Grey Wolf closes New Patriot acquisition

Ray Tyson

Petroleum News Houston correspondent

U.S. contract land driller Grey Wolf said it has closed its previously announced purchase of New Patriot Drilling and its 10 rigs for $15.8 million in cash and 4,610,480 shares of Grey Wolf common stock.

In addition, Grey Wolf said April 6 that it made payments of $14.7 million to retire the outstanding debt of Patriot. Patriot’s estimated working capital at closing was $1.7 million, excluding the current portion of the debt repaid at closing by Grey Wolf.

The cash consideration is subject to final adjustment for changes in Patriot’s working capital, the company said. With the addition of New Patriot’s assets, Grey Wolf now has 14 rigs in the Rocky Mountain region ranging from 450 to 4000 horsepower.

“We believe the Rockies hold great potential for increased natural gas drilling,” said Tom Richards, Grey Wolf’s chief executive officer.

Of the 10 drilling rigs acquired, eight are currently working and the remaining two are under contract and are expected to begin work in Wyoming in the next month, Grey Wolf said, adding that three of the rigs are currently working in Wyoming and five in Colorado.