Recent M&A Activity Has PTEN Poised to Close 2023 as one of the Largest North American OFS Firms
Following several years of rampant oversupply, the U.S. rig market has spent the past several quarters operating near maximum capacity utilization, supporting significantly increased day rates. Drillers generally start to command pricing power at around 80% utilization, and the current operating environment has pushed average rig rates well over $30,000 per day. Elevated demand will preserve the status quo over the near-to-medium term, but we expect the fierce competition among drillers will prevail in the long run. Improved rig technologies have increased drilling efficiency, ultimately requiring fewer rigs to meet demand.