EX-99.5 5 pten-ex99_5.htm EX-99.5

Exhibit 99.5

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

On September 1, 2023, Patterson-UTI Energy, Inc., a Delaware corporation (“Patterson-UTI”), and NexTier Oilfield Solutions Inc., a Delaware corporation (“NexTier”), consummated the transactions contemplated by the Agreement and Plan of Merger, dated as of June 14, 2023 (as amended, the “NexTier merger agreement”), among Patterson-UTI, NexTier and certain subsidiaries of Patterson-UTI. Pursuant to the NexTier merger agreement, (i) a direct wholly owned subsidiary of Patterson-UTI merged with and into NexTier, with NexTier continuing as the surviving entity (the “first merger” and the surviving entity, the “surviving corporation”), and (ii) immediately following the first merger, the surviving corporation merged with and into a second direct wholly owned subsidiary of Patterson-UTI, with such second subsidiary surviving the merger as a direct wholly owned subsidiary of Patterson-UTI (the “second merger” and, together with the first merger, the “NexTier mergers”). Upon consummation of the NexTier mergers on September 1, 2023, NexTier became a wholly owned subsidiary of Patterson-UTI.

On August 14, 2023, Patterson-UTI and two of its wholly owned subsidiaries consummated the transactions (the “Ulterra acquisition”) contemplated by the merger agreement, dated as of July 3, 2023 (the “Ulterra merger agreement” and, together with the NexTier merger agreement, the “merger agreements”), with BEP Diamond Holdings Corp. (“Ulterra”), which indirectly owned all of the outstanding equity interests of Ulterra Drilling Technologies, L.P., and BEP Diamond Topco L.P., a Delaware limited partnership, as sole stockholder of Ulterra (the “Ulterra stockholder”). Upon consummation of the Ulterra acquisition and the other transactions contemplated by the Ulterra merger agreement on August 14, 2023, Ulterra became a wholly owned subsidiary of Patterson-UTI.

The following unaudited pro forma condensed combined financial statements (the “pro forma financial statements”) have been prepared from the respective historical consolidated financial statements of Patterson-UTI, NexTier and Ulterra and have been adjusted to reflect the completion of the NexTier mergers and the Ulterra acquisition (referred to collectively as the “combination transactions,” and Patterson-UTI, after giving effect to the combination transactions, is referred to as the “combined company”). The pro forma financial statements have been prepared in accordance with Article 11 of the SEC’s Regulation S-X, as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” The unaudited pro forma condensed combined balance sheet gives effect to the combination transactions as if they had been completed on June 30, 2023, while the unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2023 and the year ended December 31, 2022 are presented as if the combination transactions had been completed on January 1, 2022. The information presented herein is based on and should be read in conjunction with the historical audited and unaudited consolidated financial statements and related notes of Patterson-UTI filed with the SEC and the historical audited and unaudited consolidated financial statements of NexTier and Ulterra and related notes filed herewith as Exhibits 99.1 – 99.4 to this Current Report on Form 8-K/A.

Upon consummation of the combination transactions, Patterson-UTI determined the value of the purchase consideration using the Patterson-UTI common stock closing price and the number of shares of Patterson-UTI issued on the closing date of each respective transaction. Additionally, after completing the combination transactions, Patterson-UTI identified the assets acquired and liabilities assumed from NexTier and Ulterra and determined the respective fair values using relevant information available at that time. As a result of the foregoing, the pro forma adjustments with respect to the combination transactions are preliminary and are subject to change as additional information becomes available and as additional analysis is performed. Any increases or decreases in the fair value of assets acquired and liabilities assumed upon completion of the final valuations may be materially different from the information presented in the pro forma financial statements.

The pro forma financial statements are presented for illustrative purposes only and are not necessarily indicative of the operating results and financial position of the combined company that would have occurred had the combination transactions occurred on the dates indicated. Adjustments are based on information available to management during the preparation of the pro forma financial statements and assumptions that management believes are reasonable and supportable. Further, the pro forma financial statements do not purport to project the future operating results or financial position of the combined company following the combination transactions. Patterson-UTI's actual financial position and results of operations following completion of the combination transactions may differ materially from these pro forma financial statements.

1

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET AS OF JUNE 30, 2023

(in thousands)

| As of |  |  | As of |  |  |  |  |  |  |  |  |  | As of |  |  | As of |  |  |  |  |  |  |  |  |  | As of |
| June 30, |  |  | June 30, |  |  |  |  |  |  |  |  |  | June 30, |  |  | June 30, |  |  |  |  |  |  |  |  |  | June 30, |
| 2023 |  |  | 2023 |  |  | NexTier |  | 2023 |  |  | 2023 |  |  | Ulterra |  | 2023 |
|  |  |  | NexTier |  |  |  |  |  |  |  |  |  | Pro Forma |  |  | Ulterra |  |  |  |  |  |  |  |  |  |  |
|  |  |  | (Historical |  |  |  |  |  | Financing |  |  |  | Combined |  |  | (Historical |  |  |  |  |  | Financing |  |  |  |  |
| Patterson- |  |  | as |  |  | Transaction |  |  | and |  |  |  | for |  |  | as |  |  | Transaction |  |  | and |  |  |  | Pro |
| UTI |  |  | adjusted |  |  | Accounting |  |  | Other |  |  |  | NexTier |  |  | adjusted |  |  | Accounting |  |  | Other |  |  |  | Forma |
| (Historical) |  |  | in Note 2) |  |  | Adjustments |  | Notes | Adjustments |  | Notes |  | Merger |  |  | in Note 2) |  |  | Adjustments |  | Notes | Adjustments |  | Notes |  | Combined |
ASSETS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 150,288 |  |  | $ | 310,166 |  |  | $ | (158,360 | ) | A | $ | — |  |  |  | $ | 302,094 |  |  | $ | 72,478 |  |  | $ | (375,739 | ) | A | $ | — |  |  |  | $ | 119,240 |
|  |  |  |  |  |  |  | (61,558 | ) | B |  |  |  |  |  | (61,558 | ) |  |  |  |  |  | (7,620 | ) | B |  |  |  |  |  |
|  |  |  |  |  |  |  | (174,140 | ) | F |  | 95,000 |  | E |  |  | (79,140 | ) |  |  |  |  |  | (56,275 | ) | F |  | 325,000 |  | E |  |  |
Accounts receivable, net of allowance for credit losses |  | 491,049 |  |  |  | 443,741 |  |  |  | — |  |  |  | — |  |  |  |  | 934,790 |  |  |  | 70,464 |  |  |  | — |  |  |  | — |  |  |  |  | 1,005,254 |
Inventory |  | 68,036 |  |  |  | 73,415 |  |  |  | — |  |  |  | — |  |  |  |  | 141,451 |  |  |  | 31,430 |  |  |  | — |  |  |  | — |  |  |  |  | 172,881 |
Other current assets |  | 91,954 |  |  |  | 49,571 |  |  |  | (4,665 | ) | I |  | — |  |  |  |  | 136,860 |  |  |  | 23,322 |  |  |  | (9,943 | ) | I |  | — |  |  |  |  | 150,239 |
Total current assets |  | 801,327 |  |  |  | 876,893 |  |  |  | (398,723 | ) |  |  | 95,000 |  |  |  |  | 1,374,497 |  |  |  | 197,694 |  |  |  | (449,577 | ) |  |  | 325,000 |  |  |  |  | 1,447,614 |
Non-current assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property and equipment, net |  | 2,263,581 |  |  |  | 780,036 |  |  |  | 275,678 |  | C |  | — |  |  |  |  | 3,319,295 |  |  |  | 60,211 |  |  |  | 71,001 |  | C |  | — |  |  |  |  | 3,450,507 |
Operating lease right-of-use assets |  | 18,771 |  |  |  | 29,178 |  |  |  | — |  |  |  | — |  |  |  |  | 47,949 |  |  |  | 8,588 |  |  |  | — |  |  |  | — |  |  |  |  | 56,537 |
Finance lease right-of-use assets |  | — |  |  |  | 93,565 |  |  |  | — |  |  |  | — |  |  |  |  | 93,565 |  |  |  | 6,538 |  |  |  | — |  |  |  | — |  |  |  |  | 100,103 |
Intangible assets, net |  | 5,140 |  |  |  | 48,373 |  |  |  | 687,627 |  | D |  | — |  |  |  |  | 741,140 |  |  |  | 238,598 |  |  |  | 81,402 |  | D |  | — |  |  |  |  | 1,061,140 |
Goodwill |  | — |  |  |  | 192,780 |  |  |  | 758,803 |  | A |  | — |  |  |  |  | 951,583 |  |  |  | 147,314 |  |  |  | 303,492 |  | A |  | — |  |  |  |  | 1,402,389 |
Deposits on equipment purchases |  | 14,222 |  |  |  | 16,161 |  |  |  | — |  |  |  | — |  |  |  |  | 30,383 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  |  | 30,383 |
Other assets |  | 10,128 |  |  |  | 13,654 |  |  |  | (2,247 | ) | I |  | — |  |  |  |  | 21,535 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  |  | 21,535 |
Deferred tax assets, net |  | 4,027 |  |  |  | 112,926 |  |  |  | (112,926 | ) | H |  | — |  |  |  |  | 4,027 |  |  |  | 512 |  |  |  | — |  |  |  | — |  |  |  |  | 4,539 |
Total assets | $ | 3,117,196 |  |  | $ | 2,163,566 |  |  | $ | 1,208,212 |  |  | $ | 95,000 |  |  |  | $ | 6,583,974 |  |  | $ | 659,455 |  |  | $ | 6,318 |  |  | $ | 325,000 |  |  |  | $ | 7,574,747 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable | $ | 245,562 |  |  | $ | 347,589 |  |  | $ | — |  |  | $ | — |  |  |  | $ | 593,151 |  |  | $ | 23,488 |  |  | $ | — |  |  | $ | — |  |  |  | $ | 616,639 |
Accrued liabilities |  | 204,006 |  |  |  | 215,876 |  |  |  | — |  |  |  | — |  |  |  |  | 419,882 |  |  |  | 13,247 |  |  |  | — |  |  |  | — |  |  |  |  | 433,129 |
Current maturities of long-term operating lease liabilities |  | 4,753 |  |  |  | 9,930 |  |  |  | 497 |  | K |  | — |  |  |  |  | 15,180 |  |  |  | 2,642 |  |  |  | (23 | ) | K |  | — |  |  |  |  | 17,799 |
Current maturities of long-term finance lease liabilities |  | — |  |  |  | 52,605 |  |  |  | 13,833 |  | K |  | — |  |  |  |  | 66,438 |  |  |  | 4,409 |  |  |  | 220 |  | K |  | — |  |  |  |  | 71,067 |
Current maturities of long-term debt |  | — |  |  |  | 14,176 |  |  |  | (2,165 | ) | F |  | — |  |  |  |  | 12,011 |  |  |  | 4,150 |  |  |  | (4,150 | ) | F |  | — |  |  |  |  | 12,011 |
Total current liabilities |  | 454,321 |  |  |  | 640,176 |  |  |  | 12,165 |  |  |  | — |  |  |  |  | 1,106,662 |  |  |  | 47,936 |  |  |  | (3,953 | ) |  |  | — |  |  |  |  | 1,150,645 |
Non-current liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Long-term operating lease liabilities, less current maturities |  | 17,287 |  |  |  | 17,856 |  |  |  | 895 |  | K |  | — |  |  |  |  | 36,038 |  |  |  | 6,021 |  |  |  | (52 | ) | K |  | — |  |  |  |  | 42,007 |
Long-term finance lease liabilities, less current maturities |  | — |  |  |  | 21,479 |  |  |  | 5,648 |  | K |  | — |  |  |  |  | 27,127 |  |  |  | 1,818 |  |  |  | 91 |  | K |  | — |  |  |  |  | 29,036 |
Long-term debt, net of debt discount and issuance costs |  | 822,408 |  |  |  | 340,327 |  |  |  | (327,737 | ) | F |  | 95,000 |  | E |  |  | 929,998 |  |  |  | 383,727 |  |  |  | (383,727 | ) | F |  | 325,000 |  | E |  |  | 1,254,998 |
Deferred tax liabilities, net |  | 58,635 |  |  |  | — |  |  |  | 64,634 |  | H |  | (36,594 | ) | J |  |  | 86,675 |  |  |  | 54,181 |  |  |  | 34,001 |  | H |  | — |  |  |  |  | 174,857 |
Other liabilities |  | 44,376 |  |  |  | 14,477 |  |  |  | — |  |  |  | — |  |  |  |  | 58,853 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  |  | 58,853 |
Total liabilities |  | 1,397,027 |  |  |  | 1,034,315 |  |  |  | (244,395 | ) |  |  | 58,406 |  |  |  |  | 2,245,353 |  |  |  | 493,683 |  |  |  | (353,640 | ) |  |  | 325,000 |  |  |  |  | 2,710,396 |

The accompanying notes are an integral part of the unaudited pro forma condensed combined financial statements.

2

| As of |  |  | As of |  |  |  |  |  |  |  |  |  | As of |  |  | As of |  |  |  |  |  |  |  |  |  | As of |
| June 30, |  |  | June 30, |  |  |  |  |  |  |  |  |  | June 30, |  |  | June 30, |  |  |  |  |  |  |  |  |  | June 30, |
| 2023 |  |  | 2023 |  |  | NexTier |  | 2023 |  |  | 2023 |  |  | Ulterra |  | 2023 |
|  |  |  | NexTier |  |  |  |  |  |  |  |  |  | Pro Forma |  |  | Ulterra |  |  |  |  |  |  |  |  |  |  |
|  |  |  | (Historical |  |  |  |  |  | Financing |  |  |  | Combined |  |  | (Historical |  |  |  |  |  | Financing |  |  |  |  |
| Patterson- |  |  | as |  |  | Transaction |  |  | and |  |  |  | for |  |  | as |  |  | Transaction |  |  | and |  |  |  | Pro |
| UTI |  |  | adjusted |  |  | Accounting |  |  | Other |  |  |  | NexTier |  |  | adjusted |  |  | Accounting |  |  | Other |  |  |  | Forma |
| (Historical) |  |  | in Note 2) |  |  | Adjustments |  | Notes | Adjustments |  | Notes |  | Merger |  |  | in Note 2) |  |  | Adjustments |  | Notes | Adjustments |  | Notes |  | Combined |
EQUITY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Stockholders’ equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Preferred stock, par value $0.01 |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  |  | — |
Common stock, par value $0.01 |  | 3,049 |  |  |  | 2,285 |  |  |  | 1,719 |  | A |  | — |  |  |  |  | 7,053 |  |  |  | — |  |  |  | 349 |  | A |  | — |  |  |  |  | 7,402 |
|  |  |  |  |  |  |  | (2,285 | ) | G |  |  |  |  |  | (2,285 | ) |  |  |  |  |  |  |  |  |  |  |  |  | (2,285 | )
Treasury stock, at cost |  | (1,554,706 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  |  | (1,554,706 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  |  | (1,554,706 | )
Partners’ interests |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  | 379,729 |  |  |  | (379,729 | ) | G |  | — |  |  |  |  | — |
Additional paid-in capital |  | 3,208,927 |  |  |  | 942,563 |  |  |  | 2,641,697 |  | A |  | — |  |  |  |  | 6,793,187 |  |  |  | — |  |  |  | 521,057 |  | A |  | — |  |  |  |  | 7,314,244 |
|  |  |  |  |  |  |  | (942,563 | ) | G |  |  |  |  |  | (942,563 | ) |  |  |  |  |  |  |  |  |  |  |  |  | (942,563 | )
Retained earnings (deficit) |  | 62,899 |  |  |  | 177,862 |  |  |  | (61,558 | ) | B |  | 36,594 |  | J |  |  | 215,797 |  |  |  | (225,662 | ) |  |  | (7,620 | ) | B |  | — |  |  |  |  | (17,485 | )
|  |  |  |  |  |  |  | (177,862 | ) | G |  |  |  |  |  | (177,862 | ) |  |  |  |  |  | 225,662 |  | G |  |  |  |  |  | 47,800 |
Accumulated other comprehensive income |  | — |  |  |  | 6,541 |  |  |  | (6,541 | ) | G |  | — |  |  |  |  | — |  |  |  | 10,363 |  |  |  | (10,363 | ) | G |  | — |  |  |  |  | — |
Total stockholders’ equity |  | 1,720,169 |  |  |  | 1,129,251 |  |  |  | 1,452,607 |  |  |  | 36,594 |  |  |  |  | 4,338,621 |  |  |  | 164,430 |  |  |  | 349,356 |  |  |  | — |  |  |  |  | 4,852,407 |
Non-controlling interest |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  | 1,342 |  |  |  | 10,602 |  | A |  | — |  |  |  |  | 11,944 |
Total non-controlling interest |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  | 1,342 |  |  |  | 10,602 |  |  |  | — |  |  |  |  | 11,944 |
Total equity |  | 1,720,169 |  |  |  | 1,129,251 |  |  |  | 1,452,607 |  |  |  | 36,594 |  |  |  |  | 4,338,621 |  |  |  | 165,772 |  |  |  | 359,958 |  |  |  | — |  |  |  |  | 4,864,351 |
Total liability and stockholders’ equity | $ | 3,117,196 |  |  | $ | 2,163,566 |  |  | $ | 1,208,212 |  |  | $ | 95,000 |  |  |  | $ | 6,583,974 |  |  | $ | 659,455 |  |  | $ | 6,318 |  |  | $ | 325,000 |  |  |  | $ | 7,574,747 |

The accompanying notes are an integral part of the unaudited pro forma condensed combined financial statement

3

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2023

(in thousands, except share and per share data)

| For the |  |  | For the |  |  |  |  |  |  |  |  |  |  | For the |  |  | For the |  |  |  |  |  |  |  |  |  |  | For the |
| Six |  |  | Six |  |  |  |  |  |  |  |  |  |  | Six |  |  | Six |  |  |  |  |  |  |  |  |  |  | Six |
| Months |  |  | Months |  |  |  |  |  |  |  |  |  |  | Months |  |  | Months |  |  |  |  |  |  |  |  |  |  | Months |
| Ended |  |  | Ended |  |  |  |  |  |  |  |  |  |  | Ended |  |  | Ended |  |  |  |  |  |  |  |  |  |  | Ended |
| June 30, |  |  | June 30, |  |  |  |  |  |  |  |  |  |  | June 30, |  |  | June 30, |  |  |  |  |  |  |  |  |  |  | June 30, |
| 2023 |  |  | 2023 |  |  | NexTier |  | 2023 |  |  | 2023 |  |  | Ulterra |  | 2023 |
|  |  |  | NexTier |  |  |  |  |  |  |  |  |  |  | Pro Forma |  |  | Ulterra |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | (Historical |  |  |  |  |  |  | Financing |  |  |  | Combined |  |  | (Historical |  |  |  |  |  |  | Financing |  |  |  |  |
| Patterson- |  |  | as |  |  | Transaction |  |  |  | and |  |  |  | for |  |  | as |  |  | Transaction |  |  |  | and |  |  |  | Pro |
| UTI |  |  | adjusted |  |  | Accounting |  |  |  | Other |  |  |  | NexTier |  |  | adjusted |  |  | Accounting |  |  |  | Other |  |  |  | Forma |
| (Historical) |  |  | in Note 2) |  |  | Adjustments |  | Notes |  | Adjustments |  | Notes |  | Merger |  |  | in Note 2) |  |  | Adjustments |  | Notes |  | Adjustments |  | Notes |  | Combined |
Operating revenue |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contract drilling | $ | 851,401 |  |  | $ | — |  |  | $ | — |  |  |  | $ | — |  |  |  | $ | 851,401 |  |  | $ | — |  |  | $ | — |  |  |  | $ | — |  |  |  | $ | 851,401 |
Pressure pumping |  | 543,509 |  |  |  | 1,880,763 |  |  |  | — |  |  |  |  | — |  |  |  |  | 2,424,272 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | 2,424,272 |
Directional drilling |  | 111,404 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | 111,404 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | 111,404 |
Other |  | 44,373 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | 44,373 |  |  |  | 182,310 |  |  |  | — |  |  |  |  | — |  |  |  |  | 226,683 |
Total operating revenue |  | 1,550,687 |  |  |  | 1,880,763 |  |  |  | — |  |  |  |  | — |  |  |  |  | 3,431,450 |  |  |  | 182,310 |  |  |  | — |  |  |  |  | — |  |  |  |  | 3,613,760 |
Operating costs and expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contract drillings |  | 461,778 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | 461,778 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | 461,778 |
Pressure pumping |  | 416,589 |  |  |  | 1,360,579 |  |  |  | — |  |  |  |  | — |  |  |  |  | 1,777,168 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | 1,777,168 |
Directional drilling |  | 95,411 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | 95,411 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | 95,411 |
Other |  | 26,966 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | 26,966 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | 26,966 |
Cost of equipment rentals |  | — |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | — |  |  |  | 41,273 |  |  |  | — |  |  |  |  | — |  |  |  |  | 41,273 |
Cost of equipment sales & services |  | — |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | — |  |  |  | 10,541 |  |  |  | — |  |  |  |  | — |  |  |  |  | 10,541 |
Depreciation, depletion, amortization and impairment |  | 254,994 |  |  |  | 122,147 |  |  |  | 20,022 |  | AA |  |  | — |  |  |  |  | 397,163 |  |  |  | 35,208 |  |  |  | 266 |  | AA |  |  | — |  |  |  |  | 434,854 |
|  |  |  |  |  |  |  | (10,924 | ) | BB |  |  |  |  |  |  | (10,924 | ) |  |  |  |  |  | 13,141 |  | BB |  |  | — |  |  |  |  |
Selling, general and administrative |  | 63,823 |  |  |  | 64,969 |  |  |  | (13,579 | ) | DD |  |  | — |  |  |  |  | 115,213 |  |  |  | 52,659 |  |  |  | — |  |  |  |  | — |  |  |  |  | 167,872 |
Merger and integration expenses |  | 7,940 |  |  |  | 5,436 |  |  |  | — |  |  |  |  | — |  |  |  |  | 13,376 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | 13,376 |
Other operating expense (income), net |  | (7,359 | ) |  |  | 13,617 |  |  |  | — |  |  |  |  | — |  |  |  |  | 6,258 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | 6,258 |
Total operating costs and expenses |  | 1,320,142 |  |  |  | 1,566,748 |  |  |  | (4,481 | ) |  |  |  | — |  |  |  |  | 2,882,409 |  |  |  | 139,681 |  |  |  | 13,407 |  |  |  |  | — |  |  |  |  | 3,035,497 |
Operating income (loss) |  | 230,545 |  |  |  | 314,015 |  |  |  | 4,481 |  |  |  |  | — |  |  |  |  | 549,041 |  |  |  | 42,629 |  |  |  | (13,407 | ) |  |  |  | — |  |  |  |  | 578,263 |
Interest income |  | 2,452 |  |  |  | 3,527 |  |  |  | — |  |  |  |  | — |  |  |  |  | 5,979 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | 5,979 |
Interest expense |  | (18,564 | ) |  |  | (17,032 | ) |  |  | 16,318 |  | EE |  |  | (3,411 | ) | GG |  |  | (22,689 | ) |  |  | (14,889 | ) |  |  | 14,889 |  | EE |  |  | (11,639 | ) | GG |  |  | (34,328 | )
Other income (expense) |  | 3,809 |  |  |  | 2,647 |  |  |  | — |  |  |  |  | — |  |  |  |  | 6,456 |  |  |  | (1,671 | ) |  |  | — |  |  |  |  | — |  |  |  |  | 4,785 |
Income (loss) before income taxes |  | 218,242 |  |  |  | 303,157 |  |  |  | 20,799 |  |  |  |  | (3,411 | ) |  |  |  | 538,787 |  |  |  | 26,069 |  |  |  | 1,482 |  |  |  |  | (11,639 | ) |  |  |  | 554,699 |
Income tax expense |  | (33,950 | ) |  |  | 100,900 |  |  |  | (1,675 | ) | FF |  |  | 791 |  | FF |  |  | 66,066 |  |  |  | (6,691 | ) |  |  | (351 | ) | FF |  |  | 2,760 |  | FF |  |  | 61,784 |
Net income (loss) |  | 184,292 |  |  |  | 404,057 |  |  |  | 19,124 |  |  |  |  | (2,620 | ) |  |  |  | 604,853 |  |  |  | 19,378 |  |  |  | 1,131 |  |  |  |  | (8,879 | ) |  |  |  | 616,483 |
Income attributable to non-controlling interests |  | — |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | — |  |  |  | 922 |  |  |  | — |  |  |  |  | — |  |  |  |  | 922 |
Net income (loss) attributable to common stockholders |  | 184,292 |  |  |  | 404,057 |  |  |  | 19,124 |  |  |  |  | (2,620 | ) |  |  |  | 604,853 |  |  |  | 18,456 |  |  |  | 1,131 |  |  |  |  | (8,879 | ) |  |  |  | 615,561 |
Foreign currency translation adjustments |  | — |  |  |  | (322 | ) |  |  | — |  |  |  |  | — |  |  |  |  | (322 | ) |  |  | 1,825 |  |  |  | — |  |  |  |  | — |  |  |  |  | 1,503 |
Hedging activities |  | — |  |  |  | 2,066 |  |  |  | — |  |  |  |  | — |  |  |  |  | 2,066 |  |  |  | (4,185 | ) |  |  | — |  |  |  |  | — |  |  |  |  | (2,119 | )
Total comprehensive income | $ | 184,292 |  |  | $ | 405,801 |  |  | $ | 19,124 |  |  |  | $ | (2,620 | ) |  |  | $ | 606,597 |  |  | $ | 16,096 |  |  | $ | 1,131 |  |  |  | $ | (8,879 | ) |  |  | $ | 614,945 |
Basic weighted average shares outstanding |  | 209,952 |  |  |  |  |  |  | 171,869 |  |  |  |  |  |  |  |  | 381,821 |  |  |  |  |  |  | 34,900 |  |  |  |  |  |  |  |  | 416,721 |
Diluted weighted average shares outstanding |  | 211,188 |  |  |  |  |  |  | 181,526 |  |  |  |  |  |  |  |  | 392,714 |  |  |  |  |  |  | 34,900 |  |  |  |  |  |  |  |  | 427,614 |
Basic earnings per share | $ | 0.88 |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 1.58 |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 1.48 |
Diluted earnings per share | $ | 0.87 |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 1.54 |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 1.44 |

The accompanying notes are an integral part of the unaudited pro forma condensed combined financial statements.

4

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2022

(in thousands, except share and per share data)

| For the |  |  | For the |  |  |  |  |  |  |  |  |  |  | For the |  |  | For the |  |  |  |  |  |  |  |  |  |  | For the |
| Year |  |  | Year |  |  |  |  |  |  |  |  |  |  | Year |  |  | Year |  |  |  |  |  |  |  |  |  |  | Year |
| Ended |  |  | Ended |  |  |  |  |  |  |  |  |  |  | Ended |  |  | Ended |  |  |  |  |  |  |  |  |  |  | Ended |
| December 31, |  |  | December 31, |  |  |  |  |  |  |  |  |  |  | December 31, |  |  | December 31, |  |  |  |  |  |  |  |  |  |  | December 31, |
| 2022 |  |  | 2022 |  |  | NexTier |  | 2022 |  |  | 2022 |  |  | Ulterra |  | 2022 |
|  |  |  | NexTier |  |  |  |  |  |  |  |  |  |  | Pro Forma |  |  | Ulterra |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | (Historical |  |  |  |  |  |  | Financing |  |  |  | Combined |  |  | (Historical |  |  |  |  |  |  | Financing |  |  |  |  |
| Patterson- |  |  | as |  |  | Transaction |  |  |  | and |  |  |  | for |  |  | as |  |  | Transaction |  |  |  | and |  |  |  | Pro |
| UTI |  |  | adjusted |  |  | Accounting |  |  |  | Other |  |  |  | NexTier |  |  | adjusted |  |  | Accounting |  |  |  | Other |  |  |  | Forma |
| (Historical) |  |  | in Note 2) |  |  | Adjustments |  | Notes |  | Adjustments |  | Notes |  | Merger |  |  | in Note 2) |  |  | Adjustments |  | Notes |  | Adjustments |  | Notes |  | Combined |
Operating revenue |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contract drilling | $ | 1,316,672 |  |  | $ | — |  |  | $ | — |  |  |  | $ | — |  |  |  | $ | 1,316,672 |  |  | $ | — |  |  | $ | — |  |  |  | $ | — |  |  |  | $ | 1,316,672 |
Pressure pumping |  | 1,022,413 |  |  |  | 3,244,822 |  |  |  | — |  |  |  |  | — |  |  |  |  | 4,267,235 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | 4,267,235 |
Directional drilling |  | 216,498 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | 216,498 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | 216,498 |
Other |  | 92,009 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | 92,009 |  |  |  | 370,186 |  |  |  | — |  |  |  |  | — |  |  |  |  | 462,195 |
Total operating revenue |  | 2,647,592 |  |  |  | 3,244,822 |  |  |  | — |  |  |  |  | — |  |  |  |  | 5,892,414 |  |  |  | 370,186 |  |  |  | — |  |  |  |  | — |  |  |  |  | 6,262,600 |
Operating costs and expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contract drilling |  | 832,180 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | 832,180 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | 832,180 |
Pressure pumping |  | 781,385 |  |  |  | 2,507,105 |  |  |  | — |  |  |  |  | — |  |  |  |  | 3,288,490 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | 3,288,490 |
Directional drilling |  | 179,135 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | 179,135 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | 179,135 |
Other |  | 53,850 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | 53,850 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | 53,850 |
Cost of equipment rentals |  | — |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | — |  |  |  | 94,134 |  |  |  | — |  |  |  |  | — |  |  |  |  | 94,134 |
Cost of equipment sales & services |  | — |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | — |  |  |  | 16,772 |  |  |  | — |  |  |  |  | — |  |  |  |  | 16,772 |
Depreciation, depletion, amortization and impairment |  | 483,945 |  |  |  | 229,259 |  |  |  | 34,967 |  | AA |  |  | — |  |  |  |  | 748,171 |  |  |  | 72,651 |  |  |  | 432 |  | AA |  |  | — |  |  |  |  | 853,673 |
|  |  |  |  |  |  |  | (1,737 | ) | BB |  |  | — |  |  |  |  | (1,737 | ) |  |  |  |  |  | 34,156 |  | BB |  |  | — |  |  |  |  |
Selling, general and administrative |  | 116,589 |  |  |  | 125,342 |  |  |  | 6,885 |  | DD |  |  | — |  |  |  |  | 248,816 |  |  |  | 111,011 |  |  |  | — |  |  |  |  | — |  |  |  |  | 359,827 |
Merger and integration expenses |  | 2,069 |  |  |  | 63,435 |  |  |  | 61,558 |  | CC |  |  | — |  |  |  |  | 127,062 |  |  |  | — |  |  |  | 7,620 |  | CC |  |  | — |  |  |  |  | 134,682 |
Other operating expense (income), net |  | (12,592 | ) |  |  | (12,972 | ) |  |  | — |  |  |  |  | — |  |  |  |  | (25,564 | ) |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | (25,564 | )
Total operating costs and expenses |  | 2,436,561 |  |  |  | 2,912,169 |  |  |  | 101,673 |  |  |  |  | — |  |  |  |  | 5,450,403 |  |  |  | 294,568 |  |  |  | 42,208 |  |  |  |  | — |  |  |  |  | 5,787,179 |
Operating income (loss) |  | 211,031 |  |  |  | 332,653 |  |  |  | (101,673 | ) |  |  |  | — |  |  |  |  | 442,011 |  |  |  | 75,618 |  |  |  | (42,208 | ) |  |  |  | — |  |  |  |  | 475,421 |
Interest income |  | 360 |  |  |  | 1,637 |  |  |  | — |  |  |  |  | — |  |  |  |  | 1,997 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | 1,997 |
Interest expense |  | (40,256 | ) |  |  | (30,019 | ) |  |  | 28,127 |  | EE |  |  | (6,822 | ) | GG |  |  | (48,970 | ) |  |  | (28,038 | ) |  |  | 28,038 |  | EE |  |  | (23,278 | ) | GG |  |  | (72,248 | )
Other income (expense) |  | (3,273 | ) |  |  | 15,258 |  |  |  | — |  |  |  |  | — |  |  |  |  | 11,985 |  |  |  | (5,084 | ) |  |  | — |  |  |  |  | — |  |  |  |  | 6,901 |
Income (loss) before income taxes |  | 167,862 |  |  |  | 319,529 |  |  |  | (73,546 | ) |  |  |  | (6,822 | ) |  |  |  | 407,023 |  |  |  | 42,496 |  |  |  | (14,170 | ) |  |  |  | (23,278 | ) |  |  |  | 412,071 |
Income tax benefit (expense) |  | (13,204 | ) |  |  | (4,560 | ) |  |  | 1,184 |  | FF |  |  | 38,176 |  | HH |  |  | 21,596 |  |  |  | (13,323 | ) |  |  | 1,554 |  | FF |  |  | 5,521 |  | FF |  |  | 15,348 |
Net income (loss) |  | 154,658 |  |  |  | 314,969 |  |  |  | (72,362 | ) |  |  |  | 31,354 |  |  |  |  | 428,619 |  |  |  | 29,173 |  |  |  | (12,616 | ) |  |  |  | (17,757 | ) |  |  |  | 427,419 |
Income attributable to non-controlling interests |  | — |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  |  | — |  |  |  | 1,484 |  |  |  | — |  |  |  |  | — |  |  |  |  | 1,484 |
Net income (loss) attributable to common stockholders |  | 154,658 |  |  |  | 314,969 |  |  |  | (72,362 | ) |  |  |  | 31,354 |  |  |  |  | 428,619 |  |  |  | 27,689 |  |  |  | (12,616 | ) |  |  |  | (17,757 | ) |  |  |  | 425,935 |
Foreign currency translation adjustments |  | — |  |  |  | 1,118 |  |  |  | — |  |  |  |  | — |  |  |  |  | 1,118 |  |  |  | (546 | ) |  |  | — |  |  |  |  | — |  |  |  |  | 572 |
Hedging activities |  | — |  |  |  | 12,067 |  |  |  | — |  |  |  |  | — |  |  |  |  | 12,067 |  |  |  | 9,843 |  |  |  | — |  |  |  |  | — |  |  |  |  | 21,910 |
Total comprehensive income | $ | 154,658 |  |  | $ | 328,154 |  |  | $ | (72,362 | ) |  |  | $ | 31,354 |  |  |  | $ | 441,804 |  |  | $ | 36,986 |  |  | $ | (12,616 | ) |  |  | $ | (17,757 | ) |  |  | $ | 448,417 |
Basic weighted average shares outstanding |  | 215,935 |  |  |  |  |  |  | 171,869 |  |  |  |  |  |  |  |  | 387,804 |  |  |  |  |  |  | 34,900 |  |  |  |  |  |  |  |  | 422,704 |
Diluted weighted average shares outstanding |  | 219,496 |  |  |  |  |  |  | 181,526 |  |  |  |  |  |  |  |  | 401,022 |  |  |  |  |  |  | 34,900 |  |  |  |  |  |  |  |  | 435,922 |
Basic earnings per share | $ | 0.72 |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 1.11 |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 1.01 |
Diluted earnings per share | $ | 0.70 |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 1.07 |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 0.98 |

The accompanying notes are an integral part of the unaudited pro forma condensed combined financial statements.

5

NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

Note 1 — Basis of Presentation

The pro forma financial statements have been prepared to reflect adjustments to Patterson-UTI’s historical consolidated financial information that are directly attributable to the combination transactions and are considered reasonable and supportable.

As part of the combination transactions, management has determined Patterson-UTI to be the accounting acquirer of both NexTier and Ulterra for the following reasons:

•
Patterson-UTI issued purchase consideration for both combination transactions in the form of equity or cash consideration;
•
The ownership following completion of the NexTier mergers comprised 59% Patterson-UTI stockholders (including the 34.9 million shares held by the Ulterra stockholder) and 41% NexTier stockholders, which would give voting control to the Patterson-UTI stockholder group;
•
The composition of the combined company board consists of 11 total members, including six Patterson-UTI directors and five NexTier directors;
•
Andy Hendricks, President and Chief Executive Officer (“CEO”) of Patterson-UTI, continues to serve as president and CEO of the combined company, and Curtis Huff, Patterson-UTI’s Chairman of the Board, continues in such role;
•
The combined company is named Patterson-UTI Energy, Inc., and its ticker symbol remains the same; and
•
Patterson-UTI’s corporate headquarters is the corporate headquarters of the combined company.

As the accounting acquirer, Patterson-UTI accounted for the combination transactions under the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) 805, “Business Combinations”. The allocation of the preliminary purchase consideration to the fair value of assets acquired and liabilities assumed is based upon Patterson-UTI management’s estimates and assumptions using currently available information. The final valuation could differ materially from the preliminary valuation used in the pro forma adjustments reflected below. The purchase price allocation is subject to change due to several factors, including, but not limited to changes in the final valuation of NexTier and Ulterra assets acquired and liabilities, as management obtains additional information regarding the assets acquired and liabilities assumed. As of the date of this filing, Patterson-UTI has used currently available information to determine preliminary fair value estimates for the combination transactions and its allocation to the NexTier and Ulterra assets acquired and liabilities assumed. The assumptions and estimates used to make the preliminary pro forma adjustments are described in the notes accompanying the pro forma financial statements.

The pro forma combined provision for income taxes does not necessarily reflect the amounts that would have resulted had the combined company filed consolidated income tax returns during the periods presented.

The pro forma basic and diluted earnings per share amounts presented in the pro forma financial statements are based upon the number of shares of Patterson-UTI common stock outstanding, assuming the combination transactions occurred on January 1, 2022.

6

Note 2 — Accounting Policies

Patterson-UTI will continue to perform a comprehensive review of NexTier’s and Ulterra’s accounting and financial reporting policies. As a result of that review, Patterson-UTI may identify differences between these policies, which when conformed could differ materially from the pro forma financial statements presented herein. Patterson-UTI has included certain preliminary pro forma adjustments necessary to conform the accounting and financial reporting policies historically used by NexTier and Ulterra to those used by Patterson-UTI. These adjustments relate to (i) the presentation of depreciation and amortization outside of cost of sales and selling, general and administrative expenses, (ii) research and development costs to be included in other operating expenses, (iii) reclassification of certain items previously classified in property and equipment into inventory due to their nature as short term assets to be sold or consumed, and (iv) insurance expense to be allocated to pressure pumping - expense. Additionally, Patterson-UTI has adjusted certain financial statement line items (“FSLI”) as shown below to conform to presentation within the Patterson-UTI historical financial statements.

Pro forma condensed combined balance sheet

| As of June 30, 2023 |
(in thousands) | NexTier (Historical) |  |  | FSLI alignment |  |  | NexTier (Historical as adjusted) |
Trade and other accounts receivable, net | $ | 443,741 |  |  | $ | (443,741 | ) |  | $ | — |
Accounts receivable, net of allowance for credit losses |  | — |  |  |  | 443,741 |  |  |  | 443,741 |
Inventories, net |  | 73,415 |  |  |  | (73,415 | ) |  |  | — |
Inventory |  | — |  |  |  | 73,415 |  |  |  | 73,415 |
Prepaid and other current assets |  | 49,571 |  |  |  | (49,571 | ) |  |  | — |
Other current assets |  | — |  |  |  | 49,571 |  |  |  | 49,571 |
Property and equipment, net |  | 796,197 |  |  |  | (16,161 | ) |  |  | 780,036 |
Deposits on equipment purchases |  | — |  |  |  | 16,161 |  |  |  | 16,161 |
Deferred income taxes |  | 112,926 |  |  |  | (112,926 | ) |  |  | — |
Deferred tax assets, net |  | — |  |  |  | 112,926 |  |  |  | 112,926 |
Other noncurrent assets |  | 13,654 |  |  |  | (13,654 | ) |  |  | — |
Other assets |  | — |  |  |  | 13,654 |  |  |  | 13,654 |
Accrued expenses |  | 191,053 |  |  |  | (191,053 | ) |  |  | — |
Customer contract liabilities |  | 19,377 |  |  |  | (19,377 | ) |  |  | — |
Other current liabilities |  | 5,446 |  |  |  | (5,446 | ) |  |  | — |
Accrued liabilities |  | — |  |  |  | 215,876 |  |  |  | 215,876 |
Long-term debt, net of unamortized deferred financing costs and unamortized debt discount, less current maturities |  | 340,327 |  |  |  | (340,327 | ) |  |  | — |
Long-term debt, net of debt discount and issuance costs |  | — |  |  |  | 340,327 |  |  |  | 340,327 |
Other noncurrent liabilities |  | 14,477 |  |  |  | (14,477 | ) |  |  | — |
Other liabilities |  | — |  |  |  | 14,477 |  |  |  | 14,477 |
Paid-in capital in excess of par value |  | 942,563 |  |  |  | (942,563 | ) |  |  | — |
Additional paid-in capital |  | — |  |  |  | 942,563 |  |  |  | 942,563 |

7

Pro forma condensed combined balance sheet

| As of June 30, 2023 |
(in thousands) | Ulterra (Historical) |  |  | FSLI alignment |  |  | Accounting policy adjustment |  |  | Ulterra (Historical as adjusted) |
Cash | $ | 69,155 |  |  | $ | (69,155 | ) |  | $ | — |  |  | $ | — |
Restricted cash |  | 3,323 |  |  |  | (3,323 | ) |  |  | — |  |  |  | — |
Cash and cash equivalents |  | — |  |  |  | 72,478 |  |  |  | — |  |  |  | 72,478 |
Receivables, net of allowance |  | 70,464 |  |  |  | (70,464 | ) |  |  | — |  |  |  | — |
Accounts receivables, net of allowance for credit losses |  | — |  |  |  | 70,464 |  |  |  | — |  |  |  | 70,464 |
Inventories, net |  | 25,565 |  |  |  | (25,565 | ) |  |  | — |  |  |  | — |
Inventory |  | — |  |  |  | 25,565 |  |  |  | 5,865 |  |  |  | 31,430 |
Income tax receivable |  | 1,402 |  |  |  | (1,402 | ) |  |  | — |  |  |  | — |
Prepaid and other current assets |  | 11,977 |  |  |  | (11,977 | ) |  |  | — |  |  |  | — |
Derivative asset |  | 9,943 |  |  |  | (9,943 | ) |  |  | — |  |  |  | — |
Other current assets |  | — |  |  |  | 23,322 |  |  |  | — |  |  |  | 23,322 |
Lease right of use assets, operating |  | 8,588 |  |  |  | (8,588 | ) |  |  | — |  |  |  | — |
Operating lease right-of-use assets |  | — |  |  |  | 8,588 |  |  |  | — |  |  |  | 8,588 |
Rental equipment, net |  | 47,694 |  |  |  | (47,694 | ) |  |  | — |  |  |  | — |
Property, plant and equipment, net |  | 24,920 |  |  |  | (24,920 | ) |  |  | — |  |  |  | — |
Finance lease right-of-use assets |  | — |  |  |  | 6,538 |  |  |  | — |  |  |  | 6,538 |
Property and equipment, net |  | — |  |  |  | 66,076 |  |  |  | (5,865 | ) |  |  | 60,211 |
Intangibles, net |  | 238,598 |  |  |  | (238,598 | ) |  |  | — |  |  |  | — |
Intangible assets, net |  | — |  |  |  | 238,598 |  |  |  | — |  |  |  | 238,598 |
Deferred income taxes |  | 512 |  |  |  | (512 | ) |  |  | — |  |  |  | — |
Deferred tax assets, net |  | — |  |  |  | 512 |  |  |  | — |  |  |  | 512 |
Operating lease, current |  | 2,642 |  |  |  | (2,642 | ) |  |  | — |  |  |  | — |
Current maturities of long-term operating lease liabilities |  | — |  |  |  | 2,642 |  |  |  | — |  |  |  | 2,642 |
Finance lease, current |  | 4,409 |  |  |  | (4,409 | ) |  |  | — |  |  |  | — |
Current maturities of long-term finance lease liabilities |  | — |  |  |  | 4,409 |  |  |  | — |  |  |  | 4,409 |
Operating lease, net of current portion |  | 6,021 |  |  |  | (6,021 | ) |  |  | — |  |  |  | — |
Long-term operating lease liabilities, less current maturities |  | — |  |  |  | 6,021 |  |  |  | — |  |  |  | 6,021 |
Finance lease, net of current portion |  | 1,818 |  |  |  | (1,818 | ) |  |  | — |  |  |  | — |
Long-term finance lease liabilities, less current maturities |  | — |  |  |  | 1,818 |  |  |  | — |  |  |  | 1,818 |
Long-term debt, net of current maturities and discount |  | 383,727 |  |  |  | (383,727 | ) |  |  | — |  |  |  | — |
Long-term debt, net of debt discount and issuance costs |  | — |  |  |  | 383,727 |  |  |  | — |  |  |  | 383,727 |
Deferred income taxes |  | 54,181 |  |  |  | (54,181 | ) |  |  | — |  |  |  | — |
Deferred tax liabilities, net |  | — |  |  |  | 54,181 |  |  |  | — |  |  |  | 54,181 |
Accumulated deficit |  | (225,662 | ) |  |  | 225,662 |  |  |  | — |  |  |  | — |
Retained earnings (deficit) |  | — |  |  |  | (225,662 | ) |  |  | — |  |  |  | (225,662 | )

8

Pro forma condensed combined statement of opera tions

| For the Six Months Ended June 30, 2023 |
(in thousands) | NexTier (Historical) |  |  | FSLI alignment |  |  | Accounting policy adjustment |  |  | NexTier (Historical as adjusted) |
Revenue | $ | 1,880,763 |  |  | $ | (1,880,763 | ) |  | $ | — |  |  | $ | — |
Pressure pumping |  | — |  |  |  | 1,880,763 |  |  |  | — |  |  |  | 1,880,763 |
Cost of services |  | 1,350,243 |  |  |  | (1,350,243 | ) |  |  | — |  |  |  | — |
Pressure pumping - expense |  | — |  |  |  | 1,350,243 |  |  |  | 10,336 |  |  |  | 1,360,579 |
Selling, general and administrative expenses |  | 79,380 |  |  |  | — |  |  |  | (14,411 | ) |  |  | 64,969 |
Loss (gain) on disposal of assets |  | 9,542 |  |  |  | (9,542 | ) |  |  | — |  |  |  | — |
Other operating expense (income), net |  | — |  |  |  | 9,542 |  |  |  | 4,075 |  |  |  | 13,617 |
Interest expense, net |  | (13,505 | ) |  |  | 13,505 |  |  |  | — |  |  |  | — |
Interest income |  | — |  |  |  | 3,527 |  |  |  | — |  |  |  | 3,527 |
Interest expense |  | — |  |  |  | (17,032 | ) |  |  | — |  |  |  | (17,032 | )

| For the Year Ended December 31, 2022 |
(in thousands) | NexTier (Historical) |  |  | FSLI alignment |  |  | Accounting policy adjustment |  |  | NexTier (Historical as adjusted) |
Revenue | $ | 3,244,822 |  |  | $ | (3,244,822 | ) |  | $ | — |  |  | $ | — |
Pressure pumping |  | — |  |  |  | 3,244,822 |  |  |  | — |  |  |  | 3,244,822 |
Cost of services |  | 2,490,095 |  |  |  | (2,490,095 | ) |  |  | — |  |  |  | — |
Pressure pumping - expense |  | — |  |  |  | 2,490,095 |  |  |  | 17,010 |  |  |  | 2,507,105 |
Selling, general and administrative expenses |  | 145,996 |  |  |  | — |  |  |  | (20,654 | ) |  |  | 125,342 |
Loss (gain) on disposal of assets |  | (16,616 | ) |  |  | 16,616 |  |  |  | — |  |  |  | — |
Other operating expense (income), net |  | — |  |  |  | (16,616 | ) |  |  | 3,644 |  |  |  | (12,972 | )
Interest expense, net |  | (28,382 | ) |  |  | 28,382 |  |  |  | — |  |  |  | — |
Interest income |  | — |  |  |  | 1,637 |  |  |  | — |  |  |  | 1,637 |
Interest expense |  | — |  |  |  | (30,019 | ) |  |  | — |  |  |  | (30,019 | )

| For the Six Months Ended June 30, 2023 |
(in thousands) | Ulterra (Historical) |  |  | FSLI alignment |  |  | Accounting policy adjustment |  |  | Ulterra (Historical as adjusted) |
Equipment rentals | $ | 157,258 |  |  | $ | (157,258 | ) |  | $ | — |  |  | $ | — |
Equipment sales and services |  | 25,052 |  |  |  | (25,052 | ) |  |  | — |  |  |  | — |
Other Revenue |  | — |  |  |  | 182,310 |  |  |  | — |  |  |  | 182,310 |
Cost of equipment rentals |  | 61,109 |  |  |  | — |  |  |  | (19,836 | ) |  |  | 41,273 |
Cost of equipment sales and services |  | 10,541 |  |  |  | — |  |  |  | — |  |  |  | 10,541 |
Selling, general and administrative |  | 68,031 |  |  |  | — |  |  |  | (15,372 | ) |  |  | 52,659 |
Depreciation, depletion, amortization and impairment |  | — |  |  |  | — |  |  |  | 35,208 |  |  |  | 35,208 |

| For the Year Ended December 31, 2022 |
(in thousands) | Ulterra (Historical) |  |  | FSLI alignment |  |  | Accounting policy adjustment |  |  | Ulterra (Historical as adjusted) |
Equipment rentals | $ | 331,625 |  |  | $ | (331,625 | ) |  | $ | — |  |  | $ | — |
Equipment sales and services |  | 38,561 |  |  |  | (38,561 | ) |  |  | — |  |  |  | — |
Other Revenue |  | — |  |  |  | 370,186 |  |  |  | — |  |  |  | 370,186 |
Cost of equipment rentals |  | 138,621 |  |  |  | — |  |  |  | (44,487 | ) |  |  | 94,134 |
Cost of equipment sales and services |  | 16,772 |  |  |  | — |  |  |  | — |  |  |  | 16,772 |
Selling, general and administrative |  | 139,175 |  |  |  | — |  |  |  | (28,164 | ) |  |  | 111,011 |
Depreciation, depletion, amortization and impairment |  | — |  |  |  | — |  |  |  | 72,651 |  |  |  | 72,651 |

9

Note 3 — Unaudited Pro Forma Condensed Combined Balance Sheet Adjustments and Assumptions

A.
Reflects estimated total purchase consideration paid by Patterson-UTI for the respective combination transactions. The following table presents the preliminary consideration paid and preliminary purchase price allocation of assets acquired and liabilities assumed in the combination transactions:

| NexTier |
(in thousands, except exchange ratio and per share amounts) |  |
Consideration: |  |
Number of shares of NexTier common stock outstanding as of June 30, 2023 |  | 228,549 |
Multiplied by the exchange ratio |  | 0.752 |
Number of shares of Patterson-UTI common stock to be issued in connection with the merger |  | 171,869 |
Patterson-UTI shares common stock price on September 1, 2023 | $ | 14.91 |
Common stock equity consideration |  | 2,562,565 |
Incentive unit replacement award consideration |  | 80,851 |
NexTier long-term debt to be repaid by Patterson-UTI |  | 158,360 |
Consideration transferred | $ | 2,801,776 |
Allocated to: |  |
Cash and cash equivalents | $ | 136,026 |
Accounts receivable |  | 443,741 |
Inventory |  | 73,415 |
Property and equipment |  | 1,055,714 |
Intangible assets |  | 736,000 |
Deposits on equipment purchases |  | 16,161 |
Operating lease right-of-use assets |  | 29,178 |
Finance lease right-of-use assets |  | 93,565 |
Other assets |  | 56,313 |
Accounts payable |  | (347,589 | )
Accrued liabilities |  | (215,876 | )
Operating lease liabilities |  | (29,178 | )
Finance lease liabilities |  | (93,565 | )
Long-term debt |  | (24,601 | )
Deferred tax liabilities, net |  | (64,634 | )
Other liabilities |  | (14,477 | )
Preliminary net assets acquired |  | 1,850,193 |
Preliminary allocation to goodwill | $ | 951,583 |
Less historical goodwill |  | (192,780 | )
Goodwill pro forma adjustment | $ | 758,803 |

10

| Ulterra |
(in thousands, except exchange ratio and per share amounts) |  |
Consideration: |  |
Number of shares issued to Ulterra as merger consideration |  | 34,900 |
Patterson-UTI shares common stock price on August 14, 2023 | $ | 14.94 |
Common stock equity consideration |  | 521,406 |
Net cash consideration (1) |  | 375,739 |
Consideration transferred | $ | 897,145 |
Fair value of non-controlling interests | $ | 11,944 |
Allocated to: |  |
Cash and cash equivalents | $ | 16,203 |
Accounts receivable |  | 70,464 |
Inventory |  | 31,430 |
Other current assets |  | 13,379 |
Property and equipment |  | 131,212 |
Intangible assets |  | 320,000 |
Deferred tax assets |  | 512 |
Operating lease right-of-use assets |  | 8,588 |
Finance lease right-of-use assets |  | 6,538 |
Accounts payable |  | (23,488 | )
Accrued liabilities |  | (13,247 | )
Operating lease liabilities |  | (8,588 | )
Finance lease liabilities |  | (6,538 | )
Deferred tax liabilities |  | (88,182 | )
Preliminary net assets acquired |  | 458,283 |
Preliminary allocation to goodwill | $ | 450,806 |
Less historical goodwill |  | (147,314 | )
Goodwill pro forma adjustment | $ | 303,492 |

——————

(1) Net cash consideration included $370 million cash consideration and customary purchase price adjustments set forth in the Ulterra merger agreement relating to cash, net working capital and indebtedness of Ulterra as of the closing.

B.
Reflects estimated transaction costs that Patterson-UTI expects to incur related to legal, financial advisory and other professional fees in order to consummate the combination transactions, which are not yet reflected in the historical condensed balance sheet of Patterson-UTI.
C.
Reflects property and equipment of NexTier and Ulterra adjusted to fair market value as part of the combination transactions.

| As of June 30, 2023
| NexTier |  | Ulterra
| Property and Equipment |  | Property and Equipment
($ in thousands) | Fair value of Property and Equipment, net |  |  | Remaining Useful Life |  | Fair value of Property and Equipment, net |  |  | Remaining Useful Life
Land | $ | 13,698 |  |  | n/a |  | $ | 2,250 |  |  | n/a
Land improvements |  | 6,334 |  |  | 6 |  |  | — |  |  | n/a
Buildings and improvements |  | 61,703 |  |  | 20 |  |  | 7,565 |  |  | 20
Leasehold improvements |  | 4,844 |  |  | 9 |  |  | 392 |  |  | 10
Personal property |  | 969,135 |  |  | 4.4 |  |  | 121,005 |  |  | 8
Pro forma property and equipment, net |  | 1,055,714 |  |  |  |  |  | 131,212 |  |  |
Historic property and equipment, net |  | 780,036 |  |  |  |  |  | 60,211 |  |  |
Pro forma adjustment | $ | 275,678 |  |  |  |  | $ | 71,001 |  |  |

D.
As part of the preliminary valuation, Patterson-UTI has recorded the following to reflect the fair value of identifiable intangible assets.

11

| As of June 30, 2023
| NexTier |  | Ulterra
| Intangible Assets |  | Intangible Assets
| Estimated Fair |  |  | Remaining |  | Estimated Fair |  |  | Remaining
($ in thousands) | Value |  |  | Useful Life |  | Value |  |  | Useful Life
Customer relationships | $ | 553,000 |  |  | 15 |  | $ | 248,000 |  |  | 15
Trade name |  | 72,000 |  |  | 10 |  |  | 11,000 |  |  | 10
Developed technology |  | 111,000 |  |  | 10 |  |  | 61,000 |  |  | 10
Pro forma intangible assets |  | 736,000 |  |  |  |  |  | 320,000 |  |  |
Historical intangible assets |  | 48,373 |  |  |  |  |  | 238,598 |  |  |
Pro forma adjustment | $ | 687,627 |  |  |  |  | $ | 81,402 |  |  |

E.
Reflects borrowing by Patterson-UTI on its revolving credit facility to pay transaction costs and repay certain indebtedness at the respective closings.

As of June 30, 2023
($ in thousands)
Pro forma for NexTier financing |  | Pro forma for Ulterra financing
LoC Facility (Revolver) |  | LoC Facility (Revolver)
$95,000 |  | $325,000
SOFR+ 1.75%+.10% (~7.17%) |  | SOFR+ 1.75%+.10% (~7.17%)
27-Mar-26 |  | 27-Mar-26

F.
Reflects the repayment of debt at the respective closings and therefore in connection with the combination transactions, net of discounts and deferred financing costs. A portion of the debt repayment was made with closing cash from NexTier and Ulterra, which was reflected as a reduction in cash.
G.
Reflects the elimination of NexTier’s and Ulterra’s historical equity accounts.
H.
Reflects the increase in deferred tax liabilities resulting from the combination transactions using statutory tax rates. Specifically, these adjustments are the direct result of the acquired intangible assets and property and equipment which will have a different basis for tax and book purposes as well as the impact of jurisdictional netting adjustments and the release of certain valuation allowances as a result of the combination transactions.
I.
Reflects derivative instruments that will not be acquired as part of the combination transactions. The merger agreement for Ulterra specifically refers to derivative instruments not being assumed and the value of those instruments is also included as consideration in Note 3A.
J.
Reflects the reduction of certain deferred tax liabilities due to the release of certain valuation allowances for Patterson-UTI related to net operating losses that will be able to be utilized as a result of the combination transactions.
K.
Reflects the change in fair value of operating and finance leases in connection with the combination transactions.

Note 4 — Unaudited Pro Forma Condensed Combined Statement of Operations Adjustments and Assumptions

AA.
Reflects the additional amortization expense recognized as part of the additional fair value attributed to the intangible assets acquired as part of the combination transactions. Refer to Note 3D.

Six Months Ended June 30, 2023 |  |  |  |  |
| NexTier |  |  | Ulterra |
(in thousands) | Amortization |  |  | Amortization |
Pro forma amortization of intangible assets | $ | 27,584 |  |  | $ | 11,867 |
Historical amortization of intangible assets |  | 7,562 |  |  |  | 11,601 |
Pro forma adjustment | $ | 20,022 |  |  | $ | 266 |

12

For the Year Ended December 31, 2022 |  |  |  |  |
| NexTier |  |  | Ulterra |
(in thousands) | Amortization |  |  | Amortization |
Pro forma amortization of intangible assets | $ | 55,167 |  |  | $ | 23,733 |
Historical amortization of intangible assets |  | 20,200 |  |  |  | 23,301 |
Pro forma adjustment | $ | 34,967 |  |  | $ | 432 |

These preliminary estimates of fair value will likely differ from final amounts that Patterson-UTI will calculate after completing a detailed valuation analysis, and the difference could have a material effect on the pro forma financial statements. A 10% change in the valuation of intangible assets would cause a corresponding increase or decrease in the balance of goodwill and annual amortization expense of approximately $2.8 million for the six months ended June 30, 2023 and $5.5 million for the year ended December 31, 2022 for the NexTier merger, and $1.2 million for the six months ended June 30, 2023 and $2.4 million for the year ended December 31, 2022 for the Ulterra acquisition. These calculations are based on the values and useful lives identified in Note 3D.

BB.
Reflects the change in depreciation expense recognized as part of the pro forma adjustment to the fair market value of property and equipment. Refer to Note 3C.

Six Months Ended June 30, 2023 |  |  |  |  |
| NexTier |  |  | Ulterra |
(in thousands) | Depreciation |  |  | Depreciation |
Pro forma depreciation | $ | 103,661 |  |  | $ | 36,748 |
Historical depreciation |  | 114,585 |  |  |  | 23,607 |
Pro forma adjustment | $ | (10,924 | ) |  | $ | 13,141 |

For the Year Ended December 31, 2022 |  |  |  |  |
| NexTier |  |  | Ulterra |
(in thousands) | Depreciation |  |  | Depreciation |
Pro forma depreciation | $ | 207,322 |  |  | $ | 83,506 |
Historical depreciation |  | 209,059 |  |  |  | 49,350 |
Pro forma adjustment | $ | (1,737 | ) |  | $ | 34,156 |

CC.
Reflects estimated transaction costs that Patterson-UTI expects to incur related to legal, financial advisory and other professional fees in order to consummate the combination transactions, which are not yet reflected in the historical condensed balance sheet of Patterson-UTI.
DD.
Reflects the fair value-based measure of (i) the NexTier stock options and NexTier time-based restricted stock unit awards expected to be converted into Patterson-UTI stock options and Patterson-UTI time-based restricted stock unit awards, respectively, upon the same terms existing immediately prior to the effective time of the NexTier mergers and (ii) the NexTier performance-based restricted stock unit awards and performance-based unit awards expected to be converted into Patterson-UTI time-based restricted stock units, in each case, in respect of a number of shares of Patterson-UTI common stock assuming the performance-based vesting requirements applicable to such awards were achieved at the level of actual performance attained through immediately prior to the effective time, and otherwise upon the same terms existing immediately prior to the effective time of the NexTier mergers. The expense reflects the portion of the awards to be recognized as stock-based compensation cost in the post-combination financial statements of the combined company.

Six Months Ended June 30, 2023 |  |  |  |
|  |  | NexTier |
(in thousands) |  |  | Stock-based Compensation |
Post-combination compensation expense |  |  | $ | 6,252 |
Historical compensation expense |  |  |  | 19,831 |
Pro forma adjustment |  |  | $ | (13,579 | )

13

For the Year Ended December 31, 2022 |  |  |  |
|  |  | NexTier |
(in thousands) |  |  | Stock-based Compensation |
Post-combination compensation expense |  |  | $ | 40,002 |
Historical compensation expense |  |  |  | 33,117 |
Pro forma adjustment |  |  | $ | 6,885 |

EE.
Reflects the reduction of interest expense for the repayment of indebtedness not assumed in connection with the combination transactions. Refer to Note 3F.
FF.
Reflects the incremental corporate income tax expense (benefit) to be recognized as a part of the pro forma adjustments for the combination transactions at the Patterson-UTI estimated blended statutory tax rate of approximately 23%, adjusted by permanent tax differences.
GG.
Reflects the incremental interest expense associated with borrowing by Patterson-UTI on its revolving credit facility to pay transaction costs and repay certain indebtedness at closing. Refer to Note 3E.
HH.
Reflects the release of a deferred tax asset valuation allowance for Patterson-UTI related to federal net operating losses which are forecasted to become realizable upon consummation of the combination transactions.

Note 5 — Earnings Per Share

The following pro forma weighted average shares calculations have been performed for the six months ended June 30, 2023 and for the year ended December 31, 2022. The unaudited pro forma condensed combined earnings per share (“EPS”), basic and diluted, are computed by dividing net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding as of June 30, 2023, as adjusted for the pro forma share issuances discussed above.

Patterson-UTI has one class of common stock outstanding, which continues to be outstanding upon the consummation of the combination transactions.

| For the |  |  | For the |  |  | For the |  |  | For the |
| Six Months Ended |  |  | Year Ended |  |  | Six Months Ended |  |  | Year Ended |
| June 30, 2023 |  |  | December 31, 2022 |  |  | June 30, 2023 |  |  | December 31, 2022 |
| Pro Forma |  |  | Pro Forma |  |  | Pro Forma |  |  | Pro Forma |
| Condensed |  |  | Condensed |  |  | Condensed |  |  | Condensed |
| Combined |  |  | Combined |  |  | Combined |  |  | Combined |
| for |  |  | for |  |  | for Combination |  |  | for Combination |
(in thousands, except per share data) | NexTier Merger |  |  | NexTier Merger |  |  | Transactions |  |  | Transactions |
Pro forma net income attributable to common stockholders - basic | $ | 604,853 |  |  | $ | 428,619 |  |  | $ | 615,561 |  |  | $ | 425,935 |
Basic weighted average shares outstanding |  | 381,821 |  |  |  | 387,804 |  |  |  | 416,721 |  |  |  | 422,704 |
Pro forma basic earnings per share | $ | 1.58 |  |  | $ | 1.11 |  |  | $ | 1.48 |  |  | $ | 1.01 |
Pro forma net income attributable to common stockholders - diluted | $ | 604,853 |  |  | $ | 428,619 |  |  | $ | 615,561 |  |  | $ | 425,935 |
Diluted weighted average shares outstanding |  | 392,714 |  |  |  | 401,022 |  |  |  | 427,614 |  |  |  | 435,922 |
Pro forma diluted earnings per share | $ | 1.54 |  |  | $ | 1.07 |  |  | $ | 1.44 |  |  | $ | 0.98 |
Pro forma basic and diluted weighted average shares |  |  |  |  |  |  |  |  |  |  |
Patterson-UTI common shares |  | 209,952 |  |  |  | 215,935 |  |  |  | 209,952 |  |  |  | 215,935 |
Patterson-UTI common shares issued to Ulterra stockholder | n/a |  |  | n/a |  |  |  | 34,900 |  |  |  | 34,900 |
Patterson-UTI common shares issued to NexTier stockholders |  | 171,869 |  |  |  | 171,869 |  |  |  | 171,869 |  |  |  | 171,869 |
Total pro forma basic weighted average shares |  | 381,821 |  |  |  | 387,804 |  |  |  | 416,721 |  |  |  | 422,704 |
Patterson-UTI equity awards |  | 1,236 |  |  |  | 3,561 |  |  |  | 1,236 |  |  |  | 3,561 |
Replacement incentive awards issued to NexTier unitholders |  | 9,657 |  |  |  | 9,657 |  |  |  | 9,657 |  |  |  | 9,657 |
Total pro forma diluted weighted average shares |  | 392,714 |  |  |  | 401,022 |  |  |  | 427,614 |  |  |  | 435,922 |

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