EX-99.1 2 d795537dex991.htm EX-99.1

Johnson Rice & Company 2014 Energy Conference September 29-30, 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

4 Contract Drilling • High quality fleet of land drilling rigs including 139 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 Pressure Pumping 38% Oil & Natural Gas 2% Contract Drilling 60% Components of Revenue

5 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 Pressure Pumping 38% Oil & Natural Gas 2% Contract Drilling 60% 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 2014 Capital expenditure forecast as of July 24, 2014

…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 29, 2014 50 4 49 44 11 158 6/30/2015 A leader in high specification drilling rigs 31 4 49 44 11 139 9/29/2014 APEX ® Rig Fleet 8

Permian Basin 56 Rigs Large Geographic Footprint 9 PTEN’s Active U.S. Land Drilling Rigs as of September 2014 East Texas 15 Rigs Appalachia & Midwest 37 Rigs North Texas 7 Rigs Rockies 33 Rigs South Texas 38 Rigs

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

Increasing APEX ® Drilling Activity 11 Active APEX ® Rig Count

PTEN Relative Rig Count by Rig Class 12

Greater Stability of Utilization 13 APEX ® Rig Utilization

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.

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.

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

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

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

APEX WALKING ® Rigs 20 • 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 20

Strong Demand for Pad Drilling 21 • 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 21

APEX-XK™ Rig Walking on Pad 22 http://patenergy.com/drilling/technology/apexwalk/ Video of APEX-XK™ Rig 22

The APEX-XK ™ 23 • 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 23

Enhancing our Position in Pad Drilling 24 Walking Systems Can be Added to Any Rig in Our Fleet… …Allowing for True Multi-Directional Pad Drilling Capabilities 24

Enhancing our Position in Pad Drilling 25 http://patenergy.com/drilling/technology 25

Early Adopter of Natural Gas Engines 26 http://patenergy.com/drilling/technology 26

Using Natural Gas as a Fuel Source 27 • 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 27

Pressure Pumping

Investing in Pressure Pumping 29 Pressure Pumping Capital Expenditures and Acquisitions ($ in millions) Approximately $1 billion invested since 2005 2014 Capital expenditure forecast as of July 24, 2014

Growing Pressure Pumping Business 30 Investments in Pressure Pumping… …Have Increased Fleet Size and Quality 65 1,088 * Includes acquisition of approximately 210,000 pressure pumping horsepower in October 2010 ** Previously announced agreement to acquire 143,250 horsepower. Closing of the transaction is subject to the satisfaction of various conditions, including, the receipt of approvals from third parties.

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 31 Horsepower distribution as of June 30, 2014

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 32

A Leader in Bi-Fuel Technology 33 http://patenergy.com/pressurepumping/services 33

A Leader in Bi-Fuel Technology 34 • 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 34

Comprehensive Lab Services http://patenergy.com/pressurepumping/services 35

Financial Flexibility

Investing in Our Company 37 Capital Expenditures and Acquisitions ($ in millions) 2014 Capital expenditure forecast as of July 24, 2014

Strong Financial Position 38 • 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 39 Total Liquidity ($ in millions) Liquidity defined as end of period cash plus availability under revolving line of credit

Strong Financial Position 40 Net Debt to Capital Ratio $600 million of debt not due until at least 2020

Strong Financial Returns 41 Growth in Per-Share Book Value

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 42

Johnson Rice & Company 2014 Energy Conference September 29-30, 2014

Additional References

Active in Unconventional Plays 45 PTEN’s Active Rigs in Unconventional Areas as of September 2014 Piceance Haynesville Marcellus Barnett 20 Rigs Eagle Ford 3 Rigs 19 Rigs 2 Rigs 34 Rigs 6 Rigs 18 Rigs Woodford 3 Rigs Pinedale 4 Rigs

Term Contract Coverage • 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 • PTEN expects to continue signing term contracts Improving earnings visibility and returns stability 46 Drilling term contract revenue backlog of $1.5 billion at June 30, 2014

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 47

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 $ 40,655 $ 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 59,533 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 $ 240,655 $ 208,169 $ 446,753 $ 439,555 PATTERSON-UTI ENERGY, INC. Non-GAAP Financial Measures (Unaudited) (dollars in thousands) Non-GAAP Financial Measures 48 (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 49 2013 2012 2011 2010 2009 Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)(1): Net income (loss) $ 188,009 $ 299,477 $ 322,413 $ 116,942 $ (38,290) Income tax expense (benefit) 108,432 176,196 187,938 72,856 (17,595) Net interest expense (income) 27,441 22,196 15,465 11,098 3,767 Depreciation, depletion, amortization and impairment 597,469 526,614 437,279 333,493 289,847 Net impact of discontinued operations - - (209) 1,778 1,979 EBITDA $ 921,351 $ 1,024,483 $ 962,886 $ 536,167 $ 239,708 Total revenue $ 2,716,034 $ 2,723,414 $ 2,565,943 $ 1,462,931 $ 781,946 EBITDA margin 33.9% 37.6% 37.5% 36.7% 30.7% 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.