##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
     Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2007oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission File Number 0-22664
     Patterson-UTI Energy,
    Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware(State or other jurisdiction
    of
    incorporation or organization)

75-2504748(I.R.S. Employer
    Identification No.)4510 Lamesa Highway, Snyder, Texas(Address of principal
    executive offices)

79549(Zip
    Code)   Registrants telephone number, including area code:
 (325) 574-6300
   Securities Registered Pursuant to 12(b) of the Act:
 None
   Securities Registered Pursuant to 12(g) of the Act:
 (Title of class)
  Common Stock, $.01 Par Value
   þ o
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
    Large accelerated
    filer þ

Accelerated
    filer o

Non-accelerated
    filer o

Smaller reporting
    company o   Rule 12b-2 o þ




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##### Table of Contents





FORWARD-LOOKING
    STATEMENTS
  Form 10-K Form 10-K
  Form 10-K
  PART I
  Item 1.
    Business  Available
    Information
  Form 10-K, Form 10-Q, Form 8-K 1-800-SEC-0330.
  Overview
     1




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##### Table of Contents



Industry
    Segments
    
    contract drilling,
    pressure pumping services,
    drilling and completion fluids services, and
    oil and natural gas exploration and production.      Contract
    Drilling Operations
  General 
  
    107 in the Permian Basin region (West Texas and Southeastern New
    Mexico),
    51 in South Texas,
    42 in the Ark-La-Tex region and Mississippi,
    75 in the Mid-Continent region (Oklahoma and North Central
    Texas),
    52 in the Rocky Mountain region (Colorado, Utah, Wyoming,
    Montana, North Dakota and South Dakota),
    3 in the Appalachian Basin, and
    20 in Western Canada (Alberta, British Columbia and
    Saskatchewan).     2




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##### Table of Contents



Drilling Contracts 
    on-site
  Daywork
    Contracts
    Footage
    Contracts
    Turnkey
    Contracts
   3




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##### Table of Contents



Revenues by Contract Type
  Year Ended December 31,Type of Revenues

2007


2006


2005Daywork


100
%


100
%


98
%Footage


0



0



1Turnkey


0



0



1   Contract Drilling Activity
  Year Ended December 31,2007


2006


2005Average rigs operating(1)


244



296



276Number of rigs operated


338



331



307Number of wells drilled


4,237



5,050



4,594Number of operating days


89,095



108,221



100,591     (1)
    
    A rig is operating when it is drilling, being moved, assembled,
    dismantled or otherwise earning revenue under contract.  Drilling Rigs and Related Equipment
  Depth Rating (Ft.)

Mechanical


Electric


Total5,000 to 7,999


4







48,000 to 11,999


74



2



7612,000 to 15,999


186



33



21916,000 to 30,000


17



34



51Totals


281



69



350       Pressure
    Pumping Operations
  General
 4




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##### Table of Contents



Equipment
  
    34 cement pumper trucks,
    57 fracturing pumper trucks,
    47 nitrogen pumper trucks,
    26 blender trucks,
    24 acid trucks,
    46 bulk cement trucks,
    19 bulk nitrogen trucks,
    3 bulk nitrogen tractor trailer combinations,
    51 bulk sand trucks,
    14 sand pneumatic trucks, and
    26 connection trucks.  Drilling
    and Completion Fluids Operations
  General
  Drilling Fluids
  Completion Fluids
  Raw Materials
  Drilling
  Completion
     Barite Grinding Facility
  Other Equipment
 5




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##### Table of Contents



Oil and
    Natural Gas Operations
  General
  Customers
    Competition
  Contract Drilling and Pressure Pumping
    Businesses
  Drilling and Completion Fluids Business
  Government
    and Environmental Regulation
    
    drilling of oil and natural gas wells,
    containment and disposal of hazardous materials, oilfield waste,
    other waste materials and acids,
    use of underground storage tanks, and
    use of underground injection wells.       6




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##### Table of Contents




    owners and operators of sites, and
    persons who disposed of or arranged for the disposal of
    hazardous substances found at sites.  and/or
    
    the prevention of discharges, including oil and produced water
    spills, and
    liability for drainage into waters.  clean-up.
  clean-up
    Risks and
    Insurance
    
    accidents at the work location,
    blow-outs,
    cratering,
    fires, and
    explosions. 7




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##### Table of Contents




    personal injury or death,
    suspension of drilling operations, or
    serious damage or destruction of the equipment involved and, in
    addition to environmental damage, could cause substantial damage
    to producing formations and surrounding areas.    
    oil or produced water spillage,
    natural gas leaks, and
    fires.      
    all-risk physical damages,
    employers liability,
    commercial general liability, and
    workers compensation insurance.    
    personal injury,
    well disasters,
    extensive fire damage,
    damage to the environment, or
    other hazards.    
    we will be able to maintain the type and amount of coverage that
    we believe to be adequate at reasonable rates, or
    any particular types of coverage will be available.   8




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##### Table of Contents



Employees
    Seasonality
    Raw
    Materials and Subcontractors
    Item 1A.
    Risk
    Factors.    We are
    Dependent on the Oil and Natural Gas Industry and Market Prices
    for Oil and Natural Gas. Declines in Oil and Natural Gas Prices
    Have Adversely Affected Our Operations.
    
    market supply and demand,
    international military, political and economic
    conditions, and
    the ability of the Organization of Petroleum Exporting
    Countries, commonly known as OPEC, to set and maintain
    production and price targets.    A
    General Excess of Operable Land Drilling Rigs Adversely Affects
    Our Profit Margins Particularly in Times of Weaker
    Demand.
      
    movement of drilling rigs from region to region, 9




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##### Table of Contents




    reactivation of land-based drilling rigs, or
    construction of new drilling rigs.    Shortages
    of Drill Pipe, Replacement Parts and Other Related Rig Equipment
    Adversely Affects Our Operating Results.
    The
    Oil Service Business Segments in Which We Operate Are Highly
    Competitive with Excess Capacity, which Adversely Affect Our
    Operating Results.
          Labor
    Shortages Adversely Affect Our Operating Results.
    Continued
    Growth Through Rig Acquisition is Not Assured.
   10




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##### Table of Contents




    have sufficient capital resources to complete additional
    acquisitions,
    successfully integrate acquired operations and assets,
    effectively manage the growth and increased size,
    successfully deploy idle or stacked rigs,
    maintain the crews and market share to operate drilling rigs
    acquired, or
    successfully improve our financial condition, results of
    operations, business or prospects as a result of any completed
    acquisition.    The
    Nature of our Business Operations Presents Inherent Risks of
    Loss that, if not Insured or Indemnified Against, Could
    Adversely Affect Our Operating Results.
      Violations
    of Environmental Laws and Regulations Could Materially Adversely
    Affect Our Operating Results.
    Some
    of Our Contract Drilling Services are Provided Under Turnkey and
    Footage Contracts, Which are Financially Risky.
   11




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##### Table of Contents



Anti-takeover
    Measures in Our Charter Documents and Under State Law Could
    Discourage an Acquisition and Thereby Affect the Related
    Purchase Price.
    Item 1B.
    Unresolved
    Staff Comments.    Item 2.
    Properties  (325) 574-6300.
  Contract Drilling Operations
  Pressure Pumping
  Drilling and Completion Fluids
    Item 3.
    Legal
    Proceedings.    Item 4.
    Submission
    of Matters to a Vote of Security Holders.   12




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##### Table of Contents



PART II
  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities.  (a)
    Market
    Information    High


Low2007:First quarter

$
24.89


$
21.13Second quarter


27.66



22.17Third quarter


26.48



20.79Fourth quarter


23.22



18.442006:First quarter

$
38.49


$
25.61Second quarter


35.65



25.24Third quarter


29.11



21.84Fourth quarter


28.21



20.81   (b)
    Holders    (c)
    Dividends
    and Buyback Program    Per Share


Total(In thousands)2007:Paid on March 30, 2007

$
0.08


$
12,527Paid on June 29, 2007


0.12



18,860Paid on September 28, 2007


0.12



18,690Paid on December 28, 2007


0.12



18,484Total cash dividends declared and paid

$
0.44


$
68,5612006:Paid on March 30, 2006

$
0.04


$
6,906Paid on June 30, 2006


0.08



13,413Paid on September 29, 2006


0.08



13,024Paid on December 29, 2006


0.08



12,482Total cash dividends declared and paid

$
0.28


$
45,825  13




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##### Table of Contents



ApproximateTotal number


dollar valueof shares


of shares(or units)


that may yetpurchased as


be purchasedpart of


under theTotal number


Average price


publicly announced


plans orof shares


paid per


plans or


programsPeriod covered

purchased


share


programs(1)


(In thousands)(1)October
    131,
    2007





$







$
199,726November
    130,
    2007(2)


254,126


$
18.87



250,000


$
195,009December
    131,
    2007


783,850


$
19.60



783,850


$
179,646Total


1,037,976


$
19.42



1,033,850


$
179,646     (1)
    
    On August 1, 2007, our Board of Directors approved a stock
    buyback program authorizing purchases of up to $250 million
    of our common stock in open market or privately negotiated
    transactions.(2)
    
    On November 30, 2007, we purchased 4,126 shares from
    employees to provide the respective employees with the funds
    necessary to satisfy their tax withholding obligations with
    respect to the vesting of restricted shares on that date. The
    price paid was $18.85 per share, which was the closing price of
    our common stock on November 30, 2007.  (d)
    Securities
    Authorized for Issuance Under Equity Compensation
    Plans    Equity Compensation Plan InformationNumber ofSecurities RemainingNumber of





Available forSecurities to





Future Issuancebe Issued


Weighted-Average


under Equityupon Exercise


Exercise Price


Compensation Plansof Outstanding


of Outstanding


(Excluding SecuritiesOptions, Warrants


Options, Warrants


Reflected inPlan Category

and Rights


and Rights


Column(a))(a)


(b)


(c)Equity compensation plans approved by security holders(1)


6,733,337


$
18.27



2,283,045Equity compensation plans not approved by security holders(2)


669,747


$
9.91



Total


7,403,084


$
17.52



2,283,045     (1)
    
    The Patterson-UTI Energy, Inc. 2005 Long-Term Incentive Plan
    (the 2005 Plan) provides for awards of incentive
    stock options, non-incentive stock options, tandem and
    freestanding stock appreciation rights, restricted stock awards,
    other stock unit awards, performance share awards, performance
    unit awards and dividend equivalents to key employees, officers
    and directors, which are subject to certain vesting and
    forfeiture provisions. All options are granted with an exercise
    price equal to or greater than the fair market value of the
    common stock at the time of grant. The vesting schedule and term
    are set by the Compensation Committee of 14




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##### Table of Contents



the Board of Directors. All securities remaining available for
    future issuance under equity compensation plans approved by
    security holders in column (c) are available under this
    plan.(2)
    
    The Amended and Restated Patterson-UTI Energy, Inc. 2001
    Long-Term Incentive Plan (the 2001 Plan) was
    approved by the Board of Directors in July 2001. In connection
    with the approval of the 2005 Plan, the Board of Directors
    approved a resolution that no further options, restricted stock
    or other awards would be granted under any equity compensation
    plan, other than the 2005 Plan. The terms of the 2001 Plan
    provided for grants of stock options, stock appreciation rights,
    shares of restricted stock and performance awards to eligible
    employees other than officers and directors. No Incentive Stock
    Options could be awarded under the Plan. All options were
    granted with an exercise price equal to or greater than the fair
    market value of the common stock at the time of grant. The
    vesting schedule and term were set by the Compensation Committee
    of the Board of Directors. 15




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##### Table of Contents



(e)
    Performance
    Graph    
  Fiscal Year Ended December 31,2002


2003


2004


2005


2006


2007Company/Index

($)


($)


($)


($)


($)


($)Patterson-UTI Energy, Inc.


100.00



109.15



129.56



220.73



157.34



134.84Peer Group Index


100.00



113.82



147.78



225.64



182.13



189.00S&P 500 Stock Index


100.00



128.68



142.69



149.70



173.34



182.87Oilfield Service Index (OSX)


100.00



116.47



157.50



236.16



269.34



393.90S&P MidCap Index


100.00



135.62



157.97



177.81



196.15



211.80    16




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##### Table of Contents



Item 6.
    Selected
    Financial Data.    Years Ended December 31,2007


2006


2005


2004


2003(In thousands, except per share amounts)Income Statement Data:Operating revenues:Contract drilling

$
1,741,647


$
2,169,370


$
1,485,684


$
809,691


$
639,694Pressure pumping


202,812



145,671



93,144



66,654



46,083Drilling and completion fluids


128,098



192,358



122,011



90,557



69,230Oil and natural gas


41,637



39,187



39,616



33,867



21,163Total


2,114,194



2,546,586



1,740,455



1,000,769



776,170Operating costs and expenses:Contract drilling


963,150



1,002,001



776,313



556,869



475,224Pressure pumping


105,273



77,755



54,956



37,561



26,184Drilling and completion fluids


108,752



150,372



98,530



76,503



61,424Oil and natural gas


10,864



13,374



9,566



7,978



4,808Depreciation, depletion, amortization and impairment


249,206



196,370



156,393



122,800



100,834Selling, general and administrative


64,623



55,065



39,110



31,983



27,685Embezzlement costs (recoveries)


(43,955
)


3,081



20,043



19,122



17,849(Gain) loss on disposal of assets


(16,545
)


3,819



(1,231
)


(1,411
)


(1,927
)Other operating expenses (income)


2,550



5,585



5,479



897



(2,193
)Total


1,443,918



1,507,422



1,159,159



852,302



709,888Operating income


670,276



1,039,164



581,296



148,467



66,282Other income


531



4,670



3,463



680



2,694Income before income taxes and cumulative effect of change in
    accounting principle


670,807



1,043,834



584,759



149,147



68,976Income tax expense


232,168



371,267



212,019



54,801



25,320Income before cumulative effect of change in accounting principle


438,639



672,567



372,740



94,346



43,656Cumulative effect of change in accounting principle, net of
    related income tax expense of $398 in 2006 and benefit of $287
    in 2003






687











(469
)Net income

$
438,639


$
673,254


$
372,740


$
94,346


$
43,187Income before cumulative effect of change in accounting
    principle per common share:Basic

$
2.83


$
4.07


$
2.19


$
0.57


$
0.27Diluted

$
2.79


$
4.02


$
2.15


$
0.56


$
0.27 17




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##### Table of Contents



Years Ended December 31,2007


2006


2005


2004


2003(In thousands, except per share amounts)Net income per common share:Basic

$
2.83


$
4.08


$
2.19


$
0.57


$
0.27Diluted

$
2.79


$
4.02


$
2.15


$
0.56


$
0.26Cash dividends per common share

$
0.44


$
0.28


$
0.16


$
0.06


$
Weighted average number of common shares outstanding:Basic


154,755



165,159



170,426



166,258



161,272Diluted


156,997



167,413



173,767



169,211



164,572Balance Sheet Data:Total assets

$
2,465,199


$
2,192,503


$
1,795,781


$
1,256,785


$
1,039,521Borrowings under line of credit


50,000



120,000











Stockholders equity


1,896,030



1,562,466



1,367,011



961,501



789,814Working capital


227,577



335,052



382,448



235,480



198,399  18




---



##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations    Management Overview
  2007


2006


2005Contract drilling

$
1,741,647



82
%

$
2,169,370



84
%

$
1,485,684



86
%Pressure pumping


202,812



10



145,671



6



93,144



5Drilling and completion fluids


128,098



6



192,358



8



122,011



7Oil and natural gas


41,637



2



39,187



2



39,616



2$
2,114,194



100
%

$
2,546,586



100
%

$
1,740,455



100
%           Commitments and Contingencies
   19




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##### Table of Contents



Trading and investing
  Description of business
  Critical
    Accounting Policies
    Property and equipment
  Oil and natural gas properties
 20




---



##### Table of Contents



lease-by-lease
  Goodwill
  Revenue recognition
  Use of estimates
    
    allowance for doubtful accounts,
    depreciation and depletion,
    asset impairment,
    reserves for self-insured levels of insurance coverages, and
    fair values of assets and liabilities assumed in acquisitions.   21




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##### Table of Contents



Liquidity
    and Capital Resources
    
    $812 million from operating activities,
    $34.2 million in proceeds from the disposal of property and
    equipment, and
    $3.2 million from the exercise of stock options and related
    tax benefits associated with stock-based compensation.    
    to make capital expenditures for the betterment and
    refurbishment of our drilling rigs,
    to acquire and procure drilling equipment and facilities to
    support our drilling operations,
    to fund capital expenditures for our pressure pumping and
    drilling and completion fluids divisions, and
    to fund leasehold acquisition and exploration and development of
    oil and natural gas properties.      Per Share


Total(In thousands)Paid on March 30, 2007

$
0.08


$
12,527Paid on June 29, 2007


0.12



18,860Paid on September 28, 2007


0.12



18,690Paid on December 28, 2007


0.12



18,484Total cash dividends declared and paid

$
0.44


$
68,561        22




---



##### Table of Contents



Contractual
    Obligations
    Payments Due by PeriodLess Than 1








More Than 5Total


Year


1-3 Years


3-5 Years


YearsBorrowings under line of credit(1)

$
50,000


$



$
50,000


$



$
Commitments to purchase equipment(2)


82,998



82,998











$
132,998


$
82,998


$
50,000


$



$
     (1)
    
    Our line of credit is a revolving line of credit that matures on
    December 16, 2009. So long as we are in compliance with our
    obligations under the credit agreement, no principal repayments
    are required until maturity.(2)
    
    Represents non-cancelable commitments to purchase equipment to
    be delivered throughout 2008.  Off-Balance
    Sheet Arrangements
    Results
    of Operations
  Comparison
    of the years ended December 31, 2007 and 2006
  The following tables summarize operations by business segment
    for the years ended December 31, 2007 and 2006:
  Year Ended December 31,Contract Drilling

2007


2006


% Change(Dollars in thousands)Revenues

$
1,741,647


$
2,169,370



(19.7
)%Direct operating costs

$
963,150


$
1,002,001



(3.9
)%Selling, general and administrative

$
5,893


$
7,313



(19.4
)%Depreciation

$
213,812


$
168,607



26.8
%Operating income

$
558,792


$
991,449



(43.6
)%Operating days


89,095



108,192



(17.7
)%Average revenue per operating day

$
19.55


$
20.05



(2.5
)%Average direct operating costs per operating day

$
10.81


$
9.26



16.7
%Average rigs operating


244



296



(17.6
)%Capital expenditures

$
539,506


$
531,087



1.6
%     1st Quarter


2nd Quarter


3rd Quarter


4th Quarter


Year2007:Average natural gas price(1)

$
7.44


$
7.76


$
6.35


$
7.19


$
7.182006:Average natural gas price(1)

$
7.93


$
6.74


$
6.26


$
6.87


$
6.94  23




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##### Table of Contents



(1)
    
    The average natural gas price above represents the Henry Hub
    Spot price as reported by the United States Energy Information
    Administration.    Year Ended December 31,Pressure Pumping

2007


2006


% Change(Dollars in thousands)Revenues

$
202,812


$
145,671



39.2
%Direct operating costs

$
105,273


$
77,755



35.4
%Selling, general and administrative

$
18,971


$
13,185



43.9
%Depreciation

$
14,311


$
9,896



44.6
%Operating income

$
64,257


$
44,835



43.3
%Total jobs


14,094



11,650



21.0
%Average revenue per job

$
14.39


$
12.50



15.1
%Average direct operating costs per job

$
7.47


$
6.67



12.0
%Capital expenditures

$
47,582


$
41,262



15.3
%     Year Ended December 31,Drilling and Completion Fluids

2007


2006


% Change(Dollars in thousands)Revenues

$
128,098


$
192,358



(33.4
)%Direct operating costs

$
108,752


$
150,372



(27.7
)%Selling, general and administrative

$
9,958


$
10,521



(5.4
)%Depreciation

$
2,860


$
2,706



5.7
%Operating income

$
6,528


$
28,759



(77.3
)%Capital expenditures

$
3,082


$
4,222



(27.0
)%     24




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##### Table of Contents



Year Ended December 31,Oil and Natural Gas Production and Exploration

2007


2006


% Change(Dollars in thousands, except commodity prices)Revenues

$
41,637


$
39,187



6.3
%Direct operating costs

$
10,864


$
13,374



(18.8
)%Selling, general and administrative

$
2,365


$
2,785



(15.1
)%Depreciation, depletion and impairment

$
17,410


$
14,368



21.2
%Operating income

$
10,998


$
8,660



27.0
%Capital expenditures

$
17,516


$
21,198



(17.4
)%Average net daily oil production (Bbls)


971



983



(1.2
)%Average net daily gas production (Mcf)


4,996



5,143



(2.9
)%Average oil sales price (per Bbl)

$
68.82


$
63.83



7.8
%Average gas sales price (per Mcf)

$
7.37


$
6.82



8.1
%     Year Ended December 31,Corporate and Other

2007


2006


% Change(Dollars in thousands)Selling, general and administrative

$
27,436


$
21,261



29.0
%Depreciation

$
813


$
793



2.5
%Other operating expenses

$
2,550


$
5,585



(54.3
)%Embezzlement costs (recoveries)

$
(43,955
)

$
3,081



N/A
%(Gain) loss on disposal of assets

$
(16,545
)

$
3,819



N/A
%Interest income

$
2,355


$
5,925



(60.3
)%Interest expense

$
2,187


$
1,602



36.5
%Other income

$
363


$
347



4.6
%Capital expenditures

$



$
150



(100.0
)%    25




---



##### Table of Contents



Comparison
    of the years ended December 31, 2006 and 2005
  The following tables summarize operations by business segment
    for the years ended December 31, 2006 and 2005:
  Year Ended December 31,Contract Drilling

2006


2005


% Change(Dollars in thousands)Revenues

$
2,169,370


$
1,485,684



46.0
%Direct operating costs

$
1,002,001


$
776,313



29.1
%Selling, general and administrative

$
7,313


$
5,069



44.3
%Depreciation

$
168,607


$
131,740



28.0
%Operating income

$
991,449


$
572,562



73.2
%Operating days


108,192



100,591



7.6
%Average revenue per operating day

$
20.05


$
14.77



35.7
%Average direct operating costs per operating day

$
9.26


$
7.72



19.9
%Average rigs operating


296



276



7.2
%Capital expenditures

$
531,087


$
329,073



61.4
%     1st Quarter


2nd Quarter


3rd Quarter


4th Quarter


Year2006:Average natural gas price(1)

$
7.93


$
6.74


$
6.26


$
6.87


$
6.942005:Average natural gas price(1)

$
6.62


$
7.14


$
9.82


$
12.64


$
8.98     (1)
    
    The average natural gas price above represents the Henry Hub
    Spot price as reported by the United States Energy Information
    Administration. 26




---



##### Table of Contents



Year Ended December 31,Pressure Pumping

2006


2005


% Change(Dollars in thousands)Revenues

$
145,671


$
93,144



56.4
%Direct operating costs

$
77,755


$
54,956



41.5
%Selling, general and administrative

$
13,185


$
9,430



39.8
%Depreciation

$
9,896


$
7,094



39.5
%Operating income

$
44,835


$
21,664



107.0
%Total jobs


11,650



9,615



21.2
%Average revenue per job

$
12.50


$
9.69



29.0
%Average direct operating costs per job

$
6.67


$
5.72



16.6
%Capital expenditures

$
41,262


$
25,508



61.8
%     Year Ended December 31,Drilling and Completion Fluids

2006


2005


% Change(Dollars in thousands)Revenues

$
192,358


$
122,011



57.7
%Direct operating costs

$
150,372


$
98,530



52.6
%Selling, general and administrative

$
10,521


$
8,912



18.1
%Depreciation

$
2,706


$
2,368



14.3
%Operating income

$
28,759


$
12,201



135.7
%Capital expenditures

$
4,222


$
3,042



38.8
%  27




---



##### Table of Contents



Year Ended December 31,Oil and Natural Gas Production and Exploration

2006


2005


% Change(Dollars in thousands, except commodity prices)Revenues

$
39,187


$
39,616



(1.1
)%Direct operating costs

$
13,374


$
9,566



39.8
%Selling, general and administrative

$
2,785


$
2,189



27.2
%Depreciation, depletion and impairment

$
14,368


$
14,456



(0.6
)%Operating income

$
8,660


$
13,405



(35.4
)%Capital expenditures

$
21,198


$
17,163



23.5
%Average net daily oil production (Bbls)


983



860



14.3
%Average net daily gas production (Mcf)


5,143



7,016



(26.7
)%Average oil sales price (per Bbl)

$
63.83


$
54.30



17.6
%Average gas sales price (per Mcf)

$
6.82


$
7.64



(10.7
)%     Year Ended December 31,Corporate and Other

2006


2005


% Change(Dollars in thousands)Selling, general and administrative

$
21,261


$
13,510



57.4
%Depreciation

$
793


$
735



7.9
%Other operating expenses

$
5,585


$
5,479



1.9
%Embezzlement costs

$
3,081


$
20,043



(84.6
)%(Gain) loss on disposal of assets

$
3,819


$
(1,231
)


N/A
%Interest income

$
5,925


$
3,551



66.9
%Interest expense

$
1,602


$
516



210.5
%Other income

$
347


$
428



(18.9
)%Capital expenditures

$
150


$
5,308



(97.2
)%     Income
    Taxes
  Year Ended December 31,2007


2006


2005(Dollars in thousands)Income before income tax

$
670,807


$
1,043,834


$
584,759Income tax expense


232,168



371,267



212,019Effective tax rate


34.6
%


35.6
%


36.3
%  28




---



##### Table of Contents



2007


2006


2005Statutory tax rate


35.0
%


35.0
%


35.0
%State income taxes


1.4



1.4



1.8Permanent differences


(1.6
)


(0.8
)


(0.6
)Other, net


(0.2
)


0.0



0.1Effective tax rate


34.6
%


35.6
%


36.3
%         Volatility
    of Oil and Natural Gas Prices
      Impact of
    Inflation
    Recently
    Issued Accounting Standards
  Fair Value Measurements
 29




---



##### Table of Contents



The
    Fair Value Option for Financial Assets and Financial Liabilities
    Including an Amendment of FASB Statement No. 115
  Business Combinations Noncontrolling Interests in
    Consolidated Financial Statements, an amendment of ARB
    No. 51 Business
    Combinations
  Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk      Item 8.
    Financial
    Statements and Supplementary Data.  page F-1,
  Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure.    Item 9A.
    Controls
    and Procedures.  Disclosure
    Controls and Procedures:
  Rules 13a-15(e) 15d-15(e) Form 10-K.
 30




---



##### Table of Contents



Managements
    Report on Internal Control over Financial Reporting:
  Rule 13a-15(f). Internal Control-Integrated Framework
  page F-2 Form 10-K.
  Changes
    in Internal Control over Financial Reporting:
    Item 9B.
    Other
    Information   31




---



##### Table of Contents



PART III
    Item 10.
    Directors,
    Executive Officers and Corporate Governance.    Item 11.
    Executive
    Compensation.    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters.    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence.    Item 14.
    Principal
    Accountant Fees and Services.   32




---



##### Table of Contents



PART IV
  Item 15.
    Exhibits
    and Financial Statement Schedule.  Financial Statements
  page F-1
  Financial Statement Schedule
  page S-1.
    Exhibits
    3
.1

Restated Certificate of Incorporation, as amended (filed
    August 9, 2004 as Exhibit 3.1 to the Companys
    Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2004 and
    incorporated herein by reference).3
.2

Amendment to Restated Certificate of Incorporation, as amended
    (filed August 9, 2004 as Exhibit 3.2 to the
    Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2004 and
    incorporated herein by reference).3
.3

Second Amended and Restated Bylaws (filed August 6, 2007 as
    Exhibit 3.3 to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2007 and
    incorporated herein by reference).4
.1

Rights Agreement dated January 2, 1997, between Patterson
    Energy, Inc. and Continental Stock Transfer &
    Trust Company (filed January 14, 1997 as
    Exhibit 2 to the Companys Registration Statement on
    Form 8-A
    and incorporated herein by reference).4
.2

Amendment to Rights Agreement dated as of October 23, 2001
    (filed October 31, 2001 as Exhibit 3.4 to the
    Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended September 30, 2001 and
    incorporated herein by reference).4
.3

Restated Certificate of Incorporation, as amended (See
    Exhibits 3.1 and 3.2).4
.4

Registration Rights Agreement with Bear, Stearns and Co. Inc.,
    dated March 25, 1994, as assigned by REMY Capital Partners
    III, L.P. (filed March 19, 2002 as Exhibit 4.3 to the
    Companys Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2001 and
    incorporated herein by reference).10
.1

For additional material contracts, see Exhibits 4.1, 4.2
    and 4.4.10
.2

Patterson-UTI Energy, Inc., 1993 Stock Incentive Plan, as
    amended (filed March 13, 1998 as Exhibit 10.1 to the
    Companys Registration Statement on
    Form S-8
    (File
    No. 333-47917)
    and incorporated herein by reference).*10
.3

Patterson-UTI Energy, Inc. Non-Employee Directors Stock
    Option Plan, as amended (filed November 4, 1997 as
    Exhibit 10.1 to the Companys Registration Statement
    on
    Form S-8
    (File
    No. 333-39471)
    and incorporated herein by reference).*10
.4

Amended and Restated Patterson-UTI Energy, Inc. 2001 Long-Term
    Incentive Plan (filed November 27, 2002 as Exhibit 4.4
    to Post Effective Amendment No. 1 to the Companys
    Registration Statement on
    Form S-8
    (File
    No. 333-60470)
    and incorporated herein by reference).*10
.5

Patterson-UTI Energy, Inc. Amended and Restated 1997 Long-Term
    Incentive Plan (filed July 28, 2003 as Exhibit 4.7 to
    the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2003 and
    incorporated herein by reference).*10
.6

Amendment to the Patterson-UTI Energy, Inc. Amended and Restated
    1997 Long-Term Incentive Plan (filed August 9, 2004 as
    Exhibit 10.7 to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2004 and
    incorporated herein by reference).*10
.7

Amended and Restated Patterson-UTI Energy, Inc. Non-Employee
    Director Stock Option Plan(filed July 28, 2003 as
    Exhibit 4.8 to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2003 and
    incorporated herein by reference).* 33




---



##### Table of Contents



10
.8

Amended and Restated Patterson-UTI Energy, Inc. 1996 Employee
    Stock Option Plan (filed July 25, 2001 as Exhibit 4.4
    to Post-Effective Amendment No. 1 to the Companys
    Registration Statement on
    Form S-8
    (File
    No. 333-60466)
    and incorporated herein by reference).*10
.9

Patterson-UTI Energy, Inc. 2005 Long-Term Incentive Plan,
    including Form of Executive Officer Restricted Stock Award
    Agreement, Form of Executive Officer Stock Option Agreement,
    Form of Non-Employee Director Restricted Stock Award Agreement
    and Form of Non-Employee Director Stock Option Agreement (filed
    June 21, 2005 as Exhibit 10.1 to the Companys
    Current Report on
    Form 8-K,
    and incorporated herein by reference).*10
.10

Restricted Stock Award Agreement dated April 28, 2004
    between Patterson-UTI Energy, Inc. and Mark S. Siegel (filed
    August 9, 2004 as Exhibit 10.1 to the Companys
    Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2004 and
    incorporated herein by reference).*10
.11

Restricted Stock Award Agreement dated April 28, 2004
    between Patterson-UTI Energy, Inc. and Cloyce A. Talbott (filed
    August 9, 2004 as Exhibit 10.2 to the Companys
    Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2004 and
    incorporated herein by reference).*10
.12

Restricted Stock Award Agreement dated April 28, 2004
    between Patterson-UTI Energy, Inc. and Kenneth N. Berns (filed
    August 9, 2004 as Exhibit 10.4 to the Companys
    Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2004 and
    incorporated herein by reference).*10
.13

Restricted Stock Award Agreement dated April 28, 2004
    between Patterson-UTI Energy, Inc. and John E. Vollmer III
    (filed August 9, 2004 as Exhibit 10.6 to the
    Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2004 and
    incorporated herein by reference).*10
.14

Patterson-UTI Energy, Inc. Change in Control Agreement,
    effective as of January 29, 2004, by and between
    Patterson-UTI Energy, Inc. and Mark S. Siegel (filed on
    February 4, 2004 as Exhibit 10.2 to the Companys
    Annual Report on
    Form 10-K
    for the year ended December 31, 2003 and incorporated
    herein by reference).*10
.15

Employment Agreement, dated as of September 1, 2007 between
    Patterson-UTI Energy, Inc. and Cloyce A. Talbott (filed on
    September 24, 2007 as Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K,
    and incorporated herein by reference).*10
.16

Patterson-UTI Energy, Inc. Change in Control Agreement,
    effective as of January 29, 2004, by and between
    Patterson-UTI Energy, Inc. and Kenneth N. Berns (filed on
    February 4, 2004 as Exhibit 10.5 to the Companys
    Annual Report on
    Form 10-K
    for the year ended December 31, 2003 and incorporated
    herein by reference).*10
.17

Patterson-UTI Energy, Inc. Change in Control Agreement,
    effective as of January 29, 2004, by and between
    Patterson-UTI Energy, Inc. and John E. Vollmer III (filed
    on February 4, 2004 as Exhibit 10.7 to the
    Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2003 and incorporated
    herein by reference).*10
.18

Form of Letter Agreement regarding termination, effective as of
    January 29, 2004, entered into by Patterson-UTI Energy,
    Inc. with each of Mark S. Siegel, Kenneth N. Berns and John E.
    Vollmer III (filed on February 25, 2005 as
    Exhibit 10.23 to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2004 and incorporated
    herein by reference).*10
.19

Form of Indemnification Agreement entered into by Patterson-UTI
    Energy, Inc. with each of Mark S. Siegel, Cloyce A. Talbott,
    Douglas J. Wall, Kenneth N. Berns, Curtis W. Huff, Terry H.
    Hunt, Kenneth R. Peak, Charles O. Buckner, John E. Vollmer III,
    William L. Moll, Jr. and Gregory W. Pipkin (filed April 28,
    2004 as Exhibit 10.11 to the Companys Annual Report
    on
    Form 10-K,
    as amended, for the year ended December 31, 2003 and
    incorporated herein by reference).*10
.20

Severance Agreement between Patterson-UTI Energy, Inc. and
    Douglas J. Wall, effective as of August 31, 2007 (filed
    September 4, 2007 as Exhibit 10.3 to the
    Companys Current Report on
    Form 8-K
    and incorporated herein by reference).*10
.21

Patterson-UTI Energy, Inc. Change in Control Agreement,
    effective as of August 31, 2007, by and between
    Patterson-UTI Energy, Inc. and Douglas J. Wall (filed
    September 4, 2007 as Exhibit 10.2 to the
    Companys Current Report on
    Form 8-K
    and incorporated herein by reference).* 34




---



##### Table of Contents



10
.22

Patterson-UTI Energy, Inc. Change in Control Agreement,
    effective as of August 31, 2007, by and between
    Patterson-UTI Energy, Inc. and William L. Moll, Jr. (filed
    November 5, 2007 as Exhibit 10.7 to the Companys
    Quarterly Report on
    Form 10-Q
    for the quarterly period ended September 30, 2007 and
    incorporated herein by reference).*10
.23

First Amendment to Change in Control Agreement Between
    Patterson-UTI Energy, Inc. and Mark S. Siegel, entered into
    November 1, 2007 (filed November 5, 2007 as
    Exhibit 10.8 to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended September 30, 2007 and
    incorporated herein by reference).*10
.24

First Amendment to Change in Control Agreement Between
    Patterson-UTI Energy, Inc. and Douglas J. Wall, entered into
    November 1, 2007 (filed November 5, 2007 as
    Exhibit 10.9 to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended September 30, 2007 and
    incorporated herein by reference).*10
.25

First Amendment to Change in Control Agreement Between
    Patterson-UTI Energy, Inc. and John E. Vollmer, III,
    entered into November 1, 2007 (filed November 5, 2007
    as Exhibit 10.10 to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended September 30, 2007 and
    incorporated herein by reference).*10
.26

First Amendment to Change in Control Agreement Between
    Patterson-UTI Energy, Inc. and Kenneth N. Berns, entered into
    November 1, 2007 (filed November 5, 2007 as
    Exhibit 10.11 to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended September 30, 2007 and
    incorporated herein by reference).*10
.27

First Amendment to Change in Control Agreement Between
    Patterson-UTI Energy, Inc. and William L. Moll, Jr., entered
    into November 1, 2007 (filed November 5, 2007 as
    Exhibit 10.12 to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended September 30, 2007 and
    incorporated herein by reference).*10
.28

Credit Agreement dated as of December 17, 2004 among
    Patterson-UTI Energy, Inc., as the Borrower, Bank of America,
    N.A., as administrative agent, L/C Issuer and a Lender and the
    other lenders and agents party thereto (filed on
    December 23, 2004 as Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K
    and incorporated herein by reference).10
.29

Commitment Increase and Joinder Agreement, dated as of
    August 2, 2006, by and among Patterson-UTI Energy, Inc.,
    the guarantors party thereto, the lenders party thereto, and
    Bank of America, N.A. as Administrative Agent, L/C Issuer and
    Lender (filed August 21, 2006 as Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K
    and incorporated herein by reference).10
.30

Letter Agreement dated February 6, 2006 between
    Patterson-UTI Energy, Inc. and John E. Vollmer III (filed
    May 1, 2006 as Exhibit 10.25 to the Companys
    Annual Report on
    Form 10-K,
    as amended, and incorporated herein by reference).*14
.1

Patterson-UTI Energy, Inc. Code of Business Conduct and Ethics
    for Senior Financial Executives (filed on February 4, 2004
    as Exhibit 14.1 to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2003 and incorporated
    herein by reference).21
.1

Subsidiaries of the Registrant.23
.1

Consent of Independent Registered Public Accounting Firm.31
.1

Certification of Chief Executive Officer pursuant to
    Rule 13a-14(a)/15d-14(a)
    of the Securities Exchange Act of 1934, as amended.31
.2

Certification of Chief Financial Officer pursuant to
    Rule 13a-14(a)/15d-14(a)
    of the Securities Exchange Act of 1934, as amended.32
.1

Certification of Chief Executive Officer and Chief Financial
    Officer pursuant to 18 USC Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.     *
    
    Management Contract or Compensatory Plan identified as required
    by Item 15(a)(3) of
    Form 10-K. 35




---



##### 



INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
 PageReport of Independent Registered Public
    Accounting Firm


F-2Consolidated Financial Statements:Consolidated Balance Sheets as of
    December 31, 2007 and 2006


F-3Consolidated Statements of Income for the years
    ended December 31, 2007, 2006 and 2005


F-4Consolidated Statements of Changes In
    Stockholders Equity for the years ended December 31,
    2007, 2006 and 2005


F-5Consolidated Statements of Changes In Cash Flows
    for the years ended December 31, 2007, 2006 and 2005


F-6Notes to Consolidated Financial Statements


F-7Financial Statement Schedule


S-1Subsidiaries of the RegistrantConsent of Independent Registered Public Accounting FirmCertification of Chief Executive OfficerCertification of Chief Financial OfficerCertification of CEO and CFO Pursuant to Section 906   F-1




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm     Internal Control  Integrated Framework
          F-2




---



##### Table of Contents



PATTERSON-UTI
    ENERGY, INC. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
  December 31,2007


2006(In thousands,except share data)ASSETSCurrent assets:Cash and cash equivalents

$
17,434


$
13,385Accounts receivable, net of allowance for doubtful accounts of
    $10,014 and $7,484 at December 31, 2007 and 2006,
    respectively


373,279



484,106Accrued Federal and state income taxes receivable






5,448Inventory


44,416



43,947Deferred tax assets, net


35,370



48,868Deposits on equipment purchases


1,650



24,746Other


50,636



32,170Total current assets


522,785



652,670Property and equipment, net


1,841,404



1,435,804Goodwill


96,198



99,056Other


4,812



4,973Total assets

$
2,465,199


$
2,192,503LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable:Trade

$
133,330


$
138,372Accrued revenue distributions


4,221



15,359Other


19,365



18,424Accrued Federal and state income taxes payable


1,458



Accrued expenses


136,834



145,463Total current liabilities


295,208



317,618Borrowings under line of credit


50,000



120,000Deferred tax liabilities, net


219,490



187,960Other


4,471



4,459Total liabilities


569,169



630,037Commitments and contingencies (see Note 9)






Stockholders equity:Preferred stock, par value $.01; authorized
    1,000,000 shares, no shares issued






Common stock, par value $.01; authorized 300,000,000 shares
    with 177,385,808 and 176,656,401 issued and 153,942,800 and
    156,542,512 outstanding at December 31, 2007 and 2006,
    respectively


1,773



1,766Additional paid-in capital


703,581



681,069Retained earnings


1,716,620



1,346,542Accumulated other comprehensive income


20,207



8,390Treasury stock, at cost, 23,443,008 shares and
    20,113,889 shares at December 31, 2007 and 2006,
    respectively


(546,151
)


(475,301
)Total stockholders equity


1,896,030



1,562,466Total liabilities and stockholders equity

$
2,465,199


$
2,192,503    F-3




---



##### Table of Contents



PATTERSON-UTI
    ENERGY, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF INCOME
  Year Ended December 31,2007


2006


2005(In thousands, except per share data)Operating revenues:Contract drilling

$
1,741,647


$
2,169,370


$
1,485,684Pressure pumping


202,812



145,671



93,144Drilling and completion fluids


128,098



192,358



122,011Oil and natural gas


41,637



39,187



39,6162,114,194



2,546,586



1,740,455Operating costs and expenses:Contract drilling


963,150



1,002,001



776,313Pressure pumping


105,273



77,755



54,956Drilling and completion fluids


108,752



150,372



98,530Oil and natural gas


10,864



13,374



9,566Depreciation, depletion and impairment


249,206



196,370



156,393Selling, general and administrative


64,623



55,065



39,110Embezzlement costs (recoveries)


(43,955
)


3,081



20,043(Gain) loss on disposal of assets


(16,545
)


3,819



(1,231
)Other operating expenses


2,550



5,585



5,4791,443,918



1,507,422



1,159,159Operating income


670,276



1,039,164



581,296Other income (expense):Interest income


2,355



5,925



3,551Interest expense


(2,187
)


(1,602
)


(516
)Other


363



347



428531



4,670



3,463Income before income taxes and cumulative effect of change in
    accounting principle


670,807



1,043,834



584,759Income tax expense (benefit):Current


193,897



375,373



194,918Deferred


38,271



(4,106
)


17,101232,168



371,267



212,019Income before cumulative effect of change in accounting principle


438,639



672,567



372,740Cumulative effect of change in accounting principle, net of
    related income tax expense of $398






687



Net income

$
438,639


$
673,254


$
372,740Income before cumulative effect of change in accounting
    principle per common share:Basic

$
2.83



4.07


$
2.19Diluted

$
2.79



4.02


$
2.15Net income per common share:Basic

$
2.83


$
4.08


$
2.19Diluted

$
2.79


$
4.02


$
2.15Weighted average number of common shares outstanding:Basic


154,755



165,159



170,426Diluted


156,997



167,413



173,767Cash dividends per common share

$
0.44


$
0.28


$
0.16    F-4




---



##### Table of Contents



PATTERSON-UTI
    ENERGY, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
  AccumulatedCommon Stock


Additional








OtherNumber of





Paid-in


Deferred


Retained


Comprehensive


TreasuryShares


Amount


Capital


Compensation


Earnings


Income


Stock


Total(In thousands)Balance, December 31, 2004


171,626


$
1,716


$
597,280


$
(5,420
)

$
373,712


$
7,350


$
(13,137
)

$
961,501Issuance of restricted stock


305



3



8,040



(8,043
)














Amortization of deferred compensation expense














2,825















2,825Forfeitures of restricted shares


(65
)






(1,351
)


1,351















Exercise of stock options


4,043



40



43,434



















43,474Tax benefit related to stock-based compensation










24,748



















24,748Foreign currency translation adjustment (net of tax of $705)






















1,215







1,215Purchase of treasury stock


























(12,153
)


(12,153
)Payment of cash dividend (see Note 10)


















(27,339
)










(27,339
)Net income


















372,740











372,740Balance, December 31, 2005


175,909



1,759



672,151



(9,287
)


719,113



8,565



(25,290
)


1,367,011Elimination of deferred compensation due to change in accounting
    principle










(9,287
)


9,287















Issuance of restricted stock


613



6



(6
)


















Forfeitures of restricted shares


(47
)


(1
)


1



















Exercise of stock options


181



2



1,944



















1,946Tax benefit related to stock-based compensation










1,087



















1,087Stock based compensation, net of cumulative effect of change in
    accounting principle










15,179



















15,179Foreign currency translation adjustment, (net of tax of $6)






















(175
)






(175
)Payment of cash dividend (see Note 10)


















(45,825
)










(45,825
)Purchase of treasury stock


























(450,011
)


(450,011
)Net income


















673,254











673,254Balance, December 31, 2006


176,656



1,766



681,069







1,346,542



8,390



(475,301
)


1,562,466Issuance of restricted stock


601



6



(6
)


















Forfeitures of restricted shares


(101
)


(1
)


1



















Exercise of stock options


230



2



2,048



















2,050Tax benefit related to stock-based compensation










1,105



















1,105Stock based compensation










19,364



















19,364Foreign currency translation adjustment, (net of tax of $6,755)






















11,817







11,817Payment of cash dividend (see Note 10)


















(68,561
)










(68,561
)Purchase of treasury stock


























(70,850
)


(70,850
)Net income


















438,639











438,639Balance, December 31, 2007


177,386


$
1,773


$
703,581


$



$
1,716,620


$
20,207


$
(546,151
)

$
1,896,030    F-5




---



##### Table of Contents



PATTERSON-UTI
    ENERGY, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CHANGES IN CASH FLOWS
  Year Ended December 31,2007


2006


2005(In thousands)Cash flows from operating activities:Net income

$
438,639


$
673,254


$
372,740Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation, depletion and impairment


249,206



196,370



156,393Provision for bad debts


2,550



5,400



1,231Dry holes and abandonments


1,309



4,338



Deferred income tax expense (benefit)


38,271



(3,708
)


17,101Tax benefit related to stock-based compensation










24,748Stock based compensation expense


19,364



15,179



2,825(Gain) loss on disposal of assets


(16,545
)


3,819



(1,253
)Changes in operating assets and liabilities:Accounts receivable


112,353



(67,417
)


(208,248
)Income taxes receivable/payable


7,174



(16,231
)


7,068Inventory and other current assets


4,853



(47,406
)


(9,402
)Accounts payable


(40,317
)


27,184



60,860Accrued expenses


(6,104
)


32,972



32,514Other liabilities


1,471



13,416



3,902Net cash provided by operating activities


812,224



837,170



460,479Cash flows from investing activities:Acquisitions


(29,000
)






(73,577
)Purchases of property and equipment


(607,686
)


(597,919
)


(380,094
)Proceeds from disposal of assets


34,224



10,934



12,674Change in other assets










1,766Net cash used in investing activities


(602,462
)


(586,985
)


(439,231
)Cash flows from financing activities:Purchases of treasury stock


(70,850
)


(450,011
)


(12,153
)Dividends paid


(68,561
)


(45,825
)


(27,339
)Tax benefit related to stock-based compensation


1,105



1,087



Proceeds from borrowings under line of credit


142,500



274,000



Repayment of borrowings under line of credit


(212,500
)


(154,000
)


Line of credit issuance costs






(342
)


Proceeds from exercise of stock options


2,050



1,946



43,474Net cash provided by (used in) financing activities


(206,256
)


(373,145
)


3,982Effect of foreign exchange rate changes on cash


543



(53
)


(1,203
)Net increase (decrease) in cash and cash equivalents


4,049



(123,013
)


24,027Cash and cash equivalents at beginning of year


13,385



136,398



112,371Cash and cash equivalents at end of year

$
17,434


$
13,385


$
136,398Supplemental disclosure of cash flow information:Net cash paid during the year for:Interest expense

$
(1,808
)

$
(1,278
)

$
(418
)Income taxes


(176,281
)


(377,847
)


(156,709
)    F-6




---



##### Table of Contents



PATTERSON-UTI
    ENERGY, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Description
    of Business and Summary of Significant Accounting
    Policies  A
    description of the business and basis of presentation
    follows:
  Description of business
  Basis of presentation
    A
    summary of the significant accounting policies
    follows:
  Management estimates
  Revenue recognition
  Accounts receivable
 F-7




---



##### Table of Contents



Inventories first-in,
  Property and equipment
  Useful LivesDrilling rigs and other equipment


2-15Buildings


15-20Other


3-12   Oil and natural gas properties lease-by-lease
  Goodwill
  Depreciation, depletion and impairment
  2007


2006


2005Depreciation and impairment expense

$
234.7


$
186.6


$
146.1Depletion expense


14.5



9.8



10.3Total

$
249.2


$
196.4


$
156.4   Maintenance and repairs
  Retirements
  Net income per common share
 F-8




---



##### Table of Contents



2007


2006


2005Net income

$
438,639


$
673,254


$
372,740Weighted average number of common shares outstanding excluding
    nonvested restricted stock


154,755



165,159



170,426Basic net income per common share

$
2.83


$
4.08


$
2.19Weighted average number of common shares outstanding excluding
    nonvested restricted stock


154,755



165,159



170,426Dilutive effect of stock options and restricted shares


2,242



2,254



3,341Weighted average number of diluted common shares outstanding


156,997



167,413



173,767Diluted net income per common share

$
2.79


$
4.02


$
2.15Potentially dilutive securities excluded as anti-dilutive


2,460



800



   Income taxes
  Accounting for Uncertainty in Income Taxes  an
    interpretation of FASB Statement No. 109
  Stock based compensation Accounting for Stock
    Issued to Employees Share-Based Payment
 F-9




---



##### Table of Contents



Statement of cash flows
  Recently Issued Accounting Standards Fair
    Value Measurements
  The
    Fair Value Option for Financial Assets and Financial Liabilities
    Including an Amendment of FASB Statement No. 115
  Business Combinations Noncontrolling Interests in
    Consolidated Financial Statements, an amendment of ARB
    No. 51 Business
    Combinations
  Reclassifications
  2.
    Acquisitions  2007
    Acquisitions
    2005
    Acquisitions
  Key Energy Services, Inc.
  Other
 F-10




---



##### Table of Contents



3.
    Comprehensive
    Income    2007


2006


2005Net income

$
438,639


$
673,254


$
372,740Other comprehensive income:Foreign currency translation adjustment related to Canadian
    operations, net of tax


11,817



(175
)


1,215Comprehensive income

$
450,456


$
673,079


$
373,955   4.
    Property
    and Equipment    2007


2006Equipment

$
2,748,007


$
2,135,567Oil and natural gas properties


75,732



85,143Buildings


50,955



30,987Land


9,991



7,5072,884,685



2,259,204Less accumulated depreciation and depletion


(1,043,281
)


(823,400
)$
1,841,404


$
1,435,804   5.
    Goodwill    2007


2006Contract Drilling:Goodwill at beginning of year

$
89,092


$
89,092Changes to goodwill


(2,858
)


Goodwill at end of period


86,234



89,092Drilling and completion fluids:Goodwill at beginning of year


9,964



9,964Changes to goodwill






Goodwill at end of period


9,964



9,964Total goodwill

$
96,198


$
99,056    F-11




---



##### Table of Contents



6.
    Accrued
    Expenses    2007


2006Salaries, wages, payroll taxes and benefits

$
33,816


$
42,751Workers compensation liability


70,989



69,330Sales, use and other taxes


12,119



11,043Insurance, other than workers compensation


16,308



13,328Other


3,602



9,011$
136,834


$
145,463   7.
    Asset
    Retirement Obligation  Accounting for Asset Retirement Obligations
  2007


2006Balance at beginning of year

$
1,829


$
1,725Liabilities incurred


276



154Liabilities settled


(862
)


(104
)Accretion expense


61



54Revision in estimated costs of plugging oil and natural gas wells


289



Asset retirement obligation at end of year

$
1,593


$
1,829   8.
    Borrowings
    Under Line of Credit    9.
    Commitments,
    Contingencies and Other Matters  Commitments 
    Contingencies
 F-12




---



##### Table of Contents



Other Matters
  
    a bonus payment equal to the greater of the highest bonus paid
    after the Change in Control Agreement was entered into and the
    average of the two annual bonuses earned in the two fiscal years
    immediately preceding a change in control (such bonus payment
    prorated for the portion of the fiscal year preceding the
    termination date);
    a payment equal to 2.5 times (in the case of the Chairman of the
    Board and Chief Executive Officer), 2 times (in the case of the
    Senior Vice Presidents) or 1.5 times (in the case of the General
    Counsel) of the sum of (i) the highest annual salary in
    effect for such Key Employee and (ii) the average of the
    three annual bonuses earned by the Key Employee for the three
    fiscal years preceding the termination date; and
    continued coverage under the Companys welfare plans for up
    to three years (in the case of the Chairman of the Board and
    Chief Executive Officer) or two years (in the case of the Senior
    Vice Presidents and General Counsel). F-13




---



##### Table of Contents



gross-up gross-up
  10.
    Stockholders
    Equity  Cash Dividends 
  Per Share


Total(In thousands)2007:Paid on March 30, 2007

$
0.08


$
12,527Paid on June 29, 2007


0.12



18,860Paid on September 28, 2007


0.12



18,690Paid on December 28, 2007


0.12



18,484Total cash dividends declared and paid

$
0.44


$
68,5612006:Paid on March 30, 2006

$
0.04


$
6,906Paid on June 30, 2006


0.08



13,413Paid on September 29, 2006


0.08



13,024Paid on December 29, 2006


0.08



12,482Total cash dividends declared and paid

$
0.28


$
45,8252005:Paid on March 4, 2005

$
0.04


$
6,746Paid on June 1, 2005


0.04



6,790Paid on September 1, 2005


0.04



6,904Paid on December 1, 2005


0.04



6,899Total cash dividends declared and paid

$
0.16


$
27,339        F-14




---



##### Table of Contents



11.
    Stock-based
    Compensation      Options &Shares


Restricted


SharesAuthorized


Shares


AvailablePlan Name

for Grant


Outstanding


for GrantPatterson-UTI Energy, Inc. 2005 Long-Term Incentive Plan


6,250,000



3,079,250



2,283,045Patterson-UTI Energy, Inc. Amended and Restated 1997 Long-Term
    Incentive Plan, as amended (1997 Plan)






4,903,337



Amended and Restated Patterson-UTI Energy, Inc. 2001 Long-Term
    Incentive Plan (2001 Plan)






669,747



Amended and Restated Non-Employee Director Stock Option Plan of
    Patterson-UTI Energy, Inc. (Non-Employee Director
    Plan)






120,000



Amended and Restated Patterson-UTI Energy, Inc. 1996 Employee
    Stock Option Plan (1996 Plan)






81,600



Patterson-UTI Energy, Inc., 1993 Incentive Stock Plan, as
    amended (1993 Plan)






39,300



     
    The Compensation Committee of the Board of Directors administers
    the plan.
    All employees including officers and directors are eligible for
    awards. F-15




---



##### Table of Contents




    The Compensation Committee determines the vesting schedule for
    awards. Awards typically vest over 1 year for non-employee
    directors and 3 to 4 years for employees.
    The Compensation Committee sets the term of awards and no option
    term can exceed 10 years.
    All options granted under the plan are granted with an exercise
    price equal to or greater than the fair market value of the
    Companys common stock at the time the option is granted.
    The plan provides for awards of incentive stock options,
    non-incentive stock options, tandem and freestanding stock
    appreciation rights, restricted stock awards, other stock unit
    awards, performance share awards, performance unit awards and
    dividend equivalents. As of December 31, 2007, only
    non-incentive stock options and restricted stock awards had been
    granted under the plan.            Stock Options 
  
    Previously reported amounts and disclosures are not affected.
    Compensation cost, net of estimated forfeitures for the unvested
    portion of awards outstanding at January 1, 2006, is
    recognized under the fair-value-based method as the awards vest.
    Compensation cost is based on the grant-date estimated fair
    value of stock options as calculated for the Companys
    previously reported pro forma disclosures under FASB Statement
    No. 123, Accounting for Stock-Based Compensation
    (FAS 123).
    The fair-value based method is applied to new awards and to any
    awards outstanding at January 1, 2006 that are modified,
    repurchased or cancelled after that date. F-16




---



##### Table of Contents



2007


2006


2005Volatility


36.37
%


33.18
%


26.95
%Expected term (in years)


4.00



4.00



4.00Dividend yield


1.97
%


1.09
%


0.65
%Risk-free interest rate


4.55
%


4.87
%


3.84
%     Weighted-AverageExerciseShares


PriceOutstanding at beginning of year


6,575,096


$
16.18Granted


1,060,000


$
23.92Exercised


(229,812
)

$
8.92Forfeited


(2,183
)

$
14.64Expired


(17
)

$
14.64Outstanding at end of year


7,403,084


$
17.52Exercisable at end of year


5,879,750


$
15.54     2007


2006


2005Weighted-average grant-date fair value of stock options granted
    (per share)

$
7.09


$
8.62


$
6.33Grant-date fair value of stock options vested during the year
    (in thousands)

$
5,613


$
6,900


$
15,738Aggregate intrinsic value of stock options exercised (in
    thousands)

$
3,186


$
3,377


$
73,467     Aggregate intrinsic value

$
0Weighted-average remaining contractual term


9.03 yearsWeighted-average remaining expected term


3.03 yearsWeighted-average remaining vesting period


1.97 yearsUnrecognized compensation cost

$
9.3 million  F-17




---



##### Table of Contents



Restricted Stock 
  
    Prior to January 1, 2006, forfeitures were recognized as
    they occurred;
    From January 1, 2006 forward, forfeitures are estimated in
    the determination of periodic compensation cost;
    Contra equity deferred compensation was reversed against
    paid-in-capital
    at January 1, 2006; and
    Compensation expense is recognized as attributed to each period.      Weighted-Average GrantShares


Date Fair ValueNonvested restricted stock outstanding at beginning of year


1,188,200


$
25.92Granted


601,150


$
24.60Vested


(197,645
)

$
19.37Forfeited


(101,555
)

$
26.51Nonvested restricted stock outstanding at end of year


1,490,150


$
26.22     Aggregate intrinsic value

$28.1 millionWeighted-average remaining vesting period

1.97 yearsUnrecognized compensation cost

$16.5 million   Dividends on Equity Awards 
  
    Dividends are recognized as reductions of retained earnings for
    the portion of equity awards expected to vest.
    Dividends are recognized as additional compensation cost for the
    portion of equity awards that are not expected to vest or that
    ultimately do not vest.   F-18




---



##### Table of Contents



Prior Period Pro Forma Disclosures 
  2005Net income, as reported

$
372,740Add back: Share-based employee compensation cost, net of related
    tax effects, included in net income as reported


1,795Deduct: Share-based employee compensation cost, net of related
    tax effects, that would have been included in net income if the
    fair-value-based method had been applied to all awards


(11,119
)Pro-forma net income

$
363,416Net income per common share:Basic, as reported

$
2.19Basic, pro-forma

$
2.13Diluted, as reported

$
2.15Diluted, pro-forma

$
2.11   12.
    Leases    13.
    Income
    Taxes  Accounting for Uncertainty in Income Taxes  an
    interpretation of FASB Statement No. 109
 F-19




---



##### Table of Contents



2007


2006


2005Federal income tax expense (benefit):Current

$
172,221


$
344,395


$
174,635Deferred


36,864



(5,851
)


14,182209,085



338,544



188,817State income tax expense:Current


16,456



21,371



13,045Deferred


983



1,392



1,43117,439



22,763



14,476Foreign income tax expense:Current


5,220



9,607



7,238Deferred


424



353



1,4885,644



9,960



8,726Total:Current


193,897



375,373



194,918Deferred


38,271



(4,106
)


17,101Total income tax expense

$
232,168


$
371,267


$
212,019     2007


2006


2005Statutory tax rate


35.0
%


35.0
%


35.0
%State income taxes


1.4



1.4



1.8Permanent differences


(1.6
)


(0.8
)


(0.6
)Other, net


(0.2
)


0.0



0.1Effective tax rate


34.6
%


35.6
%


36.3
%  F-20




---



##### Table of Contents



December





December





December





December31,


Net


31,


Net


31,


Net


31,2007


Change


2006


Change


2005


Change


2004Deferred tax assets:Current:Federal net operating loss carryforwards

$
374


$
(1,496
)

$
1,870


$



$
1,870


$



$
1,870Workers compensation allowance


26,586



223



26,363



6,902



19,461



4,584



14,877Embezzlement costs


660



(13,634
)


14,294



14,294











Other


18,404



3,903



14,501



3,137



11,364



4,386



6,97846,024



(11,004
)


57,028



24,333



32,695



8,970



23,725Non-current:Federal net operating loss carryforwards






(374
)


374



(1,871
)


2,245



(1,870
)


4,115AMT credit


118







118







118







118Federal benefit of foreign deferred tax liabilities


8,973



424



8,549



353



8,196



1,488



6,708Federal benefit of state deferred tax liabilities


5,427



735



4,692



460



4,232



717



3,515Embezzlement costs






















(22,178
)


22,178Other


9,999



2,890



7,109



6,172



937



174



76324,517



3,675



20,842



5,114



15,728



(21,669
)


37,397Total deferred tax assets


70,541



(7,329
)


77,870



29,447



48,423



(12,699
)


61,122Deferred tax liabilities:Current:Other


(10,654
)


(2,492
)


(8,161
)


(1,848
)


(6,313
)


1,421



(7,734
)Non-current:Property and equipment basis difference


(231,965
)


(28,466
)


(203,500
)


(23,775
)


(179,725
)


(6,381
)


(173,344
)Other


(12,042
)


(6,741
)


(5,301
)


(110
)


(5,191
)


(663
)


(4,528
)(244,007
)


(35,207
)


(208,801
)


(23,885
)


(184,916
)


(7,044
)


(177,872
)Total deferred tax liabilities


(254,661
)


(37,699
)


(216,962
)


(25,733
)


(191,229
)


(5,623
)


(185,606
)Net deferred tax liability

$
(184,120
)

$
(45,028
)

$
(139,092
)

$
3,714


$
(142,806
)

$
(18,322
)

$
(124,484
)      F-21




---



##### Table of Contents



14.
    Employee
    Benefits    15.
    Business
    Segments    Contract Drilling
  Pressure Pumping
  Drilling and Completion Fluids
  Oil and Natural Gas
 F-22




---



##### Table of Contents



Years Ended December 31,2007


2006


2005Revenues:Contract drilling(a)

$
1,744,884


$
2,174,805


$
1,488,485Pressure pumping


202,812



145,671



93,144Drilling and completion fluids(b)


128,447



192,974



122,309Oil and natural gas


41,637



39,187



39,616Total segment revenues


2,117,780



2,552,637



1,743,554Elimination of intercompany revenues(a)(b)


(3,586
)


(6,051
)


(3,099
)Total revenues

$
2,114,194


$
2,546,586


$
1,740,455Income before income taxes:Contract drilling

$
558,792


$
991,449


$
572,562Pressure pumping


64,257



44,835



21,664Drilling and completion fluids


6,528



28,759



12,201Oil and natural gas


10,998



8,660



13,405640,575



1,073,703



619,832Corporate and other


(30,799
)


(27,639
)


(19,724
)Embezzlement (costs) recoveries(c)


43,955



(3,081
)


(20,043
)Gain (loss) on disposal of assets(d)


16,545



(3,819
)


1,231Interest income


2,355



5,925



3,551Interest expense


(2,187
)


(1,602
)


(516
)Other


363



347



428Income before income taxes

$
670,807


$
1,043,834


$
584,759Identifiable assets:Contract drilling

$
2,132,910


$
1,849,923


$
1,421,779Pressure pumping


154,120



111,787



72,536Drilling and completion fluids


91,989



106,032



90,904Oil and natural gas


37,885



65,443



60,785Corporate and other(e)


48,295



59,318



149,777Total assets

$
2,465,199


$
2,192,503


$
1,795,781Depreciation, depletion and impairment:Contract drilling

$
213,812


$
168,607


$
131,740Pressure pumping


14,311



9,896



7,094Drilling and completion fluids


2,860



2,706



2,368Oil and natural gas


17,410



14,368



14,456Corporate and other


813



793



735Total depreciation, depletion and impairment

$
249,206


$
196,370


$
156,393Capital expenditures:Contract drilling

$
539,506


$
531,087


$
329,073Pressure pumping


47,582



41,262



25,508Drilling and completion fluids


3,082



4,222



3,042Oil and natural gas


17,516



21,198



17,163Corporate and other






150



5,308Total capital expenditures

$
607,686


$
597,919


$
380,094     (a)
    
    Includes contract drilling intercompany revenues of
    approximately $3.2 million, $5.4 million and
    $2.8 million for the years ended December 31, 2007,
    2006 and 2005, respectively.(b)
    
    Includes drilling and completion fluids intercompany revenues of
    approximately $348,000, $616,000 and $298,000 for the years
    ended December 31, 2007, 2006 and 2005, respectively. F-23




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##### Table of Contents



(c)
    
    The Companys former CFO has pleaded guilty to criminal
    charges and has been sentenced and is serving a term of
    imprisonment arising out of his embezzlement of funds from the
    Company. Embezzlement costs in 2005 and 2006 include embezzled
    funds and other costs incurred as a result of the embezzlement.
    The Company expects to recover a total of approximately
    $44.5 million in assets seized by a court-appointed
    receiver from the former CFO and companies that he controlled.
    Cash payments from the receiver of approximately
    $41.2 million have been received as of December 31,
    2007, with the remaining $3.3 million of the expected
    recovery consisting of notes receivable, investments and other
    assets that have been or are expected to be transferred to the
    Company. The embezzlement recovery in 2007 includes the
    recognition of this recovery, net of professional and other
    costs incurred as a result of the embezzlement.(d)
    
    Gains or losses associated with the disposal of assets relate to
    decisions of the executive management group regarding corporate
    strategy. Accordingly, the related gains or losses have been
    separately presented and excluded from the results of specific
    segments.(e)
    
    Corporate and other assets primarily include cash on hand
    managed by the parent corporation and certain deferred Federal
    income tax assets.  16.
    Quarterly
    Financial Information (in thousands, except per share amounts)
    (unaudited)  1st Quarter


2nd Quarter


3rd Quarter


4th Quarter2007Operating revenues

$
547,101


$
522,558


$
524,002


$
520,533Operating income


179,725



215,136



144,100



131,315Net income


115,801



139,551



98,181



85,106Net income per common share:Basic

$
0.75


$
0.90


$
0.63


$
0.56Diluted

$
0.73


$
0.88


$
0.62


$
0.552006Operating revenues

$
597,733


$
636,813


$
673,658


$
638,382Operating income


245,599



268,913



281,905



242,747Net income


159,256



171,690



185,990



156,318Net income per common share:Basic

$
0.93


$
1.02


$
1.14


$
0.99Diluted

$
0.91


$
1.00


$
1.12


$
0.97   17.
    Concentrations
    of Credit Risk      2007


2006Deposits in FDIC and SIPC-insured institutions under $100,000

$
462


$
684Deposits in FDIC and SIPC-insured institutions over $100,000


53,112



21,859Deposits in Foreign Banks


6,282



3,75459,856



26,297Less outstanding checks and other reconciling items


(42,422
)


(12,912
)Cash and cash equivalents

$
17,434


$
13,385  F-24




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##### Table of Contents



18.
    Related
    Party Transactions  Joint Operation of Oil and Natural Gas
    Properties
   F-25




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##### Table of Contents



PATTERSON-UTI
    ENERGY, INC. AND SUBSIDIARIESSCHEDULE II  VALUATION AND
    QUALIFYING ACCOUNTS
  Charged toCosts andDescription

Beginning Balance


Expenses(1)


Deductions(2)


Ending Balance(In thousands)Year Ended December 31, 2007Deducted from asset accounts:Allowance for doubtful accounts

$
7,484


$
2,550


$
20


$
10,014Year Ended December 31, 2006Deducted from asset accounts:Allowance for doubtful accounts

$
2,199


$
5,400


$
115


$
7,484Year Ended December 31, 2005Deducted from asset accounts:Allowance for doubtful accounts

$
1,909


$
1,231


$
941


$
2,199     (1)
    
    Net of recoveries.(2)
    
    Uncollectible accounts written off. S-1




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##### Table of Contents



SIGNATURES
  Form 10-K
    By: /s/  Douglas
    J. Wall  President and Chief Executive Officer
    Form 10-K
  Signature

Title/s/  Mark
    S. SiegelMark
    S. Siegel

Chairman of the Board/s/  Douglas
    J. WallDouglas
    J. Wall(Principal Executive Officer)

President and Chief Executive Officer/s/  John
    E. Vollmer IIIJohn
    E. Vollmer III(Principal Financial Officer)

Senior Vice President  Corporate Development, Chief
    Financial Officer and Treasurer/s/  Gregory
    W. PipkinGregory
    W. Pipkin(Principal Accounting Officer)

Chief Accounting Officer and Assistant Secretary/s/  Kenneth
    N. BernsKenneth
    N. Berns

Senior Vice President and Director/s/  Charles
    O. BucknerCharles
    O. Buckner

Director/s/  Cloyce
    A. TalbottCloyce
    A. Talbott

Director/s/  Curtis
    W. HuffCurtis
    W. Huff

Director/s/  Terry
    H. HuntTerry
    H. Hunt

Director/s/  Kenneth
    R. PeakKenneth
    R. Peak

Director




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##### Table of Contents



EXHIBIT INDEX
  3
.1

Restated Certificate of Incorporation, as amended (filed
    August 9, 2004 as Exhibit 3.1 to the Companys
    Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2004 and
    incorporated herein by reference).3
.2

Amendment to Restated Certificate of Incorporation, as amended
    (filed August 9, 2004 as Exhibit 3.2 to the
    Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2004 and
    incorporated herein by reference).3
.3

Second Amended and Restated Bylaws (filed August 6, 2007 as
    Exhibit 3.3 to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2007 and
    incorporated herein by reference).4
.1

Rights Agreement dated January 2, 1997, between Patterson
    Energy, Inc. and Continental Stock Transfer &
    Trust Company (filed January 14, 1997 as
    Exhibit 2 to the Companys Registration Statement on
    Form 8-A
    and incorporated herein by reference).4
.2

Amendment to Rights Agreement dated as of October 23, 2001
    (filed October 31, 2001 as Exhibit 3.4 to the
    Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended September 30, 2001 and
    incorporated herein by reference).4
.3

Restated Certificate of Incorporation, as amended (See
    Exhibits 3.1 and 3.2).4
.4

Registration Rights Agreement with Bear, Stearns and Co. Inc.,
    dated March 25, 1994, as assigned by REMY Capital Partners
    III, L.P. (filed March 19, 2002 as Exhibit 4.3 to the
    Companys Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2001 and
    incorporated herein by reference).10
.1

For additional material contracts, see Exhibits 4.1, 4.2
    and 4.4.10
.2

Patterson-UTI Energy, Inc., 1993 Stock Incentive Plan, as
    amended (filed March 13, 1998 as Exhibit 10.1 to the
    Companys Registration Statement on
    Form S-8
    (File
    No. 333-47917)
    and incorporated herein by reference).*10
.3

Patterson-UTI Energy, Inc. Non-Employee Directors Stock
    Option Plan, as amended (filed November 4, 1997 as
    Exhibit 10.1 to the Companys Registration Statement
    on
    Form S-8
    (File
    No. 333-39471)
    and incorporated herein by reference).*10
.4

Amended and Restated Patterson-UTI Energy, Inc. 2001 Long-Term
    Incentive Plan (filed November 27, 2002 as Exhibit 4.4
    to Post Effective Amendment No. 1 to the Companys
    Registration Statement on
    Form S-8
    (File
    No. 333-60470)
    and incorporated herein by reference).*10
.5

Patterson-UTI Energy, Inc. Amended and Restated 1997 Long-Term
    Incentive Plan (filed July 28, 2003 as Exhibit 4.7 to
    the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2003 and
    incorporated herein by reference).*10
.6

Amendment to the Patterson-UTI Energy, Inc. Amended and Restated
    1997 Long-Term Incentive Plan (filed August 9, 2004 as
    Exhibit 10.7 to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2004 and
    incorporated herein by reference).*10
.7

Amended and Restated Patterson-UTI Energy, Inc. Non-Employee
    Director Stock Option Plan(filed July 28, 2003 as
    Exhibit 4.8 to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2003 and
    incorporated herein by reference).*10
.8

Amended and Restated Patterson-UTI Energy, Inc. 1996 Employee
    Stock Option Plan (filed July 25, 2001 as Exhibit 4.4
    to Post-Effective Amendment No. 1 to the Companys
    Registration Statement on
    Form S-8
    (File
    No. 333-60466)
    and incorporated herein by reference).*10
.9

Patterson-UTI Energy, Inc. 2005 Long-Term Incentive Plan,
    including Form of Executive Officer Restricted Stock Award
    Agreement, Form of Executive Officer Stock Option Agreement,
    Form of Non-Employee Director Restricted Stock Award Agreement
    and Form of Non-Employee Director Stock Option Agreement (filed
    June 21, 2005 as Exhibit 10.1 to the Companys
    Current Report on
    Form 8-K,
    and incorporated herein by reference).*10
.10

Restricted Stock Award Agreement dated April 28, 2004
    between Patterson-UTI Energy, Inc. and Mark S. Siegel (filed
    August 9, 2004 as Exhibit 10.1 to the Companys
    Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2004 and
    incorporated herein by reference).*10
.11

Restricted Stock Award Agreement dated April 28, 2004
    between Patterson-UTI Energy, Inc. and Cloyce A. Talbott (filed
    August 9, 2004 as Exhibit 10.2 to the Companys
    Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2004 and
    incorporated herein by reference).*




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##### Table of Contents



10
.12

Restricted Stock Award Agreement dated April 28, 2004
    between Patterson-UTI Energy, Inc. and Kenneth N. Berns (filed
    August 9, 2004 as Exhibit 10.4 to the Companys
    Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2004 and
    incorporated herein by reference).*10
.13

Restricted Stock Award Agreement dated April 28, 2004
    between Patterson-UTI Energy, Inc. and John E. Vollmer III
    (filed August 9, 2004 as Exhibit 10.6 to the
    Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2004 and
    incorporated herein by reference).*10
.14

Patterson-UTI Energy, Inc. Change in Control Agreement,
    effective as of January 29, 2004, by and between
    Patterson-UTI Energy, Inc. and Mark S. Siegel (filed on
    February 4, 2004 as Exhibit 10.2 to the Companys
    Annual Report on
    Form 10-K
    for the year ended December 31, 2003 and incorporated
    herein by reference).*10
.15

Employment Agreement, dated as of September 1, 2007 between
    Patterson-UTI Energy, Inc. and Cloyce A. Talbott (filed on
    September 24, 2007 as Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K,
    and incorporated herein by reference).*10
.16

Patterson-UTI Energy, Inc. Change in Control Agreement,
    effective as of January 29, 2004, by and between
    Patterson-UTI Energy, Inc. and Kenneth N. Berns (filed on
    February 4, 2004 as Exhibit 10.5 to the Companys
    Annual Report on
    Form 10-K
    for the year ended December 31, 2003 and incorporated
    herein by reference).*10
.17

Patterson-UTI Energy, Inc. Change in Control Agreement,
    effective as of January 29, 2004, by and between
    Patterson-UTI Energy, Inc. and John E. Vollmer III (filed
    on February 4, 2004 as Exhibit 10.7 to the
    Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2003 and incorporated
    herein by reference).*10
.18

Form of Letter Agreement regarding termination, effective as of
    January 29, 2004, entered into by Patterson-UTI Energy,
    Inc. with each of Mark S. Siegel, Kenneth N. Berns and John E.
    Vollmer III (filed on February 25, 2005 as
    Exhibit 10.23 to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2004 and incorporated
    herein by reference).*10
.19

Form of Indemnification Agreement entered into by Patterson-UTI
    Energy, Inc. with each of Mark S. Siegel, Cloyce A. Talbott,
    Douglas J. Wall, Kenneth N. Berns, Curtis W. Huff, Terry H.
    Hunt, Kenneth R. Peak, Charles O. Buckner, John E. Vollmer III,
    William L. Moll, Jr. and Gregory W. Pipkin (filed April 28,
    2004 as Exhibit 10.11 to the Companys Annual Report
    on
    Form 10-K,
    as amended, for the year ended December 31, 2003 and
    incorporated herein by reference).*10
.20

Severance Agreement between Patterson-UTI Energy, Inc. and
    Douglas J. Wall, effective as of August 31, 2007 (filed
    September 4, 2007 as Exhibit 10.3 to the
    Companys Current Report on
    Form 8-K
    and incorporated herein by reference).*10
.21

Patterson-UTI Energy, Inc. Change in Control Agreement,
    effective as of August 31, 2007, by and between
    Patterson-UTI Energy, Inc. and Douglas J. Wall (filed
    September 4, 2007 as Exhibit 10.2 to the
    Companys Current Report on
    Form 8-K
    and incorporated herein by reference).*10
.22

Patterson-UTI Energy, Inc. Change in Control Agreement,
    effective as of August 31, 2007, by and between
    Patterson-UTI Energy, Inc. and William L. Moll, Jr. (filed
    November 5, 2007 as Exhibit 10.7 to the Companys
    Quarterly Report on
    Form 10-Q
    for the quarterly period ended September 30, 2007 and
    incorporated herein by reference).*10
.23

First Amendment to Change in Control Agreement Between
    Patterson-UTI Energy, Inc. and Mark S. Siegel, entered into
    November 1, 2007 (filed November 5, 2007 as
    Exhibit 10.8 to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended September 30, 2007 and
    incorporated herein by reference).*10
.24

First Amendment to Change in Control Agreement Between
    Patterson-UTI Energy, Inc. and Douglas J. Wall, entered into
    November 1, 2007 (filed November 5, 2007 as
    Exhibit 10.9 to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended September 30, 2007 and
    incorporated herein by reference).*10
.25

First Amendment to Change in Control Agreement Between
    Patterson-UTI Energy, Inc. and John E. Vollmer, III,
    entered into November 1, 2007 (filed November 5, 2007
    as Exhibit 10.10 to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended September 30, 2007 and
    incorporated herein by reference).*10
.26

First Amendment to Change in Control Agreement Between
    Patterson-UTI Energy, Inc. and Kenneth N. Berns, entered into
    November 1, 2007 (filed November 5, 2007 as
    Exhibit 10.11 to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended September 30, 2007 and
    incorporated herein by reference).*




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##### Table of Contents



10
.27

First Amendment to Change in Control Agreement Between
    Patterson-UTI Energy, Inc. and William L. Moll, Jr., entered
    into November 1, 2007 (filed November 5, 2007 as
    Exhibit 10.12 to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended September 30, 2007 and
    incorporated herein by reference).*10
.28

Credit Agreement dated as of December 17, 2004 among
    Patterson-UTI Energy, Inc., as the Borrower, Bank of America,
    N.A., as administrative agent, L/C Issuer and a Lender and the
    other lenders and agents party thereto (filed on
    December 23, 2004 as Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K
    and incorporated herein by reference).10
.29

Commitment Increase and Joinder Agreement, dated as of
    August 2, 2006, by and among Patterson-UTI Energy, Inc.,
    the guarantors party thereto, the lenders party thereto, and
    Bank of America, N.A. as Administrative Agent, L/C Issuer and
    Lender (filed August 21, 2006 as Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K
    and incorporated herein by reference).10
.30

Letter Agreement dated February 6, 2006 between
    Patterson-UTI Energy, Inc. and John E. Vollmer III (filed
    May 1, 2006 as Exhibit 10.25 to the Companys
    Annual Report on
    Form 10-K,
    as amended, and incorporated herein by reference).*14
.1

Patterson-UTI Energy, Inc. Code of Business Conduct and Ethics
    for Senior Financial Executives (filed on February 4, 2004
    as Exhibit 14.1 to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2003 and incorporated
    herein by reference).21
.1

Subsidiaries of the Registrant.23
.1

Consent of Independent Registered Public Accounting Firm.31
.1

Certification of Chief Executive Officer pursuant to
    Rule 13a-14(a)/15d-14(a)
    of the Securities Exchange Act of 1934, as amended.31
.2

Certification of Chief Financial Officer pursuant to
    Rule 13a-14(a)/15d-14(a)
    of the Securities Exchange Act of 1934, as amended.32
.1

Certification of Chief Executive Officer and Chief Financial
    Officer pursuant to 18 USC Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.     *
    
    Management Contract or Compensatory Plan identified as required
    by Item 15(a)(3) of
    Form 10-K.