PATTERSON UTI ENERGY INC

On March 27, 2018, Patterson-UTI replaced its credit agreement with a new unsecured revolving facility of up to $600 million, maturing March 27, 2023, with two optional one-year extensions and the ability to grow to $900 million. It continues to carry a debt-to-capitalization limit, now 50% (versus 40% in the prior agreement), and no subsidiaries currently need to guarantee it. This supersedes the 2012 credit agreement, which was extended to March 2019.

debt financing

Patterson-UTI completed the $525 million offering of 3.95% senior notes due 2028 on January 19, 2018, which resolves the pricing and sale announced on January 10. The notes are unsecured and guaranteed by 13 subsidiaries. Holders can require repurchase at 101% on a change of control, and the company agreed to seek registration of an exchange offer by January 4, 2019. Proceeds are intended to repay credit agreement borrowings and for general purposes, and the chairman's quote in the press release refers to an investment grade rating.

debt financing

On January 10, 2018, Patterson-UTI agreed to sell $525 million of 3.95% senior notes due 2028 to initial purchasers in a private offering, guaranteed by its subsidiaries, with closing expected January 19, 2018. The company says it plans to use the net proceeds to repay amounts under its existing credit agreement and for general corporate purposes.

material agreement

Patterson-UTI closed its purchase of Multi-Shot, LLC (MS Energy Services) on October 11, 2017, paying $75 million in cash and 8,798,391 new shares of its common stock, which the company valued at about $262 million based on a $21.31 share price. This adds a directional drilling business to the contract drilling and pressure pumping operations, and the new shares are issued to the sellers, so existing holders are diluted by that amount.

capital raising announcement

The company disclosed four shareholder or warrant-holder lawsuits tied to the SSE merger: Comeaux (W.D. Oklahoma, Feb 22, 2017; injunction motion withdrawn April 10), Sudarsan (S.D.N.Y., March 31; names Patterson-UTI and seeks to block cancellation of SSE warrants), and Gael and Scarantino (Delaware Chancery, April 7 and April 10). The company calls them without merit and says none is expected to affect the merger, which it expects to occur April 20, 2017; outcomes and costs cannot be predicted. The filing also references a joint press release (April 10) extending the deadline for SSE warrant holders to exercise.

business combination

The company sold 18,170,000 new shares (15,800,000 plus the underwriters' full 2,370,000 option) at $26.45 per share in the offering priced on January 24, 2017, with expected net proceeds of about $471 million. The money is meant to repay SSE's debt when the merger closes (with revolver borrowings if needed); if the merger does not close it goes to general corporate purposes. This meets the equity-raise condition tied to the credit facility increase and dilutes existing shareholders, and the offering is not conditioned on the merger.

material agreement

On January 24, 2017 the company agreed with lenders to use about $95.8 million of the $100 million increase option on its revolving credit facility, taking total commitments to about $595.8 million. The increase only takes effect if the SSE merger closes, the SSE credit facility is repaid and terminated, and the company raises at least $300 million of gross proceeds from a stock offering by May 31, 2017.

material agreement

On January 23, 2017 the company filed the registration statement and joint proxy for the SSE merger, covering up to 49,559,000 new shares; the filing values the deal at about $1.42 billion at the December 12, 2016 share price and says former SSE holders would own up to about 25% of the combined company. Patterson-UTI shareholders will vote on the share issuance at a special meeting, and the board recommends voting for it. It is a preliminary filing, so the merger has not yet been approved or completed.

business combination

On December 12, 2016 the company agreed to buy Seventy Seven Energy (SSE) by issuing up to 49,559,000 new Patterson-UTI shares to SSE holders, with SSE becoming a wholly owned subsidiary. The deal needs both companies' shareholder approvals, antitrust clearance and other conditions; holders of about 61% of SSE have agreed to vote in favour, and a $150 million bridge facility from Canyon Capital is committed to repay some SSE debt. Termination fees of up to $100 million (payable by Patterson-UTI) or $40 million (by SSE) apply in certain cases. Existing Patterson-UTI shareholders keep their shares but will be diluted by the new issuance.

business combination

On July 8, 2016 the company amended its 2012 credit agreement (Amendment No. 2): $357.9 million of revolver commitments now run to March 27, 2019, borrowings are limited by a borrowing base, the maximum debt-to-capitalization ratio drops to 40%, and dividends and buybacks are restricted unless a debt service coverage ratio is at least 1.5x. It repaid its bank term loans, including the March 2015 $200 million term loan (terminated with no penalty), and the press release says $70 million remains outstanding on the revolver. The release states the new terms ease paying dividends compared with the old term loan's restriction.

security holder rights change

On March 18, 2015 the company took out a $200 million unsecured term loan led by Wells Fargo, due September 27, 2017, at LIBOR plus 3.25%, and used it to repay all $150 million of revolver borrowings under its 2012 credit agreement. It also expects the $39.8 million of letters of credit to move to the Scotiabank facility signed days earlier, which would leave the full $500 million revolver available. The loan restricts dividends and buybacks unless pro forma debt to EBITDA is no more than 2.5x.

debt financing

On September 27, 2012 the company replaced its 2010 credit agreement with a new $600 million, five-year unsecured facility with Wells Fargo and other banks: a $500 million revolver and a $100 million term loan, both maturing September 27, 2017. The press release says interest margins are 50 basis points better than the 2010 agreement, and that the term loan is planned to be funded in the fourth quarter of 2012.

debt financing

On June 14, 2012 the company sold another $300 million of senior notes, 4.27% Series B due June 14, 2022. The press release says most of the proceeds paid off its revolver and term loan under the bank credit facility, leaving about $110 million in cash and $360 million available under the revolver.

debt financing

PATTERSON UTI ENERGY INC deregistered its securities, ending its obligation to file reports with the SEC.

listing compliance notice

On October 5, 2010 the company sold $300 million of 4.97% Series A Senior Notes due October 5, 2020 in a private placement, guaranteed by its domestic subsidiaries (other than immaterial ones). The filing does not say what the proceeds will be used for.

debt financing

On August 19, 2010 the company signed a new $500 million unsecured credit agreement with Wells Fargo (a $400 million revolver maturing August 2013 and a $100 million term loan maturing August 2014) and drew the full $100 million term loan that day. It replaced the March 2009 credit agreement, which was terminated, with existing letters of credit carried over.

debt financing

On July 2, 2010 Patterson-UTI agreed to buy pressure pumping and electric wireline assets from Key Energy Services subsidiaries for about $237.7 million in cash, subject to adjustments and to Hart-Scott-Rodino waiting-period clearance, with a December 1, 2010 closing deadline. To help fund it, it also signed a 364-day, $250 million unsecured term loan with Wells Fargo that must be drawn by September 30, 2010 (October 30 with an extra fee).

material agreement