Land Drillers Look Overvalued as Rising Rig Count Buoys Market Expectations
Helmerich & Payne, Precision Drilling, and Patterson-UTI Energy, representing three of our four covered land drillers, reported solid first-quarter results. Our fair value estimates and no-moat ratings are unchanged for these companies, and we reiterate our generally bearish outlook for land drillers.On the back of a 9% sequential increase in the U.S. horizontal rig count, the companies increased their U.S. land rig count by an average 8%. Collectively, these companies achieved their highes...
Patterson-UTI Energy is an oilfield services company that primarily owns and operates fleets of land-based drilling rigs and a fleet of pressure pumping equipment. The company's business segments are: contract drilling services, which markets its contract drilling services to independent and other oil and natural gas operators; pressure pumping services, which provides pressure pumping services to oil and natural gas operators, primarily in Texas, the Mid-Continent region and the Appalachian region; and directional drilling services, which provides a suite of directional drilling services, including directional drilling and downhole performance motors in various onshore oil and natural gas basins.
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