Business Combination (Tables)

9 Months Ended

Sep. 30, 2023

Ulterra Drilling Technologies, L.P. [Member]

Business Acquisition [Line Items]

Schedule of Fair Value of Consideration Transferred

The total fair value of the consideration transferred was determined as follows (in thousands, except stock price):

Shares of our common stock issued to Ulterra		34,900
Our common stock price on August 14, 2023	$	14.94
Common stock equity consideration	$	521,406
Plus net cash consideration (1)		375,740
Total consideration transferred	$	897,146

(1)Net cash consideration included $370 million cash consideration as adjusted for customary purchase price adjustments set forth in the Ulterra merger agreement relating to cash, net working capital, indebtedness and transaction expenses of Ulterra as of the closing. The adjustment is subject to a post-closing target net working capital adjustment in accordance with the Ulterra merger agreement.

Schedule of Total Purchase Price of Assets Acquired and Liabilities Assumed Based on Fair Value

Assets acquired:
Cash and cash equivalents	$	18,426
Accounts receivable		68,467
Inventory (1)		36,313
Rental equipment (2)		109,055
Property and equipment		27,583
Intangible assets		313,000
Operating lease right of use asset		7,513
Finance lease right of use asset		5,228
Other assets		14,274
Total assets acquired		599,859
Liabilities assumed:
Accounts payable		23,258
Accrued liabilities		26,475
Operating lease liability		7,513
Finance lease liability		5,228
Deferred tax liabilities		82,851
Total liabilities assumed		145,325
Less: noncontrolling interest		(8,729	)
Net assets acquired		445,805
Goodwill		451,341
Total consideration transferred	$	897,146

(1)We recorded an adjustment of $5.5 million to write-up acquired drill bits classified as inventory to estimated fair value. This adjustment will be recorded as direct operating expense as acquired drill bits are sold.

(2)We recorded an adjustment of $74.4 million to write-up acquired drill bits classified as long-lived assets to estimated fair value. This adjustment will be depreciated as acquired drill bits are rented over a weighted-average estimated useful life of 7.5 runs.

Schedule of Fair Value Consideration Transferred Assigned to Identifiable Intangible Assets

A portion of the fair value consideration transferred has been provisionally assigned to identifiable intangible assets as follows:

	Fair Value		Weighted Average Useful Life
	(in thousands)		(in years)
Customer relationships	$	245,000		15
Trade name		16,000		11
Developed technology		52,000		8
Intangible assets	$	313,000

Schedule of Pro Forma Information

The following table summarizes our selected financial information on a pro forma basis (in thousands, except per share data):

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2023			2022		2023		2022
	(Unaudited)
Revenues	$	1,052,282		$	824,902	$	2,785,279	$	2,135,922
Net income (loss)	$	(27,925	)	$	58,762	$	163,904	$	54,365

NexTier Oilfield Solutions Inc. [Member]

Business Acquisition [Line Items]

Schedule of Fair Value of Consideration Transferred

The total fair value of the consideration transferred was determined as follows (in thousands, except exchange ratio and stock price):

Number of shares of NexTier common stock outstanding as of September 1, 2023		229,022
Multiplied by the exchange ratio		0.752
Number of shares of Patterson-UTI common stock issued in connection with the merger		172,224
Patterson-UTI common stock price on September 1, 2023	$	14.91
Common stock equity consideration		2,567,872
Acceleration of RSU awards		1,997
Fair value of replacement equity awards (1)		70,416
NexTier long-term debt repaid by Patterson-UTI		161,000
Consideration transferred	$	2,801,285

(1)In connection with the merger, each of the share-based awards held by legacy NexTier employees were replaced with our share-based awards on the merger date. The fair value of the replacement awards has been allocated between each employee’s pre-combination and post-combination services. Amounts allocated to pre-combination services have been included as consideration transferred as part of the merger. See Note 12 for replacement awards details.

Schedule of Total Purchase Price of Assets Acquired and Liabilities Assumed Based on Fair Value

Assets acquired:
Cash and cash equivalents	$	95,815
Accounts receivable		420,200
Inventory		71,930
Property and equipment (1)		1,045,610
Intangible assets		768,000
Operating lease right of use asset		19,091
Finance lease right of use asset		50,733
Other assets		84,677
Total assets acquired		2,556,056
Liabilities assumed:
Accounts payable		358,873
Accrued liabilities		130,597
Operating lease liability		19,091
Finance lease liability		50,733
Deferred tax liabilities		82,785
Long-term debt		22,533
Other liabilities		11,815
Total liabilities assumed		676,427
Net assets acquired		1,879,629
Goodwill		921,656
Total consideration transferred	$	2,801,285

(1)We recorded an adjustment of $262.7 million to write-up acquired property and equipment to estimated fair value. This adjustment will be depreciated on a straight-line basis over a weighted average period of six years.

Schedule of Fair Value Consideration Transferred Assigned to Identifiable Intangible Assets

A portion of the fair value consideration transferred has been provisionally assigned to identifiable intangible assets as follows:

	Fair Value		Weighted Average Useful Life
	(in thousands)		(in years)
Customer relationships	$	540,000		10
Trade name		85,000		10
Developed technology		143,000		8
Intangible assets	$	768,000

Schedule of Pro Forma Information

The following table summarizes our selected financial information on a pro forma basis (in thousands, except per share data):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
	(Unaudited)
Revenues	$	1,589,056	$	1,623,513	$	5,020,507	$	4,233,081
Net income	$	69,256	$	140,250	$	625,020	$	45,461