Patterson-UTI Energy, Inc. (PTEN) is one of the largest onshore contract drillers in the U.S., with approximately 344 land-based rigs that operate primarily in the oil and natural gas producing regions of North America. The company, in its current form, came into existence following a merger between Patterson Energy, Inc. and UTI Energy Corporation.

Our continued Sell recommendation for Patterson-UTI shares reflects our bearish view of the North American land drilling scene. The expected drop off in drilling activities, in response to a combination of commodity-price weakness and credit market tightness, will weigh on the fortunes of all oilfield service players in general and land drillers (such as Patterson-UTI) in particular.

While the U.S. land rig count has dropped from its August 2008 peak, it still has a lot of room to go before it troughs sometime in the second half of 2009. This self-correcting mechanism is expected to bring down the current supply overhang in the natural gas market and help stabilize the commodity’s outlook for 2010 and beyond.

Read the full analyst report on “PTEN”
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