Patterson-UTI Energy, a drilling rig contractor based in NW Houston, has agreed to acquire smaller rival, Pioneer Energy Services, based in San Antonio for $295 million. This includes the retirement of all the $200 million debt of Pioneer. $30 million will be paid in cash, the rest in stock.
Pioneer exited bankruptcy in May 2020, having converted $267 million of debt into equity. Loomis, Sayles & Co, an investment management firm, ended up owning 44% of Pioneer. BlackRock owns 20% of Pioneer (and 15% of Patterson-UTI).
Patterson-UTI is buying 17 rigs in the USA and 8 that operate in Columbia. 16 of those rigs are super-spec rigs, adding to the 150 that Patterson-UTI already has. This will give Patterson a market share of around 30% for super-spec rigs, behind market leader, Helmerich & Payne (around 37%).
Pioneer’s drilling rigs account for about 60% of its revenue ($34 million out of $59 million for the 1st quarter of 2021). The rest of Pioneer’s revenue in the quarter came from Well Servicing ($14 million) and Wireline Services ($10 million). Patterson has said it will divest of the Well Servicing business after the deal closes, expected in the 4th quarter of 2021.