Sidewinder Drilling Announces Completion of Acquisition of Union Drilling

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Sidewinder Drilling Inc. (“Sidewinder”), a Houston-based land drilling company controlled by Avista Capital Partners, today announced the completion of the acquisition of Union Drilling Inc.

Sidewinder Drilling
We are excited about the combination of Sidewinder and Union, which reinforces the company’s strategy and provides a strong platform from which to continue to grow, through the construction of additional state-of-the-art rigs.

Sidewinder was formed in 2011, by its management team and Avista Capital Partners, to be a premium land drilling rig company focused on providing contract drilling services to exploration and production (“E&P”) companies targeting unconventional resource plays in North America. Sidewinder has been building a contract land drilling company with a high quality asset base focused on delivering the high performance drilling services required by large operators (including majors, international oil companies and large independent E&P companies), seeking to efficiently and safely develop unconventional oil and gas resources. Our management team has a proven track record of globally serving large and highly sophisticated E&P companies in some of the most challenging environments.

Sidewinder’s strategy is to own and operate modern, high-spec drilling units and to deliver superior drilling performance for its customers with demanding drilling requirements. The acquisition of Union Drilling will increase Sidewinder’s fleet size to sixty rigs. In the past seven years, Union has spent a total of nearly $500 million in rig development, with around 70% of this amount going to new fleet expansion. As a result of the acquisition, twenty-nine former Union rigs, which are less than seven years old, are joining our modern fleet. These rigs combined with the initial seven Sidewinder rigs comprise our thirty-six rig “core fleet” and represent substantially all of the company’s contract backlog and net book value.

Sidewinder’s core fleet will be the foundation for its future growth and is composed of ten A/C rigs, ten SCR rigs and sixteen recently constructed mechanical rigs. The core fleet averages 3.6 years of age and is among the newest in the industry. These rigs generally incorporate modern drilling rig attributes, such as walking or skidding systems that dramatically increase mobility and lower costs for operators, top drives and pipe handling systems that improve safety and drilling performance, and high horsepower mud pumps to enable the rigs to drill long reach horizontal wells more efficiently. With this acquisition, Sidewinder will be able to offer modern, fit-for-purpose equipment to operators across the full spectrum of drilling – from exploration through delineation to development drilling. In addition, the Union acquisition provides the company with a significant presence in some of the most active North American basins such as the Marcellus, Utica, Permian, and Arkoma.

Including one legacy mechanical rig with the core fleet results in over 96% of backlog concentrated in thirty-seven rigs. Today, Sidewinder’s top five customers (which include XTO {Exxon Mobil}, Statoil, Rex Energy, Mountaineer-Keystone, and Chevron), make up 81% of the Company’s total backlog. Over half of the contract backlog is with investment-grade credit customers. The Company intends to focus on attracting other majors, international oil companies and large independents with its modern fleet, innovative land drilling designs, and superior management systems.

Jon Cole, Sidewinder’s Chairman & CEO, stated: “We are excited about the combination of Sidewinder and Union, which reinforces the company’s strategy and provides a strong platform from which to continue to grow, through the construction of additional state-of-the-art rigs.”

About Sidewinder Drilling
Sidewinder Drilling Inc., headquartered in Houston, Texas, is a drilling contractor that owns and operates a fleet of premium land rigs targeting unconventional oil and gas resource plays throughout the United States. Sidewinder meets the needs and demands of E&P companies with its new fit-for-purpose fleet, demonstrated operating and safety systems and processes, and experienced management team. Sidewinder’s rigs are configured to minimize non-productive time via faster rig-up / rig-down and through the use of modern, efficient drilling and equipment. Sidewinder is a portfolio company of Avista Capital Partners.

About Avista Capital Partners
Avista Capital Partners is a leading private equity firm with over $4 billion under management and offices in New York, Houston and London. Founded in 2005, Avista’s strategy is to make controlling or influential minority investments in growth-oriented energy, healthcare, communications & media, industrials, and consumer businesses. Through its team of seasoned investment professionals and industry experts, Avista seeks to partner with exceptional management teams to invest in and add value to well-positioned businesses.

Sidewinder Drilling Inc.
Jon C. Cole, Chairman & CEO
Anthony Gallegos, CFO

Forward Looking Information
Investors are cautioned that statements in this press release that are not strictly historical statements, including, without limitation, statements regarding expectations about the tender offer or future business plans, prospective performance and opportunities, the expected timing of the completion of the transaction and the ability to complete the transaction considering the various closing conditions, are forward-looking statements within the meaning of the federal securities laws and are subject to risks, uncertainties and assumptions. These forward-looking statements may be identified by the use of words such as “expect,” “anticipate,” “believe,” “estimate,” “potential,” “should” or similar words. The actual results of the transaction could vary materially as a result of a number of factors, including the possibility that various closing conditions for the transaction may not be satisfied or waived. Other factors that may cause actual results to differ materially include those set forth in the reports that Union Drilling files from time to time with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2011 and quarterly and current reports on Form 10-Q and 8-K, including general economic and business conditions and industry trends, the continued strength or weakness of the contract land drilling industry in the geographic areas in which Union Drilling operates, decisions about onshore exploration and development projects to be made by oil and gas companies, the highly competitive nature of Union Drilling’s business, Union Drilling’s future financial performance, including availability, terms and deployment of capital, the continued availability of qualified personnel, and changes in, or Union Drilling’s failure or inability to comply with, government regulations, including those relating to workplace safety and the environment. These forward-looking statements are made only as of the date of this press release and Sidewinder undertakes no obligation to update the information provided herein.

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Jon C. Cole, Chairman & CEO
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