The recently announced $5.4 billion merger of Patterson-UTI Energy, Inc. and NexTier Oilfield Solutions Inc. will likely see an impact on Patterson’s operations throughout Oklahoma and the Mid-Continent region.
The two firms announced last week to combine in an all-stock merger of equals transition, one that will create an industry leading drilling and completions services provider in the most active major U.S. basins.
Under the terms of the agreement, which has been unanimously approved by the boards of directors of both companies, NexTier shareholders will receive 0.7520 shares of Patterson-UTI common stock for each share of NexTier common stock owned.
Upon closing of the transaction, Patterson-UTI shareholders will own approximately 55% and NexTier shareholders will own approximately 45% of the combined company on a fully diluted basis. The merger is expected to be tax-free to shareholders of both companies.
“This merger unites two top-tier and technology-driven drilling and well completions businesses, creating a leading platform at the forefront of innovation. As one company, we will have a significantly expanded, comprehensive portfolio of oilfield services offerings across the most active producing basins in the United States, along with operations in Latin America,” said Andy Hendricks, Chief Executive Officer of Patterson-UTI.
“We believe offering a comprehensive suite of solutions on one integrated platform will position the combined company as the partner of choice for a greater number of customers across geographies and throughout the full well life cycle,” said Robert Drummond, President and Chief Executive Officer of NexTier.
The two said the merger will create a leading U.S. contract drilling business with 172 super-spec drilling rigs and directional drilling business. Its completions business will have deployed capacity of 45 active spreads and 3.3 million hydraulic fracturing horsepower.
Finally, the combined companies generated nearly $6.9 billion of revenue and $1.9 billion in adjusted EBITDA.
Upon close, Andy Hendricks, President and Chief Executive Officer of Patterson-UTI, will serve as President and Chief Executive Officer of the combined company and Robert Drummond, President and Chief Executive Officer of NexTier, will become Vice Chair of the combined company’s Board.
Curtis Huff, Patterson-UTI’s current Chair of the Board, will serve as Chair of the combined company’s Board. Following close, the combined company’s Board will comprise 11 directors, six of whom will be from the Patterson-UTI Board, including Hendricks, and five of whom will be from the NexTier Board.
The combined company will operate under the name Patterson-UTI Energy, Inc. and trade under the ticker symbol PTEN. The Well Completions business will operate under the NexTier Completions brand. The combined company’s corporate headquarters will remain in Houston, Texas.
Patterson-UTI is the parent company of Seventy Seven Energy located in Oklahoma City, a firm it acquired in a 2016 deal.