Patterson-UTI Energy, Inc.

Thank you for standing by. At this time, I would like to welcome everyone to the Patterson UTI Energy Second Quarter 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Thank you. Mike Trickmer, Vice President of Events and Relations, you may begin your conference.

Thank you, Cheryl. Good morning, and on behalf of Pirates and UTI Energy, I'd like to welcome you to today's conference call to discuss the results for the three-month end of June 30th, 2023. Participating today's call will be Andy Hendricks, Chief Executive Officer, Andy Smith, Chief Financial Officer, and Mike Holcomb, Chief Operating Officer. A quick reminder that statements made in this conference call that state the company's or management's plans, intentions, Target splits, expectations, or predictions for the future are forward-looking statements. These forward-looking statements are subject to risks and uncertainties as disclosed in the company's SEC filings, which should cause the company's actual results to differ materially. The company undertakes no obligation to publicly update or revise any forward-looking statement. Statements made in this conference call include non-GAAP financial measures. Required reconciliations to GAAP financial measures are included on our website, patenergy.com. and in 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. Our drilling business performed very well, with sequential increases in both revenues and margins. Contract renewals favorably impacted our average revenue and adjusted margin on a per-day basis, offsetting the slight decline in our rig count. The improvement in contract drilling revenues and margin during the second quarter met our expectation and our rig count outperformed the broader industry decrease. The decline in industry activity had a more significant impact on our pressure pumping business with volatility and white space impacting results. The commodity price volatility in June led to some customers deciding to reduce drilling and or completion activity. For us, the decrease in frac activity occurred much faster than the decrease in our rig count, and as such, we believe our pressure pumping activity has already reached a trough here in July, while we expect additional rig releases over the next few weeks. With the recent strength in oil prices along with natural gas futures in contango, we believe the industry rig count is near a bottom, and both rig count and frac activity will improve later in the year and in 2024. In contract drilling, we ended the second quarter with 127 active rigs and expect a reduction of approximately 10 rigs during the third quarter, of which six have already been released and two more are expected to occur within the next week. These releases are the result of notifications received primarily in late June. Following these near-term rig releases, we expect our rig count to stabilize and are optimistic that the recent strength in oil prices may positively impact future drilling activities. Despite recent rig releases, day rates remain strong with recent contract renewals for super spec rigs in the low to mid 30s, including ancillary revenue. As previously discussed, we continue to prioritize margins over activity. In pressure pumping, we believe the decline in activity is already behind us and we have additional work scheduled to begin later this quarter. Based on current activity levels, we stacked the tier two diesel spread in order to accelerate its conversion to a tier four dual fuel. When this conversion is complete, 10 of our 12 spreads will be dual fuel capable, including four spreads that will be Tier 4 dual fuel, which better positions us to take advantage of what we expect to be increasing completion activity later in the year and in 2024. Pressure pumping pricing has been challenged recently given the decrease in activity, but the market pricing for dedicated work has held up better than spot work. With that, I'll turn the call over to Andy Smith, who will review the financial results for the second quarter.