The transaction is expected to add 16 super-spec drilling rigs to Patterson-UTI's current fleet
Oilfield services company Patterson-UTI Energy has reached an agreement to acquire Pioneer Energy Services for nearly $295m, which includes retirement of the latter’s debt.
The transaction is expected to add 16 super-spec drilling rigs to Patterson-UTI’s current fleet of 150 super-spec drilling rigs in the US, and expand the company’s footprint with eight pad-capable rigs in Colombia.
Also, the deal would complement the company’s current customer base and help advance its super-spec rig count growth into a competitive market.
Under the terms of the agreement, Patterson-UTI will acquire the contract drilling services company for a consideration of up to 26,275,000 shares of Patterson-UTI common stock and $30m of cash.
The transaction is expected to close in the fourth quarter of 2021, subject to customary closing conditions and approval from regulatory authorities and Pioneer’s stockholders.
Patterson-UTI chief executive officer Andy Hendricks said: “As a leading provider of contract drilling services in the United States, we are proud to announce this transaction.
“Pioneer’s high-quality fleet of 17 drilling rigs in the United States, of which 16 are super-spec, will be a valuable addition to our business.
“Additionally, many of these rigs are capable of substituting cleaner-burning natural gas for diesel, a technology that is becoming increasingly important to operators for reduced emissions.”
Apart from its the US and Colombian contract drilling businesses, Pioneer Energy Services’ portfolio includes 123 service rigs with a major position in the Gulf Coast region.
With the acquisition, Patterson-UTI is enabled to enhance its focus on reducing emissions, with additional rigs that use natural gas as a primary fuel source.
Gibson, Dunn & Crutcher served as legal counsel to Patterson-UTI, while Vinson & Elkins served as legal counsel to Pioneer Energy Services for the transaction.
Simmons Energy, a division of Piper Sandler, and Tudor, Pickering, Holt & Co. are serving as financial advisors to Pioneer Energy Services.
Hendricks added: “Following the closing of this transaction, Patterson-UTI will own 166 super-spec rigs in the US, with almost half of these rigs equipped to utilise alternative power sources for reduced emissions.
“Furthermore, this transaction expands our geographic footprint into the international markets with the addition of eight rigs in Colombia, where Pioneer has worked for 14 years with an experienced operations team and a well-established infrastructure.
“I want to recognize the Pioneer employees for their hard work in creating such an attractive company with great performance for their customers, and I look forward to welcoming the Pioneer employees to the Patterson-UTI family.”