Patterson-UTI sees U.S. Contract Drilling operating average of 114 rigs in Q2

The company said, “We see steady drilling and completion activity in oil basins, with the expectation that a few operators may add drilling rigs later this year based on current oil prices. Our activity in natural gas basins has so far been more resilient than we previously anticipated, although we have continued to see some activity decline in the second quarter. We currently expect our activity in natural gas basins will remain steady with second quarter levels through year-end. Within the Drilling Services segment, we expect U.S. Contract Drilling to operate an average of 114 U.S. rigs in the second quarter, with adjusted gross profit per operating day down roughly $300 from the prior quarter. Aside from U.S. Contract Drilling, we expect other Drilling Services adjusted gross profit will be down slightly in the second quarter compared to the prior quarter. Completion Services activity has declined slightly to start the second quarter, mostly in the natural gas basins where our customers continue to slow activity in response to current natural gas prices. We also expect to see a few dedicated fleets operate in the second quarter with planned gaps in the schedule. Completion Services revenue for the second quarter is expected to be approximately $860 million, with approximately $690 million in direct operating costs and an adjusted gross profit of around $170 million. We expect an improvement in activity in the third quarter as our dedicated and long-term customers resume completion activity after new pads are drilled. We are continuing our electric fleet deployment and remain on pace to have 140,000 horsepower of electric frac equipment working by mid-2024. Second quarter results in our Drilling Products segment are expected to be relatively in line with the first quarter, as continued growth in our International operations is expected to largely offset seasonal activity declines from Canadian spring breakup. For the second quarter, Other revenue and adjusted gross profit is expected to be roughly flat with the first quarter. For the second quarter, we expect selling, general and administrative expense of approximately $65 million, and depreciation, depletion, amortization, and impairment expense of approximately $265 million.”