Patterson-UTI Energy (PTEN) stock surged 5.01% in pre-market trading on Friday, February 7, 2025, following the company's impressive fourth-quarter 2024 earnings results and positive outlook for the year ahead.

The oil and gas services company reported strong free cash flow generation in 2024, allowing for significant capital returns to shareholders. PTEN reduced its total share count by over 6% during the year and paid a dividend of $0.08 per share for the fourth quarter.

Highlighting the company's operational excellence, PTEN successfully integrated its operations with NexTier and Ulterra, driving efficiencies and streamlining costs. Additionally, the company's drilling products segment outperformed industry activity, with revenue down less than 5% despite a more than 10% decline in the industry rig count.

Looking ahead, PTEN is transitioning towards more integrated and performance-based agreements, which are expected to drive enhanced margins and capture a greater share of the value chain. Furthermore, the company's expansion of its Emerald line of 100% natural gas-powered equipment positions it well to capitalize on the growing demand for cleaner energy solutions.

PTEN's management expressed optimism about the long-term prospects for natural gas demand, anticipating potential upside in activity levels in 2026 and 2027, driven by LNG projects and midstream company forecasts. This bodes well for the company's future performance in key natural gas basins.