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Patterson-UTI Energy Inc PTEN

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Morningstar’s Analysis

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Economic Moat


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Patterson's Results Improved in Q1, but Somewhat Disappointed Compared With Industrywide Recovery

Preston Caldwell Equity Analyst

Analyst Note

| Preston Caldwell |

While Patterson did experience sequential improvement in its first-quarter results, the magnitude of improvement was disappointing compared with the recovery in industrywide U.S. shale activity. Revenue increased 9% sequentially, driven mainly by a 16% improvement in the Contract Drilling segment. Adjusted operating margins were still an abysmal negative 49%, only slightly improved from the negative 56% of the prior quarter. However, for now our fair value and no-moat rating are unchanged following the results.

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Company Profile

Business Description

Patterson-UTI Energy is one of the largest North America-based land rig drilling contractors, and it also maintains moderately sized operations in pressure pumping and other business lines. Patterson was greatly boosted in size following its 2017 acquisition of Seventy Seven Energy.

10713 West Sam Houston Parkway North, Suite 800
Houston, TX, 77064
T +1 281 765-7100
Sector Energy
Industry Oil & Gas Drilling
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type Distressed
Employees 3,000