Grey Wolf Receives Third Unsolicited Proposal from Precision

Grey Wolf, Inc. announced today that on June 24, 2008, it received a letter from the board of trustees of Precision Drilling Trust (the Trust), making a third unsolicited proposal to acquire Grey Wolf. The Trust’s third proposal is to acquire all of Grey Wolf’s common stock for total consideration of US$10.00 per share on a fully diluted basis, consisting of cash and Trust units at the election of Grey Wolf’s shareholders, subject to proration so that the cash portion does not exceed 50% of the aggregate offer price. This third proposal contained a statement that it is the Trust’s final proposal to Grey Wolf.

In addition to the terms described above, the Trust’s third proposal includes the following terms and conditions:

  • final agreement on a transaction would be conditioned on:
  • negotiation of acceptable legal documentation, which the Trust expected to contain substantially the same terms (apart from consideration) as the pending merger agreement with Basic Energy Services, Inc.;
  • completion of focused confirmatory due diligence, which the Trust indicated would be conducted on an expedited basis;
  • Grey Wolf shareholder approval, but would not be conditioned on Trust unitholder approval; and
  • regulatory approval under the Hart-Scott-Rodino Act and other customary approvals;
  • possible completion of evaluation, due diligence, negotiation and signing of definitive documents within two weeks;
  • the Trust's statement that it has C$600 million of borrowing capacity to assist it in funding of the proposed business combination;
  • attached letters from Deutsche Bank Securities, Inc. and Royal Bank of Canada indicating that they were highly confident that they could arrange for or provide to the Trust financing required to complete the proposed business combination, subject in each case to numerous conditions, some of which were unspecified or were to be met to the satisfaction of the lender; however, each institution indicated that their letter should not be considered a binding commitment to provide such financing; and
  • the Trust's statement that it is prepared to discuss Grey Wolf nominees to the board of directors of Precision Drilling Corporation, the administrator of the Trust.

Grey Wolf’s board of directors will evaluate the Trust’s proposal consistent with its fiduciary duties and Grey Wolf’s obligations with respect to unsolicited third party offers under the merger agreement with Basic Energy Services and Horsepower Holdings, Inc. which remains in effect.