EX-99.1 2 d356418dex991.htm INVESTOR PRESENTATION SLIDES

Patterson-UTI Energy, Inc. Patterson-UTI Energy, Inc. UBS Global Oil and Gas Conference UBS Global Oil and Gas Conference May 23, 2012 May 23, 2012 Exhibit 99.1

2 2 Forward Looking Statements This material and any oral statements made in connection with this material This material and any oral statements made in connection with this material include "forward-looking statements" within the meaning of the Securities Act of include "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Statements made which provide 1933 and the Securities Exchange Act of 1934. Statements made which provide the Company’s or management’s intentions, beliefs, expectations or predictions for the Company’s or management’s intentions, beliefs, expectations or predictions for the future are forward-looking statements and are inherently uncertain. The the future are forward-looking statements and are inherently uncertain. The opinions, forecasts, projections or other statements other than statements of opinions, forecasts, projections or other statements other than statements of historical fact, including, without limitation, plans and objectives of management 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 the Company are forward-looking statements. It is important to note that actual results could differ materially from those discussed in such forward-looking results could differ materially from those discussed in such forward-looking statements. Important factors that could cause actual results to differ materially statements. Important factors that could cause actual results to differ materially include the risk factors and other cautionary statements contained from time to include the risk factors and other cautionary statements contained from time to time in the Company’s SEC filings, which may be obtained by contacting the time in the Company’s SEC filings, which may be obtained by contacting the Company Company or or the the SEC. SEC. These These filings filings are are also also available available through through the the Company’s Company’s web web site site at at http://www.patenergy.com http://www.patenergy.com or or through through the the SEC’s SEC’s Electronic Electronic Data Data Gathering Gathering and and Analysis Analysis Retrieval Retrieval System System (EDGAR) (EDGAR) at at http://www.sec.gov. http://www.sec.gov. We We undertake undertake no no obligation to publicly update or revise any forward-looking statement. Statements obligation to publicly update or revise any forward-looking statement. Statements made in this presentation include non-GAAP financial measures. The required made in this presentation include non-GAAP financial measures. The required reconciliation to GAAP financial measures are included on our website and at the reconciliation to GAAP financial measures are included on our website and at the end of this presentation. end of this presentation.

3 Presentation • PTEN Overview • The Energy Environment • PTEN’s Land Drilling Business • PTEN’s Well Stimulation Business • PTEN Investment Highlights • Conclusions A Transformation in the Energy Industry… A Transformation in the Energy Industry… …A Transformation at PTEN

4 Overview of Patterson-UTI Energy, Inc. • One of the “Big 3” US land drillers (drilling ~65% of total 2011 revenues) • One of the top pressure pumping companies in the US (pressure pumping ~33% of total 2011 revenues) • Substantial investment in new drilling and pressure pumping equipment • Strong history of creating shareholder equity • Trading at a substantial discount to both its historical valuation and its peers

Changing Energy Environment 5 Source: US Energy Information Administration, Short-Term Energy Outlook, May 8, 2012 Decades of Declining US Crude Oil Production… Reversed in 2009

Changing Energy Environment 6 Source: US Energy Information Administration, Short-Term Energy Outlook, May 8, 2012 Petroleum Imports as a Percent of Total Consumption… More Demand Being Satisfied With US Production

7 Changing Energy Environment – North America Land-Based Energy Unconventional drilling and well completion has evolved: • A “manufacturing” approach to drilling and well completion • Focus on oil & liquids rich plays • Unconventional drilling and well completion techniques being applied to historically conventional basins

Changing Energy Environment – Land-Based Drilling PTEN’s PTEN’s Drilling Drilling Business Business

PTEN’s Drilling Business 9 Strong US Rig Count 2010 - Current

10 PTEN’s Drilling Business • Increasing focus on oil & liquids rich plays – Horizontal drilling techniques developed for shale gas have been a “game changer” for oil and liquids rich shales – Approximately 68% of PTEN operating rigs are drilling for oil or liquids – “Fit-for-purpose” rigs are very active in oil & liquids rich plays, but not all oil & liquids rich plays require “fit-for- purpose” rigs (i.e. Permian and Mississippi Lime) • Decreasing Dry Gas Exposure – Approximately 15 rigs in the US drilling for dry gas under contracts that are well-to-well or that have an initial term of less than one year – Expect continued rig movement from dry gas to oil and liquids rich areas

PTEN’s Drilling Business 11 PTEN’s Active U.S. Land Drilling Rigs as of May 2012 East Texas Appalachian Basin North Texas Rockies South Texas 38 Rigs 32 Rigs 25 Rigs 45 Rigs 16 Rigs 15 Rigs Permian Basin Mid-Continent 56 Rigs

12 New APEX™ Rigs Have Significantly Increased Fleet Quality. PTEN’s Drilling Business 24 New Rigs expected to be added in 2012 27 115

13 PTEN’s Drilling Business PTEN has designed three types of land rigs for these “new wells”: • Each designed to meet customer demands in different markets – Each has specific applications for which it is “most suitable” • Significance: – Drilling is an integral part of the well “manufacturing” business •Fast drilling and “speedy” rig moves – APEX Walking ™ rigs and APEX 1000™ rigs provide access to certain “challenging well locations”

14 PTEN’s Drilling Business •1000 HP drawworks •Small footprint, big rig capability •Fast move & rig-up •Walking system is an optional feature APEX 1000™ •1500 HP drawworks •Great all purpose rig •Fast move & rig-up •Ideal for Eagle Ford, Barnett, and Haynesville APEX 1500™ •1000 to 2000 HP drawworks •Able to move in all directions •Able to “walk” with mast up and drill pipe/collars in the derrick •A leadership position in this “fit-for-purpose” rig category APEX Walking™

…and Expected as of December 31, 2012 APEX 1500 APEX 1000 APEX Walking Total New Rigs Other Electric Rigs Class 15 PTEN’s Drilling Business Preferred Rigs as of March 31, 2012 54 15 46 115 54 12/31/2012 24 new rigs planned in 2012 ~170 by the end of 2012 40 13 43 96 54 3/31/2012 PTEN has approximately 150 of these preferred rigs TM TM TM

PTEN’s Drilling Business Video of Walking Rig Moving Video of Walking Rig Moving

17 PTEN’s Drilling Business • PTEN has approximately 180 other rigs in the fleet of which approximately 90 are active – Major upgrade program has provided: – PTEN commitment to customers and service • PTEN’s large fleet provides substantial “upside” if drilling continues to increase • Improved mud systems • Iron roughnecks and other automation • Enhanced mobility • Major rig refurbishments

18 PTEN’s Drilling Business • Term contracts* – PTEN expects to average 153 rigs under term contract in the second quarter of 2012 and 132 during the last three quarters of 2012 – Approximately 68% of active rigs in the US are committed under term contracts – Provides estimated future dayrate drilling revenue stream of approximately $1.7 billion for 2012 and beyond * Term contracts are defined as having an initial duration of at least six months.

Changing Energy Environment – Well Stimulation PTEN’s PTEN’s Pressure Pressure Pumping Pumping Business Business

20 PTEN’s Pressure Pumping Business • Continuing Significance of Well Stimulation – Shale and other unconventional plays changed the business •Substantial increases in horizontal completions •Increasing number of stages per well •Substantially higher HP requirements •Higher pressures and higher volumes – Changing equipment (“quints”) and crew competencies – Key to unlocking long laterals and greatly increased shale production

21 PTEN’s Pressure Pumping Business Fracturing horsepower: 313,500 Other horsepower: 20,270 Frac Crews under contract : 3 Fracturing horsepower: 265,500 Other horsepower: 61,300 Frac Crews under contract: 2 A Significant Player in Growing Markets Approximately 155,000 HP under term contract 46% 54% Fracturing Horsepower Southwest Region: Northeast Region:

22 Recent Investments in Pressure Pumping… …Have Increased Fleet Size and Quality PTEN’s Pressure Pumping Business * Includes acquisition of pressure pumping assets from Key Energy 65 770

23 Strong Growth in Pressure Pumping PTEN’s Pressure Pumping Business

24 Service Intensity By Region Average Horsepower Per Well (000s HP)* PTEN’s Pressure Pumping Business *Source: Simmons & Company Equity Research

25 Increasing Service Intensity Eagle Ford Shale PTEN’s Pressure Pumping Business *Source: Simmons & Company Equity Research Lateral Length* Frac Stages*

26 Increasing Service Intensity Marcellus Shale PTEN’s Pressure Pumping Business *Source: Simmons & Company Equity Research

PTEN’s Pressure Pumping Business 27 More than two-thirds of fracturing horsepower is less than five years old PTEN Pressure Pumping Fleet by Age as of December 2011 >10 Years 14% 5 - 10 Years 19% < 5 Years 67%

PTEN Investment Highlights

29 PTEN Investment Highlights - Strategic Approach • Concentrate on two core businesses • Plan to continue to grow organically – PTEN has the balance sheet and expected cash flow to support continued organic growth in both businesses – Acquisitions and dispositions only when the price is right

30 PTEN Investment Highlights Components of Total Revenue EBITDA EBITDA Contract Drilling 65% Pressure Pumping 33% Oil & Natural Gas 2% Segment ($ in 000’s) Contract Drilling $690,395 Pressure Pumping 266,719 Oil & Natural Gas 40,944 Corporate & Other (34,596) Discontinued Operations (576) Total $962,886

31 PTEN Investment Highlights • No equity sales in more than 11 years • History of returning capital to investors – Stock Buyback • Total of $592 million in 2006 through 2008 – Cash Dividend • Initiated cash dividend in 2004 • Quarterly dividend currently $0.05 per share

32 PTEN Investment Highlights • Leading market position – One of the “Big 3” US land drillers – One of the largest pressure pumping companies in the US – Well positioned to grow organically and through opportunistic acquisition • Diverse asset base – Drilling rigs well-matched to customers’ needs – Well stimulation assets that meet customers’ needs • Favorable industry trends – Emerging shale and unconventional resource plays – US land drilling and pressure pumping are major beneficiaries of these trends

33 PTEN Investment Highlights • Flexible operating model – Maximizes earnings growth during periods of increased activity – Minimizes costs during periods of low activity – Strong cash flow generation • Strong management team – Prudent financial management – Operational management that is customer responsive – Proven track record through numerous cycles • Strong financial position – Low leverage – Adequate liquidity to meet medium-term growth and capex needs

PTEN Investment Highlights 34 25 – 25 – 40% discount to both peers 40% discount to both peers and historical trading multiples and historical trading multiples Low valuation relative to both peers and historical trading multiples Source: Thomson One Financial

PTEN Investment Highlights 0 500 1,000 1,500 2,000 2,500 3,000 Thousands 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 0 500 1,000 1,500 2,000 2,500 3,000 Thousands 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Growth in Shareholder Equity The Warren Buffett Standard 35

36 • Favorable trends are likely to persist in North American oil and natural gas markets • US Land Drilling and Pressure Pumping are major beneficiaries of the new trends • Patterson-UTI has the right assets: – Drilling rigs well-matched to the customers’ needs – Well stimulation assets that meet customers’ needs – Operational management that is customer responsive – Prudent financial management • Long-term record of building shareholder equity Conclusions

Patterson-UTI Energy, Inc. UBS Global Oil and Gas Conference UBS Global Oil and Gas Conference May 23, 2012 May 23, 2012

Non-GAAP Financial Measures 38 Patterson-UTI Energy, Inc. EBITDA Reconciliation (dollars in thousands) 2011 2010 2009 2008 2007 2006 Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA): Net income (loss) $ 322,413 $ 116,942 $ (38,290) $ 347,069 $ 438,639 $ 673,254 Income tax expense (benefit) 187,938 72,856 (17,595) 193,490 229,350 360,639 Net interest expense (income) 15,465 11,098 3,767 (923) (164) (4,310) Depreciation, depletion, amortization and impairment 437,279 333,493 289,847 275,990 246,346 193,664 Cumulative effect of change in accounting principle - - - - - (687) Results of discontinued operations: Income tax expense (benefit) (209) (543) (2,208) 2,389 2,818 10,628 Net interest expense (income) - - - 7 (4) (13) Depreciation - 166 2,287 2,830 2,860 2,706 Impairment of assets held for sale - 2,155 1,900 - - - Impairment of goodwill - - - 9,964 - - EBITDA $ 962,886 $ 536,167 $ 239,708 $ 830,816 $ 919,845 $ 1,235,881 Total Revenue $ 2,565,943 $ 1,462,931 $ 781,946 $ 2,063,880 $ 1,986,096 $ 2,354,228 EBITDA Margin (EBITDA/Total Revenue) 37.53% 36.65% 30.66% 40.26% 46.31% 52.50%