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Gold/Mining/Energy : Anyone following UTI Energy Corp.?
UTI 29.52+2.0%3:59 PM EST
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To: JakeStraw who wrote (610)5/1/1998 11:11:00 AM
From: 007  Read Replies (1) of 1305
 
I was able to get onto the conference call. It was very upbeat considering commodity prices. I didn't take notes, but here's what I got from it.

Their gas business is doing quite well and they don't anticipate any slowdown.

Permian Basin oil area is way down, but that never was a primary revenue area for them.

As of today, 86% of their gas rigs are being utilized and the utilization rate on all of their rigs is 65%.

There's nothing in the cards that should cause any further erosion of dayrates, unless of course, commodity prices drop. But they do not believe that gas prices will drop. Some say oil will be 18-20 in 6 months, but they don't believe it. Based on what they said, I am guessing that they are expecting oil to remain the same for awhile and gas to continue to be firm or even increase.

They have adjusted their contracts to be more favorable under current market conditions. This has kept utilization up without sacrificing dayrates as much as competitors who have only 50% utilization.

They are perturbed at competitors like NBR who have cut dayrates dramatically (even to operating cost levels) instead of stacking rigs.

Acquisitions since 1/97 have added 32 rigs, and they expect to continue to make significant acquisitions.

Analysts were congratulatory on the quarter's results (in light of current market conditions).

Overall, it sounds like they believe that the bottom is behind them and that market conditions should stay the same or improve.
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