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Patterson-UTI Rig Count Up, Dayrate Higher

More shale rigs and higher dayrates lifted the latest quarterly earnings of U.S. land-based driller Patterson-UTI Energy Inc. (PTEN), which last week topped Wall Street's forecasts.

Net income in the final three months of 2010 was $53.9 million (35 cents/share), versus a net loss of $18.2 million (minus 12 cents) in the year-ago period. Revenue more than doubled to $506 million.

"Our average number of rigs operating in the fourth quarter increased to 194 rigs, including 182 in the United States and 12 in Canada," said CEO Douglas J. Wall. "This compares to an average of 178 rigs operating in the third quarter, including 170 in the United States and eight in Canada."

Average revenue per operating day in the latest quarter rose by $1,360 to $19,090 from $17,730 in 3Q2010. Average direct operating costs per operating day also increased to $11,000 from $10,670 in the previous three months.

The company's drilling and pressure pumping operations "significantly increased...in the growing shale markets and gained strength in traditional basins," said PTEN Chairman Mark S. Siegel. "In the drilling business, we continued to enhance the capabilities of our rig fleet through both newbuilds and upgrades, while achieving higher dayrates and substantially increasing the number of rigs that are operating under long-term contracts."

Wall said the company had "continued to achieve increases in both our rig count and average dayrates. Our January rig count increased to an average of 204 rigs operating, comprised of 188 in the United States and 16 in Canada."

Like National Fuel Gas Co. (see related story), PTEN is seeing strong growth from the pressure pumping business. PTEN acquired assets late last year in the Permian Basin, as well as the Eagle Ford and Barnett shales.

"These assets complement our existing pressure pumping assets which operate primarily in the Appalachian region, including substantial work in the Marcellus Shale," said Wall. "We continue to see high demand for our pressure pumping services and have 204,000 hp of additional fracturing equipment on order for delivery in 2011 to expand these businesses."

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