PATTERSON UTI ENERGY INC
For the period ended Jun 30, 2026. Filed Aug 4, 2026.
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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, 2026 · Filed Aug 4, 2026
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 2026-03-31; filed 2026-04-28.
0000889900-26-000033
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-04.
0000889900-26-000056
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 123 previous paragraphs and 146 current paragraphs.
59 unchanged; 46 reworded; 37 added; 12 removed; 6 previous and 4 current paragraphs rearranged.
Tables are not compared: 12 previous and 17 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 completion services segment for the third quarter of 2026, we expect adjusted gross profit to be higher than the second quarter, supported by near-full utilization across our active frac equipment and additional pricing improvement compared to the second quarter.
Current report
In our drilling products segment for the third quarter of 2026, we expect adjusted gross profit to be higher than the second quarter, driven by higher drilling activity in the United States and the seasonal recovery from spring breakup in Canada.
Current report
Recent Developments in Business and Financial Matters—During the second quarter of 2026, management approved a plan to exit our Colombian contract drilling operations, which resulted in incremental operating expenses totaling $21.0 million within the Drilling Services segment. Changes in Colombia’s political environment, coupled with continued reductions in activity forecasts and challenging market conditions in the region, have reduced the attractiveness of additional investment. The exit activity is expected to be substantially completed over the next year.
Current report
On May 19, 2026, we completed an offering of $500 million in aggregate principal amount of 6.05% senior notes due 2036 (the “2036 Notes”). The net proceeds before offering expenses from the offering of the 2036 Notes were approximately $496 million, which we used to fully redeem our outstanding 2028 Notes and for general corporate purposes.
Current report
On June 4, 2026, we completed our redemption of all the approximately$483 million aggregate principal amount of the outstanding 2028 Notes. The 2028 Notes were redeemed at a redemption price of 100% of the principal amount of the 2028 Notes outstanding, plus accrued and unpaid interest to the redemption date. The total amount of the redemption was approximately$483 million, which was funded using a portion of the net proceeds from our 2036 Notes offering. We recognized a non-cash loss on extinguishment of debt of $0.9 million, primarily related to the write-off of unamortized debt issuance cost associated with the 2028 Notes, which is included in “Interest expense, net of amount capitalized” in the consolidated statement of operations.
Current report
(1)Adjusted gross profit, which is considered a non-GAAP financial measure, is defined as revenues less direct operating costs (excluding depreciation, amortization and impairment expense). See the section of this Report titled “Non-GAAP Financial Measures” for a reconciliation of GAAP gross profit to adjusted gross profit by segment.
Current report
Total revenues increased primarily due to higher activity in our directional drilling business, where operating days increased 16% and contributed approximately $12.6 million of the total segment revenue increase. Additionally, revenues from our contract drilling business benefitted from our new multi-year, sales-type lease agreements for two rigs to DLS Archer Ltd. S.A. in support of Archer's operations in Argentina, contributing approximately $7.8 million of revenue during the period.
Current report
Direct operating costs increased primarily due to costs incurred to reactive rigs in our contract drilling business and the higher activity in our directional drilling business. In addition, direct operating costs were approximately $20.0 million higher due to our decision to exit our contract drilling operations in Colombia. See Note 16 of Notes to unaudited condensed consolidated financial statements for additional information.
Current report
Capital expenditures increased primarily due to the timing of order placement and incremental growth capital investments, including additional drilling rig structural upgrades.
Current report
(1)Adjusted gross profit, which is considered a non-GAAP financial measure, is defined as revenues less direct operating costs (excluding depreciation, amortization and impairment expense). See the section of this Report titled “Non-GAAP Financial Measures” for a reconciliation of GAAP gross profit to adjusted gross profit by segment.
Current report
Capital expenditures increased primarily due to the timing of order placement and incremental growth capital investments including expansion of Emerald 100% natural gas completions equipment.
Current report
(1)Adjusted gross profit, which is considered a non-GAAP financial measure, is defined as revenues less direct operating costs (excluding depreciation, amortization and impairment expense). See the section of this Report titled “Non-GAAP Financial Measures” for a reconciliation of GAAP gross profit to adjusted gross profit by segment.
Current report
(1)Adjusted gross profit, which is considered a non-GAAP financial measure, is defined as revenues less direct operating costs (excluding depreciation, depletion, amortization and impairment expense). See the section of this Report titled “Non-GAAP Financial Measures” for a reconciliation of GAAP gross profit to adjusted gross profit by segment.
Current report
Interest expense, net of amounts capitalized, increased due to a $0.9 million loss on extinguishment of debt and higher interest expense associated with the 2036 Notes issued during the second quarter of 2026.
Current report
The change in other income (expense) was due to a $4.5 million write-down of minority equity investments during the second quarter of 2026.
Current report
Results of Operations
Current report
(1)Adjusted gross profit, which is considered a non-GAAP financial measure, is defined as revenues less direct operating costs (excluding depreciation, amortization and impairment expense). See the section of this Report titled “Non-GAAP Financial Measures” for a reconciliation of GAAP gross profit to adjusted gross profit by segment.
Current report
Depreciation, amortization and impairment expense decreased due to a $27.8 million impairment charge to Latin American drilling equipment during the second quarter of 2025.
Current report
(1)Adjusted gross profit, which is considered a non-GAAP financial measure, is defined as revenues less direct operating costs (excluding depreciation, amortization and impairment expense). See the section of this Report titled “Non-GAAP Financial Measures” for a reconciliation of GAAP gross profit to adjusted gross profit by segment.
Current report
Completion services revenues decreased primarily due to lower activity in our wireline and power solutions operations. Revenues from our wireline operations were $24.8 million lower, or 18%, resulting from fewer stages perforated. Revenues from our power solutions operations were $13.0 million lower, or 20%, due primarily to fewer working days. Revenue from our fracturing operations was resilient, only declining $6.9 million, or 1%, due to slightly lower pumping hours.
Current report
Direct operating costs declined across our fracturing, power solutions, and wireline operations by $26.6 million, $13.5 million, and $20.2 million, or 3%, 30%, and 17%, respectively. The declines in direct operating costs for our fracturing and wireline operations primarily resulted from lower activity, but we also saw incremental cost savings from reduced maintenance expense. The decrease in power solutions direct operating costs was primarily due to fewer working days.
Current report
Depreciation, amortization and impairment expense decreased primarily due to less new equipment placed in service relative to asset retirements between the periods.
Current report
(1)Adjusted gross profit, which is considered a non-GAAP financial measure, is defined as revenues less direct operating costs (excluding depreciation, amortization and impairment expense). See the section of this Report titled “Non-GAAP Financial Measures” for a reconciliation of GAAP gross profit to adjusted gross profit by segment.
Current report
Direct operating cost increased due to higher raw material and labor costs.
Current report
(2)Adjusted gross profit, which is considered a non-GAAP financial measure, is defined as revenues less direct operating costs (excluding depreciation, depletion, amortization and impairment expense). See the section of this Report titled “Non-GAAP Financial Measures” for a reconciliation of GAAP gross profit to adjusted gross profit by segment.
Current report
Excluding the effects of our oilfield rentals business divestiture, revenue increased $5.5 million, or 54%, related to our non-operating working interests in oil and natural gas properties. The increase was primarily driven by higher realized crude oil prices. Oil prices averaged $84.29 per barrel during the six months ended June 30, 2026 as compared to $68.12 per barrel during the six months ended June 30, 2025. Direct operating costs were consistent across both periods.
Current report
Depreciation, depletion, amortization and impairment expense, excluding the effects of our oilfield rentals business divestiture, decreased $4.2 million, or 59% due to a $3.6 million impairment recorded during the six months ended June 30, 2025.
Current report
Capital expenditures decreased due to our oilfield rentals business divestiture in the second quarter of 2025.
Current report
Interest expense, net of amounts capitalized, increased due to a $0.9 million loss on extinguishment of debt and higher interest expense associated with senior notes issued in the second quarter of 2026.
Current report
The change in other income (expense) was due to a $4.5 million write-down of minority equity investments in the second quarter of 2026.
Current report
Capital expenditures decreased primarily due to higher spending in 2025, which was related to our corporate office expansion.
Current report
On May 19, 2026, we completed an offering of $500 million in aggregate principal amount of the 2036 Notes. The net proceeds before offering expenses from the offering of the 2036 Notes were approximately $496 million. We pay interest on the 2036 Notes on May 15 and November 15 of each year. The 2036 Notes will mature on May 15, 2036. The 2036 Notes bear interest at a rate of 6.05% per annum. See Note 8 of Notes to unaudited condensed consolidated financial statements for additional information.
Current report
•$496 million in net proceeds from the issuance of long-term debt.
Current report
•$483 million for the repayment of the 2028 Notes,
Current report
(1)Colombia contract drilling exit costs represent inventory and other asset write-downs recorded in direct operating expenses within the consolidated statements of operations. These costs were excluded from Adjusted EBITDA as they relate to our decision to exit our Colombia contract drilling operations and are not considered representative of ongoing operating performance. See Note 16 of Notes to the unaudited condensed consolidated financial statements for additional information.
Current report
(2)Noncontrolling investment write-down represents an impairment charge of certain minority equity investments. The charge was excluded from Adjusted EBITDA as it represents a non-operating item.
Current report
(3)Legal accruals and settlements represent net expenses (income) arising from certain significant legal matters, including settlement activity and reserve adjustments related to prior-year claims. Unlike routine legal costs incurred in the ordinary course of business, these infrequent items are excluded from Adjusted EBITDA because management does not consider them representative of our current period operating performance.
Removed paragraphs (12)
Previous report
In our completion services segment for the second quarter of 2026, we expect adjusted gross profit to be higher than the first quarter. We will continue to prioritize investments that high-grade our assets with technologies that we believe will generate attractive long-term returns, versus investing to extend the life of diesel equipment.
Previous report
In our drilling products segment for the second quarter of 2026, we expect adjusted gross profit will decline slightly, sequentially. We expect lower activity in Canada with normal seasonal spring breakup, as well as an increase in international costs, particularly in the Middle East.
Previous report
(1)Adjusted gross profit, which is considered a non-GAAP financial measure, 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.
Previous report
(1)Adjusted gross profit, which is considered a non-GAAP financial measure, 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.
Previous report
Completion services revenues and direct operating costs decreased primarily due to our fracturing operations. Revenues and direct operating costs from our fracturing operations decreased by approximately $39.8 million and $45.4 million, or 7% and 9%, respectively due to lower activities. Total pumping hours from our fracturing operations declined 6% year over year. Other completion services revenue and direct operating costs decreased $46.7 million and $31.0 million, or 30% and 25%, respectively, primarily due to lower service pricing and decline in activity for our power solutions operations and a decline in activity in our wireline and cementing operations.
Previous report
Other operating expense (income), net in the fourth quarter of 2025 reflected a favorable contract settlement.
Previous report
We reduced capital expenditures in response to changing macroeconomic conditions between the periods.
Previous report
(1)Adjusted gross profit, which is considered a non-GAAP financial measure, 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.
Previous report
Revenue and direct operating costs declined primarily due to lower activity in the United States. Revenues in the United States decreased by approximately $4.6 million or 8%. The decrease in direct operating costs was partially offset by higher raw material costs and repair expenses.
Previous report
(2)Adjusted gross profit, which is considered a non-GAAP financial measure, 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
Depreciation, depletion, amortization and impairment expense decreased primarily due to a $1.7 million impairment charge recorded in our oil and natural gas properties business during the first quarter of 2025. There was no impairment charge in the first quarter of 2026.
Previous report
Capital expenditures decreased primarily due to the expansion of our Corporate office in 2025.
Reworded paragraphs (46)
Previous wording
Management Overview— We are a Houston, Texas-based leading provider of drilling and completion services to oil and natural gas exploration and production companies in the United States and other select countries, including contract drilling services, integrated well completion services and directional drilling services in the United States, and specialized drill bit solutions in the United States, Middle East and many other regions around the world. We operate under three reportable business segments: (i) drilling services, (ii) completion services and (iii) drilling products.
Current wording
Management Overview— We are a Houston, Texas-based leading provider of drilling and completion services to oil and natural gas exploration and production companies in the United States and other select countries, including contract drilling services, integrated well completion services and directional drilling services in the United States, and specialized drill bit solutions in North America, the Middle East and many other regions around the world. We operate under three reportable business segments: (i) drilling services, (ii) completion services and (iii) drilling products.
Previous wording
Our contract drilling business operates in the continental United States and internationally in Colombia and Ecuador, and from time to time, we pursue contract drilling opportunities in other select markets. We also provide a comprehensive suite of directional drilling services in most major producing onshore oil and natural gas basins in the United States and we provide services that aim to improve the statistical accuracy of wellbore placement for directional and horizontal wells. We also provide electrical controls and automation to the energy, marine and mining industries in North America and other select markets.
Current wording
Our contract drilling business operates primarily in the continental United States, and from time to time, we pursue contract drilling opportunities in other select markets. We also provide a comprehensive suite of directional drilling services in most major producing onshore oil and natural gas basins in the United States and we provide services that aim to improve the statistical accuracy of wellbore placement for directional and horizontal wells. We also provide electrical controls and automation to the energy, marine and mining industries in North America and other select markets.
Previous wording
As of March 31, 2026, we had 152 marketed land-based drilling rigs based in the following regions:
Current wording
As of June 30, 2026, we had 148 marketed land-based drilling rigs based in the following regions:
Previous wording
In the first quarter of 2026, energy markets experienced high volatility, driven in large part by instability in the Middle East, including the conflict with Iran, and concerns regarding potential disruptions to global supply and transportation routes, which has contributed to fluctuations in commodity prices and market sentiment. Geopolitical uncertainty, even in the absence of actual supply disruptions, may contribute to short-term commodity price volatility as market participants adjust expectations regarding potential sanctions, production levels and regional stability. While the full effects are yet to be determined, we believe these dynamics could support increased activity in second half of 2026, particularly in North America, as operators reassess capital allocation and activity levels commensurate with commodity prices and supply chain dependability.
Current wording
During the first half of 2026, energy markets experienced increased volatility driven by geopolitical developments in the Middle East, including the conflict with Iran and ongoing disruptions to global oil supply and key transportation routes. These events contributed to fluctuations in commodity prices, customer spending expectations and overall market sentiment. In addition, global energy markets continue to be influenced by OPEC+ production decisions, changes in worldwide supply and demand balances and broader macroeconomic conditions. While the full effects are yet to be determined, we believe these dynamics contributed to increased activity in the second quarter of 2026, particularly North America, and could support continued increases in activity in the second half of 2026, as operators reassess capital allocation and activity levels commensurate with commodity prices and long-term supply chain dependability.
Previous wording
Oil prices averaged $72.74 per barrel in the first quarter of 2026, as compared to $59.62 per barrel in the fourth quarter of 2025, and closed at $91.06 per barrel on April 20, 2026. Natural gas prices (based on the Henry Hub Spot Market Price) averaged $4.71 per MMBtu in the first quarter of 2026 as compared to an average of $3.73 per MMBtu in the fourth quarter of 2025, and closed at $2.81 per MMBtu on April 20, 2026.
Current wording
Oil prices averaged $95.65 per barrel in the second quarter of 2026, as compared to $72.74 per barrel in the first quarter of 2026, and closed at $84.25 per barrel on July 27, 2026. Natural gas prices (based on the Henry Hub Spot Market Price) averaged $2.95 per MMBtu in the second quarter of 2026 as compared to an average of $4.71 per MMBtu in the first quarter of 2026, and closed at $2.63 per MMBtu on July 27, 2026.
Previous wording
Our drilling activity in the United States remained relatively stable in the first quarter of 2026, with an average active rig count in the United States of 92 rigs, compared to our average active rig count of 93 in the fourth quarter of 2025, supported in part by term contracts. Term contracts help support our operating rig count. 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, 2026 was approximately $260 million. Approximately 7% of our total contract drilling backlog in the United States at March 31, 2026 is reasonably expected to remain at March 31, 2027. See Note 2 of Notes to unaudited condensed consolidated financial statements for additional information on backlog.
Current wording
Our drilling activity in the United States remained relatively stable in the second quarter of 2026, with an average active rig count in the United States of 92 rigs, consistent with the first quarter of 2026 and supported in part by term contracts. Activity strengthened as the quarter progressed, and we exited the quarter with 96 rigs operating, reflecting a higher level of activity than the quarterly average. Term contracts help support our operating rig count. 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, 2026 was approximately $365 million. Approximately 15% of our total contract drilling backlog in the United States at June 30, 2026 is reasonably expected to remain at June 30, 2027. See Note 2 of Notes to unaudited condensed consolidated financial statements for additional information on backlog.
Previous wording
In our drilling services segment for the second quarter of 2026, we expect adjusted gross profit will decline slightly, sequentially. We expect our active rig count to average around 90 rigs, and we expect to exit the quarterat a higher level than the quarterly average, potentially 92 to 95 rigs, as we reactivate rigs during the second half of the quarter.
Current wording
In our drilling services segment for the third quarter of 2026, we expect adjusted gross profit to be higher than the second quarter. We expect our average U.S. rig count to beapproximately 100 in the third quarter, and we expect to exit the quarter higher than the quarterly average.
Previous wording
For the three months ended March 31, 2026, December 31, 2025 and March 31, 2025 our operating revenues consisted of the following (dollars in thousands):
Current wording
For the three months ended June 30, 2026 and March 31, 2026 and for the six months ended June 30, 2026 and June 30, 2025, our operating revenues consisted of the following (dollars in thousands):
Previous wording
Completion services revenues and direct operating costs decreased primarily due to our fracturing operations, which were largely the result of disruptions caused by winter storm conditions. Revenues and direct operating costs from our fracturing operations decreased by approximately $7.2 million and $2.2 million, or 1% and 0.5%, respectively, which was primarily due to a 2% decline in total pumping hours. Other completion services revenue and direct operating costs decreased $14.7 million and $7.3 million, or 12% and 7%, respectively, mainly due to lower activity for our power solutions and cementing operations.
Current wording
Completion services revenues and direct operating costs increased primarily due to our fracturing operations. First quarter results were lower, which were largely the result of disruptions caused by winter storm conditions. Revenues and direct operating costs from our fracturing operations increased by approximately $55.1 million and $42.8 million, or 10% and 9%, respectively, which was primarily due to a 6% increase in total pumping hours. Other completion services revenue and direct operating costs increased $19.0 million and $6.4 million, or 17% and 7%, respectively, mainly due to higher activity for our power solutions and cementing operations.
Previous wording
Revenue and direct operating costs declined primarily due to lower activity in the United States. Revenues and direct operating costs in the United States decreased by approximately $4.1 million and $1.2 million, or 7% and 3%, respectively. The decrease in direct operating costs in the United States was partially offset by higher raw material and labor costs.
Current wording
Revenue and direct operating costs increased primarily due to higher activity in the United States. Revenues and direct operating costs in the United States increased by approximately $9.1 million and $5.1 million, or 17% and 15%, respectively.
Previous wording
Revenues increased primarily due to higher oil production and higher realized pricing on crude oil. Market prices for crude oil averaged $72.74 per barrel in the first quarter of 2026, as compared to $59.62 per barrel in the fourth quarter of 2025.
Current wording
Revenues increased primarily due to higher realized pricing on crude oil. Market prices for crude oil averaged $95.65 per barrel in the second quarter of 2026, as compared to $72.74 per barrel in the first quarter of 2026.
Previous wording
Revenues and direct operating costs were relatively flat between sequential quarters.
Current wording
General and administrative was relatively flat between sequential quarters.
Previous wording
Other operating (income) expenses, net includes net losses associated with the disposal of assets. Accordingly, the related gains or losses have been excluded from the results of specific segments. The change in other operating (income) expenses, net was primarily due to a $4.5 million reversal of cumulative compensation costs associated with certain performance-based restricted stock units during the first quarter of 2026.
Current wording
Other operating (income) expenses, net includes net losses associated with the disposal of assets. Accordingly, the related gains or losses have been excluded from the results of specific segments. The change in other operating (income) expenses, net was primarily due to a $4.5 million reversal of cumulative compensation costs associated with certain performance-based restricted stock units during the first quarter of 2026 and a $2.2 million increase in credit loss expense during the second quarter of 2026.
Previous wording
Total revenues and direct operating costs decreased primarily due to a decrease in operating days in our contract drilling business within the United States.
Current wording
Total revenues and direct operating costs decreased primarily due to a decrease in operating days in our contract drilling business within the United States. The decrease in operating days for our U.S. contract drilling business reflects the industry-wide activity declines at the beginning of 2026. Direct operating costs during the six months ended June 30, 2026, were approximately $20.0 million higher due to our decision to exit our contract drilling operations in Colombia. See Note 16 of Notes to unaudited condensed consolidated financial statements for additional information.
Previous wording
General and administrative expense increased primarily due to certain internal reorganization initiatives and employee separation costs incurred during the first quarter of 2026.
Current wording
General and administrative increased primarily due to certain internal reorganization initiatives and employee separation costs incurred during the first half of 2026.
Previous wording
Other operating expense (income), net in the fourth quarter of 2025 reflected a favorable contract settlement.
Current wording
Other operating expense (income), net, reflected insurance proceeds received during the second quarter of 2025.
Previous wording
The changes for the three months ended March 31, 2026 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 wording
The changes for the six months ended June 30, 2026 as compared to the six months ended June 30, 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.
Previous wording
General and administrative increased primarily due to higher share‑based compensation expense related to cash-settled liability awards and employee separation costs incurred during the first quarter of 2026.
Current wording
General and administrative increased primarily due to certain internal reorganization initiatives, higher share‑based compensation expense related to cash-settled liability awards and employee compensation costs, and software subscription fees incurred during the first half of 2026 compared to the same period of 2025.
Previous wording
Our effective income tax rate for the three months ended March 31, 2026 was 12.8%, compared with 39.2% for the three months ended December 31, 2025. 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, 2026 was 31.0%, compared with 12.8% for the three months ended March 31, 2026. The difference in effective income tax rates between the periods was primarily attributable to the impact of permanent differences against earnings between periods.
Previous wording
Our effective income tax rate for the three months ended March 31, 2026 was 12.8%, 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 against earnings between periods.
Current wording
Our effective income tax rate for the six months ended June 30, 2026 was 21.9%, compared with (5.8)% for the six months ended June 30, 2025. The difference in effective income tax rates between the periods was primarily attributable to 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, 2026, we had approximately $602 million in working capital, including $335 million of cash and cash equivalents, and approximately $497 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, 2026, we had approximately $588 million in working capital, including $201 million of cash and cash equivalents, and approximately $498 million available under our Credit Agreement.
Previous wording
Our cash flows for the three months ended March 31, 2026 and 2025 are summarized below:
Current wording
Our cash flows for the six months ended June 30, 2026 and 2025 are summarized below:
Previous wording
Operating Activities —The decrease in cash provided by operating activities between the three months ended March 31, 2026 and 2025 was primarily attributable to lower activity in 2026.
Current wording
Operating Activities —The decrease in cash provided by operating activities between the six months ended June 30, 2026 and 2025 was primarily attributable to changes related to timing of working capital payments and receipts.
Previous wording
Investing Activities — The decrease in cash used in investing activities between the three months ended March 31, 2026 and 2025 was primarily attributable to lower capital spending due to timing of order placement, lower maintenance capital expenditures due to fewer operating days, and an increase in proceeds from the sale of assets.
Current wording
Investing Activities — The decrease in cash used in investing activities between the six months ended June 30, 2026 and 2025 was primarily attributable to lower capital expenditures driven by the timing of order placement and reduced maintenance capital spending resulting from fewer operating days. These decreases were partially offset by lower proceeds from sales of assets.
Previous wording
Financing Activities —The decrease in cash used in financing activities between the three months ended March 31, 2026 and 2025 was primarily attributable to fewer share repurchases as well as the repayment of debt during 2025. The decrease was partially offset by an increase in dividends paid during the first quarter of 2026.
Current wording
Financing Activities —The decrease in cash used in financing activities between the six months ended June 30, 2026 and 2025 was primarily due to fewer share repurchases and proceeds from the issuance of our 2036 Notes. These factors were partially offset by the redemption of our 2028 Notes and increased dividend payments.
Previous 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. As of March 31, 2026, the commitments under the Credit Agreement were $500 million, and the loans and commitments under the Credit Agreement would 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 “Amended and Restated Credit Agreement”). The Credit Agreement amended and restated our Amended and Restated Credit Agreement dated as of March 27, 2018. As of June 30, 2026, the commitments under the Credit Agreement were $500 million, and the loans and commitments under the Credit Agreement would mature on January 31, 2030.
Previous wording
On April 24, 2026, we entered into the Assignment and Amendment No. 1 to Second Amended and Restated Credit Agreement, which amended the Second Amended and Restated Credit Agreement, whereby, among other things, (i) extends the maturity date for $450 million of revolving credit commitments of certain lenders under the Credit Agreement from January 31, 2030 to January 31, 2031, but we may request two one-year extensions, subject to the satisfaction of certain conditions, and (ii) assigns $25 million of the revolving credit commitments from HSBC Bank USA, N.A., to JPMorgan Chase Bank, N.A., in each case, on the terms and subject to the conditions set forth therein.
Current wording
On April 24, 2026, we entered into the Assignment and Amendment No. 1 to Second Amended and Restated Credit Agreement, which amended the Amended and Restated Credit Agreement (as amended, the “Credit Agreement”), which, among other things, (i) extended the maturity date for $450 million of revolving credit commitments of certain lenders under the Credit Agreement from January 31, 2030 to January 31, 2031, but we may request two one-year extensions, subject to the satisfaction of certain conditions, and (ii) assigned $25 million of the revolving credit commitments from HSBC Bank USA, N.A., to JPMorgan Chase Bank, N.A., in each case, on the terms and subject to the conditions set forth therein.
Previous wording
We had $32.4 million of outstanding letters of credit at March 31, 2026, which was comprised of $27.5 million outstanding under the 2015 Reimbursement Agreement, $2.8 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, 2026, no amounts had been drawn under the letters of credit. As of March 31, 2026, we had $37.0 million in surety bond exposure issued as financial assurance on an insurance agreement.
Current wording
We had $31.3 million of outstanding letters of credit at June 30, 2026, which was comprised of $27.0 million outstanding under the 2015 Reimbursement Agreement, $2.3 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, 2026, no amounts had been drawn under the letters of credit. As of June 30, 2026, we had $39.0 million in surety bond exposure issued as financial assurance on an insurance agreement.
Previous wording
Our outstanding long-term debt at March 31, 2026 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 March 31, 2026.
Current wording
Our outstanding long-term debt at June 30, 2026 was $1.2 billion and consisted of $345 million of our 2029 Notes, $400 million of our 2033 Notes, and $500 million of our 2036 Notes. We were in compliance with all covenants under the associated agreements and indentures at June 30, 2026.
Previous wording
During the three months ended March 31, 2026, our sources of cash flow included:
Current wording
During the six months ended June 30, 2026, our sources of cash flow included:
Previous wording
•$63.9 million from operating activities and
Current wording
•$120 million from operating activities and
Previous wording
•$12.2 million in proceeds from the disposal of property and equipment, including insurance recoveries.
Current wording
•$14.9 million in proceeds from the disposal of property and equipment, including insurance recoveries, and
Previous wording
During the three months ended March 31, 2026, our uses of cash flow included:
Current wording
During the six months ended June 30, 2026, our uses of cash flow included:
Previous wording
•$117 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
•$273 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
•$38.0 million to pay dividends on our common stock,
Current wording
•$76.0 million to pay dividends on our common stock,
Previous wording
•$0.4 million for repurchases of our common stock,
Current wording
•$9.5 million for repurchases of our common stock,
Previous wording
•$2.0 million for payments related to finance leases and
Current wording
•$3.3 million for payments related to finance leases and
Previous wording
•$1.6 million for other investing and financing activities.
Current wording
•$3.5 million for other investing and financing activities.
Previous wording
We paid cash dividends during the three months ended March 31, 2026 as follows:
Current wording
We paid cash dividends during the six months ended June 30, 2026 as follows:
Previous wording
Treasury stock acquisitions during the three months ended March 31, 2026 were as follows (dollars in thousands):
Current wording
Treasury stock acquisitions during the six months ended June 30, 2026 were as follows (dollars in thousands):
Showing the first 40 of 46 pairs. Open the source sections for the rest.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
The following tables summarize results of operations by business segment for the six months ended June 30, 2026 and June 30, 2025:
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
Revenues were relatively flat between the periods.
Current report — wording carried from elsewhere
Capital expenditures increased primarily due to the timing of order placement and higher raw material costs, particularly tungsten powder used in certain matrix bit applications.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
Total revenues and direct operating costs decreased primarily due to a decrease in operating days in our contract drilling business within the United States.
Previous report — wording carried elsewhere
General and administrative expense increased primarily due to certain internal reorganization initiatives and employee separation costs incurred during the first quarter of 2026.
Previous report — wording carried elsewhere
Capital expenditures decreased primarily due to the timing of order placement as well as lower maintenance capital expenditures due to fewer operating days.
Previous report — wording carried elsewhere
General and administrative decreased, benefiting from cost reduction activities.
Previous report — wording carried elsewhere
Capital expenditures decreased primarily due to the timing of order placement.
Previous report — wording carried elsewhere
General and administrative increased primarily due to higher share‑based compensation expense related to cash-settled liability awards and employee separation costs incurred during the first quarter of 2026