Patterson-UTI (PTEN) November Rig Count Decreases to 219 - Analyst Blog

Onshore contract driller, Patterson-UTI Energy Inc. (PTEN) declared that its Nov 2014 drill rig count has decreased by 2 from Oct 2014 to reach an average of 219. The company operated 209 rigs in the U.S. and 10 in Canada last month.

Patterson-UTI also revealed that for the two months ending Nov 30, its rig count averaged 210 in the U.S. and 10 in Canada.

Patterson-UTI is a major onshore contract driller in the U.S. with over 275 land-based rigs that operate primarily in the oil and natural gas producing regions of North America. The company's increasing premium land rig fleet and the expected rise in demand for such services should lead to further growth in the near term.

Moreover, owing to the emergence of major shale plays that are yielding impressive results over the last few years, there has been an overwhelming requirement of increasingly complex drilling. With its technologically advanced ‘Apex' rigs – that command higher dayrates and utilization – constituting around 65% of its total fleet, Patterson-UTI is well poised for further expansion in the shale-drilling market. Additionally, onshore drillers like Patterson-UTI are set to benefit from growth in oil-focused horizontal drilling.

However, due to weakened oil prices – the commodity having fallen to multi-year lows – several upstream companies are cutting their capital budget as maintaining profitability has become a challenge. This could hamper financials of the likes of Patterson-UTI which depend on contracts from upstream companies for revenue generation.

Houston, TX based Patterson-UTI currently carries a Zacks Rank #3 (Hold).

Better-ranked players from the broader energy sector include Seadrill Partners LLC (SDLP), Murphy USA Inc. (MUSA) and Cheniere Energy Partners LP. (CQP). All these sport a Zacks Rank #1 (Strong Buy).