|Nabors Industries Enters into Agreements to Acquire Enserco|
CALGARY, Alberta - February 26, 2002 - Nabors Industries, Inc. and Enserco Energy Service Company Inc. jointly announced today that they have entered into an acquisition agreement pursuant to which Nabors will offer Cdn. $15.50 (plus interest from today to the date of the completion of the transaction at an annual rate of 6%) for each Enserco common share. Enserco shareholders will also have the option to elect to receive the equivalent value in shares of a Canadian subsidiary of Nabors that will be exchangeable for Nabors common stock. The transaction is proposed to be effected by way of a Plan of Arrangement.
Under the terms of the agreement, the number of shares of the Canadian subsidiary to be received for each Enserco common share will take into account the interest component of the cash offer price and will be determined based on the weighted average trading price of the Nabors common stock on the American Stock Exchange for the 10 consecutive trading days ending on the third business day prior to the date of the meeting of Enserco shareholders that will be held to approve the acquisition. The shares of the Canadian subsidiary of Nabors: (i) will have the same voting rights, dividend entitlements and other attributes as Nabors common stock, (ii) will be exchangeable, at each shareholder's option, on a one-for-one basis, into Nabors common stock, and (iii) subject to compliance with the listing requirements of The Toronto Stock Exchange, will be listed on the TSE. Those shares will automatically be exchanged five years from closing, and in certain other events.
The number of shares of the Canadian subsidiary of Nabors to be issued for each Enserco common share, pursuant to the formula described above, will be announced prior to the Enserco shareholder meeting.
Gene Isenberg, Nabors' Chairman and Chief Executive Officer, commented on the acquisition: "We are very pleased to be able to increase our position in Canada with such a well regarded entity. Enserco's assets are relatively new, in excellent condition and well suited for the increasingly important role that Canada is playing in the North American natural gas supply picture. Enserco has one of the industry's best safety records, which I firmly believe is the most direct indication of the quality of an operation, its people and its management.
Nabors' business in Canada spans 50 years and our willingness to invest there has increased for several reasons. In the last few years, many of our key US customers have substantially increased their presence in Canada, as it has become even more strategic to the North American gas supply. Federal and provincial initiatives to reduce corporate tax rates have also increased Canada's attractiveness as an investment for Nabors."
The acquisition agreement has been unanimously approved by the Board of Directors of Enserco, and will require approval by at least 66 2/3% of the Enserco shareholders who vote at the meeting to be held for that purpose. The Board of Directors of Enserco has received an opinion from its financial advisor, Peters & Co. Limited, that the offer is fair, from a financial point of view, to the Enserco shareholders. The agreement contains customary non-solicitation provisions and a termination fee payable by Enserco of Cdn. $17 million under certain circumstances. Nabors also retains the right to match competitive proposals should they arise.
Nabors has also agreed to acquire from two parties, prior to the completion of the acquisition, Enserco common shares representing approximately 20.5% of the total number of issued and outstanding Enserco common shares, subject to certain conditions, for Cdn. $15.50 per Enserco common share. In addition, certain shareholders and optionholders of Enserco who own or control an aggregate of 3,748,795 Enserco common shares and options to acquire an aggregate of 511,240 Enserco common shares have agreed, subject to the terms and conditions of those agreements, to vote their Enserco common shares (including Enserco common shares acquired on the exercise of such options) in favour of the Nabors acquisition.
As a result of the purchase agreements and the lock-up agreements, Nabors may be considered to have acquired ownership of, or control or direction over, an aggregate of 9,626,907 common shares of Enserco (including an aggregate of 511,240 common shares of Enserco subject to options), which Nabors believes constitutes approximately 36% of the outstanding common shares of Enserco after giving effect to the exercise of the options.
Peters & Co. Limited is acting as financial advisor to Enserco in this transaction.
Before giving effect to this transaction, the Nabors companies own and operate over 500 land drilling and 740 land workover and well-servicing rigs worldwide, including 52 in Canada. Offshore, Nabors operates 43 platform rigs, 16 jack-ups, and three barge rigs in the Gulf of Mexico and international markets. These rigs provide drilling, workover and well-servicing services. Nabors also operates 30 marine transportation and support vessels in the Gulf of Mexico. In addition, Nabors manufactures top drives and drilling instrumentation systems and provides comprehensive oilfield hauling, engineering, civil construction, logistics and facilities maintenance, and project management services. Nabors participates in most of the significant oil, gas and geothermal markets in the world.
Enserco is an integrated energy services company providing production and drilling services to the North American oil and gas industry. Through its subsidiaries, Bonus Well Servicing and H&R Drilling, Enserco operates 193 Canadian service rigs and 30 drilling rigs, representing one of the industry's largest and most competitive fleets.
The information above includes forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Such forward-looking statements are subject to certain risks and uncertainties, as disclosed by Nabors from time to time in its filings with the Securities and Exchange Commission. As a result of these factors, Nabors' actual results may differ materially from those indicated or implied by such forward-looking statements.
Nabors Industries, Inc. stock is listed on the American Stock Exchange (NBR). For further information, please contact Dennis A. Smith, Director of Corporate Development at (281) 775-8038. To request Investor Materials, call Angela Ridgell at (281) 775-8063. Nabors' address is 515 West Greens Road, Suite 1200, Houston, Texas, 77067.