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.
Wed, Jan. 28, 3:59 PM
- Energy stocks are broadly lower as Nymex crude oil futures fell another $1.68/bbl (-3.6%) to $44.53 after today's inventory report showed the largest weekly supply buildup since 1982, but drilling contractor are whacked with especially large losses.
- Examples: NBR -11.7%, PTEN -8.6%, PES -10.9%, PDS -12.3%, KEG -6.5%; Helmerich & Payne (NYSE:HP), which reportedly has launched a round of steep layoffs, -6.3%.
- Among independent producers: DNR -9.7%, NFX -4.6%, SM -8.6%, SGY -10%, SD -9.7%, EOG -5.3%, PXD -6.8%, QEP -6%, APC -4.2%, XEC -3%.
- ETFs: XLE, ERX, VDE, OIH, XOP, ERY, FCG, DIG, GASL, DUG, IYE, XES, IEO, IEZ, PXE, PXI, FENY, PXJ, RYE, FXN, DDG
Wed, Jan. 7, 3:23 PM
- Oil driller Helmerich & Payne (HP -6.5%) is the day's biggest S&P 500 loser after saying rates for its high-tech rigs have tumbled 10% Q/Q and warns of more softness ahead because of falling crude oil prices.
- "Drilling activity and spot dayrate pricing are now expected to significantly decline in the U.S.," HP says in a presentation which indicates deteriorating utilization and dayrates among land drillers is spreading farther and faster than expected.
- HP says the idle and available number of its FlexRigs has risen to 26 from 15 since Dec. 11, and sees expects to see another 40-50 FlexRigs become idle in the next 30 days from its current total of 287 but does not foresee further idling beyond that point.
- SunTrust analysts think HP’s rig count will wind up lower by the mid-30s in percentage Q/Q, cutting their 2015 EPS estimates on HP to $2.60, well below the consensus of $5.56, and slashing their price target to $56 from $70.
- Credit Suisse's James Wicklund, who offered little optimism for the oil service sector today, also slashed his estimates on land drillers HP, Nabors Industries (NBR -3.6%), Precision Drilling (PDS -2.1%) and Patterson-UTI (PTEN -3.6%) - "the result is ugly."
Dec. 18, 2014, 9:59 AM
- RBC recommends increasing weightings and exposure to oil service stocks (OIH +2.5%) heading into 2015, as it says oil prices will start to improve in H2 of next year and that oil service stocks typically discount this move by 6-9 months.
- Down cycles such as 2000-02 and 2008-09 suggest North American land drillers and service companies provide the best returns off business cycle lows, RBC says as it expects a similar dynamic this time.
- RBC upgrades Key Energy (KEG +24.6%) and Superior Energy (SPN +7.5%) to Outperform, and downgrades FMC Tech (FTI +1.8%), Franks (FI +4.9%), Oceaneering (OII +0.2%) and Oil States (OIS +2.3%) to Sector Perform; the firm also says since 1985 three of the top five performing stocks off lows have been Patterson-UTI (PTEN +6.6%), Precision Drilling (PDS +4%) and Nabors (NBR +7.2%).
Oct. 27, 2014, 8:55 AM
- Goldman Sachs lowers its ratings on the oil services sector (NYSEARCA:OIH) to Cautious from Attractive and downgrades several specific stocks as it cuts its 2015 oil price forecast.
- U.S. land activity will suffer the biggest impact of the lower price deck, Goldman says, with customer capital spending expected to decline 6% next year vs. its prior outlook for a 9% increase; as a result, the firm now forecasts the horizontal U.S. rig count to fall 7%, or ~200 rigs, over the next 12 months.
- Goldman downgrades Parsley Energy (PE -3.8% premarket), Diamond Offshore (DO -1.5%), Laredo Petroleum (LPI -9%) and Basic Energy Services (BAS -6.2%) to Sell with sharply lower price targets; Patterson-UTI (NASDAQ:PTEN), Pioneer Energy (NYSE:PES) and Emerge Energy (NYSE:EMES) are cut to Neutral.
- The firm adds Oceaneering (OII -0.3%) to its Conviction Buy list; it also removes Halliburton (HAL -1.5%) from the list but maintains its Buy rating on the stock.
Oct. 15, 2014, 3:59 PM
- Oil services companies are rising after Citigroup issued positive comments on a number of stocks in the sector.
- Baker Hughes earns a Buy rating, seen as having a strong chance of meeting EPS estimates before tomorrow's open given recent contract wins in Norway and Brazil, and the stock's valuation is "compelling."
- Among small- and mid-caps, Citi starts Patterson-UTI (PTEN +5.7%) and RPC (RES +2.3%) with Buy ratings, seeing each as likely to outperform if, as the firm forecasts, crude prices rebound and E&P companies' capital expenditures are higher than expected.
- Citi tags Schlumberger (SLB +0.5%), Halliburton (HAL +2.1%), Weatherford (WFT +1%), Superior Energy (SPN +2%) and Helmerich & Payne (HP +5.1%) with Neutral ratings.
Oct. 9, 2014, 3:43 PM
- Offshore drillers have company now that falling oil prices are hitting the shares of land drillers such as Helmerich & Payne (HP -3.7%), Patterson-UTI (PTEN -6.8%), Nabors Industries (NBR -4.7%) and Seventy Seven Energy (SSE -5%) - with good reason, Susquehanna analysts say.
- The firm views land drillers at considerable risk to estimate revisions, given high current dayrates and significant newbuild construction activity, which could be problematic if lower crude prices persist or a weaker outlook on U.S. E&P spending comes out of earnings season.
- Nevertheless, the firm finds valuations much better in land drilling for now, and it prefers PTEN and NBR at a respective 3.7x and 4.5x 2015 EBITDA.
Jun. 6, 2014, 2:24 PM
- Patterson-UTI (PTEN +2%) is higher on news of a deal with an unidentified privately-held company to acquire pressure pumping operations in east Texas, including 31.5K horsepower of hydraulic fracturing equipment.
- PTEN says the purchase provides it with a new base of operations to support drilling programs, supplementing its existing operations in the Permian Basin as well as the Eagle Ford and Barnett shale formations; PTEN also has a significant presence in the Marcellus and Utica shale plays in the eastern U.S.
Mar. 17, 2014, 12:25 PM
- Patterson-UTI Energy (PTEN +4.3%) is upgraded to Buy from Neutral with a new $37 price target, up from $28.50, at Goldman Sachs on expectations for higher onshore pricing in North America that should help PTEN reach margin targets.
- Goldman says it is adding PTEN, the second largest land driller and premier Marcellus and Permian pressure pumper, to its Conviction Buy list given its price increase forecast for drilling rigs and pressure pumping; Halliburton (HAL +2.3%), the leading U.S. pressure pumper, already is on Goldman's list.
Feb. 20, 2014, 12:44 PM
- Nabors Industries (NBR +3.4%) extends yesterday's big gains after posting strong Q4 results, and Morgan Stanley thinks shares can move a lot higher, upgrading NBR to Overweight from Equal Weight and raising its price target to $28 from $18.
- NBR has underperformed peers Helmerich & Payne (HP) and Patterson-UTI (PTEN) by ~25% since Q3 2013 on poor operational execution and a muddled corporate strategy, but Stanley sees signs that NBR's North America results have bottomed and execution has gained relative traction.
- The firm also expects operational streamlining to gain momentum over coming quarters and is encouraged by the appointment of a new CFO.
Feb. 6, 2014, 2:24 PM
- Patterson-UTI Energy (PTEN +14.2%) soars after issuing Q4 earnings above analyst expectations, and investors focus on the company’s ongoing replacement of its rig fleet with higher specification, higher margin electrical rigs.
- PTEN added 11 of the high-spec rigs during 2013 and plans to add another 20 in 2014, 10 of which are already under contract.
- At year-end 2013, PTEN had term contracts for drilling rigs providing for ~$946M of future dayrate drilling revenue; operating days slid from 80,833 in 2012 to 69,918 in 2013, though the average revenue gained from each day rose from to ~$24K from ~$22.5K as newer rigs gained higher rates.
- Based on contracts in place, PTEN expects an average of 124 rigs operating under term contracts during Q1 and an average of 93 rigs operating under term contracts during FY 2014.
- Doubles its quarterly stock dividend to $0.10/share.
Sep. 9, 2013, 10:49 AM
- Though offshore drilling fundamentals remain challenged, Deutsche Bank believes some oilfield services stocks (OIH) are "very underappreciated."
- The firm's top three sector stocks: Baker Hughes (BHI +2%), with a long restructuring that's finally complete; Halliburton (HAL +1.3%), whose international margins should improve dramatically; and Nabors (NBR +1.2%), whose high-end U.S. rigs and strong international business will drive growth.
- Also discussed: SLB, PTEN, NE, EXH.
Aug. 28, 2013, 10:38 AM
- Shares of Patterson-UTI Energy (PTEN +2.6%) have shed 20% since March, as the recovery of the drilling rig market has taken longer than expected, but Barron's David Englander thinks PTEN could jump 35% from current levels.
- While the rig market remains weak, the worst may be over: Rigs declined by only 7% Q/Q, and PTEN said in its July 25 earnings report it had seen an increase in contracting activity in recent weeks.
- PTEN has enjoyed strong demand for its APEX rigs, with utilization levels of 96%, well above the industry average; pressure pumping sales remain strong.
Jul. 10, 2013, 2:12 PMNabors Industries' (NBR -5.8%) downbeat Q2 forecast could spell trouble for other oilfield services firms (OIH), Tudor Pickering warns; while some NBR-specific factors likely are at play, the U.S. horizontal rig count continues flat even with more than half the year over. NBR's biggest peers - SLB, HAL, BHI - are little changed, but smaller ones are mostly lower: HP -1.4%, PTEN -1.2%, PDS -1.5%, SPN -1.6%. | Comment!
Feb. 7, 2013, 3:49 PM"Congratulations on making all the other pressure pumpers look like dorks,” a Raymond James analyst tells Patterson-UTI (PTEN +10.3%) in the company's conference call after Q4 pumping results were "far better than expected," despite a tough year in the oil services industry in that space. PTEN's fracking activity also rose "as customers performed well completions that had been delayed in previous quarters." | Comment!
Feb. 7, 2013, 10:31 AMPatterson-UTI (PTEN +7%) hits a 52-week high, as Q4 earnings easily beat expectations and revenues exceeded estimates for the fourth straight quarter. At year-end 2012, PTEN says it had term contracts for drilling rigs worth $1.24B in dayrate revenues, with an average of 97 rigs on term contracts in the coming year; a higher-than-expected 205 rigs were active in Q4. | Comment!
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.
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