EX-99.1 2 d724269dex991.htm EX-99.1

Citi 2014 Global Energy and Utilities Conference May 14, 2014 Exhibit 99.1

Forward Looking Statements 2 This material and any oral statements made in connection with this material include "forward-looking statements" within the meaning of the Securities Act of 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 future are forward-looking statements and are inherently uncertain. The opinions, forecasts, projections or other statements other than statements 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 results could differ materially from those discussed in such forward-looking statements. Important factors that could cause actual results to differ materially 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 Company or the SEC. These filings are also available through the Company’s website at http://www.patenergy.com or through the SEC’s Electronic Data Gathering and Analysis Retrieval System (EDGAR) at http://www.sec.gov. We undertake no obligation to publicly update or revise any forward-looking statement. Statements made in this presentation include non-GAAP financial measures. The required reconciliation to GAAP financial measures are included on our website and at the end of this presentation.

Patterson-UTI Energy is a leading provider of contract drilling and pressure pumping services

Contract Drilling

…and Expected as of March 31, 2015 APEX-XK 1500™ APEX-XK 1000™ APEX WALKING ® APEX 1500 ® APEX 1000 ® Total APEX ® Rigs Class APEX ® Rigs as of May 14, 2014 42 4 49 44 11 150 3/31/2015 A leader in high specification drilling rigs 22 4 49 44 11 130 5/14/2014 APEX ® Rig Fleet 5

Permian Basin 54 Rigs Large Geographic Footprint 6 PTEN’s Active U.S. Land Drilling Rigs as of May 2014 East Texas Appalachia & Midwest North Texas Mid-Continent Rockies South Texas 33 Rigs 34 Rigs 24 Rigs 37 Rigs 6 Rigs 14 Rigs

Improving Average Revenue Per Day 7 Patterson-UTI Total Average Revenue Per Day Excludes early-termination revenues during the third and fourth quarter of 2013 of $3,600 per day and $130 per day, respectively. 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 26,000

Pressure Pumping

Growing Pressure Pumping Business 9 Investments in Pressure Pumping… …Have Increased Fleet Size and Quality 65 800 * Includes acquisition of approximately 210,000 pressure pumping horsepower in October 2010 0 200 400 600 800 1000 2006 2007 2008 2009 2010* 2011 2012 2013 2014E Year End Fracturing Horsepower Other Horsepower

Southwest Region: Northeast Region: Fracturing horsepower: 350,000 Other horsepower: 28,000 Fracturing horsepower: 320,000 Other horsepower: 54,000 A Significant Player in Regional Markets Pressure Pumping Areas 10 48% 52% Fracturing Horsepower

A Leader in Bi-Fuel Technology 11 • One of the largest bi-fuel frac fleets in the Marcellus • Approximately 700 stages completed using natural gas as a fuel source • Replaced more than 358,000 gallons of diesel with cleaner burning natural gas • Eliminated 2.6 million pounds of transportation loads on local roads http://patenergy.com/pressurepumping/services 11

Why Invest in Patterson-UTI Energy? • Continuing Transformation – Committed to high-spec land rigs where demand remains strong – Creating value through focus on well site execution • Technology leader – Leader in walking rigs for pad drilling – Innovator in use of natural gas as a fuel source for both drilling and pressure pumping • Financially flexible – Strong balance sheet – History of share buybacks – Dividends 12

Citi 2014 Global Energy and Utilities Conference May 14, 2014

Additional References

Contract Drilling • High quality fleet of land drilling rigs including 130 APEX ® rigs • Leader in walking rig technology for pad drilling applications • Large footprint across North American drilling markets Patterson-UTI reported results for the year ended December 31, 2013 15 Pressure Pumping 36% Oil & Natural Gas 2% Contract Drilling 62% Components of Revenue

Pressure Pumping • High quality fleet of modern pressure pumping equipment • A leader in natural gas bi-fuel technology • Strong reputation for regional knowledge and efficient operations Patterson-UTI reported results for the year ended December 31, 2013 16 Pressure Pumping 36% Oil & Natural Gas 2% Contract Drilling 62% Components of Revenue

17 Contract Drilling Capital Expenditures and Acquisitions ($ in millions) Investing in Our Drilling Rig Fleet More than $4.5 billion invested since 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E $531 $540 $361 $395 $656 $785 $745 $505 $700

Why invest in APEX ® rigs? …the impact has been transformative!

Greater Consistency in Rig Activity 19 Active APEX ® Rig Count 0 20 40 60 80 100 120 140

Rig Count by Rig Class 20 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% APEX® Other Electric Mechanical

Greater Stability of Utilization 21 APEX ® Rig Utilization 0% 20% 40% 60% 80% 100% 120%

Contribution from High Specification Rigs 22 Preferred rigs account for approximately 87% of Contract Drilling EBITDA 2010 2011 2012 2013 APEX® & Other Electric Mechanical Excludes early-termination revenues during the third and fourth quarter of 2013 of $62.8 million and $2.4 million, respectively.

Why invest in APEX ® rigs? …the outlook remains strong!

24 U.S. Rig Count % by Drilling Type High-Spec rigs account for less than half of the total horizontal rig count Continued Demand for APEX ® Rigs 0% 10% 20% 30% 40% 50% 60% 70% 80% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 % Horizontal % Vertical

25 High-Specification Rigs by Owner Type Consolidated Segment of Industry Big 3 U.S. land drillers control almost 70% of the high specification rigs in the U.S. Next 5 Largest Public Drillers Big 3 U.S. Land Drillers Others

Why invest in APEX ® rigs? …Patterson-UTI is a technology leader!

APEX WALKING ® Rigs 27 • Capable of walking with drill pipe and collars racked in derrick • Full multi-directional walking capability • Walking times average 45 minutes for 10’ – 15’ well spacing http://patenergy.com/drilling/technology/apexwalk 27

Strong Demand for Pad Drilling 28 • Pad drilling is contributing to increasing rig efficiency • Pad drilling capable rigs are highly utilized • All new APEX ® rigs completed in 2014 are expected to have walking systems http://patenergy.com/drilling/technology 28

APEX-XK™ Rig Walking on Pad 29 http://patenergy.com/drilling/technology/apexwalk/ Video of APEX-XK™ Rig 29

The APEX-XK ™ 30 • Enhanced mobility including more efficient rig up and rig down • Greater clearance under rig floor for optional walking system • Advanced environmental spill control integrated into drilling floor • Optimized number of truck loads for rig moves • Available in both 1500 HP and 1000 HP http://patenergy.com/drilling/technology 30

Enhancing our Position in Pad Drilling 31 Walking Systems Can be Added to Any Rig in Our Fleet… …Allowing for True Multi-Directional Pad Drilling Capabilities 31

Enhancing our Position in Pad Drilling 32 http://patenergy.com/drilling/technology 32

Early Adopter of Natural Gas Engines 33 http://patenergy.com/drilling/technology 33

Using Natural Gas as a Fuel Source 34 • First contract driller to use GE’s Waukesha natural gas engines on a modern land rig • 34 rigs currently configured to use natural gas as the primary fuel source including 7 natural gas powered rigs and 27 bi-fuel capable rigs • We plan to add GE Waukesha engines to two additional rigs and upgrade 11 additional rigs with bi- fuel systems during the remainder of 2014 • Natural gas powered rigs can result in up to 80% lower fuel costs http://patenergy.com/drilling/technology 34

Active in Unconventional Plays 35 PTEN’s Active Rigs in Unconventional Areas as of May 2014 Bakken Piceance Haynesville Marcellus Barnett 20 Rigs Eagle Ford 2 Rigs 20 Rigs 2 Rigs 35 Rigs 5 Rigs Utica 13 Rigs Woodford 2 Rigs

AC-powered rigs represent less than half of the horizontal rig count Total U.S. Horizontal Rig Count by Power Type Continued Demand for APEX ® Rigs Analysis from Patterson-UTI Energy based on IHS drilling data 36 SCR AC Mechanical

Term Contract Coverage • Based on term contracts in place as of April 24, 2014 – An average of 137 rigs expected under term contract in the second quarter of 2014 – An average of 111 rigs expected under term contract during the remaining three quarters of 2014 • PTEN expects to continue signing term contracts Improving earnings visibility and returns stability 37 • Drilling term contract revenue backlog of $1.04 billion at March 31, 2014

Investing in Pressure Pumping 38 Pressure Pumping Capital Expenditures and Acquisitions ($ in millions) Approximately $1 billion invested since 2005 $41 $48 $61 $43 $289 $198 $194 $123 $210 2006 2007 2008 2009 2010 2011 2012 2013 2014E

A Leader in Bi-Fuel Technology • Engines can burn a fuel mix comprised of up to 70% natural gas • Comparable torque and horsepower as an all diesel engine • Reduces operating costs by lowering fuel costs • Good for environmental sustainability http://patenergy.com/pressurepumping/services 39

A Leader in Bi-Fuel Technology 40 http://patenergy.com/pressurepumping/services 40

Comprehensive Lab Services http://patenergy.com/pressurepumping/services 41

Financial Flexibility

$598 $637 $445 $453 $976 $1,012 $974 $662 $950 2006 2007 2008 2009 2010 2011 2012 2013 2014E Investing in Our Company 43 Capital Expenditures and Acquisitions ($ in millions)

Strong Financial Position 44 • History of returning capital to investors – Cash Dividend • Initiated cash dividend in 2004 • Recently announced doubling of quarterly cash dividend to $0.10 per share – Stock Buyback • Total of $843 million repurchased since 2005 • Repurchased $85.8 million of stock in 2013 at an average price of $20.83 • Approximately $187 million remaining authorization as of March 31, 2014 • Returned approximately $1.2 billion to shareholders since 2005

Strong Financial Position 45 Total Liquidity ($ in millions) Liquidity defined as end of period cash plus availability under revolving line of credit 208 283 398 244 387 273 571 710 718 0 100 200 300 400 500 600 700 800 2006 2007 2008 2009 2010 2011 2012 2013 1Q14 Year End Line of Credit Availability Cash

Strong Financial Position 46 Net Debt to Capital Ratio $600 million of debt not due until at least 2020 6% 2% -4% -2% 15% 13% 18% 14% 13% -10% 0% 10% 20% 30% 40% 50% 2006 2007 2008 2009 2010 2011 2012 2013 1Q14 Year End

Strong Financial Returns 47 Growth in Per-Share Book Value 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Strong Financial Position • Total liquidity of approximately $718 million – $258 million of cash at March 31, 2014 – $460 million revolver availability at March 31, 2014 • $432 million net debt at March 31, 2014 – 13.4% Net Debt/Total Capitalization – $300 million of 4.97% Series A notes due October 5, 2020 – $300 million of 4.27% Series B notes due June 14, 2022 – $90 million of 5-year term loan • No equity sales in last 13 years • Reduced share count by 27.9 million shares since 2005 48

PATTERSON-UTI ENERGY, INC. Non-GAAP Financial Measures (Unaudited) (dollars in thousands) Non-GAAP Financial Measures 49 Three Months Ended March 31, 2014 2013 Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)(1): Net income $ 34,822 $ 56,230 Income tax expense 16,942 32,128 Net interest expense 7,012 6,593 Depreciation, depletion, amortization and impairment 147,322 136,435 EBITDA $ 206,098 $ 231,386 Total revenue $ 678,168 $ 667,039 EBITDA margin 30.4% 34.7% EBITDA by operating segment: Contract drilling $ 173,196 $ 170,171 Pressure pumping 35,585 58,751 Oil and natural gas 8,730 13,863 Corporate and other (11,413) (11,399) Consolidated EBITDA $ 206,098 $ 231,386 (1) EBITDA is not defined by generally accepted accounting principles (“GAAP”). We present EBITDA (a non-GAAP measure) because we believe it provides additional information with respect to both the performance of our fundamental business activities and our ability to meet our capital expenditures and working capital requirements. EBITDA should not be construed as an alternative to the GAAP measures of net income or operating cash flow.

Non-GAAP Financial Measures 50 PATTERSON-UTI ENERGY, INC. Non-GAAP Financial Measures (Unaudited) (dollars in thousands) (1) EBITDA is not defined by generally accepted accounting principles (“GAAP”). We present EBITDA (a non-GAAP measure) because we believe it provides additional information with respect to both the performance of our fundamental business activities and our ability to meet our capital expenditures and working capital requirements. EBITDA should not be construed as an alternative to the GAAP measures of net income or operating cash flow. 2013 2012 2011 2010 2009 2008 Net income (loss) $ 188,009 $ 299,477 $ 322,413 $ 116,942 $ (38,290) $ 347,069 Income tax expense (benefit) 108,432 176,196 187,938 72,856 (17,595) 193,490 Net interest expense (income) 27,441 22,196 15,465 11,098 3,767 (923) Depreciation, depletion, amortization and impairment 597,469 526,614 437,279 333,493 289,847 275,990 Net impact of discontinued operations - - (209) 1,778 1,979 15,190 EBITDA $ 921,351 $1,024,483 $ 962,886 $ 536,167 $ 239,708 $ 830,816 Total revenue $2,716,034 $2,723,414 $2,565,943 $1,462,931 $ 781,946 $2,063,880 EBITDA margin 33.9% 37.6% 37.5% 36.7% 30.7% 40.3% Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)(1):