PRECISION DRILLING TAKES OVER TRINIDAD DRILLING FOR $1.028 MILLION
Precision Drilling has entered into an arrangement agreement with Trinidad Drilling pursuant to which Precision has agreed to acquire all of the issued and outstanding common shares of Trinidad.
The aggregate Transaction value is approximately $1,028 million, including the assumption of approximately $477 million in Trinidad net debt. Upon completion of the Transaction, existing holders of Trinidad Shares will collectively own approximately 29% of Precision.
Kevin Neveu, President and Chief Executive Officer of Precision remarked, “This transaction creates exceptional value for both Trinidad and Precision shareholders. The combination provides a truly unique opportunity to combine two highly-focused drilling contractors that are pursuing similar growth initiatives and competitive strategies and importantly, operating similar Tier 1 assets.”
– Unique combination of two highly focused drilling contractors pursuing similar strategies with complementary Tier 1 assets
– Trinidad’s fleet of 141 drilling rigs includes 61 high spec AC rigs that fit 90% within Precision’s standardization protocols and are equipped with major components that are well aligned for fleet integration.
– Precision will have a North American fleet that includes over 200 active rigs and 322 total rigs. As the third largest driller in the U.S., Precision will have strong positions in all key shale plays and will be positioned for improving industry activity. The company will have an expanded platform for technology deployment and an increased inventory of economically upgradeable rigs.
– The company will have improved cash flow generation capabilities in Canada given excellent fixed cost leverage and operating synergies. Trinidad’s customer mix and rig fleet is complementary and the company is well positioned for LNG and Deep Basin development. Precision has identified 50 rigs from the combined fleet that it intends to hold as assets for sale.
The Transaction is expected to be completed in late 2018.
Precision Drilling Corporation based in Calgary, AB, is the largest drilling rig contractor in Canada, also providing oil field rental and supplies.
(Source: Precision Drilling – Image: Trinidad Drilling Rig 134)