Earlier this year, I told you not to pity Patterson-UTI
Then again, under-priced shares are really not such a bad thing when you've got the cash to hoover them up from skittish sellers. Patterson is perfectly well positioned to pick up shares at a real fire sale price. (Look, Ma -- no debt!) In the most recent quarter, the company bought back around $50 million worth at nearly double today's prices. Fortunately, that's just a fraction of the total repurchase authorization.
The company's earnings report doesn't give us too much of an idea of what to expect going forward. For example, I wouldn't expect to see earnings stay above $100 million in future quarters. However, on the conference call, management pointed out that natural gas prices aren't much different than they were a year ago. So, last year's results may actually be more informative as we look forward.
By now we know that most exploration and production companies, from Newfield Exploration
Remember this much, Fools: Declining rates are your best friend. Once rigs get laid down, production is going to drop, fast -- perhaps faster than in any previous downturn. That's the self-correcting mechanism that, along with a clean balance sheet, keeps Patterson-UTI out of the poorhouse.