Infill Thinking Lifting the O&G knowledge curve
One month ago, we wrote in an update to Infill Thinking subscribers that Patterson-UTI was likely to pre-announce better than expected results for 4Q16.
Late Monday afternoon, the company did exactly that.
Patterson-UTI said in a pre-announcement that its sales during the past quarter were 7% higher than analysts have been forecasting. The company also disclosed that its profits came in 15% above expectations during 4Q16.
Specifically, Patterson-UTI now expects to print 4Q16 revenue of $247mm and EBITDA of $44mm when it reports earnings on February 9. The 24 Wall Street analysts polled by Financial Times were looking for revenue of $231mm, and we believe consensus EBITDA expectations were around $39mm.
The company has continued to grow nicely beyond the positive 4Q16 surprise – its business buoyed by higher 2017 E&P capex budgets in the US onshore market as the year begins.
As of today, the company is running 77 rigs in the US. That is up nicely from the December average of 71 rigs running for Patterson-UTI.
On the pressure pumping side, Patterson-UTI reactivated two frac spreads in the past 30 days for a cost of about $2mm per spread (including opex and capex). This reactivation cost appears to be well below the $10-$12mm Halliburton estimates it will spend to reactivate spreads this year. However, Halliburton has said that its costs are “fully loaded” indicating that its completion peers may not be fully disclosing all the indirect costs that go with resurrecting equipment.
There’s a lot more to this story…
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