Patterson-UTI Slashes Rig-Build Program

Posted by Joseph Keefe February 5, 2015

Land rig provider Patterson-UTI Energy Inc has halved its full-year rig construction program to 16 new high-tech APEX rigs as oil producers cut back on drilling due to weak prices.

Patterson's decision follows rival Helmerich & Payne Inc's announcement last week that it would halve its FlexRig construction program.

Oil producers have been slashing capital expenditure budgets in the wake of a sustained fall in oil prices, dealing a blow to rig providers and oilfield service providers.

Patterson also said on Thursday that it would cut its capital spending budget by about 29 percent for 2015.

The company, which had earlier planned to build eight new APEX rigs each quarter, set a capital budget of about $750 million for the year.

Patterson, which had an average of 210 rigs drilling in the United States in the fourth quarter, said its U.S. rig count had dropped 17 percent since peaking in October.

The company also said headcount had "decreased at a slightly higher rate", without giving more details.

Patterson's net income more than tripled to $57.6 million, or 39 cents per share, in the quarter ended Dec. 31.

Revenue rose nearly 37 percent to $901.2 million.

The company's shares closed at $16.94 on the Nasdaq on Wednesday.