UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): March 8, 2016
Patterson-UTI Energy, Inc.
(Exact name of registrant as specified in its charter)
Delaware | 0-22664 | 75-2504748 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
450 Gears Road, Suite 500, Houston, Texas | 77067 | |
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: 281-765-7100
Not Applicable
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 7.01 Regulation FD Disclosure.
Patterson-UTI Energy, Inc. will deliver an investor presentation that includes the slides attached as Exhibit 99.1 to this Current Report on Form 8-K, which are incorporated herein by reference.
The information furnished pursuant to Item 7.01, including Exhibit 99.1 shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, shall not otherwise be subject to the liabilities of that section and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference. The furnishing of these slides is not intended to constitute a representation that such information is required by Regulation FD or that the materials they contain include material information that is not otherwise publicly available.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
99.1 | Investor presentation slides. |
SIGNATURES
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 hereunto duly authorized.
Patterson-UTI Energy, Inc. | ||||||||
March 8, 2016 | By: | /s/ John E. Vollmer III | ||||||
Name: | John E. Vollmer III | |||||||
Title: | Senior Vice President - Corporate Development, Chief Financial Officer and Treasurer |
Exhibit Index
Exhibit |
Description | |
99.1 | Investor presentation slides. |
Raymond James 37 Annual Institutional Investors Conference March 8, 2016 th Exhibit 99.1 |
Forward Looking Statements This material and any oral statements made in connection with this material include
"forward-looking statements" within the meaning of
the Securities Act of 1933 and the Securities
Exchange Act of 1934. Statements made which provide the Companys or managements 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 Companys SEC filings, which may be
obtained by contacting the Company or the SEC.
These filings are also available through the Companys web site at http://www.patenergy.com or through the SECs 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/or at the end of this presentation.
The Red Circular Rig Logo, the Universal Logo, and the terms
PATTERSON UTI, and APEX are registered trademarks
of PattersonUTI Energy, Inc. 2
|
Contract Drilling High quality fleet of land drilling rigs including 161 APEX ® rigs Leader in walking rig technology for pad drilling applications Large footprint across North American drilling markets Patterson-UTI reported results for the year ended December 31, 2015
3
Components of Revenue
Contract
Drilling
61%
Pressure
Pumping
38%
Oil &
Natural
Gas
1% |
Pressure Pumping High quality fleet of modern pressure pumping equipment Strong reputation for regional knowledge and efficient operations Concentrated footprint provides economies of scale 4 Patterson-UTI reported results for the year ended December 31, 2015
Components of Revenue
Contract
Drilling
61%
Pressure
Pumping
38%
Oil &
Natural
Gas
1% |
Scaling The Business Scaling our business effectively is key to our success
both in upturns and downturns
Patterson-UTI U.S. rig count and U.S. drilling staff size
through February 25, 2016 5
Rig Count
Drilling Staff Size
Patterson-UTI U.S. Rig Count vs. U.S. Drilling Staff
Size |
Managing Supply Chain 6 Sourcing and Supply Security Negotiated critical cost elements for both Drilling and Pressure Pumping Solidified availability of strategic commodities Reduced Costs in 2015 Sand costs down 25% - 35% Sand hauling costs down 25% - 35% Pump parts costs down 15% - 20% Chemical costs down as much as 40% |
Contract Drilling |
High Quality Drilling Rigs 128 30 3 APEX ® Rig Fleet by Drawworks Horsepower 1500hp 1000hp 2000hp 8 161 APEX ® Rigs |
Majority of Adjusted EBITDA from APEX ® Rigs APEX ® Other Electric Mechanical Adjusted EBITDA Contribution by Rig Class *Adjusted EBITDA contribution by rig class excluding early termination revenues for the year ended December 31,
2015. 9 |
The APEX-XK ® Enhanced X-Y mobility Walk with full set-back of pipe in mast More efficient rig up / rig down Walking times average 45 minutes for 10 15 well spacing Advanced environmental spill control integrated into drilling floor Reduced number of truck loads for rig moves 53 APEX-XK 1500 ® and four APEX- XK 1000 ® rigs in fleet http://patenergy.com/drilling/technology 10 |
APEX-XK ® Integrated Walking System 11 |
APEX-XK ® Rig Walking on Pad 12 http://patenergy.com/drilling/technology/apexwalk/ Video of APEX-XK ® Rig 12 |
West Texas 17 Rigs Large Geographic Footprint PTENs Active Rig Count by Region as of March 3, 2016 Appalachia 23 Rigs East Texas 5 Rigs Mid-Continent 6 Rigs Rockies 2 Rigs South Texas 7 Rigs North Dakota 8 Rigs 13 Canada 2 Rigs http://patenergy.com/ |
Pressure Pumping |
Modern Pumping Equipment 15 < 5 Years 70% 5 - 10 Years 25% >10 Years 5% Frac Horsepower by Age 4 Years Average Age |
Modern Pumping Equipment Quintuplex 80% Modern Triplex 15% Legacy Triplex 5% Frac Horsepower by Pump Type 1Million Horsepower 16 Modern triplex pumps defined as being placed in service within the last seven years. |
Southwest Region: Northeast Region: 35% 65% Frac Horsepower Fracturing horsepower: 663,800 Other horsepower: 32,165 Fracturing horsepower: 353,800 Other horsepower: 55,400 Market Concentration Provides Economies of Scale Pressure Pumping Areas Horsepower distribution as of December 31, 2015 17 |
Technology Focused PropLogic Sand Management System 18 Fully enclosed well-site sand management system More accurate than conventional sand trailers/bins More efficient use of proppant as less sand is wasted |
Technology Focused PowderStim ® Dry Friction Reducer 19 System hydrates powder form of friction reducer directly into the fluid stream Logistically safer and more efficient compared to liquefied friction reducers Successful with both fresh water and heavy brines More cost effective by utilizing produced water |
Technology Focused Comprehensive Lab Services Ability to test vendors chemicals enhances quality controls Unique in-house friction flow loop test assembly for faster test results In-house lab services are faster and more cost efficient than outsourcing 20 |
Strong Financial Position |
Investing in Our Company 22 $598 $637 $445 $453 $976 $1,012 $974 $662 $1,229 $744 $190 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016E Year End Capital Expenditures and Acquisitions ($ in millions) 2016 Capital expenditure forecast as of February 4, 2016 |
Strong Financial Position 25% Debt/ Total Cap Stockholders Equity 4.97% Series A notes Due October 5, 2020 4.27% Series B notes Due June 14, 2022 Bank Term Loans Maturing September 27, 2017 23 * Debt and equity balances as of December 31, 2015. $255 million of bank term loans includes quarterly
principal payments totaling $64 million in 2016. Principal
payments in 2017 include two quarterly payments
totaling $47 million and payments at the maturity date of $144
million. Capital Structure
($ in Millions)
$2,561
$255
$300
$300 |
Total Liquidity $500 $113 $ in Millions Line of Credit Availability Cash 24 * * Debt and equity balances as of December 31, 2015. $255 million of bank term loans includes quarterly
principal payments totaling $64 million in
2016. Principal payments in 2017 include two quarterly payments totaling $47 million and payments at the maturity date of $144 million.
$113 million cash $500 million revolver availability Of $855 million debt $255 million matures September 2017 $300 million matures October 2020 $300 million matures June 2022 |
Why Invest in Patterson-UTI Energy? High Quality Assets 161 APEX ® rigs comprised primarily of 1500 horsepower and pad capable rigs Creating value through focus on well site execution Technology leader Leader in walking rigs for pad drilling Innovator in deploying latest technologies for pressure pumping Financially flexible Strong balance sheet History of share buybacks Dividends Scalable business structure 25 |
Raymond James 37 th Annual Institutional Investors Conference March 8, 2016 |
Additional References |
Three Months Ended December 31, Twelve Months Ended December 31, 2015 2014 2015 2014 Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization
(Adjusted EBITDA)(1):
Net income (loss)
$
(58,658)
$
57,583
$(294,486)
$
162,664
Income tax expense (benefit)
(27,511)
41,216
(147,963)
91,619
Net interest expense
9,391
8,034
35,511
28,846
Depreciation, depletion, amortization and
impairment 175,302
180,157
864,759
718,730
Impairment
of
goodwill
-
-
124,561
-
Adjusted EBITDA
$
98,524
$
286,990
$
582,382
$1,001,859
Total revenue
$
338,566
$
901,219
$1,891,277
$3,182,291
Adjusted EBITDA margin
29.1%
31.8%
30.8%
31.5%
Adjusted EBITDA by operating segment:
Contract drilling
$
95,681
$
208,200
$
527,204
$
765,874
Pressure pumping
10,904
78,763
84,115
236,676
Oil and natural gas
1,184
7,671
13,431
37,094
Corporate and other
(9,245)
(7,644)
(42,368)
(37,785)
Consolidated Adjusted EBITDA
$
98,524
$
286,990
$
582,382
$1,001,859
(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
28 |
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