C&J Energy Services, Inc. To Acquire Casedhole Holdings, Inc.

HOUSTON, June 6, 2012 /PRNewswire/ -- C&J Energy Services, Inc. (NYSE:CJES) ("C&J" or the "Company") today announced that it has entered into a definitive purchase agreement to acquire all of the outstanding equity interests of Casedhole Holdings, Inc. and its operating subsidiaries, including Casedhole Solutions, Inc. ("Casedhole"), for approximately $272.5 million in cash, subject to customary closing adjustments. 

Headquartered in Houston, Texas, Casedhole is a leading multi-regional, independent provider of cased-hole wireline and other complementary services for energy producers in the United States.  With 12 district locations, Casedhole provides premium services in the most complex and demanding operating environments focusing on oily and liquids-rich basins.  We expect the addition of Casedhole to be immediately accretive to C&J's 2012 earnings and cash flow per share.  The transaction is expected to close prior to June 8, 2012 upon satisfaction of customary closing conditions.  No shareholder vote is required for the approval of the transaction, and the acquisition is not subject to a financing contingency.  The transaction received early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

Josh Comstock, President and Chief Executive Officer, stated, "This transaction advances C&J's goal to become a large scale, geographically diversified provider of the most technologically advanced completion services. With this acquisition, we are adding best-in-class wireline services to our premium hydraulic fracturing, coiled tubing and pressure pumping offerings, making us one of the few U.S. companies that simultaneously offer each of these completion services to our growing base of customers.  We are especially pleased to be able to acquire and team with a rapidly growing company whose growth strategy and operating model closely mirrors C&J's.  Both companies provide the most efficient and effective solutions for customers with the most complex and demanding well completion requirements.  C&J offers Casedhole the opportunity to grow more rapidly with greater access to capital and C&J intends to leverage Casedhole's expanding market share in geographic regions in which we are not currently operating."

The various benefits that Casedhole will bring to C&J include: 

• An expanded geographic presence in 10 of the most active U.S. areas, including the Williston and Uinta Basins and the Marcellus, Utica, Avalon and Bone Springs shale plays where C&J currently does not have a presence;
• A loyal and expanding customer base of leading E&P operators which is largely non-overlapping and complementary to C&J's existing customer base;
• A seasoned management team with extensive large-cap oilfield services management experience, as well as a full roster of skilled engineers and field-level personnel that bring extensive technical expertise and domestic and international basin knowledge; 
• Premium, custom-built assets, including 58 wireline units with an average age of less than three years, compared to an industry average of 10 to 15 years, and 11 pumpdown units that were added during the past five months;
• Industry leading EBITDA margins and significant revenue growth that since June 2009 has outpaced the U.S. land rig count growth by more than 8 times.  Casedhole's trailing 12 month revenue as of March 31, 2012 was $156.8 million, with substantial equipment additions occurring throughout the 12 month period;
• A superior track record of efficient wireline service, with an historical perforation success rate well in excess of the wireline industry average; and
• Horizontal pumpdown and high pressure, high temperature completion applications that will be complementary to C&J's existing suite of services.

"We look forward to the addition of Don Gawick, Casedhole's President and Chief Executive Officer who is joining C&J, to head up our new wireline division. Mike Hobbs, Lance Dunn, Ed Keppler, and Tom Wilkins, all experienced managers who played an integral role in the growth of Casedhole, will also be joining C&J.  Together, we will continue to lead our combined teams to provide our respective customers with additional choice in service offerings while maintaining each company's existing quality of service.  By further expanding our service lines and leveraging Casedhole's geographic and customer footprints, we expect this acquisition to facilitate significant growth across each service line and result in long-term increases to stockholder value," concluded Comstock.

C&J is funding the purchase of Casedhole through $220 million drawn from the Company's senior secured revolving credit facility, with the remainder paid from cash on hand.  The credit facility was increased to $400 million from $200 million in connection with the signing of the definitive purchase agreement and was led by Bank of America and Wells Fargo.  The bank syndicate has expanded from seven banks to nine banks in the new facility, reflecting a strong level of confidence in our financial strength and sound future.  The new facility includes increased commitments for incremental facilities and changes to certain covenants providing for future increased levels of capital expenditures and business expansion.  With the closing of this credit facility, the Company has approximately $180 million of unused borrowing capacity.

Wells Fargo served to introduce the transaction to C&J and Locke Lord LLP acted as legal advisor to C&J for the acquisition.

Conference Call Information

C&J's management team, joined by Casedhole's management, will hold a conference call on Thursday, June 7, 2012, at 10:00 a.m. Eastern Time ( 9:00 a.m. Central), to discuss this transaction.  To participate in the call, dial 480-629-9819 at least 10 minutes before the conference call begins and ask for the C&J conference call.  A replay of the call will be available approximately two hours after the call ends and will be accessible until June 14, 2012.  To access the replay, dial [phone] and enter the pass code 4544534#. 

Investors, analysts and the general public can listen to the live conference call over the Internet by accessing C&J's website at http://www.cjenergy.com.   An archive will be available shortly after the call and can be accessed for one year from C&J's website.  For more information, please contact Donna Washburn at DRG&L at [phone] or e-mail [e-mail].

About C&J Energy Services, Inc.

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