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...
Precision Drilling is engaged in the provision of contract drilling and completion and production services primarily to oil and natural gas exploration and production companies in Canada and the United States. Co. operates two segments: Contract Drilling Services and Completion and Production Services. The Contract Drilling Services segment includes drilling rigs, directional drilling, procurement and distribution of oilfield supplies, and manufacture, sale and repair of drilling equipment. The Completion and Production Services segment includes service rigs, snubbing units, oilfield equipment rental, camp and catering services, and wastewater treatment units.
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