Grey Wolf, New Patriot Drilling merge in $51 million deal

Ray Tyson

Petroleum News Houston correspondent

Contract land driller Grey Wolf of Houston, Texas, has agreed to acquire Wyoming’s New Patriot Drilling for about $51 million in cash, stock and assumed debt, Grey Wolf said March 8.

The merger would give Grey Wolf an additional 10 rigs for a total of 127. Eight of the Patriot rigs are currently working with the remaining two under contract and expected to begin work in Wyoming during the next two months, Grey Wolf said. Three of the rigs currently working are in Wyoming and five are in Colorado.

Patriot’s drilling rig fleet consists of three diesel electric rigs ranging in horsepower from 1,000 to 3,000 and seven mechanical rigs ranging in horsepower from 450 to 700. The company employs about 250 people.

“We will consolidate the Rocky Mountain management and operations of both companies in Casper with a total of 14 rigs in the market,” said Tom Richards, Grey Wolf’s chief executive officer. “We believe the Rockies hold great potential for increased natural gas drilling.”

The agreement calls for Grey Wolf to pay Patriot $16.3 million in cash, 4.6 million shares of Grey Wolf valued at about $21.4 million, and assume about $13.7 million in Patriot debt. The transaction is expected to close in April. Patriot is currently owned by Lime Rock Partners, a private equity company.

In addition to the Rockies, Grey Wolf operates in Arkansas, Louisiana, Texas, Gulf Coast, Mississippi and Alabama, with a current rig fleet of 117.