"Precision Drilling Ltd. was founded as a private drilling contractor in the early 1950s in the post-Leduc oil boom in western Canada and, after restructuring in the 1980s, grew to become the largest provider of oilfield services in Canada.
The roots of Precision Drilling Trust, date to 1987 with the reverse takeover of the far larger Precision Drilling Ltd. by Cypress Drilling Ltd., a company established two years earlier under the leadership of Hank Swartout.
In the next decade, Precision's fleet grew to more than 100 drilling rigs through acquisitions and rig builds. The acquisition of Kenting Energy Services in 1997 doubled Precision's fleet again to more than 200 rigs. Today, Precision operates over 240 land drilling rigs in Canada and United States.
Expansion into businesses that became Precision Well Servicing, Live Well Service and Precision Rentals began with the acquisitions of diversified oilfield services company EnServ Corp. in 1996 and CenAlta Energy Services four years later. Today, Precision operates over 235 service rigs, 30 snubbing units and provides 15,000 pieces of rental equipment.
To support its rig fleets, Precision developed complementary business lines. Precision entered the camp and catering business with the 1993 acquisition of LRG Oilfield Services and augmented its rig manufacturing and logistical support capabilities with the acquisitions of Rostel Industries in 1996 and Columbia Oilfield Supply in 1997. In 2005 Precision Corporation converted to an open-ended income trust and in 2006 Precision entered the campsite wastewater treatment business with the acquisition of Terra Water Group."
On December 23, 2008, the Trust completed its acquisition of Grey Wolf (GW).
Under the terms of the Merger Agreement, shareholders of Grey Wolf elected to receive cash or trust units of the Trust (the “ Trust Units ”) in exchange for their shares of Grey Wolf common stock. Each share of Grey Wolf common stock was convertible, at the option of the holder, into U.S.$9.02 in cash or 0.4225 Trust Units, subject to proration. The total consideration paid by the Trust to shareholders of Grey Wolf in connection with the Acquisition was approximately U.S.$897.2 million and 34.4 million Trust Units.
In connection with the Acquisition, Precision entered into a new U.S.$1.2 billion senior secured credit facility with Royal Bank of Canada, RBC Capital Markets, Deutsche Bank AG Cayman Islands Branch, Deutsche Bank Securities Inc., HSBC Bank Canada, HSBC Bank USA, National Association and The Toronto-Dominion Bank (collectively, the “ Commitment Banks ”) and certain other lenders (the “ Secured Facility ”) that is guaranteed by the Trust and is comprised of U.S.$800 million of term loans and a U.S.$400 million revolving facility and also entered into a U.S.$400 million unsecured bridge credit facility with certain of the Commitment Banks.
After the completion of the Acquisition and the related Acquisition financing transactions, approximately U.S.$137.5 million (Cdn.$168.4 million) was outstanding under the Bridge Facility. After June 30, 2009 (or after April 1, 2009 in certain circumstances), the lenders under the Bridge Facility may require that debt securities be issued and sold to repay amounts outstanding under the Bridge Facility, subject to certain specified terms and conditions. Precision has agreed to engage one or more investment banks to publicly sell or privately place debt securities in such circumstances, the proceeds of which will be used to repay outstanding loans under the Bridge Facility. The Trust may also, at any time, issue equity or debt securities and Precision may, at any time, issue debt securities to repay outstanding loans under the Bridge Facility.
After the Acquisition, management believes that the Trust is the second largest land driller in North America, based on the size of its drilling rig fleet. The Trust operates in most conventional and unconventional oil and natural gas basins in Canada and the United States and has an emerging presence in Mexico. Management believes that the Trust’s high performance drilling rigs, supply chain management systems and technology, together with the Trust’s United States customer base, deep drilling capabilities and positions in United States basins, provides the Trust with a substantive foundation for expansion, both in North America and internationally. After the Acquisition, the Trust has a high quality fleet consisting of 371 drilling rigs and 229 service rigs and 28 snubbing units. In addition, Precision offers its customers a complementary suite of wellsite products and services including camp and catering, wastewater treatment, snubbing and rental equipment. Most of these operations and the services rig business are located in Canada.