Patterson-UTI Energy (NASDAQ:PTEN) reported second-quarter revenue of $1.228 billion, up 10% from the first quarter, as stronger drilling activity, higher pricing and near-full utilization of completion equipment lifted results across its operating segments.
The company posted a net loss attributable to common shareholders of $20 million, or $0.05 per share, including $21 million in non-cash charges related to its exit from Contract Drilling operations in Colombia and $5 million in non-cash charges tied to the write-down of minority interests in non-controlled entities. Adjusted EBITDA totaled $232 million.
Drilling Activity and Pricing Improve
In Drilling Services, Patterson-UTI generated second-quarter revenue of $374 million and adjusted gross profit of $114 million. Excluding approximately $20 million in Colombia-related non-cash charges, adjusted gross profit would have been $134 million, Chief Financial Officer Andy Smith said.
U.S. Contract Drilling recorded 8,361 operating days and averaged 92 operating rigs in the quarter. Revenue per day increased from the first quarter, while the company’s directional drilling operation also posted a “meaningful” sequential improvement, according to Smith.
For the third quarter, Patterson-UTI expects its drilling-services rig count to average about 100 rigs and to exit the period above that level. The company forecast adjusted gross profit of roughly $145 million for the segment.
Hendricks said pricing on new drilling contracts rose about 10% to 15% from first-quarter levels. Upgraded rigs are being deployed at day rates several thousand dollars above those for standard super-spec rigs, he said. Outside the Permian Basin, high-quality rigs are effectively sold out, according to Hendricks, while increasing Permian demand has also supported pricing.
The company is investing in upgrades that increase rig capacity for deeper wells and longer laterals, including larger structures, expanded circulating systems, more pipe-racking capacity, and digital and automation capabilities. Hendricks said many upgrades cost in the low-single-digit millions of dollars, or about $2 million in some cases, and can achieve payback within a year under term contracts. Patterson-UTI expects to upgrade roughly 10 to 15 rigs through this year and early next year, alongside larger projects supported by contracts lasting more than three years.
Hendricks said roughly half of recent wells drilled had laterals longer than two miles, compared with about one-third a year earlier. Wells with laterals exceeding four miles accounted for more than 10% of recent wells, about four times the prior-year average, while drilling targeting deeper shale intervals more than doubled year over year.
Completion Fleet Utilization Supports Margin Outlook
Completion Services reported $754 million in second-quarter revenue and $123 million in adjusted gross profit. The segment benefited from a largely full frac calendar and improved pricing across part of its fleet.
Smith said pressure-pumping utilization was very high during the quarter and that even a modest improvement in demand supported meaningful pricing gains. Natural-gas-powered equipment is nearly fully utilized, he said, while much of the remaining available industry capacity consists of older diesel equipment.
Patterson-UTI expects Completion Services adjusted gross profit of approximately $140 million in the third quarter, supported by near-full utilization and additional price increases. Hendricks said the company expects third-quarter schedules to contain less idle time than in prior periods and cited higher pricing and the increasing mix of newer gas-powered equipment as the main drivers of margin improvement.
The company is retiring older diesel assets and adding direct-drive Emerald frac equipment powered entirely by natural gas. While it had expected available horsepower to decline as diesel retirements outpaced additions, capital spending announced in May is expected to keep second-half available horsepower broadly in line with the first half. By year-end, Patterson-UTI expects about 90% of active horsepower to be powered substantially by natural gas.
Hendricks said the company estimates average completion pricing had fallen about 30%, or potentially more, over the prior three years. He said the company sees an opportunity for substantial pricing recovery as increased drilling activity creates demand for frac capacity later this year and into 2027. Patterson-UTI has not decided to increase total fleet horsepower, instead prioritizing price recovery and fleet quality.
Drilling Products Reaches Post-Acquisition Revenue High
Drilling Products recorded second-quarter revenue of $91 million and adjusted gross profit of $37 million. Revenue increased 14% from the first quarter despite Middle East disruptions and Canada’s seasonal spring breakup. The quarter marked the segment’s highest revenue since Patterson-UTI acquired Ulterra in 2023.
Hendricks said the business achieved record international revenue, with growth across key geographies despite conflict-related disruptions in the Middle East. The U.S. business represented approximately 70% of segment revenue, while downhole tools grew to about 5% of segment revenue after increasing significantly since the end of 2025.
The company expects Drilling Products adjusted gross profit of about $40 million in the third quarter, citing Canada’s seasonal recovery and higher U.S. activity. Hendricks also cited growing geothermal demand, saying bit runs had doubled from the end of 2025.
Capital Spending, Cash Flow and Colombia Exit
Patterson-UTI invested $156 million in capital expenditures during the second quarter and continues to expect 2026 capital expenditures, net of asset-sale proceeds, of approximately $600 million. Spending includes drilling-rig upgrades and additional gas-powered Emerald frac fleets.
The company ended the quarter with $203 million in cash and no borrowings under its $500 million revolving credit facility. It refinanced its 2028 senior unsecured notes, extending the maturity to 2036, and now has no senior-note maturities until 2029. Smith said the company expects interest expense of about $20 million per quarter.
Management expects adjusted free cash flow in 2026 to exceed dividend payments despite higher capital spending and working-capital needs. The board approved a quarterly dividend of $0.10 per share, payable Sept. 15 to shareholders of record on Sept. 1.
The company also confirmed it is exiting Colombia, citing aging assets, a less favorable political environment and the capital required to remain competitive. Smith said approximately 75% of the value written off in the quarter related to assets acquired through the Pioneer Energy Services transaction.
Looking ahead, management said it expects free cash flow to improve in the second half of 2026 and increase meaningfully in 2027 as investments in upgraded rigs and completion equipment begin contributing more fully to results.
About Patterson-UTI Energy (NASDAQ:PTEN)
Patterson-UTI Energy provides a comprehensive suite of onshore contract drilling and pressure pumping services to exploration and production companies in North America. The company’s core offerings include land-based drilling rigs, directional drilling, hydraulic fracturing services, downhole tool rental and well-servicing equipment. By integrating drilling and completion capabilities, Patterson-UTI Energy offers operators a streamlined solution designed to improve operational efficiency and well performance.
Headquartered in Houston, Texas, Patterson-UTI Energy traces its origins to its founding in 1978 and was later incorporated in Delaware in 1996.
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