EX-99.1 2 d781230dex991.htm EX-99.1

Barclays 2014 CEO Energy-Power Conference September 2-3, 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 web site 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 3

Contract Drilling • High quality fleet of land drilling rigs including 137 APEX ® rigs • Leader in walking rig technology for pad drilling applications • Large footprint across North American drilling markets Patterson-UTI reported results for the six months ended June 30, 2014 4 Contract Drilling 60% Pressure Pumping 36% Oil & Natural Gas 2% 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 six months ended June 30, 2014 5 Contract Drilling 60% Pressure Pumping 36% Oil & Natural Gas 2% Components of Revenue

Contract Drilling

7 Contract Drilling Capital Expenditures and Acquisitions ($ in millions) Investing in Our Drilling Rig Fleet More than $4.5 billion invested since 2005 $531 $540 $361 $395 $656 $785 $745 $505 $775 2006 2007 2008 2009 2010 2011 2012 2013 2014E

…and Expected as of June 30, 2015 APEX-XK 1500™ APEX-XK 1000™ APEX WALKING ® APEX 1500 ® APEX 1000 ® Total APEX ® Rigs Class APEX ® Rigs as of September 2, 2014 6/30/2015 A leader in high specification drilling rigs 29 4 49 44 11 137 9/2/2014 APEX ® Rig Fleet 8 50 4 49 44 11 158

Large Geographic Footprint 9 PTEN’s Active U.S. Land Drilling Rigs as of September 2014 Rockies 33 Rigs Permian Basin 55 Rigs South Texas 38 Rigs Mid-Continent 26 Rigs North Texas 7 Rigs East Texas 15 Rigs Appalachia & Midwest 36 Rigs

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

Increasing APEX ® Drilling Activity 11 Active APEX ® Rig Count 0 20 40 60 80 100 120 140

PTEN Relative Rig Count by Rig Class 12 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% APEX® Other Electric Mechanical

Greater Stability of Utilization 13 APEX ® Rig Utilization 0% 20% 40% 60% 80% 100% 120%

Improving Average Revenue Per Day 14 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

EBITDA Contribution from High Specification Rigs 15 Preferred rigs account for approximately 89% of Contract Drilling EBITDA Excludes early-termination revenues during the third and fourth quarter of 2013 of $62.8 million and $2.4 million, respectively. 2010 2011 2012 2013 2014 APEX® & Other Electric Mechanical

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

17 U.S. Rig Count % by Drilling Type Continued Demand for APEX ® Rigs Source: Baker Hughes North America Rotary Rig Count 0% 10% 20% 30% 40% 50% 60% 70% 80% % Horizontal % Vertical

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 data from RigData and company filings. 18 Mechanical AC SCR

19 High-Specification Rigs by Owner Type Consolidated Segment of Industry Big 3 U.S. land drillers have almost 70% of the high specification rigs in the U.S. Based on data from multiple sources including Rig Data and corporate filings. Others Next 5 Largest Public Drillers Big 3 U.S. Land Drillers

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

APEX WALKING ® Rigs 21 • 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 21

Strong Demand for Pad Drilling 22 • 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 22

APEX-XK™ Rig Walking on Pad 23 http://patenergy.com/drilling/technology/apexwalk/ Video of APEX-XK™ Rig 23

The APEX-XK ™ 24 • 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 • Minimized number of truck loads for rig moves • Available in both 1500 HP and 1000 HP http://patenergy.com/drilling/technology 24

Enhancing our Position in Pad Drilling 25 Walking Systems Can be Added to Any Rig in Our Fleet… …Allowing for True Multi-Directional Pad Drilling Capabilities 25

Enhancing our Position in Pad Drilling 26 http://patenergy.com/drilling/technology 26

Early Adopter of Natural Gas Engines 27 http://patenergy.com/drilling/technology 27

Using Natural Gas as a Fuel Source 28 • First contract driller to use GE’s Waukesha natural gas engines on a modern land rig • 43 rigs currently configured to use natural gas as the primary fuel source including 8 natural gas powered rigs and 35 bi-fuel capable rigs • We plan to add GE Waukesha engines to three additional rigs and upgrade nine additional rigs with bi-fuel systems • Natural gas powered rigs can result in up to 80% lower fuel costs http://patenergy.com/drilling/technology 28

Pressure Pumping

Investing in Pressure Pumping 30 Pressure Pumping Capital Expenditures and Acquisitions ($ in millions) Approximately $1 billion invested since 2005 $41 $48 $61 $43 $289 $198 $194 $123 $285 2006 2007 2008 2009 2010 2011 2012 2013 2014E

Growing Pressure Pumping Business 31 Investments in Pressure Pumping… …Have Increased Fleet Size and Quality 65 945 * 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 June 2015E Year End Fracturing Horsepower Other Horsepower

Southwest Region: Northeast Region: Fracturing horsepower: 389,000 Other horsepower: 28,000 Fracturing horsepower: 320,000 Other horsepower: 55,000 A Significant Player in Regional Markets Pressure Pumping Areas 32 45% 55% Fracturing Horsepower

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 33

A Leader in Bi-Fuel Technology 34 http://patenergy.com/pressurepumping/services 34

A Leader in Bi-Fuel Technology 35 • One of the largest bi-fuel frac fleets in the Marcellus • Approximately 1,000 stages completed using natural gas as a fuel source • Replaced more than 547,000 gallons of diesel with cleaner burning natural gas • Eliminated 3.8 million pounds of transportation loads on local roads http://patenergy.com/pressurepumping/services 35

Comprehensive Lab Services http://patenergy.com/pressurepumping/services 36

Financial Flexibility

Investing in Our Company 38 Capital Expenditures and Acquisitions ($ in millions) $598 $637 $445 $453 $976 $1,012 $974 $662 $1,100 2006 2007 2008 2009 2010 2011 2012 2013 2014E

Strong Financial Position 39 • 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 $856 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 June 30, 2014 • Returned approximately $1.2 billion to shareholders since 2005

Strong Financial Position 40 Total Liquidity ($ in millions) Liquidity defined as end of period cash plus availability under revolving line of credit 208 283 398 244 387 273 571 710 581 0 100 200 300 400 500 600 700 800 2006 2007 2008 2009 2010 2011 2012 2013 2Q14 Year End Line of Credit Availability Cash

Strong Financial Position 41 Net Debt to Capital Ratio $600 million of debt not due until at least 2020 6% 2% -4% -2% 15% 13% 18% 14% 17% -10% 0% 10% 20% 30% 40% 50% 2006 2007 2008 2009 2010 2011 2012 2013 2Q14 Year End

Strong Financial Returns 42 Growth in Per-Share Book Value 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

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 43

Barclays 2014 CEO Energy-Power Conference September 2-3, 2014

Additional References

Active in Unconventional Plays 46 PTEN’s Active Rigs in Unconventional Areas as of September 2014 Bakken Piceance Haynesville Marcellus Barnett 20 Rigs Eagle Ford 2 Rigs 20 Rigs 3 Rigs 35 Rigs 6 Rigs Utica 16 Rigs Woodford 2 Rigs Pinedale 4 Rigs

Based on term contracts in place as of July 24, 2014 – An average of 149 rigs expected under term contract in the third quarter of 2014 – An average of 138 rigs expected under term contract during the second half of 2014 Term Contract Coverage Improving earnings visibility and returns stability 47 Drilling term contract revenue backlog of $1.5 billion at June 30, 2014 PTEN expects to continue signing term contracts

Strong Financial Position • Total liquidity of approximately $581 million – $121 million of cash at June 30, 2014 – $460 million revolver availability at June 30, 2014 • $567 million net debt at June 30, 2014 – 16.6% 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 – $87.5 million of 5-year term loan • No equity sales in last 13 years • Reduced share count by 26.3 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 June 30, Six Months Ended June 30, 2014 2013 2014 2013 Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)(1): Net income $ 54,283 $ 40,768 $ 89,105 $ 96,998 Income tax expense 25,905 23,528 42,847 55,656 Net interest expense 7,041 6,691 14,053 13,284 Depreciation, depletion, amortization and impairment 153,426 137,182 300,748 273,617 EBITDA $ 240,655 $ 208,169 $ 446,753 $ 439,555 Total revenue $ 757,276 $ 659,316 $1,435,444 $1,326,355 EBITDA margin 31.8% 31.6% 31.1% 33.1% EBITDA by operating segment: Contract drilling $ 181,674 $ 145,352 $ 354,870 $ 315,523 Pressure pumping 59, 62,043 95,118 120,794 Oil and natural gas 9,244 11,503 17,974 25,366 Corporate and other (9,796) (10,729) (21,209) (22,128) Consolidated EBITDA $ 655 $ 208,169 $ 446,753 $ 439,555 (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. 240, 533

Non-GAAP Financial Measures 50 PATTERSON-UTI ENERGY, INC. Non-GAAP Financial Measures (Unaudited) (dollars in thousands) 2013 2012 2011 2010 2009 2008 Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)(1): 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% (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.