 Tudor, Pickering, Holt & Co.
2015 Hotter ‘N Hell Conference
June 17, 2015 Exhibit 99.1 |
 Forward Looking Statements
2 This material and any oral statements made in connection with this material
include "forward-looking statements" within the meaning of the
Securities Act of 1933 and the Securities Exchange Act of
1934. Statements made which provide the Company’s or
management’s intentions, beliefs, expectations or predictions
for the future are forward-looking statements and are inherently
uncertain. The opinions, forecasts, projections or other statements other than
statements of historical fact, including, without limitation,
plans and objectives of management of the Company are
forward-looking statements. It is important to note that
actual results could differ materially from those discussed in
such forward-looking statements. Important factors that could cause actual results to differ materially include the risk factors and other
cautionary statements contained from time to time in the Company’s SEC
filings, which may be obtained by contacting the Company or the
SEC. These filings are also available through the Company’s
web site at http://www.patenergy.com
or through the SEC’s Electronic Data Gathering and
Analysis Retrieval System (EDGAR) at http://www.sec.gov.
We
undertake no obligation to publicly update or revise any forward-looking statement.
Statements made in this presentation include non-GAAP financial
measures. The required reconciliation to GAAP financial
measures are included on our website and at the end of this
presentation. |
 Patterson-UTI Energy is a leading
provider of contract drilling and
pressure pumping services
3 |
 Contract Drilling
• High quality fleet of land drilling rigs including 156 APEX ® rigs • Leader in walking rig technology for pad drilling applications • Large footprint across North American drilling markets Pressure Pumping 41% Oil & Natural Gas 1% Contract Drilling 58% Components of Revenue Patterson-UTI reported results for the year ended December 31, 2014 4 |
 Pressure Pumping
• High quality fleet of modern pressure pumping equipment • A leader in natural gas bi-fuel technology • Strong reputation for regional knowledge and efficient operations Patterson-UTI reported results for the year ended December 31, 2014 5 Pressure Pumping 41% Oil & Natural Gas 1% Contract Drilling 58% Components of Revenue |
 Contract Drilling |
 Improved Performance
0%
20%
40%
60%
80%
100%
120%
U.S. Rig Count Downturn
0%
20%
40%
60%
80%
100%
120%
2008 - 2009 Total Baker Hughes U.S. Land Rig Count: -53% Total PTEN U.S. Rig Count: -77% 2014 - 2015 Total PTEN U.S. Rig Count: -47% Total Baker Hughes U.S. Land Rig Count: -56% Baker Hughes and Patterson-UTI U.S. Land Rig Counts as of June 12, 2015
7 |
 A
Rig Fleet Transformation 8
Other
Electric
APEX®
Mechanical Patterson-UTI Energy Total Rig Fleet Other Electric APEX® Mechanical December 2009 Projected December 2015 |
 …and Expected as of December 31, 2015
APEX-XK 1500
® APEX-XK 1000™ APEX WALKING ® APEX 1500 ® APEX 1000 ® Total APEX ® Rigs Class APEX ® Rigs as of June 12, 2015 53 4 49 44 11 161 12/31/2015 A leader in high specification drilling rigs 48 4 49 44 11 156 6/12/2015 APEX ® Rig Fleet 9 |
 West Texas 24 Rigs Large Geographic Footprint 10 PTEN’s Active U.S. Land Drilling Rigs as of June 12, 2015 Appalachia 23 Rigs East Texas 15 Rigs Mid-Continent 8 Rigs Mid-Continent 8 Rigs Rockies 9 Rigs South Texas 21 Rigs North Dakota 13 Rigs |
 Patterson-UTI Energy
…the impact of APEX ® rigs has been transformative! |
 Increasing APEX
® Drilling Activity 12 0 20 40 60 80 100 120 140 160 Active APEX ® Rig Count |
 PTEN Relative Active Rig Count by Rig Class
13 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% APEX® Other Electric Mechanical |
 Greater Stability of Utilization
14 0% 20% 40% 60% 80% 100% 120% APEX ® Rig Utilization |
 Improving Average Rig Revenue Per Day
15 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 26,000 Patterson-UTI Total Average Rig Revenue Per Day Excludes early-termination revenues during the third and fourth quarter of 2013 of $3,600 per day and $130 per
day, respectively, and early-termination revenues during the first quarter
of 2015 of $1,020 per day. |
 Adjusted EBITDA Contribution from
High Specification Rigs
16 2010 2011 2012 2013 2014 2015 APEX® & Other Electric Mechanical Preferred rigs account for approximately 91% of Adjusted EBITDA in Contract Drilling Excludes early-termination revenues during the third and fourth quarter of 2013 of $62.8 million and $2.4 million,
respectively, and early-termination revenue during the first quarter of 2015
of $15.8 million. |
 Patterson-UTI Energy
…the APEX ® rig outlook remains strong! |
 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% % Horizontal % Vertical 18 U.S. Rig Count % by Drilling Type Continued Demand for APEX ® Rigs Source: Baker Hughes North America Rotary Rig Count |
 SCR AC Mechanical AC-powered rigs have increased as a percentage of the horizontal rig count Total U.S. Horizontal Rig Count by Power Type Continued Demand for APEX ® Rigs Analysis from Patterson-UTI Energy based on data from RigData and company filings. 19 |
 Patterson-UTI Energy
…Patterson-UTI is a technology leader!
|
 APEX WALKING ® Rigs 21 • Capable of walking with drill pipe and collars racked in the mast • Full multi-directional walking capability • Walking times average 45 minutes for 10’ – 15’ well spacing http://patenergy.com/drilling/technology/apexwalk 21 |
 Strong Demand for Pad Drilling
22 • Pad drilling is contributing to increasing rig efficiency • Pad drilling capable rigs are highly utilized • Most new APEX ® rigs are expected to have walking systems http://patenergy.com/drilling/technology 22 |
 APEX-XK ® Rig Walking on Pad 23 http://patenergy.com/drilling/technology/apexwalk/ Video of APEX-XK ® Rig 23 |
 The APEX-XK ® 24 • Enhanced mobility including more efficient rig up and rig down • Greater clearance under rig floor for optional walking system • Advanced environmental spill control integrated into drilling floor • Minimized number of truck loads for rig moves • Available in both 1500 HP and 1000 HP http://patenergy.com/drilling/technology 24 |
 Enhancing our Position in Pad Drilling
25 Walking Systems Can be Added to Any Rig in Our Fleet… …Allowing for True Multi-Directional Pad Drilling Capabilities 25 |
 Enhancing our Position in Pad Drilling
26 http://patenergy.com/drilling/technology 26 |
 Early Adopter of Natural Gas Engines
27 http://patenergy.com/drilling/technology 27 |
 Pressure Pumping |
 Growing Pressure Pumping Business
29 Investments in Pressure Pumping… …Have Increased Fleet Size and Quality 65 1,100 2006 2007 2008 2009 2010 2011 2012 2013 2014 June 0 200 400 600 800 1000 1200 Fracturing Horsepower Other Horsepower Period End 2015E |
 Southwest Region:
Northeast Region:
Fracturing horsepower: 663,800
Other horsepower: 32,165
Fracturing horsepower: 326,30
Other horsepower: 55,400
A Significant Player in Regional Markets
Pressure Pumping Areas
30 Horsepower distribution as of March 31, 2015 Fracturing Horsepower 33% 67% |
 A Leader in Bi-Fuel Technology
• Engines can burn a fuel mix comprised of up to 70% natural gas • Comparable torque and horsepower to an all diesel engine • Reduces operating costs by lowering fuel costs • Good for environmental sustainability http://patenergy.com/pressurepumping/services 31 |
 A Leader in Bi-Fuel Technology
32 http://patenergy.com/pressurepumping/services 32 |
 A Leader in Bi-Fuel Technology
33 • One of the largest bi-fuel frac fleets in the Marcellus • Approximately 1,950 stages completed using natural gas as a fuel source • Replaced approximately 1.3 million gallons of diesel with cleaner burning natural gas • Eliminated 9.6 million pounds of transportation loads on local roads http://patenergy.com/pressurepumping/services 33 |
 Comprehensive Lab Services
http://patenergy.com/pressurepumping/services
34 |
 Financial Flexibility |
 Investing in Our Company
36 $598 $637 $445 $453 $976 $1,012 $974 $662 $1,229 $710 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E Year End Capital Expenditures and Acquisitions ($ in millions) 2015 Capital expenditure forecast as of April 23, 2015 |
 Strong Financial Position
37 • History of returning capital to investors – Cash Dividend • Initiated cash dividend in 2004 • Doubled quarterly cash dividend to $0.10 per share in February 2014 – Stock Buyback • Total of $857 million repurchased since 2005 • Approximately $187 million remaining authorization as of March 31, 2015 • Returned approximately $1.3 billion to shareholders since 2005 |
 Strong Financial Position
38 2006 2007 2008 2009 2010 2011 2012 2013 2014 1Q15 Period End Line of Credit Availability Cash Total Liquidity ($ in millions) Liquidity defined as end of period cash plus availability under revolving line of credit |
 Strong Financial Position
39 6% 2% -4% -2% 15% 13% 18% 14% 24% 21% -10% 0% 10% 20% 30% 40% 50% 2006 2007 2008 2009 2010 2011 2012 2013 2014 1Q15 Period End Net Debt to Capital Ratio $600 million of debt not due until at least 2020 |
 Why Invest in Patterson-UTI Energy?
• Continuing Transformation – Committed to high-spec land rigs where demand remains strong – Creating value through focus on well site execution • Technology leader – Leader in walking rigs for pad drilling – Innovator in use of natural gas as a fuel source for both drilling and pressure pumping • Financially flexible – Strong balance sheet – History of share buybacks – Dividends 40 |
 Additional References |
 42 Contract Drilling Capital Expenditures and Acquisitions ($ in millions) Investing in Our Drilling Rig Fleet 2015 Capital expenditure forecast as of April 23, 2015 $531 $540 $361 $395 $656 $785 $745 $505 $772 $520 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E More than $5 billion invested since 2005 |
 Investing in Pressure Pumping
43 $41 $48 $61 $43 $289 $198 $194 $123 $418 $165 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E Pressure Pumping Capital Expenditures and Acquisitions ($ in millions) More Than $1.4 billion invested since 2005 2015 Capital expenditure forecast as of April 23, 2015 |
 Strong Financial Position • Total liquidity of approximately $587 million – $86.9 million of cash at March 31, 2015 – $500 million revolver availability at April 27, 2015 • $793.1 million net debt at March 31, 2015 – 21.5% Net Debt/Total Capitalization – $300 million of 4.97% Series A notes due October 5, 2020 – $300 million of 4.27% Series B notes due June 14, 2022 – $280 million of term loans maturing September 27, 2017 • No equity sales in last 14 years • Reduced share count by 25.6 million shares since 2005 44 |
 Three Months Ended March 31, Twelve Months Ended December 31, 2015 2014 2014 2013 Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization
(Adjusted EBITDA)(1):
Net income
$
9,125
$
34,822
$
162,664
$
188,009
Income tax expense
6,720
16,942
91,619
108,432
Net interest expense
8,258
7,012
28,846
27,441
Depreciation, depletion, amortization and
impairment 175,382
147,322
718,730
597,469
Adjusted EBITDA
$
199,485
$
206,098
$1,001,859
$
921,351
Total revenue
$
657,699
$
678,168
$3,182,291
$2,716,034
Adjusted EBITDA margin
31.5%
33.9%
Adjusted EBITDA by operating segment:
Contract drilling
$
765,874
$
704,990
Pressure pumping
31,903
35,585
236,676
217,228
Oil and natural gas
3,702
8,730
37,094
44,348
Corporate and other
(11,090)
(11,413)
(37,785)
(45,215)
Consolidated Adjusted EBITDA
$
199,485
$
206,098
$1,001,859
$
921,351
(1)
The company makes use of financial measures that are not
calculated in accordance with U.S. generally accepted accounting principles (“GAAP”) to help in the assessment of ongoing operating performance. These non-GAAP financial measures are reconciled to their most directly
comparable GAAP measures in the tables above. We
define Adjusted EBITDA as net income plus net interest expense, income tax expense and depreciation, depletion, amortization and impairment expense. We present Adjusted EBITDA because we believe it provides additional information with respect to both the performance of
our fundamental business activities and our
ability to meet our capital expenditures and working capital requirements. Adjusted EBITDA is not defined by GAAP and, as such, should not be construed as an
alternative to net income (loss) or operating cash flow. We
define margin as revenues less direct operating costs. We present margin because we believe it to be the component of our earnings most impacted by the variability in our contract drilling and pressure pumping operations.
Margin is not defined by GAAP and, as such, should
not be construed as an alternative to net income (loss). PATTERSON-UTI
ENERGY, INC. Non-GAAP Financial Measures (Unaudited)
(dollars in thousands)
Non-GAAP Financial Measures
45
$
174,970
$
173,196
30.3%
30.4% |
 Non-GAAP Financial Measures 46 2014 2013 2012 2011 2010 Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization
(Adjusted EBITDA)(1):
Net income (loss)
$
162,664
$
188,009
$
299,477
$
322,413
$
116,942
Income tax expense (benefit)
91,619
108,432
176,196
187,938
72,856
Net interest expense (income)
28,846
27,441
22,196
15,465
11,098
Depreciation, depletion, amortization and
impairment 718,730
597,469
526,614
437,279
333,493
Net
impact of discontinued operations
(209)
1,778
Adjusted EBITDA
$
1,001,859
$
921,351
$
1,024,483
$
962,886
$
536,167
Total revenue
$
3,182,291
$
2,716,034
$
2,723,414
$
2,565,943
$
1,462,931
Adjusted EBITDA margin
31.5%
33.9%
37.6%
37.5%
36.7%
(1) The company makes use of
financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”) to help in the assessment of
ongoing operating performance. These
non-GAAP financial measures are reconciled to their most directly comparable GAAP measures in the tables above. We define Adjusted EBITDA as net income plus net interest expense, income tax expense and depreciation, depletion, amortization and
impairment expense. We present Adjusted EBITDA because we believe it provides additional information with respect to both the performance of our fundamental business activities
and our ability to meet our capital expenditures
and working capital requirements.
Adjusted EBITDA is not defined by GAAP and, as such, should not
be construed as an alternative to net income
(loss) or operating cash flow. We define margin as
revenues less direct operating costs. We present
margin because we believe it to be the component of our earnings most impacted by the variability in our contract drilling and pressure pumping operations. Margin is not defined by GAAP and, as such, should not be construed as
an alternative to net income (loss). PATTERSON-UTI ENERGY,
INC. Non-GAAP Financial Measures (Unaudited)
(dollars in thousands)
-
-
- |