NGI The Weekly Gas Market Report
NGI Archives | NGI All News Access
Contract Drillers See Gains in Land-Based Business
Contract drilling in the United States was on the upswing in the second quarter as Patterson-UTI Energy Inc. credited its improved results compared to a year ago to more business in Appalachia as well as in West and South Texas. Helmerich & Payne also reported increased income from U.S. land operations.
“With respect to the market outlook for 2010, we remain cautiously optimistic,” Patterson-UTI Chairman Mark S. Siegel said during a conference call with financial analysts last week. “We feel very strongly about the long-term potential for natural gas in North America and have taken steps to enhance our position to take advantage of this.”
Siegel said the Houston-based company expects shale plays and other unconventional resources to continue to change the gas supply equation, “and ultimately the demand equation in North America. We fully expect the demand for oil and gas will improve as the economy improves, but we won’t try to set a date for the economic recovery.”
Patterson-UTI reported net income of $29.5 million, 19 cents/share, for the second quarter, compared to a net loss of $17.7 million, minus 12 cents/share, for the quarter ended June 30, 2009. Revenues for the second quarter were $307 million, compared to $140 million for the second quarter of 2009. Results for the most recent quarter include an after-tax profit of $12.9 million, 8 cents/share, from the sale of certain rights in oil and gas working interests.
“Our average number of rigs operating in the second quarter increased to156 rigs, including 154 in the United States and two in Canada,” said CEO Douglas J. Wall. “This compares to an average of 142 rigs operating in the first quarter, including 130 in the United States and 12 in Canada. Reduced Canadian drilling activity in the second quarter is a result of the annual spring breakup.”
Average revenue per operating day for the second quarter increased by $480 to $16,920, compared to $16,440 for the first quarter of 2010, while cost decreased slightly, widening the company’s margin.
Consistent with industrywide data (see related story), the company continues to see increases in rig counts for its U.S. land drilling operations along with a seasonal rebound in Canadian activity, Wall said. He estimated that Patterson-UTI’s July rig count will have increased to an average of 171 rigs operating, composed of 164 in the United States and seven in Canada. The company’s average number of rigs operating in the United States has increased by 56 since December. “The market for shale-suitable rigs has tightened considerably, and dayrates across the rig fleet have been increasing,” Wall said.
Recently Patterson-UTI said it would expand its pressure pumping services for hydraulic fracturing operations in the Barnett and Eagle Ford shales, and in the Permian Basin, after striking a $237.7 million cash deal with Key Energy Services Inc. (see NGI, July 12).
And at Helmerich & Payne income from U.S. land operations was $103.1 million for the company’s third fiscal quarter ending June 30, compared with $96.6 million for last year’s third fiscal quarter and $90.7 million for this year’s second fiscal quarter. The sequential increase was primarily attributable to the continuing recovery in U.S. land drilling activity, as revenue days increased to 14,374 from 13,114 during this year’s second fiscal quarter, the company said.
Following the recent announcement of seven new-build rigs, Helmerich & Payne last Thursday said it has signed contracts to build and operate nine additional FlexRigs, which will be built under multiyear term contracts to operate in the United States. Including these latest additions, the company has announced 19 new-build rigs during fiscal 2010, of which four have been completed and 15 are under construction.
“We are encouraged by improved activity for the company’s FlexRigs. It confirms our earlier expectations for a bifurcated market where high-performing rigs, and our FlexRigs in particular, would command better utilization and margins compared to the industry rig fleet,” Helmerich said. “Our recent new-build announcements further reinforce our long-held conviction that a growing number of customers are increasingly shaping their efforts in the field around efficient, high-performing rigs.”
Rig utilization for the Helmerich’s U.S. land segment was 76% for this year’s third fiscal quarter, compared with 51% for last year’s third fiscal quarter and 70% for this year’s second fiscal quarter.
Average rig utilization of the company’s nine platform rigs in the offshore segment was 78% for this year’s third fiscal quarter, compared with 93% during last year’s third fiscal quarter and 81% during this year’s second fiscal quarter.
The company has reclassified its Venezuela operations, which were nationalized by the government there, as discontinued and taken an impairment charge of $102.7 million, making a third quarter loss from discontinued operations of $101.6 million (95 cents/share). Including discontinued operations the company recorded a net loss of $36.7 million for the third fiscal quarter compared to net income of $53 million for the third fiscal quarter of 2009.
Before the impairment charge, Helmerich & Payne reported income of $64.9 million (61 cents/share) from operating revenues of $483.4 million for its third fiscal quarter ended June 30, compared with $68 million (64 cents/share) from operating revenues of $384.4 million during last year’s third fiscal quarter.
Â©Copyright 2010Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2023 Natural Gas Intelligence. All rights reserved.
ISSN © 2577-9877 | ISSN © 1532-1266 |