Patterson UTI (PTEN) Jumps on Impressive Horizontal Rig Count

Michael Teague |

Shares for Patterson-UTI Energy Inc. (PTEN) were trading 5 percent higher on Friday, on news that the oil and gas drilling and exploration company had some 190 rigs operating in the US and Canada.

The announcement is significant in that it comes in the wake of oilfield services leader Baker Hughes (BHI) released a report that indicated weaker demand for drilling rigs in the US. More than 100 of Patterson’s rig operate in the US.

The Baker Hughes report also showed that what demand does currently exist is the result of greater need for unconventional, horizontal drilling rigs that have the capability of tapping in to the US’s growing number of shale-based oil and natural gas deposits, and this is the source of Friday’s bullishness on Patterson’s stock.

Indeed, while other drillers, particularly Helmerlich & Payne (HP) currently operates the largest number of AC-powered horizontal drilling rigs in the US, with a total on average of about 270. Nabors Industries Ltd. (NBR) comes in second with 245 such rigs, but Patterson is catching up with a current and growing total of 117.

With a market-cap of $3.3 billion, however, Patterson is less than half the size of Helmerlich (nearly $8 billion), and is also smaller than Nabors (about $5 billion). Patterson has also been having a strong year, with its stock advancing over 20 percent in 2013, and looks to be on course to join the upper tier of mid-cap drillers and explorers.

The company is set to release its quarterly earnings statement on October 24. Shares were crawling steadily towards $24, approaching a 52-week high of $25.30 in Friday trading.



[Image Courtesy of Wikimedia Commons]

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Symbol Name Price Change % Volume
BHI Baker Hughes Incorporated 52.35 0.10 0.19 3,138,376
HP Helmerich & Payne Inc. 66.48 -0.50 -0.75 1,602,557
MHGI Midnight Hldgs Group Inc 0.00 0.00 0.00 0
NBR Nabors Industries Ltd. 13.05 -0.07 -0.53 6,290,703
PTEN Patterson-UTI Energy Inc. 24.40 0.30 1.24 2,655,805


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