A few quick operational nuggets from today’s Q2 earnings releases. Main takeaway is both PTEN and PDS see flattish U.S. drilling activity.
- Averaged 82 rigs in Q2 with an expectation to average 59 rigs in Q3.
- According to the company’s website, PTEN is running 59 rigs today.
- Q2 revenue/day = $22,970 vs. $23,810 in Q1
- Q2 rig margin/day = $11,280 (includes $8.6M of lump sum payments or ~$1,150/day). Q1 margin/day = $9,310
- Closed its Canadian land rig business and is attempting to sell those rigs. We believe it’s about 18 rigs total, but we’ll check later this morning.
- Pressure pumping revenue totaled $59.5M vs. $125.1M in Q1 (-52%)
- Gross profit in pressure pumping was $3.3M.
- Pressure pumping results were in-line with the company’s guidance.
- Q2 included one-time charges of $55.8M.
- Cash increased $95M to $247M.
- Total debt = $967M.
- Cost reduction efforts implemented this year are expected to reduce costs by $100M.
- PTEN will provide formal Q3 guidance on its earnings call.
- Consolidated revenue totaled $190M with adjusted EBITDA of $58M. (Canadian $$).
- Cash = $175M, up from $97M at the end of Q1
- Total debt = $1.45B with first large maturity in December 2023.
- Averaged 30 rigs in the U.S. in Q2 vs. 55 in Q1.
- Averaged 9 rigs in Canada in Q2 vs. 63 in Q1 (seasonal break-up)
- International held flat at 8 rigs.
- U.S. revenue/day totaled $29,370 but included ~$19M on contract cancellation, idle but contracted rigs and/or turnkey revenue.
- A clean U.S. revenue/day would be closer to $22,400/day if our math is correct.
- A clean implied U.S. margin/day is roughly $8,300/day.
- Company’s investment in technology continues.
- PDS commercialized two drilling apps in Q2, bringing total to 6 with another 12 under development.
- The company highlights success with its AlphaAnalytics technology which reduced drilling times in the Haynesville by 8% q/q in Q2.
- The AlpahAnalytics have been used on 110 wells this year.
- Company sees flattish U.S. activity, in Canada the Q3 normal seasonal rebound will be muted while the company’s Kuwait and Saudi rigs remain contracted.
- PDS cost savings expected to be more than originally prophesied as total annualized fixed cost savings now expected to be 35% vs. 30%.
- Normalized G&A savings expected to exceed $30M.
- In recent years, PDS has consistently been focused on FCF / debt reduction – this focus appears to be continuing.
- 2020 capex expected to total $48M.
Apologies for being late on the earnings takeaways….we overslept.
No views on the stocks….not our thing. We’ll summarize the conference calls, hopefully today, but most likely this weekend.
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