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Patterson-UTI Acquires Pioneer

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Patterson-UTI Energy has entered into an agreement to acquire Pioneer Energy Services for approximately $295m, which includes the retirement of all Pioneer Energy Services’ debt.

Consideration for this acquisition consists of the issuance of up to 26,275,000 shares of Patterson-UTI common stock plus payment of $30m of cash. The transaction is expected to close in the fourth quarter of 2021.

The transaction adds 16 super-spec drilling rigs to Patterson-UTI’s current fleet of 150 super-spec drilling rigs in the US and expands Patterson-UTI’s geographic footprint with the addition of eight pad-capable rigs in Colombia.

The deal is expected to be accretive to cash flow per share and adjusted EBITDA per share and generate annual synergies of more than $15m. It also complements Patterson-UTI’s current customer base and allows Patterson-UTI to accelerate its super-spec rig count growth into a market with improving demand.

Andy Hendricks, Patterson-UTI’s CEO 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.”

In addition to the US and Colombian contract drilling businesses, Pioneer Energy Services includes a quality well service rig business consisting of 123 service rigs in the Gulf Coast region. Patterson-UTI believes this business would be better served as part of a larger well service rig business or as a focused standalone business. Accordingly, Patterson-UTI expects that this well service rig business would be divested following the closing of the transaction.

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