Grey Wolf announced yesterday that it had received a letter from Precision
Drilling, making an unsolicited offer to acquire the oil and gas services company. Precision proposed to acquire all of the
common stock of Grey Wolf for US$9.00 per common share, bringing total consideration to US$1.6 billion (consisting of cash
and trust units). The cash portion of the deal will not exceed 33-1/3% of the equity purchase price. This acquisition will boost
Precision’s presence in the U.S. – Grey Wolf has a fleet of 123 drilling rigs. Amongst the terms and conditions of the Precision
proposal are: a) the negotiation of acceptable legal documentation; b) the satisfactory completion of due diligence; c) Grey Wolf
and Precision board approval; and d) shareholder and regulatory approvals. Grey Wolf intends to evaluate Precision’s proposal
consistent with its fiduciary duties and Grey Wolf’s obligations with respect to unsolicited third party offers under the merger
agreement in effect since April 21, 2008 with Basic Energy Services (BAS). Under the terms of the Grey Wolf/Basic Energy
“merger of equals” agreement, Grey Wolf shareholders will receive $1.82 in cash and 0.2500 shares of new Grey Wolf for each
share of Grey Wolf they currently own. Based on this exchange ratio, each stockholder of Grey Wolf will receive one share of
new Grey Wolf for each four shares of Grey Wolf in addition to the cash consideration. Basic Energy shareholders will receive
$6.70 in cash and 0.9195 shares of new Grey Wolf for each share of Basic Energy they currently own
