Patterson-UTI and NexTier Enter Merger Deal Valued at $5.4bn

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(Patterson-UTI Energy, 15.Jun.2023) — Patterson-UTI Energy, Inc. (NASDAQ: PTEN) and NexTier Oilfield Solutions Inc. (NYSE: NEX) 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 $5.4bn, 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% and NexTier shareholders will own approximately 45% of the combined company on a fully diluted basis. The merger is expected to be tax-free to shareholders of both companies.

Andy Hendricks, Chief Executive Officer of Patterson-UTI, commented, “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.”

Mr. Hendricks continued, “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.”

Robert Drummond, President and Chief Executive Officer of NexTier, said, “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.”

Mr. Drummond added, “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.”

Compelling Strategic and Financial Benefits

  • Leading Drilling and Well Completions Businesses: The combined company will have a best-in-class operational and technology portfolio, along with data analytics to maximize well performance. Specifically, the merger will create:
    • Leading U.S. Contract Drilling business with 172 super-spec drilling rigs and Directional Drilling business.
    • Leading U.S. Well Completions business with deployed capacity of 45 active spreads and 3.3 million hydraulic fracturing horsepower, with nearly two-thirds of deployed fleets being dual fuel capable. NexTier’s integrated approach will provide additional market capacity of Power Solutions, wireline, last mile logistics, proppant handling and cementing services.
  • Strong Revenue and Cash Generation: On an annualized combined basis as of the first quarter of 2023, the combined company generated approximately $6.9bn of revenue, $1.9bn in adjusted EBITDA and improved free cash flow generation. The combined company will be an attractive investment opportunity with greater size and scale facilitating increase share float and liquidity.
  • Accretive to Earnings per Share and Free Cash Flow per Share: The transaction is expected to be accretive to earnings per share and free cash flow per share in 2024. 
  • Strong Financial Position and Balance Sheet: The combined company would have Net Debt to combined trailing twelve month Adjusted EBITDA of 0.5x as of 31 March 2023. With increased scale and a strong balance sheet, the transaction is expected to lower cost of capital and enable the combined company to continue to selectively invest in value accretive opportunities.
  • Well Positioned to Return Capital to Shareholders: The combined company intends to target high free cash flow conversion, remain good stewards of capital and continue the practices of both companies of distributing at least 50% of free cash flow to shareholders. As shareholders of the combined company, NexTier shareholders will benefit from Patterson-UTI’s dividend and the combined company will continue to return capital through dividends and share repurchases. 
  • Delivers Significant Cost Saving and Operational Synergy Opportunity: The transaction is expected to create significant efficiencies for the combined company’s well completions operations. The combined company expects to realize annual cost savings and operational synergies of approximately $200mn within 18 months following close through operations integration, supply chain management and reductions in sales, general and administrative expenses. One-time costs expected to be incurred to achieve the synergies are approximately $80mn.
  • Significant Value Creation Potential through the Expansion of Wellsite Integration Strategies: The combined company’s wellsite integration strategy is expected to create additional value through efficiency gains and cost reductions. This strategy can create as much as $7mn in adjusted EBITDA improvements and CapEx reduction annually on fully integrated completions fleets with a larger frac footprint.
  • Shared Commitment to Sustainably Focused Operations: The combined company will have a sustainability leadership position in lowering carbon emissions at the wellsite, with over 50% of the drilling and completions fleet capable of being powered by natural gas.

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 Mr. Hendricks, and five of whom will be from the NexTier Board.

The combined company will operate under the name Patterson-UTI Energy, Inc. and trade under the ticker symbol PTEN. The Well Completions business will operate under the NexTier Completions brand. The combined company’s corporate headquarters will remain in Houston, Texas.

Approvals and Closing

The merger is expected to close in the fourth quarter of 2023, following Patterson-UTI and NexTier shareholder approval, regulatory approvals and satisfaction of other customary closing conditions.

Conference Call and Additional Materials

Patterson-UTI and NexTier will hold a joint conference call today, 15 June 2023, at 7:30 a.m. CT/8:30 a.m. ET to discuss the combination. An investor presentation regarding the transaction can also be found at and

Interested parties may listen to the conference call via a live webcast accessible at the Investor Relations section of Patterson-UTI’s website at and at the Investor Relations page of NexTier’s website at The conference call may also be accessed by dialing (800) 274-8461 in the U.S. or (203) 518-9814 internationally, Conference ID: 42406.

A playback of the call will also be available through 22 June 2023, on both companies’ websites, or by dialing (888) 274-8336 in the U.S. or (402) 220-2328 internationally. No passcode is required.


Goldman Sachs & Co. LLC is serving as financial advisor and Gibson, Dunn & Crutcher LLP is serving as legal advisor to Patterson-UTI.

Moelis & Company LLC is serving as financial advisor and Kirkland & Ellis LLP is serving as legal advisor to NexTier.


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