Grey Wolf, Basic Energy Reach Merger Agreement

Grey Wolf, Inc. ("Grey Wolf") and Basic Energy Services, Inc. ("Basic Energy Services") announced that their Boards of Directors have approved a definitive agreement to combine the two businesses in a "merger of equals". Based upon closing prices for each company's common stock as of April 18, 2008, the estimated enterprise value of the combined company would be approximately $2.9 billion. The combined company will be named Grey Wolf, Inc., have its corporate offices in Houston, establish incorporation in the state of Delaware and trade on the New York Stock Exchange under the symbol "GW".

Under the terms of the 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 Services shareholders will receive $6.70 in cash and 0.9195 shares of new Grey Wolf for each share of Basic Energy Services they currently own. The total number of shares outstanding of the combined company, which is reflective of the above exchange ratios applied to both companies' respective current shares outstanding, will be approximately 85 million shares. Pro forma net debt as of December 31, 2007 will be approximately $960 million. The combined company intends to dedicate a substantial amount of its free cash flow to the repayment of the debt while at the same time fully funding and implementing its significant, value-adding growth initiatives.

The greater financial strength of the combined company will enable it to return approximately $600 million in cash to the combined shareholder base while retaining financial flexibility to invest for future growth. The financing will be provided by affiliates of UBS Investment Bank and Goldman, Sachs & Co. The cash is being issued to the two sets of shareholders proportionate to pro forma ownership of the combined company, which will be approximately 54% owned by current Grey Wolf shareholders and 46% owned by current Basic Energy Services shareholders.

The combination will create an organization with approximately 7,500 personnel, providing a broad range of drilling and oilfield well services. The combined company will have 395 well servicing and 130 drilling rigs as well as a suite of other oilfield service assets, pro forma sales and EBITDA of approximately $1,784 million and $632 million, respectively (for the full year ending 12/31/07). Pro forma sales (for the full year ending 12/31/07) would be approximately 53% from contract drilling, 19% from well servicing, 15% from fluid services and 13% from completion and remedial services.

Current Grey Wolf Chairman, President and CEO, Thomas P. Richards, who will serve as Grey Wolf, Inc.'s Chairman following the merger, said, "This is an exciting opportunity for our shareholders, our customers and our people. Grey Wolf's premium land drilling rig fleet complements Basic Energy Service's premium land-based well servicing equipment. With approximately 50% of Basic Energy Service's business focused on oil and approximately 95% of Grey Wolf's business focused on natural gas, this transaction results in a company with a diversified revenue stream in terms of exposure to oil and gas opportunities, involvement through the life of the well from drilling to production to well abandonment and a very broad geographic coverage, all of which is consistent with our stated strategic goal. We are confident that our valued customers will respond positively to this merger with the combined company's enhanced ability to satisfy their needs. Grey Wolf has an outstanding management team, as well as operational and support staff, which when combined with Basic Energy Services' organization, will produce a best-in-class team."

Ken Huseman, who will serve as Chief Executive Officer of Grey Wolf, Inc. after the merger, said, "This combination achieves the goal of moving Basic Energy Services forward in achieving a size which allows the combined company to compete effectively for expansion opportunities anywhere in the world while continuing to build upon the existing footprint of both companies. The expanded operational capability of a more diversified company will produce significant benefits for our customers and provide substantial growth opportunities for our people. In addition, the cash consideration allows us to provide each companies' shareholders with a meaningful financial return without unduly limiting the growth potential for the combined entity. This is an ideal fit for the stakeholders in both companies."

Following the merger, in addition to the executive officers listed above, Bob Proffit, current Senior Vice President, Human Resources of Grey Wolf, will assume the role of Senior Vice President, Administration at the combined company and Spencer Armour, current Senior Vice President, Corporate Development of Basic Energy Services, will remain in the same role at the combined company. Operating level officers for both companies will continue in their current roles.


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