Patterson-UTI Energy, Inc. PTEN shares declined more than 2% in the wake of an explosion in a well in Quinton, OK, owned by Red Mountain Energy. The tragedy, one of the deadliest oil and gas related accidents in the last few years, occurred at one of Patterson-UTI's APEX 1500 rigs. The rig had operated for 10 days and dug 13,500 feet when the accident took place. Notably, the company has 25 drilling rigs online in the state.
Although the reason for the explosion is still not clear, gas from the well may have been a factor. Out of the 22 workers at the site, 16 managed to escape while five went missing. Their bodies were found in an adjacent building, one day after the explosion took place. Three of them were working for Patterson-UTI.
Halliburton Company's HAL well control and prevention service providing unit, Boots & Coots was summoned to extinguish the fire at this eastern Oklahoma site.
Currently, the U.S. Chemical Safety Board and Occupational Safety and Health Administration of the United States are investigating the disaster. The public utilities commission of the state, Oklahoma Corporation Commission, is also examining the incident.
About the Company
Patterson-UTI is one of the largest onshore contract drillers in the United States. Its focus areas are located in continental United States and western Canada. The company also provides pressure pumping services – an umbrella term used to describe a number of vital services performed on new and existing wells. Patterson-UTI is based in Houston, TX.
The strategic acquisition of MS Energy and Seventy Seven has not only bolstered Patterson-UTI's scale and customer base but also provided an impetus to the company’s earnings and revenues. However, we remain concerned about Patterson-UTI's lowering rig margins and increasing costs.
Zacks Rank and Stocks to Consider
Patterson-UTI has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the oil and energy sector are Cabot Oil & Gas Corporation COG and Royal Dutch Shell plc RDS.A. Both the companies sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Houston, TX -based Cabot is an independent energy company. Its sales for the fourth quarter of 2017 are expected to grow 37.2% year over year. Earnings for 2017 are expected to be up 357.1%.
Shell, based in The Hague, the Netherlands, is an integrated energy company. Its earnings for 2017 are expected to increase 102.2% year over year. The company delivered a positive earnings surprise of 18.1% in the third quarter of 2017.
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