PATTERSON UTI ENERGY INC
For the period ended Jun 30, 2025. Filed Jul 29, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Jul 29, 2025
PTEN$9.92-0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-04-29.
0001628280-25-020675
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-07-29.
0000889900-25-000058
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 111 previous paragraphs and 138 current paragraphs.
51 unchanged; 45 reworded; 37 added; 11 removed; 4 previous and 5 current paragraphs rearranged.
Tables are not compared: 11 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (37)
Current report
In our Drilling Services segment for the third quarter of 2025, we expect our average rig count will be in the mid-90s, with the sequential change driven by moderating activity in oil basins compared to the second quarter and steady activity in natural gas basins.
Current report
In our Drilling Products segment for the third quarter of 2025, we expect adjusted gross profit will improve slightly, sequentially. We expect that the Canadian market should resume normal activity following the second quarter seasonal spring breakup, and we expect slight gains in our International markets, partially offset by lower industry drilling activity in the United States.
Current report
Total revenues and average revenue per operating day decreased primarily due to a decrease in operating days in our contract drilling business within the United States and lower pricing. The increase in direct operating costs and average direct operating costs per operating day was primarily impacted by the fixed cost leverage for U.S. drilling rigs during the three months ended June 30, 2025.
Current report
Depreciation, amortization and impairment expense increased primarily due to a $27.8 million impairment charge to Latin American drilling equipment during the second quarter of 2025. See Note 5 of Notes to unaudited condensed consolidated financial statements for additional information.
Current report
Other operating income, net, increased due to insurance proceeds received during the second quarter of 2025.
Current report
Selling, general and administrative expenses decreased primarily as a result of cost reduction efforts.
Current report
(1)Other includes our oilfield rentals business, prior to its divestiture in April 2025, and oil and natural gas working interests.
Current report
(2)Adjusted gross profit is defined as revenues less direct operating costs (excluding depreciation, depletion, amortization and impairment expense). See Non-GAAP Financial Measures below for a reconciliation of GAAP gross profit to adjusted gross profit by segment.
Current report
The changes for the three months ended June 30, 2025 as compared to the three months ended March 31, 2025 can be primarily attributed to the divestiture of our oilfield rentals business during the second quarter of 2025. In order to provide a more meaningful basis for comparison, the discussion below is focused on changes between comparable periods excluding the effects of the divestiture.
Current report
Revenues and direct operating costs, excluding the effects of our oilfield rentals business divestiture, were relatively flat between sequential quarters.
Current report
Depreciation, depletion, amortization and impairment expense, excluding the effects of our oilfield rentals business divestiture, was relatively flat between sequential quarters.
Current report
Corporate expenses were relatively flat between sequential quarters.
Current report
Results of Operations
Current report
Total revenues and direct operating costs decreased primarily due to a decrease in operating days in our contract drilling business within the United States. However, average revenue per operating day decreased disproportionately as compared to the decrease in average direct operating costs per operating day. The decline in operating days impacted the fixed cost leverage for U.S. drilling rigs during the six months ended June 30, 2025.
Current report
Other operating income, net, increased due to insurance proceeds received during the second quarter of 2025.
Current report
Capital expenditures decreased primarily due to the timing of order placement as well as lower maintenance capital expenditures due to fewer operating days.
Current report
(1)Other includes our oilfield rentals business, prior to its divestiture in April 2025, and oil and natural gas working interests.
Current report
(2)Adjusted gross profit is defined as revenues less direct operating costs (excluding depreciation, depletion, amortization and impairment expense). See Non-GAAP Financial Measures below for a reconciliation of GAAP gross profit to adjusted gross profit by segment.
Current report
The changes for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 can be primarily attributed to the divestiture of our oilfield rentals business during the second quarter of 2025. In order to provide a more meaningful basis for comparison, the discussion below is focused on changes between comparable periods excluding the effects of the divestiture.
Current report
Excluding the effects of our oilfield rentals business divestiture, the decrease in revenue and direct operating costs was driven by lower realized crude oil prices. Oil prices averaged $68.12 per barrel in the first half of 2025 as compared to $79.69 per barrel in the first half of 2024.
Current report
Depreciation, depletion, amortization and impairment expense, excluding the effects of our oilfield rentals business divestiture, was relatively flat between the periods.
Current report
Interest expense was relatively flat between the periods.
Current report
The increase in capital expenditures was primarily due to the expansion of our Corporate office.
Current report
We continue to monitor income tax developments in the United States and other countries where we have legal entities. On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law in the United States. This legislation includes several changes to existing income tax provisions with certain changes effective in 2025 and others implemented through 2027. We are currently evaluating the impact of the OBBBA on our consolidated financial statements.
Current report
•$6.4 million to repay the Equipment Loans;
Current report
Impairment of long-lived assets — We review our long-lived assets, including property and equipment and definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amounts of certain assets may not be recovered over their estimated remaining useful lives (“triggering events”). In connection with this review, assets are grouped at the lowest level at which identifiable cash flows are largely independent of other asset groupings. We estimated future cash flows over the life of the respective assets or asset groupings in our assessment of its recoverability. These estimates of cash flows were based on historical trends in the industry as well as our expectations regarding the continuation of these trends in the future.
Current report
Negative market indicators such as lower industry-wide drilling rig and pressure pumping fleet count forecasts, increased volatility and margin compression for certain of our asset groups have led to our reduced outlook for activity. The reduction in activity forecasts combined with the recent decline in the market price of our common stock were considered a triggering event indicating certain of our long-lived tangible and intangible assets may be impaired. We deemed it necessary to perform recoverability tests on our hydraulic fracturing asset group within our completion services reporting unit and our Latin American contract drilling asset group during the second quarter of 2025. We estimated future cash flows over the expected remaining life of the primary asset for each asset group. On an undiscounted basis, the expected cash flows exceeded the carrying value of our hydraulic fracturing asset group within our completion services reporting unit, indicating that no impairment was required.
Current report
The recoverability test for our Latin American contract drilling asset group indicated that estimated undiscounted cash flows did not exceed its carrying value. Accordingly, we performed an impairment test and estimated the fair value of the asset group using the income approach. Under this approach, we used a discounted cash flow model, which utilized present values of cash flows to estimate fair value. Forecasted cash flows reflected known market conditions in the second quarter of 2025 and management’s anticipated business outlook for the asset group. Future cash flows were projected based on estimates of revenue, gross profit, selling, general and administrative expense, changes in working capital, and capital expenditures. Future cash flows were then discounted using a market-participant, risk-adjusted weighted average cost of capital. Based on the results of the analysis performed, we recorded a $27.8 million impairment charge to Latin American drilling equipment during the three months ended June 30, 2025 in our drilling services segment.
Current report
While the full effects of recent market developments are yet to be determined, prolonged trade tensions and sustained lower crude oil futures prices could adversely affect our future outlook on activity and profitability. If these conditions persist or deteriorate further, or if other unforeseen macroeconomic conditions emerge, they could negatively impact the expected cash flows used in our recoverability tests for our asset groups. Such changes could result in impairment charges in the future, which could be material to our results of operations and financial statements as a whole.
Current report
Goodwill — We assess goodwill at least annually on July 31, or more frequently if impairment indicators arise. Goodwill is tested at the reporting unit level, which is at or one level below our operating segments. We determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value after considering qualitative, market and other factors. Any necessary goodwill impairment is determined using a quantitative impairment test. If the resulting fair value of goodwill is less than the carrying value of goodwill, an impairment loss would be recognized for the amount of the shortfall. The fair value of a reporting unit is determined using significant unobservable inputs, or level 3 in the fair value hierarchy. These inputs are based on forecasts and significant judgment.
Current report
We determined our drilling products operating segment consists of a single reporting unit to which the goodwill from our 2023 acquisition of Ulterra Drilling Technologies, L.P. was allocated. We determined our completion services operating segment consisted of two reporting units; completion services, which was primarily comprised of our hydraulic fracturing operations and other integrated service offerings, and cementing services.
Current report
During the second quarter of 2025, we viewed the reduction in activity forecasts combined with the decline in the market price of our common stock as a triggering event that warranted a quantitative assessment for goodwill impairment.
Current report
We estimated the fair value of the drilling products and cementing services reporting units using the income approach. Under this approach, we used a discounted cash flow model, which utilized present values of cash flows to estimate fair value. Forecasted cash flows reflected known market conditions in the second quarter of 2025 and the expected market outlook. Future cash flows were projected based on estimates of revenue growth rates, gross profit, selling, general and administrative expense, changes in working capital, and capital expenditures. The terminal period used within the discounted cash flow model consisted of a growth estimate. Future cash flows were then discounted using a market-participant, risk-adjusted weighted average cost of capital. Financial and credit market volatility directly impacts our fair value measurement through the weighted average cost of capital used to determine a discount rate. During times of volatility, significant judgment must be applied to determine whether credit market changes are a short-term or long-term trend.
Current report
The forecast for the cementing services reporting unit assumed lower activity in 2026 compared to estimated average activity levels for full year 2025 and moderate growth estimates thereafter. Those estimates were based on future drilling rig count forecasts during the second quarter of 2025 and estimated market share. Based on the results of the goodwill impairment test, the fair value of the cementing services reporting unit exceeded its carrying value with a substantial cushion. Accordingly, no impairment was recorded.
Current report
The forecast for the drilling products reporting unit assumed lower activity during 2025 relative to 2024, with growth estimates thereafter. The increases in estimated activity assumed growth in both domestic and international markets. Those growth estimates were based on drilling rig count forecasts and estimated market share. Geopolitical instability in regions in which we expect to maintain and grow market share, an unfavorable legal proceeding outcome, a global decrease in the demand of drilling products or other unforeseen macroeconomic considerations could negatively impact the key assumptions used in our goodwill assessment for our drilling products reporting unit. Based on the results of the goodwill impairment test, the fair value of the drilling products reporting unit exceeded its carrying value by approximately 8%. Accordingly, no impairment was recorded.
Current report
Assuming all changes are isolated, a decrease of 100 bps in our long-term revenue growth rate for our drilling products reporting unit would reduce our estimated fair value by approximately 7%, while a 100 bps increase to our discount rate would reduce our estimated fair value by approximately 10%.
Current report
A decrease in fair value resulting from unfavorable changes to these assumptions, or others, could result in goodwill impairment in future periods that could be material to our results of operations and financial statements as a whole.
Removed paragraphs (11)
Previous report
In our Drilling Services segment for the second quarter of 2025, we expect our average daily rig count to remain relatively steady compared to the first quarter. We expect adjusted gross profit within the Drilling Services segment to decline slightly, with the sequential change driven by a reduction in average contracted revenue as existing term contracts with more favorable pricing expire, as well as some normal seasonal increase in costs.
Previous report
In our Drilling Products segment for the second quarter of 2025, we expect sequential adjusted gross profit to remain relatively flat compared to the first quarter, with steady activity in the United States. We expect impacts from the normal seasonal spring breakup in Canada to be mostly offset by higher International revenue in the rest of the world.
Previous report
As of March 31, 2025, we had no borrowings outstanding under our Credit Agreement. We had $2.0 million in letters of credit outstanding under the Credit Agreement at March 31, 2025 and, as a result, had available borrowing capacity of approximately $498 million at that date.
Previous report
Capital expenditures decreased primarily due to reduced investment in our ancillary drilling services not included within our contract drilling business.
Previous report
Depreciation, amortization and impairment expense decreased primarily due to $20.8 million of accelerated depreciation recognized in the fourth quarter of 2024.
Previous report
Revenues and direct operating costs were relatively flat between the quarters.
Previous report
Depreciation, depletion, amortization and impairment expense increased primarily due to a $1.7 million impairment charge recorded in our oil and natural gas properties business during the first quarter of 2025.
Previous report
Revenues and direct operating costs decreased primarily due to lower activity as a result of lower crude oil and natural gas market prices. Oil prices averaged $71.78 per barrel in the first quarter of 2025, as compared to $77.50 per barrel in the first quarter of 2024.
Previous report
Selling, general and administrative expense decreased primarily due to certain severance costs incurred in the fourth quarter that did not recur as well as a continued focus on cost reduction efforts.
Previous report
Other income (expense) during the first quarter of 2025 included $1.4 million of income from an unconsolidated joint venture.
Previous report
We continue to monitor income tax developments in the United States and other countries where we have legal entities. We will incorporate into our future financial statements the impacts, if any, of future regulations and additional authoritative guidance when finalized.
Reworded paragraphs (45)
Previous wording
We have addressed our customers’ needs for drilling horizontal wells in shale and other unconventional resource plays by improving the capabilities of our drilling fleet. The U.S. land rig industry has in recent years referred to certain high specification rigs as “super-spec” rigs, which we consider to be at least a 1,500 horsepower, AC-powered rig that has at least a 750,000-pound hookload, a 7,500-psi circulating system, and is pad-capable. Due to evolving customer preferences, we refer to certain premium rigs as “Tier-1, super spec” rigs, which we consider as being a super-spec rig that also has a third mud pump and raised drawworks that allows for more clearance underneath the rig floor. As of March 31, 2025, our rig fleet included 135 Tier-1, super-spec rigs.
Current wording
We have addressed our customers’ needs for drilling horizontal wells in shale and other unconventional resource plays by improving the capabilities of our drilling fleet. The U.S. land rig industry has in recent years referred to certain high specification rigs as “super-spec” rigs, which we consider to be at least a 1,500 horsepower, AC-powered rig that has at least a 750,000-pound hookload, a 7,500-psi circulating system, and is pad-capable. Due to evolving customer preferences, we refer to certain premium rigs as “Tier-1, super spec” rigs, which we consider as being a super-spec rig that also has a third mud pump and raised drawworks that allows for more clearance underneath the rig floor. As of June 30, 2025, our rig fleet included 136 Tier-1, super-spec rigs.
Previous wording
Recent Developments in Market Conditions and Outlook — Commodity prices have historically been volatile but were relatively range-bound from the end of 2022 through the first quarter of 2025. The current demand for equipment and services remains impacted by macro conditions, including commodity prices, geopolitical environment, changes to international tariffs and trade policies, inflationary pressures, economic conditions in the United States and elsewhere, as well as customer consolidation and focus by exploration and production companies and service companies on capital returns. Subsequent to March 31, 2025, global economic conditions deteriorated, in part, because of recently enacted trade policies and tariffs implemented by the United States and other governments, as well as uncertainty regarding potential future changes to global trade policies and tariffs. Additionally, subsequent to March 31, 2025, several OPEC+ countries announced plans to phase out existing crude oil output cuts earlier than anticipated. These developments and geopolitical tensions have introduced increased uncertainty in global energy markets, which has contributed to a decline in our share price, lowered crude oil futures prices and increased uncertainty regarding the future economic environment in which we operate. The recent deterioration in macroeconomic conditions and the decline in our share price occurred after the balance sheet date and do not reflect conditions that existed as of March 31, 2025. Accordingly, these developments have not been reflected in the unaudited condensed consolidated financial statements for the three months ended March 31, 2025. While the full effects are yet to be determined, prolonged trade tensions and sustained lower crude oil futures prices could adversely affect our future outlook on activity and profitability. Oil prices averaged $71.78 per barrel in the first quarter of 2025, as compared to $70.73 per barrel in the fourth quarter of 2024, and closed at $63.48 per barrel on April 21, 2025. Natural gas prices (based on the Henry Hub Spot Market Price) averaged $4.14 per MMBtu in the first quarter of 2025 as compared to an average of $2.45 per MMBtu in the fourth quarter of 2024, and closed at $3.16 per MMBtu on April 21, 2025.
Current wording
Recent Developments in Market Conditions and Outlook — Commodity prices have historically been volatile but were relatively range-bound from the end of 2022 through the first quarter of 2025. The current demand for equipment and services remains impacted by macro conditions, including commodity prices, geopolitical environment, changes to international tariffs and trade policies, inflationary pressures, economic conditions in the United States and elsewhere, as well as customer consolidation and focus by exploration and production companies and service companies on capital returns. During the second quarter of 2025, global economic conditions deteriorated, in part, because of recently enacted and proposed trade policies and tariffs by the United States and other governments, as well as uncertainty regarding potential future changes to global trade policies and tariffs. Additionally, during the second quarter of 2025, OPEC+ countries began phasing out voluntary crude oil production cuts, leading to an increase in global supply. These developments, combined with rising geopolitical tensions—particularly in the Middle East—have heightened uncertainty in global energy markets, which has contributed to a decline in our share price, lowered average crude oil futures prices and increased uncertainty regarding the future economic environment in which we operate. While the full effects are yet to be determined, and commodity prices have modesty recovered from the lows in the second quarter, prolonged trade tensions and sustained lower crude oil futures prices could adversely affect our future outlook on activity and profitability. Oil prices averaged $64.57 per barrel in the second quarter of 2025, as compared to $71.78 per barrel in the first quarter of 2025, and closed at $68.39 per barrel on July 21, 2025. Natural gas prices (based on the Henry Hub Spot Market Price) averaged $3.19 per MMBtu in the second quarter of 2025 as compared to an average of $4.14 per MMBtu in the first quarter of 2025, and closed at $3.50 per MMBtu on July 21, 2025.
Previous wording
Our average active rig count in the United States for the first quarter of 2025 was 106 rigs. This was an increase from our average active rig count for the fourth quarter of 2024 of 105. Term contracts help support our operating rig count. Based on contracts in place in the United States as of April 24, 2025, we expect an average of 62 rigs operating under term contracts during the second quarter of 2025 and an average of 35 rigs operating under term contracts during the four quarters ending March 31, 2026.
Current wording
Our average active rig count in the United States for the second quarter of 2025 was 104 rigs. This was a decrease from our average active rig count for the first quarter of 2025 of 106. Term contracts help support our operating rig count. Based on contracts in place in the United States as of July 24, 2025, we expect an average of 48 rigs operating under term contracts during the third quarter of 2025 and an average of 27 rigs operating under term contracts during the four quarters ending June 30, 2026.
Previous wording
We maintain a backlog of commitments for contract drilling services under term contracts, which we define as contracts with a duration of six months or more. Our contract drilling backlog in the United States as of March 31, 2025 was approximately $407 million. Approximately 9% of our total contract drilling backlog in the United States at March 31, 2025 is reasonably expected to remain at March 31, 2026. See Note 2 of Notes to unaudited condensed consolidated financial statements for additional information on backlog.
Current wording
We maintain a backlog of commitments for contract drilling services under term contracts, which we define as contracts with a duration of six months or more. Our contract drilling backlog in the United States as of June 30, 2025 was approximately $312 million. Approximately 9% of our total contract drilling backlog in the United States at June 30, 2025 is reasonably expected to remain at June 30, 2026. See Note 2 of Notes to unaudited condensed consolidated financial statements for additional information on backlog.
Previous wording
In our Completion Services segment for the second quarter of 2025, we currently expect activity to remain relatively steady as compared to activity levels at the end of the first quarter, although current oil prices may impact demand for completion services later in the second quarter. We expect second quarter Completion Services adjusted gross profit to decline slightly, sequentially.
Current wording
In our Completion Services segment for the third quarter of 2025, we expect activity to be steady compared to the second quarter. We expect third quarter Completion Services adjusted gross profit to remain steady with the second quarter.
Previous wording
For the three months ended March 31, 2025, December 31, 2024, and March 31, 2024 our operating revenues consisted of the following (dollars in thousands):
Current wording
For the three months ended June 30, 2025 and March 31, 2025 and for the six months ended June 30, 2025 and June 30, 2024 our operating revenues consisted of the following (dollars in thousands):
Previous wording
Capital expenditures increased primarily due to spending related to maintenance capital and the timing of order placement that more heavily impacted the first quarter of 2025.
Current wording
Capital expenditures decreased primarily due to the timing of order placement and spending on committed deliveries that more heavily impacted the first quarter of 2025.
Previous wording
Revenues and direct operating costs were relatively flat between sequential quarters.
Current wording
Completion services revenues and direct operating costs declined primarily due to a decline in activity in our fracturing and power solutions operations. Revenues from these operations collectively decreased $35 million, and direct operating costs for these operations collectively decreased by $31 million, or 5% and 6%, respectively, from the first quarter of 2025.
Previous wording
Completion services revenues and direct operating costs increased primarily due to seasonal recovery as customer budgets reset in the first quarter. The higher revenues and direct operating costs were primarily from our fracturing operations, which increased $86 million and $82 million, or 17% and 18%, respectively. The increases were primarily activity driven, with pumping hours increasing 23% during the first quarter of 2025.
Current wording
Revenues and direct operating costs increased primarily due to additional activity.
Previous wording
Direct operating costs and depreciation, amortization and impairment expense were approximately $0.6 million and $2.3 million higher than they would have otherwise been for the three months ended March 31, 2025, respectively, as a result of the step up to fair value of our drill bits in accordance with purchase accounting. For the three months ended December 31, 2024, direct operating costs and depreciation, amortization and impairment expense were approximately $3.1 million and $6.1 million higher than they would have otherwise been, respectively, as a result of the step up to fair value of our drill bits.
Current wording
Direct operating costs and depreciation, amortization and impairment expense were approximately $0.5 million and $1.6 million higher than they would have otherwise been for the three months ended June 30, 2025, respectively, as a result of the step up to fair value of our drill bits in accordance with purchase accounting. For the three months ended March 31, 2025, direct operating costs and depreciation, amortization and impairment expense were approximately $0.6 million and $2.3 million higher than they would have otherwise been, respectively, as a result of the step up to fair value of our drill bits.
Previous wording
Revenues and direct operating costs decreased due to a decrease in operating days for our U.S. contract drilling operations.
Current wording
The decrease in operating days for our U.S. contract drilling business reflects the industry-wide activity declines during the first six months of 2025.
Previous wording
The decrease in depreciation, amortization and impairment expense was attributable to a lower depreciable asset base in the first quarter of 2025, in part, due to the abandonment of 42 legacy non-super-spec rigs and equipment in the third quarter of 2024.
Current wording
Depreciation, amortization and impairment expense increased primarily due to a $27.8 million impairment charge to Latin American drilling equipment during the second quarter of 2025. This increase was partially offset by a decrease in depreciation, amortization and impairment expense which was attributable to a lower depreciable asset base in 2025, in part, due to the abandonment of 42 legacy non-super-spec rigs and equipment in the third quarter of 2024. See Note 5 of Notes to unaudited condensed consolidated financial statements and Note 6 in Notes to consolidated financial statements in Item 8 of our Annual Report for additional information.
Previous wording
Completion services revenues and direct operating costs decreased primarily due to lower activity in our fracturing operations. Revenues and direct operating costs from our fracturing operations decreased by $170 million and $84 million, or 21% and 13%, respectively.
Current wording
Completion services revenues and direct operating costs decreased primarily due to lower activity in our fracturing operations. Revenues and direct operating costs from our fracturing operations decreased by approximately $250 million and $123 million, or 17% and 11%, respectively.
Previous wording
Other operating income, net in the first quarter of 2024 was due to a gain on legal settlement.
Current wording
Other operating income, net in 2024 was due to gain on legal settlements.
Previous wording
We reduced capital expenditures in response to the changing macroeconomic conditions between the periods.
Current wording
We reduced capital expenditures in response to changing macroeconomic conditions between the periods.
Previous wording
Revenues and direct operating costs, both on a total and per operating day basis, were relatively flat between sequential quarters.
Current wording
Revenues and direct operating costs were relatively flat between the periods.
Previous wording
Direct operating costs and depreciation, amortization and impairment expense were approximately $0.6 million and $2.3 million higher than they would have otherwise been for the three months ended March 31, 2025, respectively, as a result of the step up to fair value of our drill bits in accordance with purchase accounting. For the three months ended March 31, 2024, direct operating costs and depreciation, amortization and impairment were approximately $2.2 million and $5.8 million higher, respectively, as a result of the step up to fair value of our drill bits.
Current wording
Direct operating costs and depreciation, amortization and impairment expense were approximately $1.1 million and $3.8 million higher than they would have otherwise been for the six months ended June 30, 2025, respectively, as a result of the step up to fair value of our drill bits in accordance with purchase accounting. Direct operating costs and depreciation, amortization and impairment expense were approximately $3.8 million and $9.1 million higher than they would have otherwise been for the six months ended June 30, 2024, respectively, as a result of the step up to fair value of our drill bits in accordance with purchase accounting.
Previous wording
Merger and integration expense decreased due to the passage of time since closing the NexTier merger and the Ulterra acquisition in third quarter of 2023.
Current wording
Merger and integration expense decreased due to the timing of the NexTier merger and the Ulterra acquisition, which both closed in the third quarter of 2023.
Previous wording
Our effective income tax rate for the three months ended March 31, 2025 was 51.9%, compared with 27.9% for the three months ended March 31, 2024. The difference in effective income tax rates between the periods was primarily attributable to the impact of permanent differences against earnings between periods.
Current wording
Our effective income tax rate for the three months ended June 30, 2025 was (2.5)%, compared with 51.9% for the three months ended March 31, 2025. The difference in effective income tax rates between the periods was primarily attributable to the impact of permanent differences and book impairments against earnings between periods.
Previous wording
Our effective income tax rate for the three months ended March 31, 2025 was 51.9%, compared with (3.9)% for the three months ended December 31, 2024. The difference in effective income tax rates between the periods was primarily attributable to the impact of valuation allowances on deferred tax assets between periods, as well as the impact of goodwill impairments and permanent differences against earnings between periods.
Current wording
Our effective income tax rate for the six months ended June 30, 2025 was (5.8)%, compared with 37.4% for the six months ended June 30, 2024. The difference in effective income tax rates between the periods was primarily attributable to the impact of valuation allowances on deferred tax assets between periods, as well as the impact of permanent differences against earnings between periods.
Previous wording
Our primary sources of liquidity are cash and cash equivalents, availability under our Credit Agreement and cash provided by operating activities. As of March 31, 2025, we had approximately $499 million in working capital, including $223 million of cash and cash equivalents, and approximately $498 million available under our Credit Agreement.
Current wording
Our primary sources of liquidity are cash and cash equivalents, availability under our Credit Agreement and cash provided by operating activities. As of June 30, 2025, we had approximately $525 million in working capital, including $184 million of cash and cash equivalents, and approximately $498 million available under our Credit Agreement.
Previous wording
Recent Developments in Debt Financing — On January 31, 2025, we entered into the Second Amended and Restated Credit Agreement with the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent, and the other parties thereto (the “Credit Agreement”). The Credit Agreement amended and restated our Amended and Restated Credit Agreement dated as of March 27, 2018 (as amended, restated, supplemented or otherwise modified at December 31, 2024, the “Prior Credit Agreement”). The commitments under the Credit Agreement are $500 million, and the loans and commitments under the Credit Agreement mature on January 31, 2030.
Current wording
On January 31, 2025, we entered into the Second Amended and Restated Credit Agreement with the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent, and the other parties thereto (the “Credit Agreement”). The Credit Agreement amended and restated our Amended and Restated Credit Agreement dated as of March 27, 2018. The commitments under the Credit Agreement are $500 million, and the loans and commitments under the Credit Agreement mature on January 31, 2030.
Previous wording
On March 16, 2015, we entered into a Reimbursement Agreement (as amended from time to time, the “Reimbursement Agreement”) with The Bank of Nova Scotia (“Scotiabank”), pursuant to which we may from time to time request that Scotiabank issue an unspecified amount of letters of credit. As of March 31, 2025, we had $38.8 million in letters of credit outstanding under the Reimbursement Agreement.
Current wording
On March 16, 2015, we entered into a Reimbursement Agreement (as amended from time to time, the “Reimbursement Agreement”) with The Bank of Nova Scotia (“Scotiabank”), pursuant to which we may from time to time request that Scotiabank issue an unspecified amount of letters of credit. As of June 30, 2025, we had $38.1 million in letters of credit outstanding under the Reimbursement Agreement.
Previous wording
We had $42.8 million of outstanding letters of credit at March 31, 2025, which was comprised of $38.8 million outstanding under the Reimbursement Agreement, $2.0 million outstanding under the Credit Agreement, and $2.0 million outstanding with financial institutions providing for short-term borrowing capacity, overdraft protection and bonding requirements. We maintain these letters of credit primarily for the benefit of various insurance companies as collateral for retrospective premiums and retained losses which could become payable under terms of the underlying insurance contracts and compliance with contractual obligations. These letters of credit expire annually at various times during the year and are typically renewed. As of March 31, 2025, no amounts had been drawn under the letters of credit. As of March 31, 2025, we had $35.0 million in surety bond exposure issued as financial assurance on an insurance agreement.
Current wording
We had $42.1 million of outstanding letters of credit at June 30, 2025, which was comprised of $38.1 million outstanding under the Reimbursement Agreement, $2.0 million outstanding under the Credit Agreement, and $2.0 million outstanding with financial institutions providing for short-term borrowing capacity, overdraft protection and bonding requirements. We maintain these letters of credit primarily for the benefit of various insurance companies as collateral for retrospective premiums and retained losses which could become payable under terms of the underlying insurance contracts and compliance with contractual obligations. These letters of credit expire annually at various times during the year and are typically renewed. As of June 30, 2025, no amounts had been drawn under the letters of credit. As of June 30, 2025, we had $37.0 million in surety bond exposure issued as financial assurance on an insurance agreement.
Previous wording
Our outstanding long-term debt at March 31, 2025 was $1.2 billion and consisted of $483 million of our 2028 Notes, $345 million of our 2029 Notes, $400 million of our 2033 Notes and $3.2 million of secured equipment financing term loans. We were in compliance with all covenants under the associated agreements and indentures at March 31, 2025.
Current wording
Our outstanding long-term debt at June 30, 2025 was $1.2 billion and consisted of $483 million of our 2028 Notes, $345 million of our 2029 Notes and $400 million of our 2033 Notes. We were in compliance with all covenants under the associated agreements and indentures at June 30, 2025.
Previous wording
We anticipate $44.7 million of expenditures for the remainder of 2025 related to various contractual obligations such as certain commitments to purchase proppants and lease liabilities.
Current wording
We anticipate $29.9 million of expenditures for the remainder of 2025 related to various contractual obligations such as certain commitments to purchase proppants and lease liabilities.
Previous wording
As of March 31, 2025, we had working capital of $499 million, including cash, cash equivalents and restricted cash of $225 million, compared to working capital of $453 million, including cash, cash equivalents and restricted cash of $241 million, at December 31, 2024.
Current wording
As of June 30, 2025, we had working capital of $525 million, including cash, cash equivalents and restricted cash of $186 million, compared to working capital of $453 million, including cash, cash equivalents and restricted cash of $241 million, at December 31, 2024.
Previous wording
During the three months ended March 31, 2025, our sources of cash flow included:
Current wording
During the six months ended June 30, 2025, our sources of cash flow included:
Previous wording
•$208 million from operating activities, and
Current wording
•$348 million from operating activities, and
Previous wording
•$4.3 million in proceeds from the disposal of property and equipment.
Current wording
•$28.3 million in proceeds from the disposal of property and equipment, including insurance recoveries.
Previous wording
During the three months ended March 31, 2025, our uses of cash flow included:
Current wording
During the six months ended June 30, 2025, our uses of cash flow included:
Previous wording
•$162 million to make capital expenditures for the betterment and refurbishment of drilling services and completion services equipment and, to a much lesser extent, equipment for our other businesses, to acquire and procure equipment to support our drilling services, completion services, drilling products, and other operations,
Current wording
•$306 million to make capital expenditures for the betterment and refurbishment of drilling services and completion services equipment and, to a much lesser extent, equipment for our other businesses, to acquire and procure equipment to support our drilling services, completion services, drilling products, and other operations,
Previous wording
•$20.3 million for repurchases of our common stock,
Current wording
•$35.8 million for repurchases of our common stock,
Previous wording
•$30.9 million to pay dividends on our common stock,
Current wording
•$61.6 million to pay dividends on our common stock,
Previous wording
•$2.6 million for payments related to finance leases, and
Current wording
•$4.4 million for payments related to finance leases, and
Previous wording
•$12.1 million for other investing and financing activities.
Current wording
•$15.9 million for other investing and financing activities.
Previous wording
We paid cash dividends during the three months ended March 31, 2025 as follows:
Current wording
We paid cash dividends during the six months ended June 30, 2025 as follows:
Previous wording
In September 2013, our Board of Directors approved a stock buyback program. In February 2024, our Board of Directors approved an increase of the authorization under the stock buyback program to allow for an aggregate of $1.0 billion of future share repurchases. All purchases executed to date have been through open market transactions. Purchases under the buyback program are made at management’s discretion, at prevailing prices, subject to market conditions and other factors. Purchases may be made at any time without prior notice. There is no expiration date associated with the buyback program. As of March 31, 2025, we had remaining authorization to purchase approximately $741 million of our outstanding common stock under the stock buyback program. Shares of stock purchased under the buyback program are held as treasury shares.
Current wording
In September 2013, our Board of Directors approved a stock buyback program. In February 2024, our Board of Directors approved an increase of the authorization under the stock buyback program to allow for an aggregate of $1.0 billion of future share repurchases. All purchases executed to date have been through open market transactions. Purchases under the buyback program are made at management’s discretion, at prevailing prices, subject to market conditions and other factors. Purchases may be made at any time without prior notice. There is no expiration date associated with the buyback program. As of June 30, 2025, we had remaining authorization to purchase approximately $728 million of our outstanding common stock under the stock buyback program. Shares of stock purchased under the buyback program are held as treasury shares.
Previous wording
Treasury stock acquisitions during the three months ended March 31, 2025 were as follows (dollars in thousands):
Current wording
Treasury stock acquisitions during the six months ended June 30, 2025 were as follows (dollars in thousands):
Previous wording
(1)We withheld 258,558 shares during the three months ended March 31, 2025 with respect to employees’ tax withholding obligations upon the vesting of restricted stock units. These shares were acquired at fair market value. These acquisitions were made pursuant to the terms of the Patterson-UTI Energy, Inc. 2021 Long-Term Incentive Plan, as amended and the NexTier Oilfield Solutions Inc. Equity and Incentive Award Plan, and not pursuant to the stock buyback program.
Current wording
(1)We withheld 669,959 shares during the six months ended June 30, 2025 with respect to employees’ tax withholding obligations upon the vesting of restricted stock units. These shares were acquired at fair market value. These acquisitions were made pursuant to the terms of the Patterson-UTI Energy, Inc. 2021 Long-Term Incentive Plan, as amended and the NexTier Oilfield Solutions Inc. Equity and Incentive Award Plan, and not pursuant to the stock buyback program.
Showing the first 40 of 45 pairs. Open the source sections for the rest.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
The following tables summarize results of operations by business segment for the six months ended June 30, 2025 and June 30, 2024:
Current report — wording carried from elsewhere
(1)Adjusted gross profit is defined as revenues less direct operating costs (excluding depreciation, amortization and impairment expense). See Non-GAAP Financial Measures below for a reconciliation of GAAP gross profit to adjusted gross profit by segment.
Current report — wording carried from elsewhere
(2)Operational data relates to our contract drilling business. A rig is considered to be operating if it is earning revenue pursuant to a contract on a given day.
Current report — wording carried from elsewhere
(1)Adjusted gross profit is defined as revenues less direct operating costs (excluding depreciation, amortization and impairment expense). See Non-GAAP Financial Measures below for a reconciliation of GAAP gross profit to adjusted gross profit by segment.
Current report — wording carried from elsewhere
(1)Adjusted gross profit is defined as revenues less direct operating costs (excluding depreciation, amortization and impairment expense). See Non-GAAP Financial Measures below for a reconciliation of GAAP gross profit to adjusted gross profit by segment.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
The Credit Agreement provides for a committed senior unsecured credit facility that permits aggregate revolving credit borrowings of up to $500 million, with a letter of credit sub-facility of $100 million and a swing line sub-facility that, at any time outstanding, is limited to the lesser of $50 million and the amount of the swing line provider’s unused commitment. Subject to customary conditions, we may request that the lenders’ aggregate commitments be increased by up to $200 million, not to exceed total commitments of $700 million. For a description of the Credit Agreement, see “Liquidity and Capital Resources” below.
Previous report — wording carried elsewhere
(1)Adjusted gross profit is defined as revenues less direct operating costs (excluding depreciation, depletion, amortization and impairment expense). See Non-GAAP Financial Measures below for a reconciliation of GAAP gross profit to adjusted gross profit by segment.
Previous report — wording carried elsewhere
Revenues and direct operating costs were relatively flat between sequential quarters.
Previous report — wording carried elsewhere
On January 31, 2025, we entered into the Credit Agreement, which amended and restated the Prior Credit Agreement. The commitments under the Credit Agreement are $500 million, and the loans and commitments under the Credit Agreement mature on January 31, 2030.