HOUSTON, and LUBBOCK, Texas, April 26 /PRNewswire/ -- UTI Energy Corp. (Amex: UTI - news) and Norton Drilling Services, Inc. (OTC Bulletin Board: NORT - news) today jointly announced that the boards of both companies have approved the sale of Norton Drilling Services, Inc. of Lubbock, Texas, to UTI Energy for UTI common stock. According to the terms of the transaction, each Norton shareholder will receive one share of UTI common stock for 3.8 shares of Norton. As of February 28, 1999, Norton reported 4,934,321 weighted average number of shares outstanding. Based on UTI's opening price today of $10 1/2, the value of the transaction is approximately $13.6 million.
Included in the transaction are Norton's 16 drilling rigs, three of which are located in South Texas, two in Wyoming, and the remaining eleven in New Mexico and West Texas. All of the rigs are suitable for both gas and oil drilling. Norton 's rigs have an average drilling capacity of more than 13,000 feet, with the largest rig having a capacity of approximately 22,000 feet. The fleet includes two ''SCR'' Rigs, with an average drilling capacity of about 21,000 feet, and seven ''self-propelled'' rigs, five of which can drill to a depth of more than 11,000 feet. Self-propelled rigs are less expensive to move and can be quickly and easily deployed, providing them with a competitive advantage in certain drilling situations.
Commenting on the acquisition, Mark S. Siegel, UTI's chairman, stated, ''Norton is an exceptionally good fit for UTI from a geographic, as well as from an operational standpoint. They have drilling experience in Mexico, an area that we believe has considerable potential for our company, and their presence in the Rocky Mountains is a market in which we want to expand. Their activity in the New Mexico gas drilling market and the deep gas market in west Texas, as well as their west Texas oil drilling complements our existing drilling operations in these markets.
''We are pleased that both S. Howard Norton, III and John W. Norton have agreed to remain with the company and that Sherman H. Norton, Jr., who began his contract drilling career more than 40 years ago, and founded Norton, will also continue to be involved in an advisory capacity. Norton is well respected in the drilling industry and has a loyal customer base,'' Siegel added.
Sherman H. Norton stated, ''We look at this transaction as an opportunity for Norton to partner with a drilling industry leader. UTI provides us with greater financial resources to weather the difficult times and to expand in good times. Over the years we have been approached by many companies in our industry, and believe that this transaction with UTI is in the best interests of our shareholders.''
As of February 28, 1999, Norton had debt of $6.3 million, which will either be repaid or assumed by UTI. The transaction is expected to close late in the second quarter or during the third quarter and is subject to the approval of Norton 's shareholders, who will be sent complete information and proxy materials.
About UTI Energy
UTI Energy Corp. is a leading provider of contract drilling and pressure pumping services in the continental United States. With the addition of the sixteen Norton rigs, UTI will have a total of 120 drilling rigs that provide drilling services primarily in Texas, Oklahoma, New Mexico, and the Rocky Mountains. The Company's pressure pumping subsidiary provides stimulation and cementing services in the Northeast.
About Norton Drilling Services, Inc.
Norton Drilling Services, Inc., headquartered in Lubbock, Texas, owns and operates sixteen drilling rigs. Eleven of the rigs operate in the Permian Basin area of West Texas and eastern New Mexico, including two SCR diesel electric rigs. Norton also operates two rigs in the Southwest Wyoming area and three rigs in South Texas.
Statements made in this press release that state the Company's or management's intentions, beliefs, expectations or predictions for the future are forward-looking statements. It is important to note that the Company's actual results could differ materially from those projected in such forward- looking statements. In addition to the factors set forth above, other important factors that could cause actual results to differ materially include, but are not limited to, the impact of recent declines in prices of oil and gas on the demand for the Company's services and the risk of any further declines in oil and gas prices that could adversely affect demand for the Company's services, and their associated effect on day rates and rig utilization, industry conditions, integration of acquisitions, demand for oil and gas, and ability to retain management and field personnel. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company's SEC filings, including but not limited to the Company's report on Form 10-K for the year ended December 31, 1998. Copies of these filings may be obtained by contacting the Company or the SEC. |
