-based payments to compensate employees and non-employee directors. The Company recognizes the cost of share-based payments under the fair-value-based method. Share-based awards consist of equity instruments in the form of stock options, restricted stock or restricted stock units and have included service and, in certain cases, performance conditions. The Company’s share-based awards have also included both cash-settled and share-settled performance unit awards. Cash-settled performance unit awards were accounted for as liability awards. Share-settled performance unit awards are accounted for as equity awards. The Company issues shares of common stock when vested stock options are exercised, when restricted stock is granted and when restricted stock units and share-settled performance unit awards vest.

Stock Options. The Company estimates the grant date fair values of stock options using the Black-Scholes-Merton valuation model. Volatility assumptions are based on the historic volatility of the Company’s common stock over the most recent period equal to the expected term of the options as of the date the options are granted. The expected term assumptions are based on the Company’s experience with respect to employee stock option activity. Dividend yield assumptions are based on the expected dividends at the time the options are granted. The risk-free interest rate assumptions are determined by reference to United States Treasury yields. Weighted-average assumptions used to estimate the grant date fair values for stock options granted in the three and six month periods ended June 30, 2012 and 2011 follow:

	Three Months Ended June  30,						Six Months Ended June  30,
	2012			2011			2012			2011
Volatility		48.86	%		45.82	%		48.85	%		45.97	%
Expected term (in years)		5.00			5.00			5.00			5.00
Dividend yield		1.22	%		0.64	%		1.21	%		0.67	%
Risk-free interest rate		0.88	%		2.38	%		0.88	%		2.34	%

Stock option activity from January 1, 2012 to June 30, 2012 follows:

	Underlying Shares			Weighted Average Exercise Price
Outstanding at January 1, 2012		7,081,295		$	20.73
Granted		780,000		$	16.53
Exercised		(13,300	)	$	14.64
Outstanding at June 30, 2012		7,847,995		$	20.33
Exercisable at June 30, 2012		6,548,510		$	20.64

Restricted Stock. For all restricted stock awards to date, shares of common stock were issued when the awards were made. Non-vested shares are subject to forfeiture for failure to fulfill service conditions and, in certain cases, performance conditions. Non-forfeitable dividends are paid on non-vested shares of restricted stock. The Company uses the straight-line method to recognize periodic compensation cost over the vesting period.

Restricted stock activity from January 1, 2012 to June 30, 2012 follows:

	Shares			Weighted Average Grant Date Fair Value
Non-vested restricted stock outstanding at January 1, 2012		1,213,799		$	24.13
Granted		788,650		$	15.60
Vested		(524,010	)	$	22.16
Forfeited		(51,696	)	$	21.89
Non-vested restricted stock outstanding at June 30, 2012		1,426,743		$	20.22

Restricted Stock Units. For all restricted stock unit awards made to date, shares of common stock are not issued until the units vest. Restricted stock units are subject to forfeiture for failure to fulfill service conditions. Non-forfeitable cash dividend equivalents are paid on non-vested restricted stock units. The Company uses the straight-line method to recognize periodic compensation cost over the vesting period.

Restricted stock unit activity from January 1, 2012 to June 30, 2012 follows:

	Shares			Weighted Average Grant Date Fair Value
Non-vested restricted stock units outstanding at January 1, 2012		17,501		$	23.47
Granted		9,000		$	14.91
Vested		(7,830	)	$	21.08
Forfeited		—		$	—
Non-vested restricted stock units outstanding at June 30, 2012		18,671		$	20.35

Performance Unit Awards. In 2009, the Company granted cash-settled performance unit awards to certain executive officers (the “2009 Performance Units”). The 2009 Performance Units provided for those executive officers to receive a cash payment upon the achievement of certain performance goals established by the Compensation Committee during a specified period. The performance period for the 2009 Performance Units was the period from April 1, 2009 through March 31, 2012. The performance goals for the 2009 Performance Units were tied to the Company’s total shareholder return for the performance period as compared to total shareholder return for a peer group determined by the Compensation Committee. These goals were considered to be market conditions under the relevant accounting standards and the market conditions were factored into the determination of the fair value of the performance units. Generally, the recipients would receive a target payment if the Company’s total shareholder return was positive and, when compared to the peer group, was at or above the 50^thpercentile but less than the 75^th percentile and two times the target if at the 75^th percentile or higher. The total target amount with respect to the 2009 Performance Units was approximately $3.4 million. If the Company’s total shareholder return was positive, and, when compared to the peer group, was at or above the 25^th percentile but less than the 50^th percentile, the recipients would only receive one-half of the target payment. Because the 2009 Performance Units were settled in cash at the end of the performance period, they were accounted for as liability awards and the Company’s pro-rated obligation was measured at estimated fair value at the end of each reporting period using a Monte Carlo simulation model. The performance period ended on March 31, 2012 and the Company’s total shareholder return was at the 46^th percentile. The resulting cash payments totaling $1.7 million were paid in April 2012. A compensation benefit associated with the 2009 Performance Units of approximately $1.9 million was recognized for the six months ended June 30, 2012. Compensation expense associated with the 2009 Performance Units was approximately $1.0 million and $2.2 million for the three and six month periods ended June 30, 2011, respectively.

In 2010, 2011 and 2012, the Company granted stock-settled performance unit awards to certain executive officers (the “Stock-Settled Performance Units”). The Stock-Settled Performance Units provide for the recipients to receive a grant of shares of stock upon the achievement of certain performance goals established by the Compensation Committee during the performance period. The performance period for the Stock-Settled Performance Units is the three year period commending on April 1 of the year of grant, but can extend for an additional two years in certain circumstances. The performance goals for the Stock-Settled Performance Units are tied to the Company’s total shareholder return for the performance period as compared to total shareholder return for a peer group determined by the Compensation Committee. These goals are considered to be market conditions under the relevant accounting standards and the market conditions were factored into the determination of the fair value of the performance units. Generally, the recipients will receive a target number of shares if the Company’s total shareholder return is positive and, when compared to the peer group, is at the 50^th percentile and two times the target if at the 75^th percentile or higher.

If the Company’s total shareholder return is positive, and, when compared to the peer group, is at or above the 25^th percentile, but less than the 50^th percentile, the recipients will only receive one-half of the target number of shares. The grant of shares when achievement is between the 25^th and 75^thpercentile will be determined on a pro-rata basis. The total target number of shares with respect to the Stock-Settled Performance Units is set forth below:

	2012 Performance Unit Awards		2011 Performance Unit Awards		2010 Performance Unit Awards
Target number of shares		192,000		144,375		178,750

Because the Stock-Settled Performance Units are stock-settled awards, they are accounted for as equity awards and measured at fair value on the date of grant using a Monte Carlo simulation model. The fair value of the Stock-Settled Performance Units is set forth below (in thousands):

	2012 Performance Unit Awards		2011 Performance Unit Awards		2010 Performance Unit Awards
Fair value at date of grant	$	3,065	$	5,569	$	3,117

These fair value amounts are charged to expense on a straight-line basis over the performance period. Compensation expense associated with the Stock-Settled Performance Units is shown below (in thousands):

	Three Months Ended June  30,				Six Months Ended June  30,
	2012		2011		2012		2011
Stock-based compensation expense associated with Stock-Settled Performance Units	$	979	$	724	$	1,703	$	983

XML

Discontinued Operations

6 Months Ended

Jun. 30, 2012

Discontinued Operations

2. Discontinued Operations

On January 27, 2011, the stock of the Company’s electric wireline subsidiary, Universal Wireline, Inc., was sold in a cash transaction for $25.5 million. Except for inventory, the working capital of Universal Wireline, Inc. was excluded from the sale and retained by a subsidiary of the Company. Universal Wireline, Inc. was formed in 2010 to acquire the electric wireline business of Key Energy Services, Inc. The results of operations of this business have been presented as results of discontinued operations in these consolidated financial statements. Upon being classified as held for sale, the carrying value of the assets to be disposed of were reduced to fair value less estimated costs to sell resulting in a charge of $2.2 million in 2010. Due to the fact that the carrying value of the assets had been adjusted to net realizable value during 2010, no significant additional gain or loss was recognized in connection with the sale in 2011.

Summarized operating results from discontinued operations for the three and six months ended June 30, 2012, and 2011 are shown below (in thousands):

	Three Months Ended June  30,				Six Months Ended June  30,
	2012		2011		2012		2011
Electric wireline revenues	$	—	$	—	$	—	$	1,104
Loss before income taxes	$	—	$	—	$	—	$	(576	)
Income tax benefit		—		—		—		209
Loss from discontinued operations, net of income tax	$	—	$	—	$	—	$	(367	)

XML

Recently Issued Accounting Standards

6 Months Ended

Jun. 30, 2012

Recently Issued Accounting Standards

14. Recently Issued Accounting Standards

In June 2011, the FASB issued an accounting standard update that requires that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In the two-statement approach, the first statement should present total net income and its components followed consecutively by a second statement that should present total other comprehensive income, the components of other comprehensive income, and the total of comprehensive income. Historically, these components of other comprehensive income and total comprehensive income have been presented in the statement of changes in stockholders’ equity by many companies, including the Company. This requirement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, and became effective for the Company in the quarter ending March 31, 2012. The adoption of this update has resulted in the addition of a new consolidated statement of comprehensive income being added to the Company’s consolidated financial statements.

In May 2011, the FASB issued an accounting standard update to improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with United States GAAP and International Financial Reporting Standards. The amendments in this update do not require additional fair value measurements, but provide additional guidance as to measuring fair value as well as certain additional disclosure requirements. The requirements in this update are effective during interim and annual periods beginning after December 15, 2011 and became effective for the Company in the quarter ending March 31, 2012. The adoption of this update did not have a material impact on the Company’s disclosures included in its consolidated financial statements.

XML

Commitments, Contingencies and Other Matters

6 Months Ended

Jun. 30, 2012

Commitments, Contingencies and Other Matters

10. Commitments, Contingencies and Other Matters

As of June 30, 2012, the Company maintained letters of credit in the aggregate amount of $39.8 million for the benefit of various insurance companies as collateral for retrospective premiums and retained losses which could become payable under the terms of the underlying insurance contracts. These letters of credit expire annually at various times during the year and are typically renewed. As of June 30, 2012, no amounts had been drawn under the letters of credit.

As of June 30, 2012, the Company had commitments to purchase approximately $220 million of major equipment for its drilling and pressure pumping businesses.

The Company’s pressure pumping business has entered into agreements to purchase minimum quantities of proppants from certain vendors. These agreements expire in 2013 and 2016. As of June 30, 2012, the remaining obligation under these agreements is approximately $33.7 million, of which materials with a total purchase price of approximately $4.7 million are expected to be delivered during the last half of 2012. In the event that the required minimum quantities are not purchased during any contract year, the Company would be required to make a liquidated damages payment to the respective vendor for any shortfall.

In November of 2011, the Company’s pressure pumping business entered into an agreement with a proppant vendor to advance up to $12.0 million to such vendor to finance the construction of certain processing facilities. This advance is secured by the underlying processing facilities and bears interest at an annual rate of 5.0%. Repayment of the advance is to be made through discounts applied to purchases from the vendor and repayment of all amounts advanced must be made no later than October 1, 2017. As of June 30, 2012, advances of approximately $5.7 million had been made under this agreement and repayments of approximately $239,000 had been received resulting in a balance outstanding of approximately $5.5 million.

The Company is party to various legal proceedings arising in the normal course of its business. The Company does not believe that the outcome of these proceedings, either individually or in the aggregate, will have a material adverse effect on its financial condition, results of operations or cash flows.

XML

Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2012

Goodwill and Intangible Assets

6. Goodwill and Intangible Assets

Goodwill — Goodwill by operating segment as of June 30, 2012 and changes for the six months then ended are as follows (in thousands):

	Contract Drilling		Pressure Pumping		Total
Balance December 31, 2011	$	86,234	$	67,575	$	153,809
Changes to goodwill		—		—		—
Balance June 30, 2012	$	86,234	$	67,575	$	153,809

There were no accumulated impairment losses as of June 30, 2012 or December 31, 2011.

Goodwill is evaluated at least annually on December 31 to determine if the fair value of recorded goodwill has decreased below its carrying value. For purposes of impairment testing, goodwill is evaluated at the reporting unit level. The Company’s reporting units for impairment testing have been determined to be its operating segments. Goodwill impairment is measured using a two-step impairment test. The first step is to compare the fair value of an entity’s reporting units to the respective carrying value of those reporting units. If the carrying value of a reporting unit exceeds its fair value the second step of the impairment test is performed whereby the fair value of the reporting unit is allocated to its identifiable tangible and intangible assets and liabilities with any remaining fair value representing the fair value of goodwill. If this resulting fair value of goodwill is less than the carrying value of goodwill, an impairment loss would be recognized in the amount of the shortfall.

Intangible Assets — Intangible assets were recorded in the pressure pumping operating segment in connection with the fourth quarter 2010 acquisition of the assets of a pressure pumping business. As a result of the purchase price allocation, the Company recorded intangible assets related to a non-compete agreement and the customer relationships acquired. These intangible assets were recorded at fair value on the date of acquisition.

The non-compete agreement has a term of three years from October 1, 2010. The value of this agreement was estimated using a with and without scenario where cash flows were projected through the term of the agreement assuming the agreement is in place and compared to cash flows assuming the non-compete agreement was not in place. The intangible asset associated with the non-compete agreement is being amortized on a straight-line basis over the three-year term of the agreement. Amortization expense of approximately $117,000 was recorded in the three months ended June 30, 2012 and 2011 and amortization expense of approximately $233,000 was recorded in the six months ended June 30, 2012 and 2011 associated with the non-compete agreement.

The value of the customer relationships was estimated using a multi-period excess earnings model to determine the present value of the projected cash flows associated with the customers in place at the time of the acquisition and taking into account a contributory asset charge. The resulting intangible asset is being amortized on a straight-line basis over seven years. Amortization expense of approximately $911,000 was recorded in the three months ended June 30, 2012 and 2011 and amortization expense of approximately $1.8 million was recorded in the six months ended June 30, 2012 and 2011 associated with customer relationships.

The following table presents the gross carrying amount and accumulated amortization of intangible assets as of June 30, 2012 (in thousands):

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Non-compete agreement	$	1,400	$	(816	)	$	584
Customer relationships		25,500		(6,375	)		19,125
Total intangible assets	$	26,900	$	(7,191	)	$	19,709

XML

Commitments, Contingencies and Other Matters - Additional Information (Detail) (USD $)	6 Months Ended
	Jun. 30, 2012
Commitments and Contingencies Disclosure [Line Items]
Letters of credit, collateral for retrospective premiums and retained losses	$ 39,800,000
Commitments to purchase major equipment	220,000,000
Current obligation	33,700,000
Obligation for remainder of the year	4,700,000
Non Revolving Senior Secured Term Loan
Commitments and Contingencies Disclosure [Line Items]
Advance to non-affiliates	12,000,000
Notes receivable interest rate	5.00%
Notes receivable	5,700,000
Repayment of notes receivable	239,000
Notes receivable outstanding	$ 5,500,000

XML

Property and Equipment

6 Months Ended

Jun. 30, 2012

Property and Equipment

4. Property and Equipment

Property and equipment consisted of the following at June 30, 2012 and December 31, 2011 (in thousands):

	June 30, 2012			December 31, 2011
Equipment	$	5,029,295		$	4,730,925
Oil and natural gas properties		145,303			131,812
Buildings		62,418			64,090
Land		10,411			11,467
		5,247,427			4,938,294
Less accumulated depreciation and depletion		(1,845,014	)		(1,771,028	)
Property and equipment, net	$	3,402,413		$	3,167,266

On April 23, 2012, the Company sold its flowback operations to a subsidiary of TETRA Technologies, Inc. in a cash transaction. The sale price was $42.5 million, and the Company recognized a gain of approximately $22.6 million in the second quarter of 2012 as a result of this transaction.

XML

Business Segments

6 Months Ended

Jun. 30, 2012

Business Segments

5. Business Segments

The Company’s revenues, operating profits and identifiable assets are primarily attributable to three business segments: (i) contract drilling of oil and natural gas wells, (ii) pressure pumping services and (iii) the investment, on a working interest basis, in oil and natural gas properties. Each of these segments represents a distinct type of business. These segments have separate management teams which report to the Company’s chief operating decision maker. The results of operations in these segments are regularly reviewed by the chief operating decision maker for purposes of determining resource allocation and assessing performance. As discussed in Note 2, included in discontinued operations for the six months ended June 30, 2011 are the operating results for an electric wireline business that was acquired on October 1, 2010 and sold in January 2011. Separate financial data for each of our business segments is provided in the table below (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Revenues:
Contract drilling	$	461,798		$	387,622		$	952,501		$	765,647
Pressure pumping		206,173			200,131			447,895			379,790
Oil and natural gas		14,690			13,454			29,407			23,841
Total segment revenues		682,661			601,207			1,429,803			1,169,278
Elimination of intercompany revenues (a)		(1,549	)		(1,143	)		(2,770	)		(1,810	)
Total revenues	$	681,112		$	600,064		$	1,427,033		$	1,167,468
Income before income taxes:
Contract drilling	$	90,536		$	85,135		$	202,307		$	165,654
Pressure pumping		36,846			50,340			83,633			91,718
Oil and natural gas		7,224			7,129			14,742			11,947
		134,606			142,604			300,682			269,319
Corporate and other		(12,044	)		(11,761	)		(22,856	)		(22,533	)
Net gain on asset disposals (b)		28,332			1,017			30,732			2,621
Interest income		179			45			233			88
Interest expense		(5,051	)		(3,514	)		(9,633	)		(7,403	)
Other income (expense)		(144	)		78			(89	)		197
Income from continuing operations before income taxes	$	145,878		$	128,469		$	299,069		$	242,289

	June 30, 2012		December 31, 2011
Identifiable assets:
Contract drilling	$	3,466,902	$	3,252,116
Pressure pumping		774,924		748,643
Oil and natural gas		50,860		44,990
Corporate and other (c)		149,929		176,152
Total assets	$	4,442,615	$	4,221,901

(a) Consists of contract drilling intercompany revenues for drilling services provided to the oil and natural gas exploration and production segment.

(b) Net gains or losses associated with the disposal of assets relate to corporate strategy decisions of the executive management group. Accordingly, the related gains or losses have been separately presented and excluded from the results of specific segments.

(c) Corporate and other assets primarily include cash on hand, income taxes receivable and certain deferred tax assets.

XML

Accrued Expenses

6 Months Ended

Jun. 30, 2012

Accrued Expenses

7. Accrued Expenses

Accrued expenses consisted of the following at June 30, 2012 and December 31, 2011 (in thousands):

	June 30, 2012		December 31, 2011
Salaries, wages, payroll taxes and benefits	$	49,198	$	58,692
Workers’ compensation liability		66,214		66,121
Property, sales, use and other taxes		13,776		11,850
Insurance, other than workers’ compensation		8,789		6,012
Accrued interest payable		5,196		4,937
Deferred revenue - current		5,137		7,229
2009 Performance Unit Awards		—		3,640
Other		5,072		6,148
	$	153,382	$	164,629

Deferred revenue was recorded in the fourth quarter of 2010 in the purchase price allocation associated with the Company’s acquisition of a pressure pumping business. The deferred revenue relates to out-of-market pricing agreements that were in place at the acquired business at the time of the acquisition. The deferred revenue will be recognized as pressure pumping revenue over the remaining term of the pricing agreements. Deferred revenue of approximately $1.8 million and $3.6 million was recognized in the three and six months ended June 30, 2012, respectively, related to these pricing agreements. Deferred revenue of approximately $1.8 million and $4.7 million was recognized in the three and six months ended June 30, 2011, respectively, related to these pricing agreements.

XML

Estimated Fair Value of Outstanding Debt Balances (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Carrying (Reported) Amount, Fair Value Disclosure
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of Debt	$ 600,000	$ 502,500
Carrying (Reported) Amount, Fair Value Disclosure | Revolving Credit Facility
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of Debt		110,000
Carrying (Reported) Amount, Fair Value Disclosure | Term Loan Facility
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of Debt		92,500
Carrying (Reported) Amount, Fair Value Disclosure | Series A Senior Notes, 4.97 Percent
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of Debt	300,000	300,000
Carrying (Reported) Amount, Fair Value Disclosure | Series B Senior Notes, 4.27 Percent
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of Debt	300,000
Estimate of Fair Value, Fair Value Disclosure
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of Debt	621,345	518,442
Estimate of Fair Value, Fair Value Disclosure | Revolving Credit Facility
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of Debt		110,000
Estimate of Fair Value, Fair Value Disclosure | Term Loan Facility
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of Debt		92,500
Estimate of Fair Value, Fair Value Disclosure | Series A Senior Notes, 4.97 Percent
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of Debt	321,345	315,942
Estimate of Fair Value, Fair Value Disclosure | Series B Senior Notes, 4.27 Percent
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of Debt	$ 300,000

XML

Income Taxes - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
Income Taxes [Line Items]
Reduction in deferred tax liabilities due to statutory tax rates in Canada being lower than those in the United States	$ (5.1)
Deferred tax liabilities that have not been provided on such unremitted foreign earnings for United States Federal or state income taxes	$ 23.5

XML

Fair Values of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2012

Estimated Fair Value of Outstanding Debt Balances

The estimated fair value of the Company’s outstanding debt balances (including current portion) as of June 30, 2012 and December 31, 2011 is set forth below (in thousands):

	June 30, 2012				December 31, 2011
	Carrying Value		Fair Value		Carrying Value		Fair Value
Borrowings under Credit Agreement:
Revolving credit facility	$	—	$	—	$	110,000	$	110,000
Term loan facility		—		—		92,500		92,500
4.97% Series A Senior Notes		300,000		321,345		300,000		315,942
4.27% Series B Senior Notes		300,000		300,000		—		—
Total debt	$	600,000	$	621,345	$	502,500	$	518,442

XML

Business Segments - Assets (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012		Dec. 31, 2011
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	$ 4,442,615		$ 4,221,901
Operating Segments | Contract Drilling
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	3,466,902		3,252,116
Operating Segments | Pressure Pumping
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	774,924		748,643
Operating Segments | Oil and Natural Gas
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	50,860		44,990
Corporate and other
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	$ 149,929	[1]	$ 176,152	[1]

[1] Corporate and other assets primarily include cash on hand, income taxes receivable and certain deferred tax assets.

XML

Income Taxes

6 Months Ended

Jun. 30, 2012

Income Taxes

12. Income Taxes

On January 1, 2010, the Company converted its Canadian operations from a Canadian branch to a controlled foreign corporation for Federal income tax purposes. Because the statutory tax rates in Canada are lower than those in the United States, this transaction triggered a $5.1 million reduction in the Company’s deferred tax liabilities, which is being amortized as a reduction to deferred income tax expense over the weighted average remaining useful life of the Canadian assets.

As a result of the above conversion, the Company’s Canadian assets are no longer subject to United States taxation, provided that the related unremitted earnings are permanently reinvested in Canada. Effective January 1, 2010, the Company has elected to permanently reinvest these unremitted earnings in Canada, and intends to do so for the foreseeable future. As a result, no deferred United States federal or state income taxes have been provided on such unremitted foreign earnings, which totaled approximately $23.5 million as of June 30, 2012.

XML

Stock-based Compensation (Tables)

6 Months Ended

Jun. 30, 2012

Weighted-Average Assumptions Used to Estimate Grant Date Fair Values for Stock Options Granted

Treasury yields. Weighted-average assumptions used to estimate the grant date fair values for stock options granted in the three and six month periods ended June 30, 2012 and 2011 follow:

	Three Months Ended June  30,						Six Months Ended June  30,
	2012			2011			2012			2011
Volatility		48.86	%		45.82	%		48.85	%		45.97	%
Expected term (in years)		5.00			5.00			5.00			5.00
Dividend yield		1.22	%		0.64	%		1.21	%		0.67	%
Risk-free interest rate		0.88	%		2.38	%		0.88	%		2.34	%

Stock Option Activity

Stock option activity from January 1, 2012 to June 30, 2012 follows:

	Underlying Shares			Weighted Average Exercise Price
Outstanding at January 1, 2012		7,081,295		$	20.73
Granted		780,000		$	16.53
Exercised		(13,300	)	$	14.64
Outstanding at June 30, 2012		7,847,995		$	20.33
Exercisable at June 30, 2012		6,548,510		$	20.64

Restricted Stock Activity

Restricted stock activity from January 1, 2012 to June 30, 2012 follows:

	Shares			Weighted Average Grant Date Fair Value
Non-vested restricted stock outstanding at January 1, 2012		1,213,799		$	24.13
Granted		788,650		$	15.60
Vested		(524,010	)	$	22.16
Forfeited		(51,696	)	$	21.89
Non-vested restricted stock outstanding at June 30, 2012		1,426,743		$	20.22

Restricted Stock Unit Activity

Restricted stock unit activity from January 1, 2012 to June 30, 2012 follows:

	Shares			Weighted Average Grant Date Fair Value
Non-vested restricted stock units outstanding at January 1, 2012		17,501		$	23.47
Granted		9,000		$	14.91
Vested		(7,830	)	$	21.08
Forfeited		—		$	—
Non-vested restricted stock units outstanding at June 30, 2012		18,671		$	20.35

Stock-Settled Performance Units

The total target number of shares with respect to the Stock-Settled Performance Units is set forth below:

	2012 Performance Unit Awards		2011 Performance Unit Awards		2010 Performance Unit Awards
Target number of shares		192,000		144,375		178,750

Fair value of the Stock-Settled Performance Units

using a Monte Carlo simulation model. The fair value of the Stock-Settled Performance Units is set forth below (in thousands):

	2012 Performance Unit Awards		2011 Performance Unit Awards		2010 Performance Unit Awards
Fair value at date of grant	$	3,065	$	5,569	$	3,117

Compensation Expense Associated with the Stock-Settled Performance Units

These fair value amounts are charged to expense on a straight-line basis over the performance period. Compensation expense associated with the Stock-Settled Performance Units is shown below (in thousands):

	Three Months Ended June  30,				Six Months Ended June  30,
	2012		2011		2012		2011
Stock-based compensation expense associated with Stock-Settled Performance Units	$	979	$	724	$	1,703	$	983

XML

Business Segments - Revenues (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2012		Jun. 30, 2011		Jun. 30, 2012		Jun. 30, 2011
Segment Reporting, Revenue Reconciling Item [Line Items]
Oil and natural gas	$ 14,690		$ 13,454		$ 29,407		$ 23,841
Revenues	681,112		600,064		1,427,033		1,167,468
Operating Segments
Segment Reporting, Revenue Reconciling Item [Line Items]
Oil and natural gas	14,690		13,454		29,407		23,841
Revenues	682,661		601,207		1,429,803		1,169,278
Operating Segments | Contract Drilling
Segment Reporting, Revenue Reconciling Item [Line Items]
Oil and gas services	461,798		387,622		952,501		765,647
Operating Segments | Pressure Pumping
Segment Reporting, Revenue Reconciling Item [Line Items]
Oil and gas services	206,173		200,131		447,895		379,790
Intersegment Elimination
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	$ (1,549)	[1]	$ (1,143)	[1]	$ (2,770)	[1]	$ (1,810)	[1]

[1] Consists of contract drilling intercompany revenues for drilling services provided to the oil and natural gas exploration and production segment.

XML

Restricted Stock Unit Activity (Detail) (Restricted Stock Units (RSUs), USD $)	6 Months Ended
	Jun. 30, 2012
Restricted Stock Units (RSUs)
Shares
Outstanding at beginning of period	17,501
Granted	9,000
Vested	(7,830)
Forfeited
Outstanding at end of period	18,671
Weighted Average Grant Date Fair Value
Outstanding at beginning of period	$ 23.47
Granted	$ 14.91
Vested	$ 21.08
Forfeited
Outstanding at end of period	$ 20.35

XML

Consolidated Statements Of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Net income	$ 92,538	$ 81,638	$ 189,812	$ 152,890
Other comprehensive income, net of taxes of $0 for all periods:
Foreign currency translation adjustment	(3,166)	(538)	(612)	2,160
Total comprehensive income	$ 89,372	$ 81,100	$ 189,200	$ 155,050

XML

Basis of Consolidation and Presentation

6 Months Ended

Jun. 30, 2012

Basis of Consolidation and Presentation

1. Basis of Consolidation and Presentation

The unaudited interim consolidated financial statements include the accounts of Patterson-UTI Energy, Inc. (the “Company”) and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. Except for wholly-owned subsidiaries, the Company has no controlling financial interests in any entity which would require consolidation.

The unaudited interim consolidated financial statements have been prepared by management of the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations, although the Company believes the disclosures included either on the face of the financial statements or herein are sufficient to make the information presented not misleading. In the opinion of management, all adjustments which are of a normal recurring nature considered necessary for a fair statement of the information in conformity with accounting principles generally accepted in the United States of America have been included. The Unaudited Consolidated Balance Sheet as of December 31, 2011, as presented herein, was derived from the audited consolidated balance sheet of the Company, but does not include all disclosures required by accounting principles generally accepted in the United States of America. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011. The results of operations for the three and six months ended June 30, 2012 are not necessarily indicative of the results to be expected for the full year.

The U.S. dollar is the functional currency for all of the Company’s operations except for its Canadian operations, which uses the Canadian dollar as its functional currency. The effects of exchange rate changes are reflected in accumulated other comprehensive income, which is a separate component of stockholders’ equity.

The carrying values of cash and cash equivalents, trade receivables and accounts payable approximate fair value.

The Company provides a dual presentation of its net income (loss) per common share in its unaudited consolidated statements of operations: Basic net income (loss) per common share (“Basic EPS”) and diluted net income (loss) per common share (“Diluted EPS”).

Basic EPS excludes dilution and is computed by first allocating earnings between common stockholders and holders of non-vested shares of restricted stock. Basic EPS is then determined by dividing the earnings attributable to common stockholders by the weighted average number of common shares outstanding during the period, excluding non-vested shares of restricted stock.

Diluted EPS is based on the weighted average number of common shares outstanding plus the dilutive effect of potential common shares, including stock options, non-vested shares of restricted stock and restricted stock units. The dilutive effect of stock options and restricted stock units is determined using the treasury stock method. The dilutive effect of non-vested shares of restricted stock is based on the more dilutive of the treasury stock method or the two-class method, assuming a reallocation of undistributed earnings to common stockholders after considering the dilutive effect of potential common shares other than non-vested shares of restricted stock.

The following table presents information necessary to calculate income from continuing operations per share, loss from discontinued operations per share and net income per share for the three and six months ended June 30, 2012 and 2011 as well as potentially dilutive securities excluded from the weighted average number of diluted common shares outstanding, as their inclusion would have been anti-dilutive (in thousands, except per share amounts):

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
BASIC EPS:
Income from continuing operations	$	92,538		$	81,638		$	189,812		$	153,257
Adjust for income attributed to holders of non-vested restricted stock		(806	)		(648	)		(1,550	)		(1,145	)
Income from continuing operations attributed to common stockholders	$	91,732		$	80,990		$	188,262		$	152,112
Loss from discontinued operations, net	$	—		$	—		$	—		$	(367	)
Adjust for loss attributed to holders of non-vested restricted stock		—			—			—			3
Loss from discontinued operations attributed to common stockholders	$	—		$	—		$	—		$	(364	)
Weighted average number of common shares outstanding, excluding non-vested shares of restricted stock		153,269			153,556			153,947			153,340
Basic income from continuing operations per common share	$	0.60		$	0.53		$	1.22		$	0.99
Basic loss from discontinued operations per common share	$	0.00		$	0.00		$	0.00		$	0.00
Basic net income per common share	$	0.60		$	0.53		$	1.22		$	0.99
DILUTED EPS:
Income from continuing operations attributed to common stockholders	$	91,732		$	80,990		$	188,262		$	152,112
Add incremental earnings related to potential common shares		—			8			—			—
Adjusted income from continuing operations attributed to common stockholders	$	91,732		$	80,998		$	188,262		$	152,112
Weighted average number of common shares outstanding, excluding non-vested shares of restricted stock		153,269			153,556			153,947			153,340
Add dilutive effect of potential common shares		386			2,025			597			1,912
Weighted average number of diluted common shares outstanding		153,655			155,581			154,544			155,252
Diluted income from continuing operations per common share	$	0.60		$	0.52		$	1.22		$	0.98
Diluted loss from discontinued operations per common share	$	0.00		$	0.00		$	0.00		$	0.00
Diluted net income per common share	$	0.60		$	0.52		$	1.22		$	0.98
Potentially dilutive securities excluded as anti-dilutive		5,969			380			5,529			1,796

XML

Long Term Debt - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended		12 Months Ended	1 Months Ended	3 Months Ended	1 Months Ended		1 Months Ended								1 Months Ended					1 Months Ended		1 Months Ended					1 Months Ended				6 Months Ended		1 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2010	Apr. 19, 2010 2010 Credit Agreement LegalMatter	Jun. 30, 2012 2010 Credit Agreement	May 19, 2010 2010 Credit Agreement Minimum	Apr. 19, 2010 2010 Credit Agreement Minimum Point	May 19, 2010 2010 Credit Agreement Maximum	Apr. 19, 2010 2010 Credit Agreement Maximum	Jun. 30, 2012 2010 Credit Agreement LIBOR	May 19, 2010 2010 Credit Agreement LIBOR Minimum	May 19, 2010 2010 Credit Agreement LIBOR Maximum	Jun. 30, 2012 2010 Credit Agreement Base Rate	May 19, 2010 2010 Credit Agreement Base Rate Minimum	May 19, 2010 2010 Credit Agreement Base Rate Maximum	Aug. 19, 2010 2010 Credit Agreement Revolving Credit Facility	Jun. 30, 2012 2010 Credit Agreement Revolving Credit Facility	Jun. 30, 2012 2010 Credit Agreement Revolving Credit Facility Letter of Credit	Aug. 19, 2010 2010 Credit Agreement Revolving Credit Facility Letter of Credit	Aug. 19, 2010 2010 Credit Agreement Revolving Credit Facility Swing Line Facility	Aug. 19, 2010 2010 Credit Agreement Term Loan Facility	Jun. 30, 2012 2010 Credit Agreement Term Loan Facility	Aug. 19, 2010 2010 Credit Agreement Term Loan Facility First Four Quarterly Installments	Aug. 19, 2010 2010 Credit Agreement Term Loan Facility Subsequent Eight Quarterly Installments	Aug. 19, 2010 2010 Credit Agreement Term Loan Facility Next Subsequent Three Quarterly Installments	Oct. 05, 2010 Series A, Senior Notes, 4.97 Percent, Due October 5th 2020 LegalMatter	Oct. 05, 2010 Series A, Senior Notes, 4.97 Percent, Due October 5th 2020 Minimum Point	Oct. 05, 2010 Series A, Senior Notes, 4.97 Percent, Due October 5th 2020 Maximum	Oct. 05, 2010 Series A, Senior Notes, 4.97 Percent, Due October 5th 2020 Semi Annual Payment, First Payment	Oct. 05, 2010 Series A, Senior Notes, 4.97 Percent, Due October 5th 2020 Semi Annual Payment, Second Payment	Jun. 14, 2012 Series B, Senior Notes, 4.27 Percent, Due June 14th 2022 LegalMatter	Jun. 30, 2012 Series B, Senior Notes, 4.27 Percent, Due June 14th 2022	Jun. 14, 2012 Series B, Senior Notes, 4.27 Percent, Due June 14th 2022 Minimum Point	Jun. 14, 2012 Series B, Senior Notes, 4.27 Percent, Due June 14th 2022 Maximum	Jun. 14, 2012 Series B, Senior Notes, 4.27 Percent, Due June 14th 2022 Semi Annual Payment, First Payment	Jun. 14, 2012 Series B, Senior Notes, 4.27 Percent, Due June 14th 2022 Semi Annual Payment, Second Payment
Debt Disclosure [Line Items]
Current aggregate borrowing capacity																		$ 400,000,000			$ 150,000,000	$ 40,000,000
Aggregate amount by which the revolving credit facility can be increased																		100,000,000
Debt maturity date																		Aug. 19, 2013					Aug. 19, 2014					Oct. 05, 2020					Jun. 14, 2022
Credit facility, maximum borrowing capacity																		500,000,000
Line of credit																							100,000,000
Line of credit facility, frequency of payment and payment terms																							The term loan facility is payable in quarterly principal installments commencing November 19, 2010. The installment amounts vary from 1.25% of the original principal amount for each of the first four quarterly installments, 2.50% of the original principal amount for each of the subsequent eight quarterly installments, 5.00% of the original principal amount for the next subsequent three quarterly installments, with the remainder becoming due at maturity.
Line of credit facility, frequency of payments																							Quarterly
Commencement date of principal payments																							Nov. 19, 2010
Installment amounts percentage of the original principal amount																									1.25%	2.50%	5.00%
Full repayment of term loan facility date																							June 14, 2012
Applicable margin												2.75%	2.75%	3.75%	1.75%	1.75%	2.75%
Commitment fee payable to the lenders for the unused portion of the revolving credit facility							0.50%	0.50%		0.75%
Financial covenant description						The Company must not permit its debt to capitalization ratio to exceed 45% at any time. The Credit Agreement generally defines the debt to capitalization ratio as the ratio of (a) total borrowed money indebtedness to (b) the sum of such indebtedness plus consolidated net worth, with consolidated net worth determined as of the last day of the most recently ended fiscal quarter. The Company also must not permit the interest coverage ratio as of the last day of a fiscal quarter to be less than 3.00 to 1.00. The Credit Agreement generally defines the interest coverage ratio as the ratio of earnings before interest, taxes, depreciation and amortization ("EBITDA") of the four prior fiscal quarters to interest charges for the same period. The Company was in compliance with these covenants at June 30, 2012.
Number of compliance covenants						2																						2					2
Debt to capitalization ratio, percentage the Company must not exceed at any time											45.00%																			50.00%						50.00%
Interest coverage ratio that the Company must exceed on the last day of the fiscal quarter									3.00																				2.50						2.50
Line of credit, amount outstanding																			0					0
Unfunded letters of credit, amount outstanding	39,800,000		39,800,000																	39,800,000
Line of credit, available borrowing capacity																			360,000,000
Notes issuance date																												Oct. 05, 2010					Jun. 14, 2012
Long-term debt, aggregate principal amount																												300,000,000					300,000,000
Debt interest rate																												4.97%					4.27%
Interest pay date																															April 5	October 5					April 5	October 5
Interest payment commencement date																																	October 5, 2012
Description of the prepayment terms																												Notes are prepayable at the Company's option, in whole or in part, provided that in the case of a partial prepayment, prepayment must be in an amount not less than 5% of the aggregate principal amount of the notes then outstanding, at any time and from time to time at 100% of the principal amount prepaid, plus accrued and unpaid interest to the prepayment date					Notes are prepayable at the Company's option, in whole or in part, provided that in the case of a partial prepayment, prepayment must be in an amount not less than 5% of the aggregate principal amount of the notes then outstanding, at any time and from time to time at 100% of the principal amount prepaid, plus accrued and unpaid interest to the prepayment date
Prepayment terms, percent of principal before accrued and unpaid interest and "make-whole" premium																													100.00%						100.00%
Description of the acceptance terms																												If any offer to prepay is accepted, the purchase price of each prepaid note is 100% of the principal amount thereof, plus accrued and unpaid interest thereon to the prepayment date.					If any offer to prepay is accepted, the purchase price of each prepaid note is 100% of the principal amount thereof, plus accrued and unpaid interest thereon to the prepayment date.
Acceptance terms, percent of principal before accrued and unpaid interest																												100.00%					100.00%
Financial covenant description																												The Company must not permit its debt to capitalization ratio to exceed 50% at any time. The note purchase agreements generally define the debt to capitalization ratio as the ratio of (a) total borrowed money indebtedness to (b) the sum of such indebtedness plus consolidated net worth, with consolidated net worth determined as of the last day of the most recently ended fiscal quarter. The Company also must not permit the interest coverage ratio as of the last day of a fiscal quarter to be less than 2.50 to 1.00. The note purchase agreements generally define the interest coverage ratio as the ratio for the four prior quarters of EBITDA to interest charges for that same period. The Company was in compliance with these covenants at June 30, 2012.					The Company must not permit its debt to capitalization ratio to exceed 50% at any time. The note purchase agreements generally define the debt to capitalization ratio as the ratio of (a) total borrowed money indebtedness to (b) the sum of such indebtedness plus consolidated net worth, with consolidated net worth determined as of the last day of the most recently ended fiscal quarter. The Company also must not permit the interest coverage ratio as of the last day of a fiscal quarter to be less than 2.50 to 1.00. The note purchase agreements generally define the interest coverage ratio as the ratio for the four prior quarters of EBITDA to interest charges for that same period. The Company was in compliance with these covenants at June 30, 2012.
Debt issuance costs			1,549,000		10,800,000																													1,500,000
Interest expense related to amortization of debt issuance costs	$ 617,000.0	$ 604,000.0	$ 1,200,000	$ 1,200,000

XML

Property and Equipment (Tables)

6 Months Ended

Jun. 30, 2012

Property and Equipment

Property and equipment consisted of the following at June 30, 2012 and December 31, 2011 (in thousands):

	June 30, 2012			December 31, 2011
Equipment	$	5,029,295		$	4,730,925
Oil and natural gas properties		145,303			131,812
Buildings		62,418			64,090
Land		10,411			11,467
		5,247,427			4,938,294
Less accumulated depreciation and depletion		(1,845,014	)		(1,771,028	)
Property and equipment, net	$	3,402,413		$	3,167,266

XML

Weighted-Average Assumptions Used to Estimate Grant Date Fair Values for Stock Options Granted (Detail) (Stock Options)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Stock Options
Share based Compensation Arrangement by Share based Payment Award, Fair Value Assumptions, Method Used [Line Items]
Volatility	48.86%	45.82%	48.85%	45.97%
Expected term (in years)	5 years	5 years	5 years	5 years
Dividend yield	1.22%	0.64%	1.21%	0.67%
Risk-free interest rate	0.88%	2.38%	0.88%	2.34%

XML

Stockholders' Equity

6 Months Ended

Jun. 30, 2012

Stockholders' Equity

11. Stockholders’ Equity

Cash Dividends - The Company paid cash dividends during the six months ended June 30, 2011 and 2012 as follows:

2011:	Per Share		Total
			(in thousands)
Paid on March 30, 2011	$	0.05	$	7,708
Paid on June 30, 2011		0.05		7,772
Total cash dividends	$	0.10	$	15,480

2012:	Per Share		Total
			(in thousands)
Paid on March 30, 2012	$	0.05	$	7,788
Paid on June 29, 2012		0.05		7,650
Total cash dividends	$	0.10	$	15,438

On July 25, 2012, the Company’s Board of Directors approved a cash dividend on its common stock in the amount of $0.05 per share to be paid on September 28, 2012 to holders of record as of September 14, 2012. The amount and timing of all future dividend payments, if any, is subject to the discretion of the Board of Directors and will depend upon business conditions, results of operations, financial condition, terms of the Company’s credit facilities and other factors.

On August 1, 2007, the Company’s Board of Directors approved a stock buyback program authorizing purchases of up to $250 million of the Company’s common stock in open market or privately negotiated transactions. During the six months ended June 30, 2012, approximately 4.7 million shares were purchased under the program at a cost of approximately $70.1 million. As of June 30, 2012, the Company was authorized to purchase approximately $42.8 million of the Company’s outstanding common stock under the program. On July 25, 2012, the Company’s Board of Directors terminated the remaining authority under the 2007 stock buyback program and approved a new stock buyback program authorizing purchases of up to $150 million of the Company’s common stock in open market or privately negotiated transactions. Shares purchased under the buyback programs are accounted for as treasury stock.

The Company purchased 83,229 shares of treasury stock from employees during the six months ended June 30, 2012. These shares were purchased at fair market value upon the vesting of restricted stock to provide the employees with the funds necessary to satisfy payroll tax withholding obligations. The total purchase price for these shares was approximately $1.2 million. These purchases were made pursuant to the terms of the Patterson-UTI Energy, Inc. 2005 Long-Term Incentive Plan and not pursuant to the stock buyback program.