Davis Polk & Wardwell is advising Basic Energy Services, Inc. in connection with the merger of equals between Basic Energy Services and Grey Wolf, Inc. Under the terms of the agreement, Grey Wolf shareholders will receive $1.82 in cash and 0.2500 shares of new Grey Wolf for each share of Grey Wolf they currently own. Basic Energy Services shareholders will receive $6.70 in cash and 0.9195 shares of new Grey Wolf for each share of Basic Energy Services they currently own. The new company, called Grey Wolf, Inc., has an estimated enterprise value of $2.9 billion and will be assuming a net debt of approximately $960 million.

Basic Energy Services, based in Midland, Texas, is the nation’s third-largest well-servicing rig contractor, with more than 4,600 employees in 11 states, operating in the major oil and gas-producing markets in the United States. Based in Houston, Texas, Grey Wolf is the fourth-largest provider of contract land-drilling services in the United States, servicing major and independent oil and gas companies with a premium fleet of 121 rigs.

The Davis Polk corporate team includes partners George R. Bason Jr., Michael Davis, Lawrence E. Wieman and Michael Kaplan, and associates Stevan R.B. Nicholas and H. Oliver Smith. Partner Kathleen L. Ferrell and associate Christine E. Graham are providing tax advice. Partner Edmond T. FitzGerald and associate Ron M. Aizen are providing employee benefits advice. All members of the Davis Polk team work in the New York office.