Patterson-UTI to Acquire Directional Drilling Services Company

Source: www.gulfoilandgas.com 9/5/2017, Location: North America

Patterson-UTI Energy, Inc. (Patterson-UTI) has entered into an agreement to acquire Multi-Shot, LLC d/b/a MS Energy Services (MS Energy), on a debt-free basis for total consideration of approximately 8.8 million shares of Patterson-UTI common stock and $75 million of cash. Based in Conroe, Texas, MS Energy is a leading directional drilling services company in the United States. The pending transaction, which is expected to close early in the fourth quarter, is subject to customary closing conditions and receipt of required third party consents, and is subject to expiration or termination of the waiting period under the Hart-Scott-Rodino Act.

Founded in 1980, MS Energy has grown to become a leading provider of directional drilling services in the United States. With operations in most major producing onshore oil and gas basins in the United States, MS Energy provides a comprehensive suite of directional drilling services including directional drilling, downhole performance motors, directional surveying, measurement while drilling (MWD), and wireline steering tools.

Mark S. Siegel, Chairman of Patterson-UTI, commented, "The acquisition of MS Energy will broaden our service offerings and strengthen our position as a leading provider of oilfield services in the United States. Additionally, this transaction increases our exposure to North American unconventional drilling activity. With the increasing proportion of pad drilling and the growing number of horizontal wells per pad, directional drilling is seeing an increase in demand, even in the vertical section of the wells, as the well placement is increasingly important to avoid interfering with other nearby wells."

Andy Hendricks, Patterson-UTI's Chief Executive Officer, stated, "MS Energy has assembled a strong group of talented employees and is well known within the industry for their great reputation in directional drilling services and high-performance drilling motors. Additionally, they have differentiated themselves within the directional drilling industry through a strong focus on technology. MS Energy has proprietary mud motor, MWD and survey equipment that was designed, engineered and manufactured in-house. Their internally-developed and patented Clean Communications (C2) technology enables high-speed electromagnetic MWD telemetry independent of geological formation constraints in pad drilling, which saves E&P companies considerable drilling time and expense."

Allen R. Neel, Chairman and Chief Executive Officer of MS Energy, commented, "We look forward to combining our industry leading directional services and technology with Patterson-UTI's state of the art drilling rig technology to enhance Patterson-UTI's position as a leading oilfield services company." Pursuant to the transaction, Mr. Neel will be joining Patterson-UTI as President of MS Energy. Mr. Neel has served as the CEO of MS Energy since 2004 when he co-founded the company that purchased MS Energy from previous owners. Mr. Neel has more than 37 years of experience in oilfield services having worked in the industry since receiving a Bachelor of Science in Petroleum Engineering from the University of Alabama.

Also joining Patterson-UTI will be Paul Culbreth. Mr. Culbreth has served as the COO of MS Energy since he co-founded the company that purchased MS Energy from previous owners in 2004. Mr. Culbreth has held various technical and leadership positions within the oilfield services industry since 1977.

Under the terms of the transaction, Patterson-UTI will acquire all of the issued and outstanding limited liability company interests of MS Energy for consideration of approximately 8.8 million shares of Patterson-UTI common stock and $75 million of cash. In connection with this transaction, Patterson-UTI expects to acquire approximately $30 million of non-cash working capital. The transaction values MS Energy at approximately $215 million, based on the most recent closing price of Patterson-UTI common stock of $15.94. Patterson-UTI will fund the $75 million cash consideration using cash on hand and the Company's revolving line of credit. The cash consideration paid to the sellers will be used to cover transaction expenses and repay the outstanding debt at MS Energy, and as such, Patterson-UTI will not assume any debt of MS Energy.

The sellers include Denham Capital Management LP and NGP Energy Capital Management, L.L.C. and are represented by Simmons &Company International Energy Specialists of Piper Jaffray.


Related Categories: Artificial Lift  Cementing, Stimulation  Directional Drilling  Drilling  Drilling Engineering & Equipment Systems  Enhanced Oil Recovery  General  Logging, Perforating, Testing  Offshore Drilling  Reservoir/Completion Consultants  Workover & Well Services  Workover Rigs/Services 

Related Articles: Artificial Lift  Cementing, Stimulation  Directional Drilling  Drilling  Drilling Engineering & Equipment Systems  Enhanced Oil Recovery  General  Logging, Perforating, Testing  Offshore Drilling  Reservoir/Completion Consultants  Workover & Well Services  Workover Rigs/Services 


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