Patterson-UTI says no plans to invest in e-frac, points to oversupplied market

(Reuters) - Oilfield services provider Patterson-UTI on Tuesday said it had no plans to invest in electric hydraulic fracturing fleets, pointing to the high cost of building equipment and the oversupplied pressure pumping market.

The company provides drilling and hydraulic fracturing services for oil and gas producers. It has explored divesting its fracking business as customers are cutting back on new projects.

Newer equipment known as electric frac spreads have been gaining interest among investors and operators because they run on natural gas instead of more costly and polluting diesel.

Patterson-UTI manufactures electrical control systems used for electric frac spreads, but does not own any electric frac fleets.

“I’ll tell you today, the math doesn’t work,” said Chief Executive Officer Andy Hendricks at the Barclays Energy-Power Conference in New York, pointing to the oversupplied pressure pumping market.

“We don’t see the need to go that route today, but we could do it if we want,” he added.

The company already runs some drilling rigs on natural gas produced at nearby wells, and on Tuesday said in the past year it started running some drilling rigs on lithium battery packs, in addition to diesel. The hybrid rigs help reduce emissions, Hendricks told investors.

Reporting by Liz Hampton; Editing by Tom Brown