Weatherford to Acquire Precision Energy Services and International Drilling Divisions for US$2.28 billion;
06 Juin 2005 - 2:30PM
PR Newswire (US)
Weatherford to Acquire Precision Energy Services and International
Drilling Divisions for US$2.28 billion; Deal provides enhanced
service and technology offerings HOUSTON, TX, June 6
/PRNewswire-FirstCall/ -- Weatherford International Ltd. (NYSE:WFT)
today announced that the company has signed a definitive agreement
to purchase Precision Drilling Corporation's Energy Services
Division and International Contract Drilling Division. Under the
terms of the agreement, Weatherford will pay approximately US$2.28
billion, consisting of 26 million Weatherford common shares and
approximately US$900 million in cash, based on current exchange
rates. The cash portion of the consideration is payable in Canadian
dollars. Acquired net book value is about US$1.63 billion.
Weatherford expects the transaction to be accretive to its earnings
per share and cash flow per share for 2005, before consideration of
potential synergies. Precision's Energy Services division is a
global provider of cased hole and open hole wireline services,
drilling and evaluation services (directional drilling, MWD, LWD
and rotary steerable systems) and production services (primarily
underbalanced drilling). Weatherford's cased hole wireline and
underbalanced segments will be consolidated and strengthened by
this transaction. Furthermore, the transaction will substantially
broaden the company's open hole wireline and directional
capabilities. Precision's International Contract Drilling division
is an international land rig contractor. It became a major player
in the international market after its acquisition of the worldwide
land drilling assets of Global Santa Fe Corporation in May 2004.
Precision currently has 48 rigs, with a strong presence in the
Middle East/North Africa. The land drilling assets being acquired
are among the best in the industry and further bolster
Weatherford's already strong presence in the Middle East. The
availability of these assets will allow the company to further meet
customers' bundling needs in the region. Precision has developed
innovative technologies which Weatherford is anxious to harvest.
Weatherford will endeavor to accelerate the growth of these
technologies with the full support of its worldwide infrastructure.
Post- acquisition, the company will offer a comprehensive suite of
products and services with leading technology. In the twelve months
ended December 2004, Precision Energy Services and International
Drilling had revenues of C$1.1 billion. The combined divisions have
approximately 5,300 employees operating in 25 countries. Hank B.
Swartout, Chairman, President and Chief Executive Officer of
Precision stated, "This transaction is the result of an extensive
process undertaken by the board of directors to explore possible
avenues of value creation for our shareholders. After careful
consideration of various strategic alternatives, the board
determined this opportunity to be the best for our shareholders and
for employees of the respective divisions. We believe the strategic
fit with Weatherford will strengthen their global presence and
provide opportunities for all stakeholders affected by this
expanded Weatherford organization - shareholders, customers and
employees. It is currently anticipated that a portion of the
consideration received by Precision will be distributed to our
shareholders following completion of the sale." Bernard J.
Duroc-Danner, Chairman, President and Chief Executive Officer of
Weatherford commented, "What we are adding from Precision
consolidates, strengthens and broadens critical segments of our
business. Weatherford in turn will provide the Precision operations
with the full support of our infrastructure, in particular in the
Eastern Hemisphere. This is a growth strategy for shareholder
value." The transaction is expected to be completed during the
third quarter of 2005 and is subject to regulatory approvals,
including U.S. and Canadian competition filings, and to other
customary closing conditions. UBS Investment Bank acted as
exclusive financial advisor to Precision. Simmons & Company
International and Goldman, Sachs & Co. acted as financial
advisors to Weatherford. The company will host a conference call to
discuss the acquisition this morning at 8:00 a.m. (CDT). The
company invites investors to listen to a play back of the
conference call at the company's website,
http://www.weatherford.com/ in the "investor relations" section.
The call will be open to the public. To access the call please
contact the conference call operator at 800-901-5248, or
617-786-4512 for international calls, approximately 10 minutes
prior to the scheduled start time, and ask for the Weatherford
conference call. The passcode is "Weatherford". A replay will be
available until 5:00 p.m. central, June 13, 2005. The number for
the replay is 888-286-8010, or 617-801-6888 for international
calls; passcode 88618607. The issuance of the Weatherford common
shares in the transaction to Precision will not be registered under
the Securities Act of 1933 and may not be offered or sold by
Precision in the United States absent registration or an applicable
exemption from registration. Weatherford has agreed to file a
registration statement with the Securities and Exchange Commission
to register the distribution of the shares by Precision to its
shareholders. Weatherford is one of the largest global providers of
innovative mechanical solutions, technology and services for the
drilling and production sectors of the oil and gas industry.
Weatherford operates in over 100 countries and employs more than
18,000 people worldwide. Precision Drilling Corporation is a global
contract drilling and oilfield services company providing a broad
range of drilling, production and evaluation services with focus on
fulfilling customer needs through fit-for-purpose technologies for
the maturing oilfields of the 21st century. Precision employs more
than 12,000 people in more than 30 countries. DATASOURCE: Precision
Drilling Corporation; Weatherford International CONTACT:
Weatherford: Lisa W. Rodriguez, Chief Financial Officer,
713-693-4746; Andrew P. Becnel, Vice President - Finance,
713-693-4136; and Precision: Hank B. Swartout, Chairman, President
and Chief Executive Officer, 403-716-4500
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