Patterson-Uti To Incur Pretax Charge Of $37.8 Mln On Mechanical Drilling Rigs

(RTTNews) - Patterson-Uti Energy Inc. (PTEN) announced that it will incur a pretax non-cash charge of about $37.8 million or an estimated $24.0 million after-tax related to its mechanically powered rig fleet. This charge reflects the recent shift in customer demand away from mechanically powered drilling rigs to electric powered drilling rigs.

The pretax non-cash charge includes $7.9 million from the retirement of 48 of its mechanical drilling rigs and certain spare parts in the fourth quarter of 2013. These rigs are primarily smaller mechanical units with an average horsepower rating of 731. This pretax non-cash charge also includes $29.9 million associated with the Company's 55 mechanical rigs that are not currently under contract.

Although these 55 rigs remain marketable, the company said it has lower expectations with respect to utilization of these rigs due to the industry shift to high-spec drilling rigs, such as its APEX rigs.

Although some components of the 48 rigs retired may be sold at auction, the company expects that the majority of the components of these rigs will be transferred to spare parts inventory and be available to support other rigs in the fleet. In addition, the company announced that its Board has scheduled the company's 2014 Annual Meeting of Stockholders for April 17, 2014. The Board has set a record date for the 2014 Meeting of February 20, 2014. Since the 2014 Meeting will occur more than 30 days prior to the anniversary of the Company's prior Annual Meeting of Stockholders held on June 5, 2013, the Board has set a new deadline for the receipt of shareholder proposals.

For business to be properly brought before the 2014 Meeting by any shareholder, and for a nomination of directors to be made by a shareholder, notice must be received by the Company in proper written form, in accordance with the Company's Second Amended and Restated Bylaws, no later than December 28, 2013.