We haven't had a look at Patterson-UTI's
Month |
Average Rigs Operating |
Change from Previous Month |
---|---|---|
July 2009 |
65 |
n/a |
August 2009 |
72 |
11% |
September 2009 |
81 |
13% |
October 2009 |
88 |
9% |
November 2009 |
104 |
18% |
December 2009 |
118 |
13% |
January 2010 |
136 |
15% |
Data from company press releases.
For the fourth quarter, Patterson-UTI's operating rig average jumped 41%, to 103, and the company is now at 145 rigs. The oil patch has clearly gotten busy since last summer, and activity continues to heat up in places like the Eagle Ford shale, where EOG Resources
Showing how tightly the company's financial results are tied to activity, Patterson-UTI's EBITDA rise by 37% compared with the third quarter. Partly on account of charges taken against a sizeable retirement of rigs, earnings stayed in the red for the quarter.
Additions of new Apex rigs in 2009 -- which are designed for drilling in unconventional resource plays -- nearly offset the 21 rig retirements in the fourth quarter, so Patterson isn't exactly withering away. Nineteen of the 21 retired rigs were located in West Texas, which underlines the plunge in conventional drilling activity in that state.
Looking ahead to 2010, Patterson-UTI sees a rapid expansion in the Marcellus, where the company has 16 rigs operating. The stated plans of companies like Talisman
As far as valuation goes, Patterson-UTI's no longer clearly trading well below replacement cost, as it was at this time last year. Things really change in a heartbeat in this business, so these shares are certainly not suitable for all investors.
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Fool contributor Toby Shute doesn't have a position in any company mentioned. Check out his Motley Fool CAPS profile or follow his articles using Twitter or RSS. The Fool owns shares of Chesapeake Energy. Drill into The Motley Fool's disclosure policy.