July 23, 2015 / 11:51 AM / 3 years ago

UPDATE 1-Drillers Patterson-UTI, Precision gain from high-tech rig demand

(Adds details, background, shares)

July 23 (Reuters) - Two North American land drilling-rig operators - Patterson-UTI Energy Inc and Precision Drilling Corp - issued positive outlooks on Thursday, highlighting the competitive advantage of drillers using newer, high-tech rigs.

Snyder, Texas-based Patterson-UTI said its margins were improving and its U.S. rig count was stabilizing, while Calgary-based Precision Drilling said it expected its market share to improve due to demand for high-tech rigs.

Modern, faster rigs are cheaper to run and drill more efficiently than the older rigs still used by many drillers.

That makes them a must-have for oil and gas companies trying to rein in spending in the face of weak oil prices. Crude oil prices have more than halved since June last year.

Cost-cutting is also helping the drilling companies protect their margins. Precision Drilling said in April it had 2,200 fewer employees than at the end of 2014.

“Although we have no visibility into a recovery at this time, we believe that our rig count appears to be stabilizing,” Patterson-UTI Chief Executive Andy Hendricks said in a statement accompanying the company’s second-quarter results.

Ongoing cost-cutting efforts in the company’s contract drilling business, especially in the pressure pumping unit, have resulted in better-than-expected margins, he said.

Patterson-UTI, which had an average 122 rigs in operation in the United states in the quarter, said it expected the average rig count in July to be consistent with the second-quarter U.S. exit rate of 110.

Patterson-UTI’s revenue fell nearly 38 percent to $472.8 million in the three months ended June 30. The company reported a net loss of about 13 cents per share, compared with a year-earlier profit of 37 cents per share.

Precision Drilling posted a loss of 10 Canadian cents per share, compared with the loss of 2 cents per share it reported in the second quarter of 2014.

Revenue fell nearly 30 percent to C$334.5 million.

Patterson-UTI shares closed at $16.70 on Wednesday on the Nasdaq, while Precision Drilling closed at C$6.71 in Toronto. Both stocks have more than halved in value in the past year. (Reporting by Shubhankar Chakravorty and Anannya Pramanick in Bengaluru; Editing by Savio D’Souza and Ted Kerr)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below