Utilization for Bronco Drilling's drilling fleet remained the same as August's 84 percent. The company averaged 42 marketed rigs in September and 41 for August. Bronco's average dayrate was $18,543, an increase over July's $18,138.
In early August, Bronco Drilling Company, Inc. and Texas-based Allis-Chalmers Energy Inc. announced they have terminated plans to merge. A statement jointly released by both companies said they agreed "to terminate the merger agreement in light of clear indications that Bronco stockholders would not adopt the merger agreement."
Houston's Allis-Chalmers Energy Inc. announced it entered a merger agreement to acquire Bronco Drilling for a combination of cash and stock in January. On Aug. 1, Glass Lewis, a proxy advisory firm, recommended Bronco Drilling stockholders vote in favor of the merger.
The merger would have resulted in a combined company with an implied enterprise value of approximately $1.4 billion, based upon the closing stock price of Allis-Chalmers on Jan. 22. The merger agreement provides for a subsidiary of Allis-Chalmers to merge with and into Bronco Drilling, with Bronco Drilling surviving as a wholly owned subsidiary of Allis-Chalmers.
Upon completion of the transaction, Allis-Chalmers' stockholders would have owned approximately 72.1 percent, and that Bronco Drilling's stockholders would have owned approximately 27.9 percent of the combined company based on Allis-Chalmers' closing stock price on Jan. 22.
The merger agreement provided that at the effective time of the merger, stockholders of Bronco Drilling would receive merger consideration with an aggregate value of approximately $437.8 million, comprised of an aggregate of $280 million in cash and Allis-Chalmers common stock having an aggregate value of approximately $157.8 million.