Patterson-UTI Energy (NASDAQ:PTEN) and NexTier Oilfield Solutions have agreed to an all-stock merger, according to reports, creating a $5.4 billion oil services company.
The deal will see NexTier shareholders receive 0.7520 shares of Patterson-UTI common stock for each share of NexTier common stock owned.
Shares of Patterson-UTI are up nearly 10% to $12.24 on the news, and NexTier shares climbed more than 3% to $9.19 Thursday morning.
The merger combines Patterson-UTI's large land drilling business and NexTier's well-completion operations. The combined company would rival the two largest fracking services firms in the US, Halliburton and Liberty Energy.
The deal is expected to close in the fourth quarter of 2023, at which point Patterson-UTI shareholders will own roughly 55% and NexTier shareholders will own approximately 45% of the combined company.
Patterson-UTI CEO Andy Hendricks will serve in the same role at the combined entity.
Consolidation has been the norm for oilfield services firms in recent years. Prior to their merger Patterson-UTI and NexTier each acquired operations from rivals and customers to boost competitiveness and service offerings.
All told, there were 69 oilfield mergers and acquisitions worth a combined $13 billion in 2022, 35% more than in 2021.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
Follow him on Twitter @andrew_kessel