About William Hendricks
William Hendricks, CEO of Patterson-UTI, has discussed the company's operations and industry outlook in several CNBC interviews. In September 2021, he noted that during the COVID-19 downturn the company's operating rigs fell from 126 to 34, and had since recovered to 73, with expectations to reach 80 by July. Hendricks stated that even if WTI oil prices pulled back from $70 to the mid-to-low $60s, activity growth would continue, and he expressed encouragement from discussions with customers. He said the company could provide new engines that burn 100% natural gas and battery storage solutions to reduce emissions, and described sustainability and ESG as watchwords in the industry. Hendricks also said that capital discipline remained important to investors, with room to grow activity relative to budgets set at lower oil prices.
In earlier appearances, Hendricks addressed the severe down cycle in oil and gas during 2020, stating that lower oil prices eventually cure low oil prices as customers shut in wells. He said that coordinating production throttling across states would be difficult and likely ineffective given the rapid drop in global demand. Hendricks emphasized that Patterson-UTI had strong liquidity, a good balance sheet, and low debt, positioning the company to survive the cycle and potentially gain market share. In 2018, Executive Chairman Mark Siegel discussed the company's acquisition of MMS Energy, a directional drilling firm, and noted that the U.S. had become the world's marginal producer of oil and gas. Siegel said the company emphasized a strong balance sheet and that fewer rigs could achieve more due to efficiency gains.
Source: AI-verified profile updated from William Hendricks's recent appearances.
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Transcript (13 segments)
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Host0:03
Operators out there. Patterson UTI. We are joined by Andy Hendricks, they are a land drilling rig operator. The best leading indicator of where the industry is going, and probably the last person I interviewed at the in-person conference before everything shutdown.
A little over a year ago. We're back together. I said the same thing in Miami when we spoke a year and a half ago. What are you seeing now? What a year it has been. You have 73 operating rigs. What was the low during the lowest point for you?
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William Hendricks0:40
During the COVID downturn, we went down to 34 operating rigs. If you remember, we were in Miami, we had 126 working. From 126 to 34, now up to 73. We're showing a projection of growth. We said 80 in July. We are in discussions for the rest of the year and encouraged.
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Host1:05
Coming double off those lows. Obviously the price of oil surprised people with where it is. Are you still seeing a reluctance to spend, a nervousness that 65 or 70 can't last? Oil has been volatile. I don't need to tell you that.
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William Hendricks1:22
It has been volatile. If there's a pull back from 70 and it comes back to mid to low 60s, that's still okay. We're still going to see activity growth. Even if you see a pull back in WTI because of volatility, I'm encouraged by what we're seeing in the discussions we are having with customers. Part of it is because of our leadership position in ESG and reducing emissions on rigs. We can help with that.
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Host1:52
How? Listen, sustainability is the watchword. ESG is the investing watchword. Everybody here is talking about ESG at the conference. Others would say you are an oil rig company. How are you sustainable at all?
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William Hendricks2:07
An oil rig company. Somebody has to drill. We want to do it better. We want to do things more responsibly. We can provide new engines that burn 100% natural gas to reduce emissions. We have a battery storage solution to reduce emissions as well. We are encouraged by the discussions with the operators wanting to deploy the technology.
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Host2:33
The companies that hire you, investors have been loud and clear. Capital discipline. Don't drill, drill, drill. We want positive cash flow. You want a mix. You need companies to spend. How willing are companies to open their wallets right now?
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William Hendricks2:48
So, you know, certainly it has to show capital discipline. This is relative to budgets set at a lower WTI. There is room to grow activity and it is still showing capital discipline.
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Host3:03
The old saying is the cure for high prices is high prices. Over drills and over produces and then collapses. Are we smarter this time?
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William Hendricks3:16
I'll paraphrase Mark Twain. The numbers are greatly exaggerated. We still need energy. As countries get vaccinated, this will be demand for energy.
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Host3:28
Do you see demand for oil and gas remaining fairly strong? The energy minister on the OPEC call a couple of weeks ago for zero is la la. There is an transformation, whether it is...
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William Hendricks3:46
We see a transition, a transformation. Whether it is decades away, we are providing the energy needed now. We are focused on doing it responsibly and with lower emissions.
