EX-99.1 2 d29766dex991.htm EX-99.1

Cowen and Company 5 th Annual Ultimate Energy Conference December 1, 2015 Exhibit 99.1

Forward Looking Statements 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/or at the end of this presentation. 2

Contract Drilling • High quality fleet of land drilling rigs including 161 APEX ® rigs • Leader in walking rig technology for pad drilling applications • Large footprint across North American drilling markets Patterson-UTI reported results for the nine months ended September 30, 2015 3 Pressure Pumping 38% Oil & Natural Gas 1% Contract Drilling 61% Components of Revenue

Pressure Pumping • High quality fleet of modern pressure pumping equipment • Strong reputation for regional knowledge and efficient operations • Concentrated footprint provides economies of scale 4 Patterson-UTI reported results for the nine months ended September 30, 2015 Pressure Pumping 38% Oil & Natural Gas 1% Contract Drilling 61% Components of Revenue

Scaling The Business Scaling our business effectively is key to our success… …both in upturns and downturns 5 Patterson-UTI U.S. rig count and U.S. drilling staff size through November 17, 2015 Rig Count Drilling Staff Size Patterson-UTI U.S. Rig Count vs. U.S. Drilling Staff Size

Managing Supply Chain 6 • Sourcing and Supply Security – Negotiated critical cost elements for both Drilling and Pressure Pumping – Solidified availability of strategic commodities • Reduced Costs in 2015 – Sand costs down 25% - 35% – Sand hauling costs down 25% - 35% – Pump parts costs down 15% - 20% – Chemical costs down as much as 40%

Contract Drilling

High Quality Drilling Rigs 8 161 APEX ® Rigs 128 30 3 APEX ® Rig Fleet by Drawworks Horsepower 1500hp 1000hp 2000hp

Majority of Adjusted EBITDA from APEX ® Rigs *Adjusted EBITDA contribution by rig class excluding early termination revenues for the nine months ended September 30, 2015. 9 APEX ® Other Electric Mechanical Adjusted EBITDA Contribution by Rig Class

The APEX-XK ® • Enhanced X-Y mobility – Walk with full set-back of pipe in mast – More efficient rig up / rig down – Walking times average 45 minutes for 10’ – 15’ well spacing • Advanced environmental spill control integrated into drilling floor • Reduced number of truck loads for rig moves • 53 APEX-XK 1500 ® and four APEX- XK 1000™ rigs in fleet http://patenergy.com/drilling/technology 10

APEX-XK ® Integrated Walking System 11

APEX-XK ® Rig Walking on Pad 12 http://patenergy.com/drilling/technology/apexwalk/ Video of APEX-XK ® Rig 12

West Texas 19 Rigs Large Geographic Footprint PTEN’s Active Rig Count by Region as of November 24, 2015 Appalachia 22 Rigs East Texas 8 Rigs Mid-Continent 8 Rigs Rockies 8 Rigs South Texas 12 Rigs North Dakota 11 Rigs 13 Canada 2 Rigs http://patenergy.com/

Pressure Pumping

Modern Pumping Equipment 15 - 10 Years 25% 5 >10 Years 5% < 5 Years 70% 4 Years Average Age Frac Horsepower by Age

Modern Pumping Equipment 16 Modern triplex pumps defined as being placed in service within the last seven years. Quintuplex 80% Modern Triplex 15% Legacy Triplex 5% Frac Horsepower by Pump Type 1 Million Horsepower

Southwest Region: Northeast Region: Fracturing horsepower: 663,800 Other horsepower: 32,165 Fracturing horsepower: 353,800 Other horsepower: 55,400 Market Concentration Provides Economies of Scale Pressure Pumping Areas Horsepower distribution as of September 30, 2015 17 35% 65% Frac Horsepower

Technology Focused PropLogic™ Sand Management System 18 • Fully enclosed well-site sand management system • More accurate than conventional sand trailers/bins • More efficient use of proppant as less sand is wasted

Technology Focused PowderStim ® Dry Friction Reducer 19 • System hydrates powder form of friction reducer directly into the fluid stream • Logistically safer and more efficient compared to liquefied friction reducers • Successful with both fresh water and heavy brines • More cost effective by utilizing produced water

Technology Focused Comprehensive Lab Services 20 • Ability to test vendors’ chemicals enhances quality controls • Unique in-house friction flow loop test assembly for faster test results • In-house lab services are faster and more cost efficient than outsourcing

Strong Financial Position

Investing in Our Company 22 $598 $637 $445 $453 $976 $1,012 $974 $662 $1,229 $700 <$200 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E Year End Capital Expenditures and Acquisitions ($ in millions) 2015 and 2016 Capital expenditure forecast as of October 22, 2015

Strong Financial Position 4.97% Series A notes Due October 5, 2020 4.27% Series B notes Due June 14, 2022 Bank Term Loans Maturing September 27, 2017 23 * Debt and equity balances as of September 30, 2015. $265 million of bank term loans includes quarterly payments totaling $10 million in the fourth quarter of 2015 and $63.8 million in total for 2016. Capital Structure ($ in Millions) 25% Debt/ Total Cap Stockholder’s Equity $300 $300 $265 $2,631

Total Liquidity 24 * Cash and debt balances as of September 30, 2015. $265 million of bank term loans includes quarterly payments totaling $10 million in the fourth quarter of 2015 and $63.8 million in total for 2016. • $76.5 million cash • $500 million revolver availability • Of $865 million debt – $265 million matures September 2017 – $300 million matures October 2020 – $300 million matures June 2022 $ in Millions Line of Credit Availability Cash $500 $76

Why Invest in Patterson-UTI Energy? • High Quality Assets – 161 APEX ® rigs comprised primarily of 1500 horsepower and pad capable rigs – Creating value through focus on well site execution • Technology leader – Leader in walking rigs for pad drilling – Innovator in deploying latest technologies for pressure pumping • Financially flexible – Strong balance sheet – History of share buybacks – Dividends – Scalable business structure 25

Cowen and Company December 1, 2015 5 th Annual Ultimate Energy Conference

Additional References

Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA)(1): Net income (loss) $ (225,978) $ 15,976 $(235,828) $ 105,081 Income tax expense (benefit) (112,452) 7,556 (120,452) 50,403 Net interest expense 8,931 6,759 26,120 20,812 Depreciation, depletion, amortization and impairment 332,151 237,825 689,457 538,573 Impairment of goodwill 124,561 - 124,561 - Adjusted EBITDA $ 127,213 $ 268,116 $ 483,858 $ 714,869 Total revenue $ 422,251 $ 845,628 $1,552,711 $2,281,072 Adjusted EBITDA margin 30.1% 31.7% 31.2% 31.3% Adjusted EBITDA by operating segment: Contract drilling $ 123,500 $ 202,804 $ 431,523 $ 557,674 Pressure pumping 11,791 62,795 73,211 157,913 Oil and natural gas 3,508 11,449 12,247 29,423 Corporate and other (11,586) (8,932) (33,123) (30,141) Consolidated Adjusted EBITDA $ 127,213 $ 268,116 $ 483,858 $ 714,869 (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). PATTERSON-UTI ENERGY, INC. Non-GAAP Financial Measures (Unaudited) (dollars in thousands) Non-GAAP Financial Measures 28

Non-GAAP Financial Measures 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% (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). PATTERSON-UTI ENERGY, INC. Non-GAAP Financial Measures (Unaudited) (dollars in thousands) 29