On Jul 3, 2014, onshore contract driller, Patterson-UTI Energy Inc. (PTEN - Free Report) announced that its Jun 2014 drill rig count increased by 8 from May 2014 to reach an average of 210. The company operated 204 rigs in the U.S. and 6 in Canada last month.
Patterson-UTI revealed that for the three months ending Jun 30, the rig count of the company averaged 201 in the U.S. and 3 in Canada.
Patterson-UTI’s activity levels in the U.S. peaked in early Oct 2008, with a rig count of 275. Since then, through the second quarter of 2009, the company witnessed a sharp and rapid decline in rig count owing to decreased demand, largely caused by lower natural gas prices.
However, recently, the statistics have been improving on a rise in rig demand. Furthermore, as several companies are shifting focus on horizontal drilling, Patterson-UTI seems poised to benefit from its portfolio of high-specification rigs and a dominant market position.
Patterson-UTI is a major onshore contract driller in the U.S. with approximately 275 land-based rigs that operate mostly in the oil and natural gas producing regions of North America. The company’s technologically advanced ‘Apex’ rigs are the key to its success. Patterson-UTI’s proprietary design makes the rigs move faster than conventional rigs, drill quicker and more efficiently than conventional rigs, and allows a safer operating environment.
On the flip side, Patterson-UTI’s operating cost has been increasing significantly over the last three quarters. We are concerned about persistently rising expenses which might hamper the company’s future profitability.
As such, Patterson-UTI currently sports 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 same industry like Helmerich & Payne Inc. (HP - Free Report) , Parker Drilling Co. (PKD - Free Report) and Tesco Corporation (TESO - Free Report) . All these stocks carry a Zacks Rank #1 (Buy).