Patterson-UTI Energy, Inc.

This is the operator. Today's conference is scheduled to begin momentarily. Until that time, your lines will again be placed on hold. Thank you for your patience. Oh, my God. Good day. Thank you for standing by. And welcome to the Pedersen UTI Energy Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press Star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, press Star 0. I would now like to hand the call over to your host, Mike Drickemore, Vice President of Investor Relations. Please go ahead.

Thank you, Felita. Good morning, and on behalf of Patterson UTI Energy, I'd like to welcome you to today's conference call to discuss the results of the three and six months ended June 30th, 2021. Participating in today's call will be Andy Hendricks, Chief Executive Officer, and Andy Smith, Chief Financial Officer. A quick reminder that statements made in this conference call that state the company's or management's plans Intentions, beliefs, expectations, or predictions for the future are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, the Securities Act of 1933, and the Securities Exchange Act of 1934. These forward-looking statements are subject to risks and uncertainties as disclosed in the company's annual report and on Form 10-K and other filings with the SEC. These risks and uncertainties could cause the company's actual results to differ materially from those suggested in such forward-looking statements or what the company expects. The company undertakes no obligation to publicly update or revise any forward-looking statement. The company's SEC filings may be obtained by contacting the company or the SEC and are available through the company's website and through the SEC's EDGAR system. Statements made in this conference call include non-GAAP financial measures. The required reconciliations to GAAP financial measures are included on our website. www.patenergy.com, and in the company's press release issued prior to this conference call. In addition, you'll find important information for stockholders and cautionary statements included at the end of the company's press release issued prior to this conference call. And now it's my pleasure to turn the call over to Andy Hendricks for some opening remarks. Andy?

Thanks, Mike. Good morning and welcome to Patterson UTI's second quarter conference call. We are pleased that you can join us today. For the second quarter, revenues and adjusted EBITDA increased sequentially as drilling and completion activity has steadily improved from the lows of last summer. Based on conversations with customers about the remainder of this year and into early 2022, we expect increasing activity and increasing pricing. In contract drilling, since the beginning of the second quarter, our rig count has increased by eight rigs. In addition to the overall increase in our industry, we continue to see increasing customer interest in reducing emissions through the use of alternative power sources, and we believe these lower emissions technologies, where we have a leadership position, are a differentiator. As an example, we were recently notified by a major international EMP that we will be increasing our activity within their drilling program and activating multiple rigs over the next year. This major customer intends to use a combination of our natural gas powered and our highline utility powered rigs. In pressure pumping, we took advantage of opportunities with customers to accelerate our reactivation plans, and we activated two spreads late in the quarter. I'm very pleased with the performance of our team this quarter as they met margin expectations while also incurring reactivation costs for these two spreads at the end of the quarter. These two spreads are expected to be accretive to our average adjusted EBITDA per spread and will help improve our fixed-cost coverage going forward. We continue to see opportunities to economically reactivate additional spreads, and as such, we expect to reactivate another spread early in the fourth quarter. Our pressure pumping team has done a great job in controlling costs through greater operational efficiency and has also successfully achieved higher pricing to improve margins. With the improved pricing, we expect a meaningful improvement in our third quarter pressure pumping margins. As well as the increasing demand for lower emissions technologies and consistent with our disciplined approach to capital spending, we plan to continue to upgrade engines on existing pump trailers to tier four dual fuel. We continue to believe that Tier 4 dual fuel has many advantages, especially over electric frac spreads, which in reality also burn natural gas. We believe this premium technology generates savings and offers operational flexibility for the customer and better economics for Patterson UTI. We've also started to gain considerable experience performing simulfracs, and I believe we are one of a very few companies to have completed simulfracs in both the Northeast and in the Permian. In directional drilling, the reliability and performance of our mercury measurement while drilling system and our impact directional drilling motors have allowed us to continue gaining market share. During the second quarter, we saw a 70% increase in the number of rigs on which we provided directional drilling services, which led to better-than-expected revenues. But margins were impacted by the higher reactivation costs as we grew. With that, I will now turn the call over to Andy Smith, who will review the financial results for the second quarter.