Published: June 15, 2023 | Share This

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Patterson-UTI Energy and NexTier Oilfield Solutions have entered into a definitive merger agreement to combine in an all-stock merger of equals transaction. The combined company, with an enterprise value of approximately $5.4 billion, will be an industry leading drilling and completions services provider with operations in the most active major U.S. basins, and strong free cash flow to accelerate the return of capital to shareholders.

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 percent and NexTier shareholders will own approximately 45 percent of the combined company on a fully diluted basis.

“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. With our combined strong balance sheet, ample liquidity, and greater free cash flow, we will be well positioned to continue to invest in technology, innovation, and people, while delivering strong cash returns to shareholders,” said Andy Hendricks, chief executive officer of Patterson-UTI.

“NexTier shares our culture of safety, deep customer relationships and operational and financial outperformance. Together, we will better serve our employees, shareholders, customers, suppliers and the communities in which we operate. We look forward to working with the NexTier team to successfully bring our two companies together,” added Hendricks.

“Our agreement to merge with Patterson-UTI brings together two complementary organizations to create a premier North American drilling and completions company. 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. We’re confident that together, we will be able to drive efficiencies across the portfolio and unlock more value for shareholders and customers than either organization could achieve on its own,” said Robert Drummond, president and chief executive officer of NexTier.

“NexTier and Patterson-UTI each have proven track records of integrating businesses, and we’re confident that combining through a merger of equals will enable us to leverage the strengths of both highly talented workforces and create exciting career opportunities for employees as we become a larger, more diversified platform,” added Drummond.

LEADERSHIP, GOVERNANCE, AND HEADQUARTERS

The combined company will be led by a proven management team that reflects the strengths and capabilities of both organizations. 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. The well completions business will operate under the NexTier completions brand. The combined company’s corporate headquarters will remain in Houston, Texas.

Patterson-UTI Energy is a leading provider of oilfield services and products to oil and natural gas exploration and production companies in the United States and other select countries, including contract drilling, pressure pumping and directional drilling services.

NexTier Oilfield Solutions is an industry-leading U.S. land oilfield service company, with a diverse set of well completion and production services across active and demanding basins. Its integrated solutions approach delivers efficiency today, and their ongoing commitment to innovation helps customers better address what is coming next. NexTier is differentiated through four points of distinction, including safety performance, efficiency, partnership, and innovation.

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