Mon, Jul. 27, 12:57 PM
- Patterson-UTI (PTEN -2.7%) is downgraded to Accumulate from Buy with an $18 price target, cut from $27, at Global Hunter, which calls into question the timing and trajectory of a North American onshore recovery due to the more uncertain E&P spending outlook.
- Hunter says it still believes onshore service activity is bottoming, and favors PTEN's positioning relative to peers, but it expects investors will focus on 2016, and the firm's EPS estimate for 2016 is 18% below consensus.
- While the firm believes activity levels likely have stabilized, it assumes a more moderate slope to the recovery in both contract drilling and pressure pumping.
Thu, Jul. 23, 6:05 AM
Fri, Jul. 17, 11:32 AM
- Offshore drillers are significantly underperforming the broader market following cautious commentary from Schlumberger (SLB -0.1%) despite its Q2 earnings beat, a contract termination and an analyst downgrade.
- On its earnings call this morning, SLB said it expects little improvement in pricing levels in the near future and declines in activity for offshore drillers, while land rigs provide a more attractive opportunity and better margins.
- For its Q3, SLB foresees a further 5%-6% decline in Q/Q revenue as well as lower EPS, and says the $0.77 consensus is a realistic number.
- Yesterday, ConocoPhillips (COP -1.8%) said it plans to cut future deepwater exploration spending, particularly in its operated Gulf of Mexico program; in light of the decision, COP is terminating a contract for an Ensco (ESV -4.9%) deepwater drill ship.
- Also, UBS today downgraded National Oilwell Varco (NOV -1.5%) to Sell from Neutral.
- SDRL -6.4%, RIG -4.7%, RDC -6%, DO -3.3%, ATW -4.2%, HP -1.2%, PTEN -1.2%, PACD -5.7%.
Thu, Jul. 9, 3:26 PM
- The tide is finally starting to turn for global oil services stocks (NYSEARCA:OIH), Morgan Stanley says, now seeing a very favorable risk/reward balance for investors and up to 60% upside in the space over the next 6-9 months with only ~10% downside risk.
- The firm says it begins to see signs that global oil production is getting under control, as U.S. rig counts appear to have stabilized well below the level necessary to sustain production and Brazil production was recently revised well below consensus expectations.
- Stanley's top pick in the group is Schlumberger (SLB +1.1%), and it also likes Core Labs (CLB +2.2%), Frank's International (FI +1.5%), Patterson-UTI (PTEN +2.7%), Nabors Industries (NBR +4%) and Helmerich & Payne (HP +1.9%).
Fri, Jun. 19, 4:58 PM
- Patterson-UTI Energy (NASDAQ:PTEN), Precision Drilling (NYSE:PDS) and Nabors Industries (NYSE:NBR) are the best bets among oilfield services stocks, RBC analysts say.
- The firm says its initial 2017 EPS estimates for North American land drillers are generally higher than consensus, and believes the Street underestimates the magnitude of the North American recovery and that valuations are reasonable "when looking through the near term noise."
- RBC says land drillers consistently have been among the top performers in every oil cycle rebound dating back to 1997-98, driven primarily by U.S. E&P spending, which has the highest velocity once oil starts to recover; NBR, PTEN and PDS have averaged among the top five performing sector stocks coming off crude oil troughs, the firm says.
Tue, May 26, 3:58 PM
- Land drillers Patterson-UTI Energy (PTEN -6.1%), Nabors Industries (NBR -6.1%) and Weatherford (WFT -2.7%) are downgraded to Underperform from Outperform at CLSA, based on its belief that oil prices remain vulnerable.
- CLSA describes the advancement of unconventional drilling and completion as one of the most disruptive technologies in oilfield history, an achievement that likely will derail the normalization of a cycle and trigger a number of structural consequences; the firm says it favors maintstays such as Halliburton (HAL -1.1%) and Schlumberger (SLB -1.4%) "that have and will continue to facilitate the change, not those that will be impaired by the change."
Mon, May 11, 11:49 AM
- It's time to "take profits and... a summer vacation" in onshore oil services stocks such as National Oilwell Varco (NOV -2.8%), Weatherford International (WFT -2.7%), Patterson-UTI Energy (PTEN -3.7%) and RPC (RES -4%), Citigroup's Scott Gruber says.
- The onshore service stocks are discounting at least 400 horizontal rigs returning to service, yet quick-to-market tight oil means supply concerns likely will manifest as soon as the rig count begins to rally, the firm says.
- Citi downgrades NOV to Sell from Neutral given risk of backlog cancellations, continued EPS compression and valuation, and believes a recovery multiple is not warranted for the stock until backlog growth resumes; the firm also cuts RPC to Sell, reiterates its Sell rating on Helmerich & Payne (HP -2%), and lowers WFT and PTEN to Neutral from Buy.
Thu, May 7, 11:59 AM
- UBS says it's time to buy the big three names in land drilling - Helmerich & Payne (HP -2.6%), Nabors Industries (NBR -4.2%) and Patterson-UTI Energy (PTEN -2.6%) - as they take market share from the weaker companies while lower oil prices wash out the weaker hands.
- The firm also notes the group is not taking the public relations beating that some of the fracking giants are from the likes of David Einhorn.
- The three companies are taking it on the chin today, but they recently reported better than expected Q1 results on improved rig revenues, even as revenues typically fell due to reduced rig activity.
Mon, Apr. 27, 5:30 PM
- Land drilling activity cuts that began late last year are nearing an end with the bottom likely this quarter, Goldman Sachs says as it upgrades land drillers Patterson-UTI Energy (NASDAQ:PTEN), Nabors Industries (NYSE:NBR) and Helmerich & Payne (NYSE:HP) to Buy from Neutral.
- Goldman believes the sharp reduction in rig activity - with rig declines reaching 900-plus rigs on average in Q2 2015 v- has started the self-correcting mechanism in oil supply, and that oil production should flatten in Q2 and is unlikely to grow Y/Y by Q4; the firm now expects the U.S. land rig count to increase by ~430 rigs by year-end 2016, with the horizontal rig count increasing by nearly 300 rigs.
- Earlier: Helmerich & Payne upgraded to Buy from Neutral at Goldman
Thu, Apr. 23, 6:07 AM
Tue, Apr. 21, 7:30 PM
- There’s not much value to be found in the stock market by traditional metrics, but the equity strategists at Jefferies think they’ve found five companies that are still bargains.
- The firm cites HollyFrontier (NYSE:HFC), Reliance Steel (NYSE:RS) and Universal (NYSE:UVV) as three value picks whose assets are at least double their liabilities, their long-term debt is less than their working capital, each has enjoyed positive earnings growth the past five years and made consecutive dividend payouts over the past decade, and their P-E ratio is less than 15x over the past 10 years, among other criteria.
- Patterson-UTI Energy (NASDAQ:PTEN) and Tidewater (NYSE:TDW) are seen as more aggressive value picks, meaning their current ratio of assets to liabilities is higher than 1.5x, long-term debt is less than 110% of working capital, and current price-to-book ratio is 1.2x.
- “Investors ought to be mindful that the market is no longer inexpensive,” the Jefferies strategists sum up.
Tue, Apr. 21, 9:54 AM
- Patterson-UTI Energy (NASDAQ:PTEN) says it agrees to pay $14.5M to settle U.S. Equal Employment Opportunity Commission claims that it tolerated racial and ethnic discrimination and harassment on its drilling rigs and punished individuals who complained.
- The EEOC claimed that since at least 2006, PTEN assigned minorities to the lowest level jobs, failed to train and promote minorities, and disciplined and demoted minority employees disproportionately.
- The agency estimates that at least 1,000 people were affected.
Thu, Apr. 9, 5:48 PM
- Sell-rated Helmerich & Payne (NYSE:HP) has the greatest risk for negative revisions among its oilfield services peers, Citi analyst Scott Gruber writes, since earnings compression is happening faster at peers; 2016 estimates are above consensus for Patterson-UTI Energy (NASDAQ:PTEN), RPC (NYSE:RES) and Superior Energy (NYSE:SPN), partly reflecting improvement in pressure pumping margins given a lack of contract roll.
- Gruber also thinks consensus estimates are too optimistic, pricing in a full recovery in one year; the Street expects HP’s land business to generate $400M in sales in FY 2016, which Gruber estimates would require a spot dayrate of more than $30K/day or a rig count of ~270, which would be within 5% of the prior peak.
- HP currently trades at 1.7x 2016 consensus price to book value vs. 1.1x for PTEN, 1.1x for Precision Drilling (NYSE:PDS) and 0.9x for Nabors Industries (NYSE:NBR); Gruber says history suggests downside risk to 1x as HP's return on equity likely will fall to 3% in 2016.
Wed, Feb. 18, 3:15 PM
- RBC analysts think it's time to position for an oil recovery by buying oilfield services stocks such as Schlumberger (SLB -1.2%), Patterson-UTI (PTEN -0.4%), Nabors Industries (NBR +2.5%) and Precision Drilling (PDS +0.4%).
- The firm believes oil prices will bottom in H1 2015, improves during H2 and averages at least $75/bbl in 2016, and sees U.S. land drillers and intensive service companies providing the best returns in the early phases of cycle recovery.
- RBC notes that three of the top five performing stocks in the sector off the lows since 1997 have been PTEN, PDS and NBR; the firm considers SLB and NBR as best ideas, while PTEN is a small-cap best idea.
Tue, Feb. 10, 6:47 PM
- Figuring the debt markets are a bit more rational than the equity markets right now, Wunderlich analysts look to the bond market for some clues about energy investing.
- The firm finds that where Chesapeake Energy's (NYSE:CHK) debt is trading now as "quite refreshing" given the strong balance sheet the company has built, strengthening its conviction that CHK is a Best idea among oil stocks; others holding up well, it says, are financially strong names such as XEC, CXO, EGN, EOG, GPOR, MTZ, NBL, PTEN, PDCE, PXD and ROSE.
- In other cases, the debt is providing “equity-like returns” for investors who want to move out of stocks and into bonds, with the firm mentioning AREX, BBG, CWEI and NOG.
Thu, Feb. 5, 2:26 PM
- Patterson-UTI Energy (PTEN +4.4%) enjoys solid gains after Q4 earnings more than tripled from the same quarter last year and revenue climbed 37% Y/Y to $901M.
- Still, the land rig provider warns that 2015 will be "challenging," having received indications that customers could terminate a number of longer-term contracts early.
- PTEN says it plans to reduce 2015 capital spending by 29% to $750M, cutting its construction schedule in half to 16 new high-tech APEX rigs; it adds that headcount "decreased at a slightly higher rate," without providing additional details.
- PTEN's decision mirrors rival Helmerich & Payne's announcement last week that it would halve its FlexRig construction program, cut 2K jobs and reduce spending by 16%.
- Expects revenue from its pressure-pumping business to fall by 25% Q/Q, hurt mainly by weak prices and lower utilization of its rigs, after rising 70% Y/Y to $397.7M in Q4.
PTEN vs. ETF Alternatives
Patterson-UTI Energy Inc is a provider of contract services to the oil and natural gas industry. It operates in three segments namely contract drilling services, pressure pumping services, and oil and natural gas exploration and production.
Other News & PR