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imaginima Last week, OPEC decided to reduce its production by 2 million barrels per day. As a result, the price of oil enjoyed a steep rally last week. Patterson-UTI Energy (NASDAQ: PTEN ) is likely to greatly benefit from this strategic move of OPEC, as North American oil producers will almost certainly increase their production amid higher oil prices. However, the oilfield services provider remains risky from a long-term perspective. Business overview Patterson-UTI provides onshore oilfield services and products to oil and gas producers in the U.S. and Canada. Its two primary segments are the contract drilling and pressure pumping segments, which generate 49% and 38% of total sales, respectively. Patterson-UTI incurred a fierce downturn due to the coronavirus crisis in 2020. Drilling activity collapsed in that year and thus the company posted excessive losses per share ( -$4.27 ). As those losses were 30% of the current market capitalization of the stock, it is easy to understand the impact of the pandemic on the company. Fortunately, U.S. drilling activity has almost returned to pre-pandemic levels thanks to the recovery of global oil consumption and the ongoing war in Ukraine. Due to the sanctions imposed by western countries on […]
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