One of the largest onshore contract drillers in the U.S., Patterson-UTI Energy Inc. (PTEN) has declared its May 2010 drill rig count to average 155, up from 150 in the previous month. The company operated 155 rigs in the U.S. and no rigs in Canada in May, compared with 148 rigs in the U.S. and 2 rigs in Canada during April.
Patterson-UTI’s activity levels in the U.S. peaked in early October 2008 with a rig count of 275. Since then, till the second quarter of 2009, the company witnessed a steep and rapid decline in rig count on the back of decreased demand, largely caused by lower commodity prices for natural gas and tighter access to credit.
However, during the last few quarters, there have been signs that companies were beginning to bring rigs back on line amid signs of economic stabilization that could drive up energy demand. This is reflected in Patterson-UTI’s monthly rig count numbers, which has recovered from a low of 60 in May 2009 to the current level of 155.
Patterson-UTI is one of the largest onshore contract drillers in the U.S. with approximately 350 land-based rigs that operate primarily, in the oil and natural gas producing regions of North America. The company primarily operates in Texas, New Mexico, Oklahoma, Arkansas, Louisiana, Mississippi, Colorado, Utah, Wyoming, Montana, North Dakota, Pennsylvania, West Virginia and western Canada. Additionally, Patterson-UTI is engaged in the exploration and production business and provides pressure pumping services.
Patterson-UTI is currently rated as Zacks #3 Rank (Hold), implying that the stock is expected to perform in line with the broader U.S. equity market over the next one to three months. This is supported by our Neutral recommendation, which implies that Patterson-UTI shares are expected to perform in line with the overall U.S. equity market over the next six to twelve months. Therefore, we advise investors to retain the stock over this time period.
Patterson-UTI’s activity levels in the U.S. peaked in early October 2008 with a rig count of 275. Since then, till the second quarter of 2009, the company witnessed a steep and rapid decline in rig count on the back of decreased demand, largely caused by lower commodity prices for natural gas and tighter access to credit.
However, during the last few quarters, there have been signs that companies were beginning to bring rigs back on line amid signs of economic stabilization that could drive up energy demand. This is reflected in Patterson-UTI’s monthly rig count numbers, which has recovered from a low of 60 in May 2009 to the current level of 155.
Patterson-UTI is one of the largest onshore contract drillers in the U.S. with approximately 350 land-based rigs that operate primarily, in the oil and natural gas producing regions of North America. The company primarily operates in Texas, New Mexico, Oklahoma, Arkansas, Louisiana, Mississippi, Colorado, Utah, Wyoming, Montana, North Dakota, Pennsylvania, West Virginia and western Canada. Additionally, Patterson-UTI is engaged in the exploration and production business and provides pressure pumping services.
Patterson-UTI is currently rated as Zacks #3 Rank (Hold), implying that the stock is expected to perform in line with the broader U.S. equity market over the next one to three months. This is supported by our Neutral recommendation, which implies that Patterson-UTI shares are expected to perform in line with the overall U.S. equity market over the next six to twelve months. Therefore, we advise investors to retain the stock over this time period.
Read the full analyst report on “PTEN”
Zacks Investment Research
