Falling onshore rig counts caused shares of contract driller Patterson-UTI Energy (NASDAQ:PTEN) to fall as well. However, as the number of drill rigs in operation has risen and the latest Energy Department’s weekly inventory release showed a larger-than-expected decrease in natural gas supplies, PTEN has been riding high.
There are plenty of reasons to believe that will continue.
Analysts at Susquehanna estimate that the possible rebound in U.S. drilling activity will benefit Patterson the most — not only because it’s one of the largest onshore contract drillers, but also because the company has favorable drilling contract rollovers coming due, not to mention that these rollovers will have limited cost impacts on the firm’s bottom line.
That will help pad shareholders as well as PTEN’s bottom lines. Paterson can be had for a dirt cheap P/E of 9.