Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Onshore contract driller Patterson-UTI Energy Inc. (PTEN - Analyst Report) declared that its Nov 2013 drill rig count increased by seven from Oct 2013 to average 194. The company operated 184 rigs in the U.S. and 10 in Canada in November.

Patterson-UTI reveals that for the two months ending Nov 30, the rig count of the company averaged 181 in the U.S. and 10 in Canada.

Patterson-UTI’s activity levels in the U.S. peaked in early Oct 2008, with a rig count of 275. Since then, and through 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.

However, natural gas prices have recovered significantly from their multi-year lows amid signs of economic stabilization. Moreover, according to U.S Energy Information Administration (EIA), the winters of 2013 and 2014 are expected to be colder, compared to a relatively warm 2012 winter. Hence natural gas demand is expected to increase, which would help set an increasing price trend.   

Houston, Texas-based Patterson-UTI Energy is one of the largest onshore contract drillers in the U.S. with more than 300 land-based rigs that operate primarily in the oil and natural gas producing regions of North America. The company operates primarily in three segments – contract drilling, pressure pumping, and oil and natural gas production and exploration – with contract drilling being the most significant contributor to operating income.  

However, with a strong competitive market, there is excess availability of land drilling rigs as well as pressure pumping equipment. Hence, the company has lost some of its market share to competitors who offer better products and services at a cheaper rate.

Patterson-UTI currently retains a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile one can look at better-ranked players in the oil and gas drilling sector like Tesco Corporation (TESO - Snapshot Report), Helmerich & Payne Inc. (HP - Analyst Report) and Pacific Drilling SA (PACD - Snapshot Report). Tesco sports a Zacks Rank #1 (Strong Buy) while Helmerich & Payne and Pacific Drilling hold a Zacks Rank #2 (Buy). 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
BITAUTO HOLD BITA 34.95 +13.58%
E HOUSECHINA EJ 10.88 +8.10%
ANI PHARMACE ANIP 23.13 +6.98%
CANADIAN SOL CSIQ 26.62 +5.76%
KNIGHTSBRIDG VLCCF 12.41 +4.99%