Grey Wolf Stays Strong in Pending Merger with Basic



Grey Wolf, Inc. has announced that its Board of Directors, after a thorough review and consultation with its financial and legal advisors, has determined that the previously-announced third unsolicited proposal to acquire Grey Wolf by the Precision Drilling Trust is not, and is not reasonably likely to result in, a proposal superior to its pending strategic merger with Basic Energy Services, Inc.

Grey Wolf’s Board of Directors concluded that pursuing discussions with Precision is not in the best interests of Grey Wolf stockholders, particularly in light of Precision’s adamant and publicly-announced refusal to consider any increase in its final offer. An effort to seek clarification of Precision’s proposal led Grey Wolf to conclude that Precision’s third offer was truly Precision’s final, non-negotiable offer.
 
In addition to Precision’s public and categorical refusal to consider an increased offer for Grey Wolf stockholders, the Grey Wolf Board of Directors weighed a number of other factors, including: the Precision proposal undervalues Grey Wolf and offers an insufficient premium to Grey Wolf stockholders; the considerable uncertainty in the long-term value of Precision’s trust units; the negative outlook for the Canadian drilling and well service markets; the risk of substantial pressure on the market price of Precision’s trust units following a Precision transaction; and possible future under-investment by Precision due to high debt levels and the need to distribute cash.
 
The Grey Wolf Board of Directors continues to believe that its merger agreement with Basic Energy Services follows Grey Wolf’s long-term strategic plan and maximizes value for Grey Wolf stockholders. The Board of Directors recommends that stockholders vote for the merger at its Special Meeting of Stockholders, which is scheduled for July 15, 2008.
 
Grey Wolf’s Board of Directors continues to believe that the pending strategic merger with Basic Energy Services continues to offer the best value for its stockholders.

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