Intrinsic value of Patterson-UTI Energy - PTEN

Previous Close

$15.57

  Intrinsic Value

$3.74

stock screener

  Rating & Target

str. sell

-76%

Previous close

$15.57

 
Intrinsic value

$3.74

 
Up/down potential

-76%

 
Rating

str. sell

We calculate the intrinsic value of PTEN stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 3.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  47.50
  43.25
  39.43
  35.98
  32.88
  30.10
  27.59
  25.33
  23.29
  21.47
  19.82
  18.34
  17.00
  15.80
  14.72
  13.75
  12.88
  12.09
  11.38
  10.74
  10.17
  9.65
  9.19
  8.77
  8.39
  8.05
  7.75
  7.47
  7.22
  7.00
Revenue, $m
  3,476
  4,980
  6,943
  9,441
  12,545
  16,321
  20,823
  26,098
  32,177
  39,084
  46,830
  55,417
  64,840
  75,086
  86,141
  97,985
  110,601
  123,971
  138,077
  152,908
  168,455
  184,711
  201,677
  219,358
  237,762
  256,904
  276,804
  297,485
  318,976
  341,310
Variable operating expenses, $m
  3,047
  4,335
  6,018
  8,158
  10,818
  14,053
  17,911
  22,430
  27,639
  33,557
  40,126
  47,484
  55,558
  64,337
  73,809
  83,958
  94,768
  106,224
  118,311
  131,019
  144,340
  158,269
  172,806
  187,956
  203,725
  220,127
  237,178
  254,899
  273,313
  292,450
Fixed operating expenses, $m
  585
  597
  611
  624
  638
  652
  666
  681
  696
  711
  727
  743
  759
  776
  793
  810
  828
  846
  865
  884
  903
  923
  944
  964
  986
  1,007
  1,029
  1,052
  1,075
  1,099
Total operating expenses, $m
  3,632
  4,932
  6,629
  8,782
  11,456
  14,705
  18,577
  23,111
  28,335
  34,268
  40,853
  48,227
  56,317
  65,113
  74,602
  84,768
  95,596
  107,070
  119,176
  131,903
  145,243
  159,192
  173,750
  188,920
  204,711
  221,134
  238,207
  255,951
  274,388
  293,549
Operating income, $m
  -156
  47
  315
  659
  1,089
  1,616
  2,246
  2,986
  3,842
  4,815
  5,977
  7,190
  8,523
  9,973
  11,539
  13,217
  15,005
  16,901
  18,901
  21,006
  23,212
  25,519
  27,927
  30,438
  33,051
  35,770
  38,596
  41,534
  44,588
  47,761
EBITDA, $m
  1,013
  1,690
  2,579
  3,714
  5,126
  6,847
  8,901
  11,310
  14,088
  17,246
  20,789
  24,719
  29,032
  33,723
  38,785
  44,209
  49,988
  56,112
  62,575
  69,370
  76,493
  83,942
  91,717
  99,820
  108,254
  117,028
  126,148
  135,628
  145,479
  155,716
Interest expense (income), $m
  37
  47
  92
  153
  233
  335
  461
  615
  798
  1,012
  1,259
  1,540
  1,855
  2,204
  2,588
  3,004
  3,454
  3,935
  4,448
  4,992
  5,566
  6,169
  6,801
  7,462
  8,152
  8,871
  9,619
  10,398
  11,207
  12,048
  12,922
Earnings before tax, $m
  -202
  -46
  161
  426
  755
  1,155
  1,632
  2,189
  2,830
  3,556
  4,437
  5,335
  6,319
  7,386
  8,534
  9,763
  11,070
  12,452
  13,909
  15,440
  17,043
  18,718
  20,465
  22,286
  24,180
  26,150
  28,198
  30,327
  32,539
  34,839
Tax expense, $m
  0
  0
  44
  115
  204
  312
  441
  591
  764
  960
  1,198
  1,441
  1,706
  1,994
  2,304
  2,636
  2,989
  3,362
  3,756
  4,169
  4,602
  5,054
  5,526
  6,017
  6,529
  7,061
  7,614
  8,188
  8,786
  9,407
Net income, $m
  -202
  -46
  118
  311
  551
  843
  1,191
  1,598
  2,066
  2,596
  3,239
  3,895
  4,613
  5,391
  6,230
  7,127
  8,081
  9,090
  10,154
  11,271
  12,441
  13,664
  14,940
  16,268
  17,651
  19,090
  20,585
  22,139
  23,754
  25,433

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  8,499
  12,175
  16,975
  23,083
  30,673
  39,905
  50,913
  63,808
  78,672
  95,559
  114,498
  135,494
  158,532
  183,585
  210,613
  239,573
  270,419
  303,107
  337,597
  373,859
  411,869
  451,616
  493,098
  536,327
  581,325
  628,128
  676,783
  727,347
  779,893
  834,499
Adjusted assets (=assets-cash), $m
  8,499
  12,175
  16,975
  23,083
  30,673
  39,905
  50,913
  63,808
  78,672
  95,559
  114,498
  135,494
  158,532
  183,585
  210,613
  239,573
  270,419
  303,107
  337,597
  373,859
  411,869
  451,616
  493,098
  536,327
  581,325
  628,128
  676,783
  727,347
  779,893
  834,499
Revenue / Adjusted assets
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
Average production assets, $m
  5,937
  8,505
  11,858
  16,125
  21,428
  27,876
  35,566
  44,575
  54,958
  66,755
  79,985
  94,652
  110,746
  128,247
  147,128
  167,359
  188,907
  211,742
  235,836
  261,167
  287,720
  315,486
  344,465
  374,663
  406,097
  438,793
  472,781
  508,105
  544,811
  582,958
Working capital, $m
  233
  334
  465
  633
  841
  1,094
  1,395
  1,749
  2,156
  2,619
  3,138
  3,713
  4,344
  5,031
  5,771
  6,565
  7,410
  8,306
  9,251
  10,245
  11,286
  12,376
  13,512
  14,697
  15,930
  17,213
  18,546
  19,932
  21,371
  22,868
Total debt, $m
  1,708
  2,840
  4,319
  6,200
  8,538
  11,381
  14,772
  18,743
  23,321
  28,523
  34,356
  40,822
  47,918
  55,634
  63,959
  72,879
  82,379
  92,447
  103,070
  114,239
  125,946
  138,188
  150,965
  164,279
  178,139
  192,554
  207,539
  223,113
  239,297
  256,116
Total liabilities, $m
  2,618
  3,750
  5,228
  7,110
  9,447
  12,291
  15,681
  19,653
  24,231
  29,432
  35,265
  41,732
  48,828
  56,544
  64,869
  73,789
  83,289
  93,357
  103,980
  115,149
  126,856
  139,098
  151,874
  165,189
  179,048
  193,463
  208,449
  224,023
  240,207
  257,026
Total equity, $m
  5,881
  8,425
  11,747
  15,973
  21,226
  27,614
  35,232
  44,155
  54,441
  66,127
  79,233
  93,762
  109,704
  127,041
  145,744
  165,785
  187,130
  209,750
  233,617
  258,710
  285,014
  312,518
  341,224
  371,138
  402,277
  434,665
  468,334
  503,324
  539,686
  577,473
Total liabilities and equity, $m
  8,499
  12,175
  16,975
  23,083
  30,673
  39,905
  50,913
  63,808
  78,672
  95,559
  114,498
  135,494
  158,532
  183,585
  210,613
  239,574
  270,419
  303,107
  337,597
  373,859
  411,870
  451,616
  493,098
  536,327
  581,325
  628,128
  676,783
  727,347
  779,893
  834,499
Debt-to-equity ratio
  0.290
  0.340
  0.370
  0.390
  0.400
  0.410
  0.420
  0.420
  0.430
  0.430
  0.430
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
  0.440
Adjusted equity ratio
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -202
  -46
  118
  311
  551
  843
  1,191
  1,598
  2,066
  2,596
  3,239
  3,895
  4,613
  5,391
  6,230
  7,127
  8,081
  9,090
  10,154
  11,271
  12,441
  13,664
  14,940
  16,268
  17,651
  19,090
  20,585
  22,139
  23,754
  25,433
Depreciation, amort., depletion, $m
  1,168
  1,644
  2,265
  3,055
  4,037
  5,231
  6,655
  8,323
  10,246
  12,431
  14,812
  17,528
  20,509
  23,749
  27,246
  30,992
  34,983
  39,211
  43,673
  48,364
  53,282
  58,423
  63,790
  69,382
  75,203
  81,258
  87,552
  94,093
  100,891
  107,955
Funds from operations, $m
  966
  1,598
  2,382
  3,365
  4,588
  6,074
  7,846
  9,921
  12,312
  15,027
  18,051
  21,423
  25,121
  29,141
  33,476
  38,119
  43,064
  48,302
  53,827
  59,635
  65,723
  72,087
  78,729
  85,650
  92,855
  100,348
  108,137
  116,232
  124,645
  133,388
Change in working capital, $m
  75
  101
  132
  167
  208
  253
  302
  353
  407
  463
  519
  575
  631
  687
  741
  794
  845
  896
  945
  994
  1,042
  1,089
  1,137
  1,185
  1,233
  1,283
  1,333
  1,386
  1,440
  1,496
Cash from operations, $m
  891
  1,497
  2,251
  3,198
  4,380
  5,821
  7,544
  9,568
  11,904
  14,564
  17,532
  20,848
  24,490
  28,454
  32,735
  37,326
  42,218
  47,406
  52,882
  58,642
  64,681
  70,998
  77,593
  84,466
  91,622
  99,065
  106,804
  114,847
  123,205
  131,891
Maintenance CAPEX, $m
  -746
  -1,099
  -1,575
  -2,196
  -2,986
  -3,968
  -5,162
  -6,586
  -8,255
  -10,177
  -12,362
  -14,812
  -17,528
  -20,509
  -23,749
  -27,246
  -30,992
  -34,983
  -39,211
  -43,673
  -48,364
  -53,282
  -58,423
  -63,790
  -69,382
  -75,203
  -81,258
  -87,552
  -94,093
  -100,891
New CAPEX, $m
  -1,911
  -2,568
  -3,353
  -4,267
  -5,303
  -6,449
  -7,690
  -9,008
  -10,384
  -11,797
  -13,230
  -14,667
  -16,094
  -17,501
  -18,881
  -20,231
  -21,548
  -22,835
  -24,094
  -25,331
  -26,553
  -27,766
  -28,978
  -30,198
  -31,434
  -32,695
  -33,989
  -35,323
  -36,707
  -38,147
Cash from investing activities, $m
  -2,657
  -3,667
  -4,928
  -6,463
  -8,289
  -10,417
  -12,852
  -15,594
  -18,639
  -21,974
  -25,592
  -29,479
  -33,622
  -38,010
  -42,630
  -47,477
  -52,540
  -57,818
  -63,305
  -69,004
  -74,917
  -81,048
  -87,401
  -93,988
  -100,816
  -107,898
  -115,247
  -122,875
  -130,800
  -139,038
Free cash flow, $m
  -1,766
  -2,170
  -2,677
  -3,265
  -3,909
  -4,596
  -5,308
  -6,027
  -6,734
  -7,411
  -8,060
  -8,631
  -9,132
  -9,555
  -9,895
  -10,151
  -10,322
  -10,412
  -10,424
  -10,363
  -10,236
  -10,049
  -9,809
  -9,522
  -9,195
  -8,833
  -8,443
  -8,029
  -7,595
  -7,146
Issuance/(repayment) of debt, $m
  841
  1,132
  1,478
  1,881
  2,338
  2,843
  3,391
  3,972
  4,578
  5,201
  5,833
  6,467
  7,096
  7,716
  8,325
  8,920
  9,501
  10,068
  10,623
  11,169
  11,707
  12,242
  12,777
  13,314
  13,859
  14,415
  14,986
  15,574
  16,184
  16,819
Issuance/(repurchase) of shares, $m
  2,101
  2,589
  3,204
  3,916
  4,702
  5,545
  6,427
  7,326
  8,220
  9,090
  9,867
  10,634
  11,330
  11,945
  12,474
  12,913
  13,265
  13,530
  13,714
  13,822
  13,862
  13,841
  13,766
  13,646
  13,487
  13,298
  13,084
  12,852
  12,607
  12,355
Cash from financing (excl. dividends), $m  
  2,942
  3,721
  4,682
  5,797
  7,040
  8,388
  9,818
  11,298
  12,798
  14,291
  15,700
  17,101
  18,426
  19,661
  20,799
  21,833
  22,766
  23,598
  24,337
  24,991
  25,569
  26,083
  26,543
  26,960
  27,346
  27,713
  28,070
  28,426
  28,791
  29,174
Total cash flow (excl. dividends), $m
  1,177
  1,552
  2,005
  2,533
  3,131
  3,793
  4,509
  5,270
  6,065
  6,881
  7,640
  8,469
  9,293
  10,106
  10,903
  11,682
  12,443
  13,186
  13,913
  14,628
  15,333
  16,033
  16,734
  17,438
  18,152
  18,880
  19,627
  20,397
  21,196
  22,028
Retained Cash Flow (-), $m
  -2,101
  -2,589
  -3,322
  -4,227
  -5,253
  -6,388
  -7,618
  -8,923
  -10,286
  -11,686
  -13,106
  -14,529
  -15,943
  -17,336
  -18,704
  -20,040
  -21,345
  -22,620
  -23,867
  -25,093
  -26,303
  -27,505
  -28,706
  -29,914
  -31,139
  -32,388
  -33,669
  -34,991
  -36,361
  -37,788
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -925
  -1,038
  -1,317
  -1,694
  -2,122
  -2,596
  -3,108
  -3,653
  -4,221
  -4,805
  -5,466
  -6,059
  -6,649
  -7,230
  -7,801
  -8,358
  -8,902
  -9,434
  -9,954
  -10,465
  -10,970
  -11,471
  -11,972
  -12,476
  -12,987
  -13,508
  -14,042
  -14,594
  -15,165
  -15,760
Discount rate, %
  4.60
  4.83
  5.07
  5.33
  5.59
  5.87
  6.16
  6.47
  6.80
  7.14
  7.49
  7.87
  8.26
  8.67
  9.11
  9.56
  10.04
  10.54
  11.07
  11.62
  12.21
  12.82
  13.46
  14.13
  14.84
  15.58
  16.36
  17.17
  18.03
  18.93
PV of cash for distribution, $m
  -884
  -944
  -1,135
  -1,377
  -1,617
  -1,843
  -2,045
  -2,212
  -2,336
  -2,412
  -2,469
  -2,442
  -2,369
  -2,256
  -2,110
  -1,939
  -1,750
  -1,553
  -1,354
  -1,160
  -977
  -808
  -656
  -523
  -409
  -313
  -235
  -173
  -124
  -87
Current shareholders' claim on cash, %
  62.0
  41.0
  28.4
  20.5
  15.3
  11.7
  9.2
  7.4
  6.1
  5.1
  4.4
  3.8
  3.3
  2.9
  2.6
  2.4
  2.2
  2.0
  1.9
  1.8
  1.6
  1.6
  1.5
  1.4
  1.4
  1.3
  1.3
  1.2
  1.2
  1.2

Patterson-UTI Energy, Inc. is an oilfield services company. The Company owns and operates a fleet of land-based drilling rigs and a fleet of pressure pumping equipment in the United States. The Company's segments include Contract Drilling, Pressure Pumping and Other operations. The Contract Drilling segment markets its contract drilling services to independent and other oil and natural gas operators. As of December 31, 2016, the Company had 202 marketed land-based drilling rigs. The Pressure Pumping segment provides pressure pumping services to oil and natural gas operators primarily in Texas (Southwest Region) and the Appalachian region (Northeast Region). The Other operations segment includes the Company's pipe handling components and related technology business, the oil and natural gas working interests and the Middle East/North Africa business. In addition, the Company owns and invests in oil and natural gas assets as a non-operating working interest owner in Texas and New Mexico.

FINANCIAL RATIOS  of  Patterson-UTI Energy (PTEN)

Valuation Ratios
P/E Ratio -7.2
Price to Sales 2.5
Price to Book 1
Price to Tangible Book
Price to Cash Flow 7.6
Price to Free Cash Flow 12.5
Growth Rates
Sales Growth Rate -51.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -83.9%
Cap. Spend. - 3 Yr. Gr. Rate -28.9%
Financial Strength
Quick Ratio NaN
Current Ratio 0.2
LT Debt to Equity 26.6%
Total Debt to Equity 26.6%
Interest Coverage -12
Management Effectiveness
Return On Assets -7.1%
Ret/ On Assets - 3 Yr. Avg. -3%
Return On Total Capital -10.2%
Ret/ On T. Cap. - 3 Yr. Avg. -4.6%
Return On Equity -13.3%
Return On Equity - 3 Yr. Avg. -6.1%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 29.1%
Gross Margin - 3 Yr. Avg. 32.5%
EBITDA Margin 22.8%
EBITDA Margin - 3 Yr. Avg. 26.1%
Operating Margin -49.8%
Oper. Margin - 3 Yr. Avg. -20.8%
Pre-Tax Margin -54.1%
Pre-Tax Margin - 3 Yr. Avg. -23.2%
Net Profit Margin -34.8%
Net Profit Margin - 3 Yr. Avg. -15.1%
Effective Tax Rate 35.7%
Eff/ Tax Rate - 3 Yr. Avg. 35%
Payout Ratio -7.5%

PTEN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PTEN stock intrinsic value calculation we used $2356.684 million for the last fiscal year's total revenue generated by Patterson-UTI Energy. The default revenue input number comes from 0001 income statement of Patterson-UTI Energy. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our PTEN stock valuation model: a) initial revenue growth rate of 47.5% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.6%, whose default value for PTEN is calculated based on our internal credit rating of Patterson-UTI Energy, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Patterson-UTI Energy.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of PTEN stock the variable cost ratio is equal to 88.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $572 million in the base year in the intrinsic value calculation for PTEN stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Patterson-UTI Energy.

Corporate tax rate of 27% is the nominal tax rate for Patterson-UTI Energy. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the PTEN stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for PTEN are equal to 170.8%.

Life of production assets of 5.4 years is the average useful life of capital assets used in Patterson-UTI Energy operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for PTEN is equal to 6.7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $3982.493 million for Patterson-UTI Energy - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 220.026 million for Patterson-UTI Energy is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Patterson-UTI Energy at the current share price and the inputted number of shares is $3.4 billion.

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COMPANY NEWS

▶ Patterson-UTI Reports Drilling Activity for October 2018   [Nov-05-18 06:00AM  PR Newswire]
▶ Patterson-UTI: 3Q Earnings Snapshot   [08:48AM  Associated Press]
▶ Patterson-UTI Reports Drilling Activity for August 2018   [Sep-06-18 06:00AM  PR Newswire]
▶ Chemical Safety Board releases findings on deadly well explosion in Oklahoma   [Aug-17-18 08:55AM  American City Business Journals]
▶ Patterson-UTI Reports Drilling Activity for July 2018   [Aug-03-18 06:00AM  PR Newswire]
▶ Patterson-UTI: 2Q Earnings Snapshot   [06:33AM  Associated Press]
▶ Patterson-UTI Reports Drilling Activity for June 2018   [Jul-05-18 06:00AM  PR Newswire]
▶ Shareholders vote against exec compensation plan at Houston oil field service co.   [Jun-20-18 09:35AM  American City Business Journals]
▶ Patterson-UTI Reports Drilling Activity for May 2018   [Jun-05-18 06:00AM  PR Newswire]
▶ Patterson-UTI Reports Drilling Activity for April 2018   [May-03-18 06:00AM  PR Newswire]
▶ Patterson-UTI Energy, Inc. to Host Earnings Call   [Apr-26-18 08:20AM  ACCESSWIRE]
▶ Patterson-UTI: 1Q Earnings Snapshot   [06:46AM  Associated Press]
▶ Three more Houston energy companies report CEO, median employee pay   [Apr-25-18 03:56PM  American City Business Journals]
▶ Edited Transcript of PTEN presentation 7-Mar-17 1:40pm GMT   [Apr-10-18 03:18PM  Thomson Reuters StreetEvents]
▶ Patterson-UTI Reports Drilling Activity for March 2018   [Apr-04-18 06:00AM  PR Newswire]
▶ 3rd lawsuit filed over fatal Oklahoma gas rig explosion   [Mar-15-18 10:10AM  Associated Press]
▶ Why Patterson-UTI Energy, Inc.'s Stock Is Plunging Today   [Feb-08-18 04:08PM  Motley Fool]
▶ Patterson-UTI misses 4Q profit forecasts   [06:57AM  Associated Press]
▶ Patterson-UTI Reports Drilling Activity for January 2018   [Feb-05-18 06:00AM  PR Newswire]
▶ [$$] Oklahoma Drilling Accident is Deadliest Since Start of Shale Boom   [Jan-24-18 12:06AM  The Wall Street Journal]
▶ [$$] Oklahoma Drilling Accident is Deadliest Since Start of Shale Boom   [Jan-23-18 05:34PM  The Wall Street Journal]
▶ The Latest: Fire out at drilling rig hours after explosion   [Jan-22-18 09:04PM  Associated Press]
▶ What Wall Street Expects from Weatherfords 4Q17 Earnings   [Jan-18-18 04:09PM  Market Realist]
▶ How Schlumberger Reacted to Crude Oil Prices Last Week   [Jan-16-18 10:32AM  Market Realist]
▶ How Weatherford Reacted to Crude Oil Price Changes   [Jan-09-18 10:33AM  Market Realist]

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