How Much Will Rig Count Affect Patterson-UTI Energy in Fiscal 3Q16?



Revenue growth

Patterson-UTI Energy (PTEN) primarily generates its revenues in the US. In the past year, Patterson-UTI Energy’s revenue has come down. In fiscal 2Q16, PTEN’s revenue decreased by 59% over fiscal 2Q15. By comparison, Flotek Industries’ (FTK) revenue share from the US declined to 75% as compared to 84% in 2Q15.

Notably, PTEN makes up only 0.56% of the WisdomTree SmallCap Dividend Fund ETF (DES), whereas the energy sector makes up 4.5% of DES.

Article continues below advertisement

US rig count

In 2Q16, the US rig count declined by 51% over one year previously. During this period, the international rig count decreased by only 19%.

From June 30 to August 19, 60 rigs were added in the US. Remember, a higher US rig count could improve PTEN’s revenues and earnings in fiscal 3Q16. Other factors that can affect PTEN’s results include energy prices, contract drilling rate, rig utilization, and excess availability of land drilling rigs and pressure pumping equipment.

Now let’s discuss Patterson-UTI Energy’s indebtedness.


More From Market Realist