What happened with PTEN today?
No read yet
Uses news and trading volume to explain the day’s move and how it relates to the market.
Stop guessing. Get the call, a three-month target price, the best and worst cases, and a source for every claim.
Patterson-UTI Energy serves oil and natural gas producers, with most of its business in the United States. Well completion generates most of its revenue: the company supplies crews, equipment and materials for hydraulic fracturing and related work that prepares wells for production. Customers generally pay per completed stage or at a fixed monthly rate, with charges for services and materials.
Drilling is its other major business. Patterson-UTI supplies and operates rigs, pays crew and maintenance costs, and usually charges customers a daily rate while a rig is working. It also helps steer wells through directional drilling. Its smaller Ulterra business makes drill bits and downhole tools, earning mainly from rentals rather than sales.
Demand depends on producers’ willingness and ability to fund drilling and completion, which reflects both current oil and gas prices and expectations for future prices. A small group of large customers supplies most revenue, including a substantial share from one unnamed customer. Customers can generally terminate drilling contracts on short notice, although termination payments may apply. Hydraulic fracturing also faces location and operating restrictions that can limit where and how the company works.
The risk section is the longest, dullest part of the filing. This keeps only what can really hurt you: where it hits, how hard, when it plays out.
Every company claims an edge. Each one is checked against hard numbers like margins and returns: which hold, and which line gives way first.
Patterson-UTI depends chiefly on U.S. producers’ drilling and completion budgets and service pricing; watch SLB too for competition in drilling technology and well services.
Liberty Energy and Patterson-UTI compete for producers’ completion spending through hydraulic fracturing, wireline, proppant delivery and natural-gas-supported services. Liberty’s North American completion revenue is a useful gauge of the shale activity and service pricing that matter to Patterson-UTI.
Helmerich & Payne and Patterson-UTI compete to supply U.S. oil and gas producers with high-specification land rigs and drilling technology. Watch H&P’s rigs working under contract: it says available rigs exceed demand in many markets, putting pressure on prices.
Halliburton competes with Patterson-UTI for oil and gas producers’ spending on stimulating wells, cementing and steering wellbores into position. Its Completion and Production and Drilling and Evaluation results offer a view of customer spending across those overlapping services.
ProFrac and Patterson-UTI compete for producers’ hydraulic-fracturing work, including jobs using natural-gas-powered and electric completion fleets. Watch ProFrac’s active fleet mix as Patterson-UTI expands equipment aimed at lower-emission, more cost-efficient completions.
ProPetro competes with Patterson-UTI for Permian producers’ hydraulic-fracturing, wireline and cementing work. Its dedicated fleets and crews often stay with customers for years, making its commentary on customers’ future completion activity worth watching.
Nabors and Patterson-UTI compete to operate rigs for U.S. oil and gas producers and supply equipment and services that steer wells. Both generally earn a daily rate for rig work; watch Nabors’ U.S. Drilling results for the activity and dayrate conditions Patterson-UTI also faces.
Precision Drilling and Patterson-UTI compete to provide U.S. oil and gas producers with high-specification land rigs, generally paid for by the day while in use. Focus on Precision’s U.S. rig activity rather than its Canadian completion business when gauging demand facing Patterson-UTI.
RPC and Patterson-UTI compete for U.S. oil and gas producers’ spending on well-site work and downhole equipment. RPC’s Technical Services revenue covers equipment, operating crews and materials used at wells, making it a useful view of the well-service spending they share.
KLX Energy Services and Patterson-UTI compete to steer wells and provide related downhole services for onshore oil and gas producers across overlapping U.S. shale basins. Watch KLX’s directional-drilling and rental-tool business for demand for the drilling guidance and equipment Patterson-UTI also sells.
Nine Energy Service and Patterson-UTI compete for producers’ work preparing unconventional oil and gas wells for production. Nine’s North American completion business is the closer comparison; its completion-tool revenue also includes international sales.
Baker Hughes competes with Patterson-UTI to supply oil and gas producers with drilling and completion products and services, but also has substantial industrial-energy businesses. Watch its Oilfield Services & Equipment results rather than group-wide revenue for the closer read on Patterson-UTI’s markets.
Liberty Energy Inc. earningsLBRT
Liberty Energy's North American completion business shows how producers' spending and prices for services such as fracturing are changing in a market Patterson-UTI also serves.
Read Liberty Energy's North American completion revenue alongside what it says about service pricing and activity. Firm revenue and pricing would indicate that producers are still paying for fracturing and related work, easing competitive pressure on Patterson-UTI for similar jobs. Weakening revenue or prices would point to softer spending or tougher price competition in the same market, putting more pressure on Patterson-UTI's completion business.
EIA Crude Oil Stocks Change (Oct/16)
For Patterson-UTI, EIA weekly counts of crude oil and gasoline in storage signal whether fuel supply is tightening or loosening, which can move oil prices and, in turn, customers’ spending on its drilling and completion services and the rates they pay.
Expected-0.3MLast release-8.557M
If it comes in above expectations
If the reading is above the -0.3M estimate, it is above the previous -8.557M. If crude and fuel stocks are above the estimate, looser supply may weigh on oil prices and lead exploration and production customers to trim drilling and completion work or press for lower service rates, reducing Patterson-UTI’s billable activity or revenue per day or job.
If it comes in below expectations
If stocks are below the estimate, tighter supply may support oil prices and encourage customers to fund more drilling and completion work or accept firmer rates, potentially increasing Patterson-UTI’s billable activity or revenue per day or job.
Precision Drilling Corporation earningsPDS
Precision Drilling's U.S. rig activity and dayrates show demand and pricing for high-specification land rigs in a market where Patterson-UTI also competes.
Focus on how many of Precision Drilling's rigs are working in the U.S. and the dayrates they earn. Steady activity and dayrates would show that producers are still using and paying for high-specification rigs, supporting Patterson-UTI's chances of keeping its rigs working and rates firm. Falling activity or dayrates would mean tougher competition for drilling contracts and more pressure on Patterson-UTI's rig revenue.
Patterson-UTI Energy Inc earningsThis company
Patterson-UTI's report will show whether oil and gas producers' spending on completions and drilling is supporting its service profits and rig use.
Read Completion Services revenue alongside adjusted gross profit—the amount left after direct operating costs, before depreciation, amortization and impairment. Then check U.S. drilling operating days against Drilling Services revenue. Completion revenue holding up with gross profit would show that paid work is covering field costs; revenue without improved gross profit would point to pressure from service prices or materials costs. More drilling days supported by revenue would show rigs are working more, while fewer days leave fixed equipment costs spread across less work. Together, these figures show whether customer spending is supporting both service economics and rig use.
