CALGARY — Two of Canada’s largest oil and gas contract drilling companies have agreed to combine in a deal worth about $1.03 billion.
Under the friendly deal reached by the two Calgary-based companies, Precision Drilling Corp. will buy Trinidad Drilling Ltd. in exchange for shares. Precision will also assume $477 million in debt.
If the deal closes as expected, Trinidad shareholders will own about 29 per cent of Precision, which is Canada’s biggest contract drilling company.
Precision would have more than 200 active rigs in its North American fleet after the transaction, and 322 total rigs. Of those, it has identified 50 that would be held for sale.
It projects to achieve more than $30 million in annual synergies from the combination, through improved corporate efficiency and facility consolidations.
Precision shares closed Thursday at $4.44, making the offer of 0.445 share worth about $1.98 per Trinidad common share. Trinidad shares closed Thursday at $1.84 per share on the Toronto Stock Exchange.
Companies in this story: (TSX:PD, TSX:TDG)
The Canadian Press