Patterson-UTI Energy (NASDAQ: PTEN) kicked off 2025 with a steady operational performance, a strategic focus on natural gas, and an unwavering commitment to drilling innovation. While revenue declined year-over-year, the company’s solid footing in rig operations, growing adoption of advanced technologies, and optimism around natural gas markets show it’s playing the long game.
💰 Revenue Recap: In Line With Expectations, Down From 2024
In Q1 2025, Patterson-UTI posted $1.3 billion in revenue, a sequential increase from Q4 2024 but a decline from $1.51 billion in Q1 2024.
“The first quarter unfolded largely as we anticipated, with steady drilling activity and a strong sequential rebound in completion demand,” said Andy Hendricks, CEO.
The Completion Services segment, in particular, saw a year-over-year revenue decline from $945 million to $766 million, although demand rebounded strongly from Q4 lows.
🛠️ Rig Count: Holding Steady in the U.S.
The company operated an average of 106 drilling rigs in the U.S. during Q1 2025 and expects the number to remain stable into Q2.
“Current activity remains steady relative to first quarter levels, and we have not seen any material change in customer plans,” Hendricks noted.
Patterson-UTI also reported 9,573 operating rig days in Q1, with an average revenue per operating day of $35,720 and adjusted gross profit of $16,170 per day.
Looking ahead, the company expects an average of 62 rigs to remain under term contracts in Q2 and 35 rigs across the next four quarters.
⚙️ Technology: APEX Rigs and Natural Gas-Powered Fleets
Patterson-UTI’s technology-first approach continues to pay dividends:
- APEX® rig technology and performance-based pricing models boosted margins.
“Our Drilling Services technology continues to drive efficiency gains for our customers, resulting in a sequential improvement in both average daily rig count and returns for that segment,” said Hendricks.
- In Completion Services, the company expanded its Emerald™ line of 100% natural gas-powered assets, contributing to 80% of its active fleet being gas-capable.
“Including our Emerald™ line of 100% natural gas-powered assets and our dual fuel assets, approximately 80% of our active fleet is capable of being powered by natural gas, with that proportion expected to increase in 2025.”
The strategy supports both emissions reduction and cost efficiency, aligning with increased demand for LNG-linked completions in gas basins like the Haynesville.
🔮 Outlook: Optimistic on Natural Gas, Cautious on Oil
While the oil price outlook remains uncertain, Patterson-UTI is bullish on natural gas. Hendricks emphasized the strategic opportunity:
“We continue to believe that increased drilling and completion activity in natural gas basins will be necessary over the next several years to meet growing domestic demand and global demand for U.S. LNG.”
The company remains disciplined in its capital strategy.
“Our balanced approach to capital allocation has positioned us well for a range of market conditions,” added Andy Smith, CFO.
“We maintain significant liquidity and expect to generate strong free cash flow in 2025.”
✅ Conclusion
Patterson-UTI’s first quarter of 2025 showcased a company staying the course in a shifting landscape. With stable rig operations, cutting-edge drilling and completion technology, and a clear eye on the long-term role of natural gas, Patterson-UTI continues to position itself as a leader in the evolving U.S. energy sector.
“Overall, we are pleased with our first quarter performance and remain focused on execution and outperforming the market,” Hendricks concluded.
