The shareholders of Seventy Seven Energy shall receive 1.7851 shares of the newly issued Patterson-UTI stock in exchange for each share of Seventy Seven Energy.
Patterson-UTI has repaid all of the outstanding debt for Seventy Seven Energy totalling $472m ($403m net cash from Seventy Seven Energy). Apart from this, Patterson-UTI has agreed with its lenders to increase the amount of revolving credit to $632m through September this year and $490m through March 2019.
In December last year, Patterson-UTI Energy had entered into an agreement to acquire Oklahoma City-based Seventy Seven Energy in an all-stock deal worth $1.76bn. The transaction was expected to strengthen Patterson-UTI’s position in the US land drilling market with 201 high-spec rigs.
Patterson-UTI CEO Andy Hendricks said: "This merger combines two highly complementary companies and further enhances our position as a leader in both drilling and pressure pumping.
“We are beginning the merger integration process, and I am pleased with the plan that we and Seventy Seven Energy have developed. While implementing this plan, our focus will continue to be on the safety and quality of our field operations."
Seventy Seven Energy former CEO Jerry Winchester said: "With this merger, we bring together two strategically aligned companies into a financially well-positioned leader in US land. We are excited to align ourselves with a company that shares a similar commitment to safety and service quality."
Last September, Patterson-UTI agreed to acquire Warrior Rig, a Calgary-based drilling technology company. The company designs, manufactures and services high-spec rig components with a recent focus on top drive technology for improved drilling performance.
