EX-99.1 2 d883447dex991.htm EX-99.1

Raymond James 36 th Annual Institutional Investors Conference March 3-4, 2015 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 149 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, 2014 4 Pressure Pumping 41% Oil & Natural Gas 1% Contract Drilling 58% 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, 2014 5 Pressure Pumping 41% Oil & Natural Gas 1% Contract Drilling 58% Components of Revenue

Contract Drilling

Improved Performance 2008 - 2009 Total Baker Hughes U.S. Land Rig Count: -23% Total PTEN U.S. Rig Count: - 46% 2014 - 2015 Total PTEN U.S. Rig Count: -28% Total Baker Hughes U.S. Land Rig Count: -35% Baker Hughes and Patterson-UTI U.S. Land Rig Counts as of February 27, 2015 0% 20% 40% 60% 80% 100% 120% U.S. Rig Count Downturn 0% 20% 40% 60% 80% 100% 120%

A Rig Fleet Transformation 8 Mechanical Patterson-UTI Energy Total Rig Fleet Mechanical December 2009 Projected December 2015 Other Electric APEX® Other Electric APEX®

…and Expected as of December 31, 2015 APEX-XK 1500™ APEX-XK 1000™ APEX WALKING ® APEX 1500 ® APEX 1000 ® Total APEX ® Rigs Class APEX ® Rigs as of March 3, 2015 53 4 49 44 11 161 12/31/2015 A leader in high specification drilling rigs 41 4 49 44 11 149 3/3/2015 APEX ® Rig Fleet 9

Permian Basin 32 Rigs Large Geographic Footprint 10 PTEN’s Active U.S. Land Drilling Rigs as of February 27, 2015 Appalachia 35 Rigs East Texas 14 Rigs Mid-Continent 16 Rigs South Texas 32 Rigs Rockies 26 Rigs

Patterson-UTI Energy …the impact of APEX® rigs has been transformative!

Increasing APEX ® Drilling Activity 12 Active APEX ® Rig Count 0 20 40 60 80 100 120 140 160

PTEN Relative Active Rig Count by Rig Class 13 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% APEX® Other Electric Mechanical

Greater Stability of Utilization 14 APEX ® Rig Utilization 0% 20% 40% 60% 80% 100% 120%

Improving Average Rig Revenue Per Day 15 Patterson-UTI Total Average Rig 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

Adjusted EBITDA Contribution from High Specification Rigs 16 Preferred rigs account for approximately 89% of Adjusted EBITDA in Contract Drilling APEX® & Other Electric Mechanical 2010 2011 2012 2013 2014 Excludes early-termination revenues during the third and fourth quarter of 2013 of $62.8 million and $2.4 million, respectively.

Patterson-UTI Energy …the APEX® rig outlook remains strong!

18 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 have increased as a percentage 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. 19 SCR AC Mechanical

Patterson-UTI Energy …Patterson-UTI is a technology leader!

APEX WALKING ® Rigs 21 • Capable of walking with drill pipe and collars racked in the mast • 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 • Most new APEX ® rigs 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 • 54 rigs currently configured to use natural gas as the primary fuel source including 10 natural gas powered rigs and 44 bi-fuel capable rigs • We plan to add bi-fuel systems to four contracted new APEX ® rigs to be completed in 2015 • Natural gas powered rigs can result in up to 80% lower fuel costs http://patenergy.com/drilling/technology 28

Pressure Pumping

Growing Pressure Pumping Business 30 Investments in Pressure Pumping… …Have Increased Fleet Size and Quality 65 1,100 0 200 400 600 800 1000 1200 2006 2007 2008 2009 2010 2011 2012 2013 2014 June 2015E Year End Fracturing Horsepower Other Horsepower

Fracturing horsepower: 638,800 Other horsepower: 32,165 Fracturing horsepower: 303,800 Other horsepower: 54,700 A Significant Player in Regional Markets Pressure Pumping Areas 31 Horsepower distribution as of December 31, 2014 32% 68% Fracturing Horsepower Southwest Region: Northeast Region:

A Leader in Bi-Fuel Technology • Engines can burn a fuel mix comprised of up to 70% natural gas • Comparable torque and horsepower to 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 1,800 stages completed using natural gas as a fuel source • Replaced approximately 1.2 million gallons of diesel with cleaner burning natural gas • Eliminated 9.0 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) 2015 Capital expenditure forecast as of February 5, 2015 $598 $637 $445 $453 $976 $1,012 $974 $662 $1,229 $750 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E

Strong Financial Position 38 • History of returning capital to investors – Cash Dividend • Initiated cash dividend in 2004 • Doubled quarterly cash dividend to $0.10 per share in February 2014 – Stock Buyback • Total of $857 million repurchased since 2005 • Approximately $187 million remaining authorization as of December 31, 2014 • Returned approximately $1.3 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 * Subsequent to December 31, 2014, we received an $82 million federal income tax refund. The refund, along with other cash generated was used to repay $103 million outstanding under our revolving line of credit. As of February 10, 2015, availability under the revolving credit facility was $260 million. 2006 2007 2008 2009 2010 2011 2012 2013 2014 Pro Forma 2014* Year End Line of Credit Availability Cash

Strong Financial Position 40 Net Debt to Capital Ratio $600 million of debt not due until at least 2020 * Subsequent to December 31, 2014, we received an $82 million federal income tax refund. The refund, along with other cash generated was used to repay $103 million outstanding under our revolving line of credit. As of February 10, 2015, availability under the revolving credit facility was $260 million. 6% 2% -4% -2% 15% 13% 18% 14% 24% 22% -10% 0% 10% 20% 30% 40% 50% 2006 2007 2008 2009 2010 2011 2012 2013 2014 Pro Forma 2014* Year End

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 41

Raymond James 36 th Annual Institutional Investors Conference March 3-4, 2015

43 Contract Drilling Capital Expenditures and Acquisitions ($ in millions) Investing in Our Drilling Rig Fleet More than $5 billion invested since 2005 2015 Capital expenditure forecast as of February 5, 2015 $531 $540 $361 $395 $656 $785 $745 $505 $772 $525 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E

Investing in Pressure Pumping 44 Pressure Pumping Capital Expenditures and Acquisitions ($ in millions) More Than $1.4 billion invested since 2005 2015 Capital expenditure forecast as of February 5, 2015 $41 $48 $61 $43 $289 $198 $194 $123 $418 $200 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E

Term Contract Coverage 45 Based on term contracts in place as of February 5, 2015 An average of 138 rigs expected under term contract in the first quarter of 2015 An average of 104 rigs expected under term contract during 2015 Drilling term contract revenue backlog of $1.5 billion at December 31, 2014 Due to market conditions, we have received, and expect to continue to receive, notice from some customers to terminate term contracts. The receipt of early termination payments will result in earlier than planned cash inflows and reduced term contract revenue backlog.

Strong Financial Position • Total liquidity of approximately $200 million* – $43.0 million of cash at December 31, 2014 – $157 million revolver availability at December 31, 2014* • $942.5 million net debt at December 31, 2014* – 24.5% 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 – $82.5 million of 5-year term loan – $303 million outstanding under revolving line of credit • No equity sales in last 14 years • Reduced share count by 26.0 million shares since 2005 46 * Subsequent to December 31, 2014, we received an $82 million federal income tax refund. The refund, along with other cash generated was used to repay $103 million outstanding under our revolving line of credit. As of February 10, 2015, availability under the revolving credit facility was $260 million.

PATTERSON-UTI ENERGY, INC. Non-GAAP Financial Measures (Unaudited) (dollars in thousands) Non-GAAP Financial Measures 47 Three Months Ended December 31, Twelve Months Ended December 31, 2014 2013 2014 2013 Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA)(1): Net income $ 57,583 $ 16,591 $ 162,664 $ 188,009 Income tax expense 41,216 9,475 91,619 108,432 Net interest expense 8,034 6,947 28,846 27,441 Depreciation, depletion, amortization and impairment 180,157 183,118 718,730 597,469 Adjusted EBITDA $ 286,990 $ 216,131 $1,001,859 $ 921,351 Total revenue $ 901,219 $ 658,772 $3,182,291 $2,716,034 Adjusted EBITDA margin 31.8% 32.8% 31.5% 33.9% Adjusted EBITDA by operating segment: Contract drilling $ 208,200 $ 172,178 $ 765,874 $ 704,990 Pressure pumping 78,763 45,757 236,676 217,228 Oil and natural gas 7,671 8,757 37,094 44,348 Corporate and other (7,644) (10,561) (37,785) (45,215) Consolidated Adjusted EBITDA $ 286,990 $ 216,131 $1,001,859 $ 921,351 (1) The company makes use of financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”) to help in the assessment of ongoing operating performance. These non-GAAP financial measures are reconciled to their most directly comparable GAAP measures in the tables above. We define Adjusted EBITDA as net income plus net interest expense, income tax expense and depreciation, depletion, amortization and impairment expense. We present Adjusted EBITDA 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. Adjusted EBITDA is not defined by GAAP and, as such, should not be construed as an alternative to net income (loss) or operating cash flow. We define margin as revenues less direct operating costs. We present margin because we believe it to be the component of our earnings most impacted by the variability in our contract drilling and pressure pumping operations. Margin is not defined by GAAP and, as such, should not be construed as an alternative to net income (loss).

Non-GAAP Financial Measures 48 2014 2013 2012 2011 2010 Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA)(1): Net income (loss) $ 162,664 $ 188,009 $ 299,477 $ 322,413 $ 116,942 Income tax expense (benefit) 91,619 108,432 176,196 187,938 72,856 Net interest expense (income) 28,846 27,441 22,196 15,465 11,098 Depreciation, depletion, amortization and impairment 718,730 597,469 526,614 437,279 333,493 Net impact of discontinued operations - - - (209) 1,778 Adjusted EBITDA $ 1,001,859 $ 921,351 $ 1,024,483 $ 962,886 $ 536,167 Total revenue $ 3,182,291 $ 2,716,034 $ 2,723,414 $ 2,565,943 $ 1,462,931 Adjusted EBITDA margin 31.5% 33.9% 37.6% 37.5% 36.7% PATTERSON-UTI ENERGY, INC. Non-GAAP Financial Measures (Unaudited) (dollars in thousands) The company makes use of financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”) to help in the assessment of ongoing operating performance. These non-GAAP financial measures are reconciled to their most directly comparable GAAP measures in the tables above. We define Adjusted EBITDA as net income plus net interest expense, income tax expense and depreciation, depletion, amortization and impairment expense. We present Adjusted EBITDA 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. Adjusted EBITDA is not defined by GAAP and, as such, should not be construed as an alternative to net income (loss) or operating cash flow. We define margin as revenues less direct operating costs. We present margin because we believe it to be the component of our earnings most impacted by the variability in our contract drilling and pressure pumping operations. Margin is not defined by GAAP and, as such, should not be construed as an alternative to net income (loss). (1)