Service Company Makes Big Push into Land Drilling High Spec Rigs and Pressure Pumping
Patterson-UTI Energy Inc. (ticker: PTEN) and Seventy Seven Energy Inc. (ticker: SVNT) today jointly announced that they have entered into a definitive merger agreement in which PTEN will buy SVNT through an all-stock transaction. Both companies build and operate high-spec rigs.
The combined company will be called Patterson-UTI, with 201 high-spec rigs and more than 1.5 million hydraulic fracturing horsepower available in the U.S. It is subject to customary regulatory approvals, stockholder approval of both companies and other customary closing conditions, and is expected to close late in the first quarter of 2017.
Andy Hendricks, Patterson-UTI’s CEO, said that Seventy Seven’s “contributions will allow us to further capitalize on the shifting industry fundamentals in the U.S. oil and gas market, where customers are increasingly-focused on efficiency and high-quality execution.” The company expects to achieve synergies in excess of $50 million through the merger.
Patterson-UTI provides contract drilling and pressure pumping services in North America through its fleet of 161 APEX® rigs. The company’s pressure pumping subsidiaries have more than one million fracturing horsepower in Texas and the Appalachian region of the northeast United States.
Seventy Seven Energy provides contract drilling, pressure pumping, and oilfield rentals for oil and natural gas plays onshore in the United States. The company has a fleet of 40 high-spec drilling rigs, 93% of which are pad capable, including 28 PeakeRigs™, as well as 51 SCR rigs. The company also owns 500,000 horsepower of fracturing equipment located in the Anadarko Basin and Eagle Ford Shale.
This merger will add a new product line to Patterson-UTI through Seventy Seven Energy’s oilfield rentals business. The rentals business has a fleet of rental tools and provides specialized services for land-based oil and natural gas drilling, completion and workover activities.
The presentation associated with the proposed merger is available here.
