SDLP Seadrill Partners LLC

Onshore contract driller Patterson-UTI Energy Inc. (PTEN) has finished its $150 million share repurchase program, which was authorized in Jul 2012. On Sep 6, 2013, the board of directors of the company approved another stock buyback program of $200 million.

Patterson-UTI reveals that it has repurchased roughly 2.6 million shares in the third quarter for an average price of $19.90 per share. This finishes its previously approved $150 million stock buyback program.

The company added that repurchase of stocks for the new buyback program of $200 million will be made in the open market or through private transactions in a timely manner. But the volume and timing of the buyback are expected to be dependent on the price of share, conditions of the market along with other factors. However, without any prior notice, the company can start or stop the repurchase program.

Patterson-UTI is the second-largest North American land drilling contractor engaged in exploration and production and also provides pressure pumping services. Patterson-UTI operates primarily in three segments: Contract Drilling, Pressure Pumping, and Oil and Natural Gas Production and Exploration.

Patterson-UTI owns a large fleet of high-quality drilling rigs. The company’s technologically-advanced ‘Apex’ rigs are the key to its success. Patterson-UTI’s proprietary design makes the rigs move faster and quicker than conventional rigs, and allows for a safer operating environment. As such, these rigs are better suited to the new demands of the exploration business and, therefore, command higher dayrates and utilization than rigs from other land drillers.

However, with a strong competitive market, there is an over availability of land drilling rigs as well as pressure pumping equipment. Hence, the company has lost some of its market share to competitors who offer better products and services at a cheaper rate.

Patterson-UTI currently retains a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next 1 to 3 months.

Meanwhile, one can have look at oil and gas drilling firms like Parker Drilling Co (PKD), SeaDrill Limited (SDRL) and Seadrill Partners LLC (SDLP) that offer value. All the stocks have a Zacks Rank #2 (Buy).
 

 
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