Inconvenient Truth: Recovery But No Recovery at Driller Patterson-UTI
Patterson-UTI Energy had an average of 88 drilling rigs operating in October, up from an average count of 73 in the third-quarter ended September. Talk of a significant recovery in demand might be premature, however, given the current supply overhang in the natural gas market. With about 350 marketable rigs, Patterson-UTI is the second largest onshore driller in North America, behind Nabors Industries. Size has not immunized the company to the downturn, as average revenue per operating day declined 5.5 percent year-on-year to $16,800. In addition to pricing power residing with producers, the drilling slowdown has eroded the company’s U.S. land rig market share, which is down some 50 percent in the last 24 months to about 7.5 percent. Competitor…
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