Precision Drilling Corp., Canada's biggest drilling contractor, has conditionally resolved a potential $500 million-plus legal dispute with Houston-based Pride International Inc. and expects to complete its acquisition of Plains Energy Services Ltd. by the end of this week, officials said Wednesday.
No details of the confidential settlement were provided by the participants. However, a spokesman for Precision Drilling told OGJ Online that the settlement involved no cost to that company.
Pride International officials last week sued both Precision Drilling and Plains Energy in a Houston court, claiming it had cut a "white knight" deal of its own to merge with Plains Energy when that drilling contractor was trying to evade an unsolicited offer of $250 million (Can.), or $8/share, by Precision (OGJ Online, June 29, 2000). Precision Drilling subsequently sweetened its offer to $10.75/share, plus 8.85% of a common share warrant. Plains Energy then accepted that offer.
Pride International officials charged in their suit that Plains Energy reneged on a merger contract. They also claimed tortious interference in that deal by Precision Drilling.
Pride was suing for $500 million as a result of "lost opportunity," plus unspecified punitive damages�about 2� times more than Plains Energy's book value, officials said. Plains Energy officials denied they had signed a merger agreement with Pride International.
Both Precision Drilling and Pride International wanted to obtain Plains Energy's new fleet of nine coiled-tubing drilling rigs and that technology.