The transaction is expected to strengthen Patterson-UTI’s position in the US land drilling market with 201 high-spec rigs.
After the completion of the acquisition, Patterson-UTI will have 1.5 million hydraulic fracturing horsepower both available and strategically-located in some of the most prolific oil and gas regions in the US.
Patterson-UTI expects to obtain synergies in excess of $50m from the acquisition.
The transaction is expected to close late in the first quarter of 2017.
It is subject to customary regulatory approvals, stockholder approval of both companies and other customary closing conditions.
Under the terms of the agreement, Patterson-UTI will acquire all of the issued and outstanding shares of common stock of Seventy Seven Energy.
At the closing of the transaction, Seventy Seven Energy's debt is expected to see repayment of all of its debt.
Patterson-UTI said that it has the financial resources to repay Seventy Seven Energy's indebtedness.
The repayment will be done through a combination of cash on hand, borrowing under its $500m revolving credit facility and through the use of a senior unsecured bridge financing commitment.
Besides, the company expects to issue additional equity in order to maintain its historically conservative capital structure.
With a fleet of 161 APEX rigs, Patterson-UTI is one of major providers of contract drilling and pressure pumping services in North America.
In September, it entered into an agreement to acquire Calgary-based drilling technology company Warrior Rig.
