Patterson-UTI Energy’s Stock Price Returns after 4Q16



Patterson-UTI Energy’s stock price reaction

Patterson-UTI Energy (PTEN) released its financial results for 4Q16 on February 9, 2017. Its stock price reacted positively. It rose ~2% to $27.84 from the closing price on February 8.

National Oilwell Varco (NOV), Patterson-UTI Energy’s oilfield equipment and services peer, rose ~5.3% in after-hour trading from the closing price on February 6. Read Market Realist’s National Oilwell Varco’s 4Q16 Earnings Beat Estimates to learn more about National Oilwell Varco’s 4Q16 earnings.

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Patterson-UTI Energy’s stock price returns versus the industry

In the past year, Patterson-UTI Energy stock more than doubled as of February 9. In the past year, it outperformed the VanEck Vectors Oil Services ETF (OIH). OIH produced ~46% returns. Patterson-UTI Energy accounts for 3% of OIH, an ETF tracking an index of 25 OFS companies. The Energy Select Sector SPDR ETF (XLE), the broader energy industry ETF, produced 34% returns. Patterson-UTI Energy outperformed the SPDR S&P 500 ETF (SPY). SPY produced ~24% returns during the same period. The Dow Jones Industrial Average (DJIA-INDEX) rose 27% in the past year. Read Oil Prices Recover Due to Gasoline Demand and Short Covering for the latest on crude oil prices.

Will Patterson-UTI Energy’s new rig design improve returns?

Patterson-UTI Energy’s proprietary APEX-XC rig design offers a pad-optimal design with greater clearance for walking, larger drill pipe racking capacity, and a higher-torque top drive. Mark S. Siegel, Patterson-UTI Energy’s chairman, commented in the 4Q16 press release, “During 2017, we will introduce our new APEX-XC rig design to the market. This enhanced design is based on our experience as a leading high-spec drilling company and incorporates many of the features sought by a broad customer base of E&P companies, which are constantly seeking greater efficiency.”

Seventy Seven Energy acquisition

In January 2017, Patterson-UTI Energy filed initial form S-4 registration statement with the SEC following its bid to acquire Seventy Seven Energy (SVNT). On December 12, 2016, Patterson-UTI Energy disclosed that it agreed to acquire Seventy Seven Energy—a contract drilling, pressure pumping, and oilfield rental services provider. Read Oilfield Services Deal: PTEN Will Acquire Seventy Seven Energy to learn more.

Next, we’ll discuss Wall Street analysts’ targets for Patterson-UTI Energy.


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