Infill Thinking Lifting the O&G knowledge curve
Land drilling / pressure pumping hybrids Patterson-UTI and Seventy Seven Energy have agreed to join forces as 2016 draws to a close. Patterson-UTI will purchase Seventy Seven Energy for $1.76bn in an all-stock deal that includes the assumption and repayment of $336mm of net debt.
This deal isn’t a bargain, as we see Patterson-UTI paying top dollar for the assets here. We think Patterson-UTI is paying top dollar now, but the industry is sitting at the bottom of an industry-wide ramp, and Patterson-UTI tucks in a top-tier organization. If Patterson-UTI had waited 12 months, they might have had to pay a whole lot more.
In this update, we discuss value and deal logic.
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