Patterson

Patterson-UTI Energy, Inc., a leading provider of drilling and completions services in the United States, announced it has entered into a definitive agreement to acquire Ulterra Drilling Technologies, L.P., a global provider of specialized drill bit solutions, for consideration of $370 million of cash and 34.9 million shares of Patterson-UTI common stock.

Founded in 2005 and headquartered in Fort Worth, Texas, privately-owned Ulterra designs, manufactures, sells and rents PDC drill bits. With a global footprint, Ulterra supports customers in over 30 countries with sales, manufacturing, and repair facilities throughout North and South America, the Middle East, and Asia. In North America, Ulterra is a leading provider of PDC drill bits, with operations across the most active basins in the United States and Canada.

Andy Hendricks, Chief Executive Officer of Patterson-UTI, commented, "Both Patterson-UTI and Ulterra share a culture of innovation and a focus on superior service quality, building deep and highly collaborative relationships with customers. Ulterra's industry leading position in the North American PDC drill bit market will expand our operational and technology portfolio and strengthen our position as a leading drilling and completions company. The addition of Ulterra to our drilling offering and our recent announcement to merge with NexTier Oilfield Solutions advances our strategy to enhance our positions in both drilling and completions, areas where Patterson-UTI has a strong 45-year history of operations and innovation."

Mike Holcomb, Patterson-UTI's Chief Operating Officer, added, "Ulterra's growing Middle East presence will broaden our geographic footprint and provide strong relationships with key customers in this international market. Additionally, Ulterra's data-centric approach to manufacturing, operations, and marketing has been key to their success in the PDC drill bit business. Their proprietary BitHub™ data platform is complementary to our PTEN+ data platform and will further expand our comprehensive data analytics capabilities from the drill bit to the well completion. When you consider the combination of data systems from Patterson-UTI, NexTier and Ulterra, we believe we will have the most comprehensive set of data for drilling and completions across the United States, which through our analytics capabilities can allow us to better support our customers' objectives to improve well productivity."

Mr. Holcomb further stated, "For the full year 2023, we expect Ulterra to generate between $160 and $180 million of EBITDA. We also expect to begin generating revenue synergies within the first year."

John Clunan, President and Chief Executive Officer of Ulterra, stated, "Along with our team at Ulterra, I am excited to join the team at Patterson-UTI and look forward to all of the technical collaboration possibilities we will have going forward together. Our data-driven approach to industry-leading drill bit engineering and innovation, along with strong customer relationships, aligns well with Patterson-UTI's engineering and operational success. We are excited about the potential to add our leading drill bit technologies to Patterson-UTI's portfolio of drilling rigs, directional drilling services, controls automation and well placement technologies to better support our customers' efforts to drill better wells." Mr. Clunan has more than 26 years of experience in the drilling business and has been with Ulterra since 2008.

"We are proud of our long-standing partnership with Ulterra and believe a merger with Patterson-UTI is the right next step to continue accelerating Ulterra's growth," said Darius Sepassi, Senior Managing Director, Blackstone. "We believe Patterson-UTI's strategic direction under CEO Andy Hendricks, its breadth and its product and service offerings within drilling and completion end markets position the company to deliver value to shareholders."

Transaction and timing

Under the terms of the transaction, Patterson-UTI will acquire Ulterra Drilling Technologies, L.P. from affiliates of Blackstone Energy Partners on a debt-free basis for aggregate consideration of $370 million of cash and 34.9 million shares of Patterson-UTI common stock. Patterson-UTI intends to fund the $370 million cash consideration using cash on hand and Patterson-UTI's revolving line of credit. In connection with the transaction, Blackstone has entered into a voting agreement with NexTier Oilfield Solutions, whereby Blackstone will vote the shares of Patterson-UTI issued in the transaction and held by the stockholder at the time of the Patterson-UTI special meeting in a manner to facilitate the consummation of the merger between Patterson-UTI and NexTier.

The pending transaction, which is expected to close in the third quarter of 2023, is subject to customary closing conditions and receipt of required regulatory approvals, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Act.

The Ulterra business will continue to operate under the name Ulterra, and its headquarters will remain in Fort Worth, Texas.