Drilling and Energy Divisions
Weatherford International Ltd. announces that the company has signed a definitive agreement to purchase Precision Drilling Corp.'s Energy Services Division and International Contract Drilling Division. Under the terms of the agreement, Weatherford will pay approximately $2.28 billion, consisting of 26 million Weatherford common shares and approximately $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 $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 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 Corp. in May 2004. Precision currently has 48 rigs, with a strong presence in the Middle East/North Africa.