Filed by NexTier Oilfield Solutions Inc. pursuant to
Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934
Subject Company: NexTier Oilfield Solutions Inc.
Commission File No. 001-37988
To: All NexTier Employees
From: Robert Drummond
Subject: NexTier to Combine with Patterson-UTI, Creating an Industry Leader in North American Drilling and Completions; Town Hall Information
Date: June 15, 2023
NexTier Team,
Moments ago, we announced an agreement to combine with Patterson-UTI in an all-stock merger of equals that will create a premier North American drilling and completions company. You can read the joint press release we issued here: https://www.prnewswire.com/news-releases/patterson-uti-energy-and-nextier-oilfield-solutions-to-combine-in-merger-of-equals-creating-industry-leading-drilling-and-completions-services-provider-301851831.html?tc=eml_cleartime.
Today’s announcement is a testament to the significant accomplishments of our team. At NexTier, we have a strong focus on safety, efficiency, and innovation. Patterson-UTI shares a similar passion for these priorities, which is why we believe the combined company will integrate successfully and drive our performance to new heights. Our core values have always been centered around the desire to Win, and this merger is just another example of us living that value. We expect this combined company to be stronger together than we would be separately.
Merging our premier completions portfolio and Patterson-UTI’s leading drilling solutions will provide opportunities to support a greater number of customers across geographies and throughout the full well life cycle with best-in-class operations and technology. With enhanced financial flexibility and resources, we will also be able to accelerate our transition to more fuel-efficient fleets, enhance our digital capabilities, and progress our wellsite integration strategy. We are confident that together we can unlock opportunities that neither company could achieve on our own.
Planning for our Combined Future
This transaction is a merger of equals that will bring together the best of both businesses. Upon closing, I will serve as Vice Chair of the Board alongside Patterson-UTI’s current Board Chair, Curtis Huff. Patterson-UTI’s Chief Executive Officer, Andy Hendricks, will serve as President and CEO.
The combined company will maintain the Patterson-UTI name and will remain headquartered in Houston, Texas. Patterson-UTI’s existing completions business, named Universal, will be combined with our Completions Services business and will operate under the NexTier Completions name. Matt Gillard, currently COO and EVP of NexTier Completions Solutions, will lead the combined Completions service business and report to the CEO. Our Well Construction offering is highly complementary to Patterson-UTI’s strong drilling portfolio, and we are excited about the opportunities we see ahead for this business.
3990 Rogerdale | 713-325-6000 | NexTierOFS.com | ||
Houston, TX 77042 |
In the coming weeks, we will form an integration planning team comprising members of both companies to develop a plan to bring our two organizations together. Kenneth Pucheu, Chief Financial Officer of NexTier, will serve as Chief Integration Officer and report to the CEO to facilitate this process. NexTier has a proven track record of successfully integrating businesses, and we’re confident in our ability to create a seamless process with Patterson-UTI. Both NexTier and Patterson-UTI are committed to investing in employees, and we will continue to focus on bolstering our talent pipeline with employee development programs as a combined company.
Importantly, today’s announcement is just the first step of the transaction process. We expect the transaction to close in the fourth quarter of 2023, following approval by both companies’ shareholders and customary closing conditions and regulatory approvals. Until then, NexTier and Patterson-UTI remain separate, independent companies, and it is business as usual. We will continue to operate out of our current facilities, including our headquarters in Houston. Please stay focused on your day-to-day responsibilities and delivering for our customers.
Until the transaction closes, we should not be engaging with Patterson-UTI employees or customers outside of our normal course of business. If a Patterson-UTI customer reaches out to you, please let them know that they should continue to engage with Patterson-UTI as normal. Importantly, you should not speculate or discuss business arrangements that may occur once the transaction is complete.
Join our Town Hall Today at 9:30 AM CT
I understand you may have additional questions about this merger and what it means for NexTier and for you. I’ll be hosting a town hall today at 9:30 AM CT to discuss the transaction further and I look forward to seeing you all there. A meeting invite will follow shortly. We’re committed to keeping you informed and will provide updates as we work through this process. In the meantime, please email Zach.Wilbur@nextierofs.com so that we can capture and address your questions.
Additionally, today’s news may generate increased interest in our company. In line with our usual policy, please direct any inquiries you receive from the media to Kevin McDonald at Kevin.McDonald@NexTierOFS.com, and any inquiries from investors to Michael Sabella at Michael.Sabella@NexTierOFS.com.
On behalf of the entire management team, I want to thank you for your continued commitment to our mission and purpose. I hope you share my excitement for NexTier’s next chapter with Patterson-UTI.
Sincerely,
Robert Drummond
President and Chief Executive Officer
3990 Rogerdale | 713-325-6000 | NexTierOFS.com | ||
Houston, TX 77042 |
Forward-Looking Statements
This communication, including the exhibits hereto, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included in this communication that address activities, events or developments that NexTier or Patterson-UTI expects, believes or anticipates will or may occur in the future are forward-looking statements. Words such as “estimate,” “project,” “predict,” “believe,” “expect,” “anticipate,” “potential,” “create,” “intend,” “could,” “would,” “may,” “plan,” “will,” “guidance,” “look,” “goal,” “future,” “build,” “focus,” “continue,” “strive,” “allow” or the negative of such terms or other variations thereof and words and terms of similar substance used in connection with any discussion of future plans, actions, or events identify forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements include, but are not limited to, statements regarding the expected closing of the proposed transaction and the timing thereof and as adjusted descriptions of the post-transaction company and its operations, strategies and plans, integration, debt levels and leverage ratio, capital expenditures, cash flows, synergies, opportunities and anticipated future performance, including the composition of the management team post-transaction, an expected accretion to earnings and free cash flow, increase in value of tax attributes, and expected impact on EBITDA. Information adjusted for the transaction should not be considered a forecast of future results. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements included in this communication including, but not limited to, (i) the competitive nature of the industry in which NexTier and Patterson-UTI conduct their business, including pricing pressures; (ii) the ability to meet rapid demand shifts; (iii) the impact of pipeline capacity constraints and adverse weather conditions in oil or gas producing regions; (iv) the ability to obtain or renew customer contracts and changes in customer requirements in the markets NexTier and Patterson-UTI serve; (v) the ability to identify, effect and integrate acquisitions, joint ventures or other transactions; (vi) the ability to protect and enforce intellectual property rights; (vii) the effect of environmental and other governmental regulations on NexTier’s and Patterson-UTI’s operations; (viii) the effect of a loss of, or interruption in operations of, one or more key suppliers, including resulting from product defects, recalls or suspensions; (ix) the variability of crude oil and natural gas commodity prices; (x) the market price and availability of materials or equipment; (xi) the ability to obtain permits, approvals and authorizations from governmental and third parties; (xii) NexTier’s and Patterson-UTI’s ability to employ a sufficient number of skilled and qualified workers to combat the operating hazards inherent in NexTier’s and Patterson-UTI’s industry; (xiii) fluctuations in the market price of NexTier’s and Patterson-UTI’s stock; (xiv) the level of, and obligations associated with, NexTier’s and Patterson-UTI’s indebtedness; and (xv) other risk factors and additional information. In addition, material risks that could cause actual results to differ from forward-looking statements include: the inherent uncertainty associated with financial or other projections; the prompt and effective integration of NexTier’s businesses and the ability to achieve the anticipated synergies and value-creation contemplated by the proposed transaction; the risk associated with NexTier’s and Patterson-UTI’s ability to obtain the approval of the proposed transaction by their shareholders required to consummate the proposed transaction and the timing of the closing of the proposed transaction, including the risk that the conditions to the transaction are not satisfied on a timely basis or at all and the failure of the transaction to close for any other reason; the risk that a consent or authorization that may be required for the proposed transaction is not obtained or is obtained subject to conditions that are not anticipated; unanticipated difficulties or expenditures relating to the transaction, the response of business partners and retention as a result of the announcement and pendency of the transaction; and the diversion of management time on transaction-related issues. All such factors are difficult to predict and are beyond NexTier’s or Patterson-UTI’s control, including those detailed in NexTier’s Annual Reports on Form 10-K,
3990 Rogerdale | 713-325-6000 | NexTierOFS.com | ||
Houston, TX 77042 |
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that are available on NexTier’s website at www.nextierofs.com and on the website of the Securities and Exchange Commission (the “SEC”) at www.sec.gov, and those detailed in Patterson-UTI’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that are available on the website of the SEC. All forward-looking statements are based on assumptions that NexTier and Patterson-UTI believe to be reasonable but that may not prove to be accurate. Any forward-looking statement speaks only as of the date on which such statement is made, and neither NexTier nor Patterson-UTI undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.
Important Additional Information Regarding the Merger of Equals Will Be Filed With the SEC
In connection with the proposed transaction, Patterson-UTI intends to file with the SEC a registration statement on Form S-4 that will include a joint proxy statement of NexTier and Patterson-UTI that also constitutes a prospectus of Patterson-UTI. Each of NexTier and Patterson-UTI also plan to file other relevant documents with the SEC regarding the proposed transaction. No offering of securities shall be made, except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended. Any definitive joint proxy statement/prospectus (if and when available) will be mailed to stockholders of Patterson-UTI and NexTier. INVESTORS AND STOCKHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT, JOINT PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT MAY BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and stockholders will be able to obtain free copies of these documents (if and when available) and other documents containing important information about NexTier and Patterson-UTI, once such documents are filed with the SEC through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by NexTier will be available free of charge on NexTier’s website at www.nextierofs.com or by contacting NexTier’s Investor Relations Department by phone at (346) 242-0519. Copies of the documents filed with the SEC by Patterson-UTI will be available free of charge on Patterson-UTI’s website at www.patenergy.com or by contacting Patterson-UTI’s Investor Relations Department by phone at (281) 765-7170.
Participants in the Solicitation
NexTier, Patterson-UTI and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about the directors and executive officers of NexTier is set forth in its proxy statement for its 2023 annual meeting of stockholders, which was filed with the SEC on April 28, 2023, and NexTier’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which was filed with the SEC on February 16, 2023. Information about the directors and executive officers of Patterson-UTI is set forth in Patterson-UTI’s proxy statement for its 2023 annual meeting of stockholders, which was filed with the SEC on April 11, 2023, and Patterson-UTI’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which was filed with the SEC on February 13, 2023. Other information regarding the participants in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC regarding the proposed transaction when such materials become available. Investors should read the joint proxy statement/prospectus carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents from NexTier or Patterson-UTI using the sources indicated above.
3990 Rogerdale | 713-325-6000 | NexTierOFS.com | ||
Houston, TX 77042 |
No Offer or Solicitation
This document is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote in any jurisdiction pursuant to the proposed transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. Subject to certain exceptions to be approved by the relevant regulators or certain facts to be ascertained, the public offer will not be made directly or indirectly, in or into any jurisdiction where to do so would constitute a violation of the laws of such jurisdiction, or by use of the mails or by any means or instrumentality (including without limitation, facsimile transmission, telephone and the internet) of interstate or foreign commerce, or any facility of a national securities exchange, of any such jurisdiction.
3990 Rogerdale | 713-325-6000 | NexTierOFS.com | ||
Houston, TX 77042 |