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C&J-Nabors merger consideration sum cut by USD 250m

10th February 2015

C&J Energy Services has reached an agreement with Nabors Industries to reduce by USD 250m the cash portion of the consideration to be received by Nabors upon closing of the proposed combination of C&J with the completion and production services business of Nabors

C&J Energy Services has reached an agreement with Nabors Industries to reduce by USD 250m the cash portion of the consideration to be received by Nabors upon closing of the proposed combination of C&J with the completion and production services business of Nabors

As a result, the cash portion of the consideration to be paid to Nabors will decline from USD 938m to USD 688m and the debt incurred by the combined company to finance the cash consideration will be proportionally reduced.

"As we near the final stage of completing our combination with Nabors completion and production services business, we remain confident that this transaction will create meaningful strategic, financial and operational value for all of our shareholders, customers and employees,” said Josh Comstock, founder, chairman and chief executive officer of C&J Energy Services.

“By reducing C&J's cash obligation by USD 250m and therefore the required debt financing, our combined company will have more liquidity, lower leverage and a stronger balance sheet, which are critical, especially during a challenging time for our industry.

“Nabors, who will be our largest stockholder post-closing, has demonstrated its alignment with all C&J stockholders by ensuring that our company has a solid financial position from which to build a stronger, more successful enterprise and deliver value to all of our shareholders over the long term. 

“We believe that this strategic combination, and the immediate increases in scale, capabilities, resources, geographic footprint and customer base that it provides, will better position us to manage through any downturn and enable us to capitalise on future market opportunities.

“Both C&J and Nabors remain committed to successfully closing this transaction, integrating our operations and realizing the benefits of this strategic combination – and today's announced purchase price reduction is a significant reaffirmation of our shared commitment."

Effective as of February 6, 2015, each of the Separation Agreement and the Merger Agreement related to the Pending Transaction were amended to, among other things, reflect the aforementioned USD 250m reduction in purchase price.

C&J will file with the SEC copies of the amendments as exhibits to a Current Report on Form 8-K.  The Pending Transaction is subject to approval by C&J's stockholders and customary closing conditions.

 

 

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