Patterson-UTI Energy Announces Non-Cash Charge of $37.8M on Mechanical Drilling Rigs

PATTERSON-UTI ENERGY. PTEN today announced that it will incur a pretax non-cash charge of approximately $37.8 million (or an estimated $24.0 million after-tax) related to its mechanically powered rig fleet.  This charge reflects the recent shift in customer demand away from mechanically powered drilling rigs to electric powered drilling rigs.  This pretax non-cash charge includes $7.9 million from the retirement of 48 of its mechanical drilling rigs and certain spare parts in the fourth quarter of 2013. These rigs are primarily smaller mechanical units with an average horsepower rating of 731.  This pretax non-cash charge also includes $29.9 million associated with the Company's 55 mechanical rigs that are not currently under contract.  Although these 55 rigs remain marketable, the Company has lower expectations with respect to utilization of these rigs due to the industry shift to high-spec drilling rigs, such as our APEX® rigs.  See full press release