Calgary-based Precision Drilling Corporation has agreed to buy fellow Canadian firm Trinidad Drilling Limited for about US$1 billion.
The deal will include $540 million in Precision shares and $477 million of Trinidad debt. Upon completion of the deal, existing holders of Trinidad Shares will collectively own approximately 29 per cent of Precision.
The timetable for completion of the deal is expected in late 2018 and is subject to TSX, court and regulatory approvals.
Kevin Neveu, president and chief executive officer of Precision said: "The combination provides a truly unique opportunity to combine two highly-focused drilling contractors that are pursuing similar growth initiatives and competitive strategies.
He added: "From a strategic perspective, Trinidad is a perfect fit with Precision. We can realize immediate synergies, estimated to be over $30 million, through fixed cost reductions, operational efficiencies and reduced public company costs."
Precision will benefit from the deployment of international rigs into long-term contracts and Precision’s operating experience, infrastructure and scale in Saudi Arabia and Kuwait will support successful project execution. With an expanded international platform, Precision said it is well positioned to win future tenders and to leverage the combined company’s fleet of 26 international rigs.