In the second-quarter 2024 earnings conference call, Patterson-UTI showcased the impressive strides made with their electric fleets (e-fleets). Having operated these fleets for nearly a year, the company shared insights into the performance, strategic growth, market dynamics, and technological advancements of their e-fleets. With a focus on efficiency, service quality, and environmentally friendly solutions, Patterson-UTI is positioning itself as a leader in next-generation frac solutions.
Summary on E-Fleets
Initial Reaction and Performance:
- Patterson-UTI has been running electric fleets for almost a year, with full deployment and prior testing.
- The company is pleased with the efficiencies and service quality of its electric fleets.
- Electric fleets have generated accretive returns compared to other technologies.
- Initial customer feedback has been positive, with new electric fleets operating at least 500 hours per month.
Growth and Strategy:
- Patterson-UTI intends to grow the share of electric equipment within its fleet over time.
- Approximately 80% of the company’s active fleets are capable of being powered by natural gas.
- The company plans to continue deploying electric frac equipment in a capital-efficient manner, ensuring that capital returns to shareholders remain high.
- Plans for additional electric fleets will be provided in future updates, with a focus on meeting customer demand and maximizing operational efficiencies.
Market Dynamics and Competition:
- The demand for natural gas-powered and electric equipment is expected to increase, driven by customer needs for more efficient and environmentally friendly solutions.
- Patterson-UTI is selective about the pricing and contracts it accepts, preferring to protect margins rather than compete at lower rates with less efficient equipment.
Technological Advancements:
- Electric fleets are part of Patterson-UTI’s strategy to offer next-generation frac solutions.
- The company’s natural gas fueling business supports its electric fleets, ensuring reliable and cost-effective operations.
In summary, Patterson-UTI is investing in and expanding its electric fleet offerings, focusing on capital efficiency, customer demand, and high service quality, while remaining selective about market participation to protect margins.
