Seventy Seven Energy Inc. (OTCMKTS:SSEIQ) Files An 8-K Entry into a Material Definitive Agreement

Item1.01

Merger Agreement

On December12, 2016, Seventy Seven Energy Inc., a Delaware
corporation (SSE), entered into an Agreement and Plan of Merger
(the Merger Agreement) with Patterson-UTI Energy, Inc., a
Delaware corporation (Patterson-UTI), and Pyramid Merger Sub,
Inc., a Delaware corporation and a direct, wholly owned
subsidiary of Patterson-UTI (Merger Sub), to which Patterson-UTI
will acquire SSE in exchange for newly issued shares of
Patterson-UTI common stock, par value $0.01 per share
(Patterson-UTI Common Stock). The Merger Agreement provides that,
upon the terms and subject to the conditions set forth therein,
Merger Sub will be merged with and into SSE, with SSE continuing
as the surviving entity and a wholly owned subsidiary of
Patterson-UTI (the Merger).

Under the terms and conditions of the Merger Agreement, at the
effective time of the Merger (the Effective Time), each issued
and outstanding share of SSE common stock, par value $0.01 per
share (SSE Common Stock), will be converted into the right to
receive a number of shares of Patterson-UTI Common Stock equal to
the exchange ratio, as described in the next sentence. The
exchange ratio will be equal to 49,559,000 shares of
Patterson-UTI Common Stock, divided by the total number of shares
of SSE outstanding or deemed outstanding immediately prior to the
effective time (including, among other things, shares issued upon
exercise of warrants to acquire SSE Common Stock and restricted
stock units that are exercised or deemed exercised);
provided that, in the event that any Series A warrants
to acquire SSE Common Stock are forfeited or net settled, such
49,559,000 shares of Patterson-UTI Common Stock will be reduced
by a number equal to (i)the aggregate exercise price for the
warrants that are forfeited or net settled, divided by (ii)the
volume weighted average price of a share of Patterson-UTI Common
Stock for the 10 consecutive trading days immediately preceding
the 3rd business day prior to the closing. In no event will
Patterson-UTI issue more than 49,559,000 of its shares as Merger
Consideration. AnnexA of the Merger Agreement sets forth an
illustrative calculation of the Exchange Ratio.

In connection with the Merger, each SSE restricted stock unit
award granted prior to December12, 2016 that is outstanding as of
the Effective Time will fully vest immediately prior to the
closing of the Merger and be treated as shares of SSE Common
Stock and receive the Merger Consideration in respect of each
share of SSE Common Stock subject to the award. In addition, at
the Effective Time, each SSE restricted stock unit award granted
on or following December12, 2016 will be assumed by Patterson-UTI
and converted into a restricted stock unit award covering a
number of shares of Patterson-UTI Common Stock equal to (i)the
number of shares of SSE Common Stock subject to the award
immediately prior to the Effective Time, multiplied by (ii)the
exchange ratio (discussed above), rounded to the nearest whole
share.

SSE and Patterson-UTI have agreed, subject to certain exceptions,
not to directly or indirectly solicit, initiate, facilitate,
knowingly encourage or induce or take any other action that could
be reasonably expected to lead to the making, submission, or
announcement of competing acquisition proposals (the
non-solicitation provisions). With respect to competing
acquisition proposals, subject to certain exceptions, both
parties are also prohibited from furnishing any nonpublic
information, engaging in discussions or negotiations, entering
into a letter of intent or similar document, or otherwise
approving, endorsing or recommending a competing proposal. SSE
and Patterson-UTI have also agreed to cease all existing
discussions with third parties regarding any competing
acquisition proposals.

Notwithstanding the prior paragraph, either party may, subject to
the terms and conditions set forth in the Merger Agreement,
furnish information to, and engage in discussions and
negotiations with, a third party that makes an unsolicited
competing acquisition proposal if the board of directors of such
party determines in good faith, after consultation with its
outside counsel and its outside financial advisor, that such
competing acquisition proposal is or is reasonably likely to
result in a superior proposal, and that the failure to take such
action would be inconsistent with its fiduciary duties under
applicable law. Prior to the time that the relevant stockholders
approve the Merger Agreement (in the case of SSE) or the issuance
of Patterson-UTI Common Stock as Merger Consideration (the
Patterson-UTI Stock Issuance) (in the case of Patterson-UTI), the
board of directors of each of SSE and Patterson-UTI may change
its recommendation with respect to the adoption of the Merger
Agreement (in the case of SSE) or the Patterson-UTI Stock
Issuance (in the case of Patterson-UTI), in each case, in
response to a superior proposal or an intervening event if the
board of directors determines in good faith, after consultation
with its outside counsel, that, among other things, the failure
to do so would be inconsistent with its fiduciary duties under
applicable law and complies with certain other specified
conditions.

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The Merger Agreement contains representations and warranties from
both Patterson-UTI and SSE, and each party has agreed to
covenants, including, among others, covenants relating to (i)the
conduct of its business during the interim period between the
execution of the Merger Agreement and the Effective Time, (ii)the
obligation to use reasonable best efforts to cause the Merger to
be consummated and to obtain expiration of the waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (HSR Act), (iii)the obligation of SSE to call a
meeting of its stockholders to approve the Merger Agreement and
(iv)the obligation of Patterson-UTI to call a meeting of its
stockholders to approve the Patterson-UTI Stock Issuance.

The completion of the Merger is subject to satisfaction or waiver
of certain closing conditions, including but not limited to:
(i)adoption of the Merger Agreement by SSEs stockholders and
approval of the Patterson-UTI Stock Issuance by Patterson-UTIs
stockholders, (ii)the expiration or termination of any waiting
period under the HSR Act, (iii)the absence of any law, order,
decree or injunction prohibiting the consummation of the Merger,
(iv)the effectiveness of the registration statement on Form S-4
to which the shares of Patterson-UTI Common Stock to be issued as
Merger Consideration will be registered, (v)approval for listing
on the Nasdaq Global Select Market of the shares of Patterson-UTI
Common Stock to be issued in connection with the Merger subject
to official notice of issuance, (vi)subject to specified
materiality standards, the accuracy of the representations and
warranties of each party, (vii)compliance by each party in all
material respects with its covenants, (viii)receipt of a tax
opinion from each partys counsel, dated as of the closing date,
to the effect that the merger will be treated as a reorganization
within the meaning of Section368(a) of the Internal Revenue Code
of 1986, as amended, (ix)the absence of material losses (as
defined in the Merger Agreement) during the interim period
between the date of execution of the Merger Agreement and the
Effective Time that exceed, or would reasonably be expected to
exceed, individually or in the aggregate, $100 million with
respect to SSE and its subsidiaries, and $300 million with
respect to Patterson-UTI and its subsidiaries, in each case, net
of certain insurance or indemnification proceeds and certain
other deductions, and (x)an amount of net debt (as defined in the
Merger Agreement) as of the closing date not exceeding $500
million with respect to SSE and its subsidiaries, and $725
million (not including debt incurred to refinance SSEs debt or
pay for the expenses of the transaction) with respect to
Patterson-UTI and its subsidiaries.

Upon termination of the Merger Agreement, if the stockholders of
either party does not provide the requisite approval, such party
must reimburse the expenses of the other party, capped at
$7,500,000. In certain circumstances, including if the board of
directors of SSE changes its recommendation or if the Merger
Agreement is terminated in certain circumstances and SSE enters
into an alternative acquisition transaction within 12 months of
termination, SSE may be required to pay Patterson-UTI a
termination fee of $40,000,000. Patterson-UTI may be required to
pay SSE a termination fee of $100,000,000 in certain
circumstances, including if the board of directors of
Patterson-UTI changes its recommendation as a result of a
Superior Parent Proposal or if the Merger Agreement is terminated
in certain circumstances and Patterson-UTI enters into certain
types of alternative acquisition transactions within 12 months of
termination. In certain other circumstances, Patterson-UTI may be
required to pay SSE a termination fee of $40,000,000. In no event
will either party be entitled to receive more than one expense
reimbursement payment or more than one termination fee payment to
which either party is entitled.

The foregoing description of the Merger Agreement is only a
summary, does not purport to be complete, and is subject to, and
qualified in its entirety by reference to, the Merger Agreement,
a copy of which is filed as Exhibit2.1 to this Current Report on
Form 8-K and is incorporated herein by reference.

Voting Agreements

On December12, 2016, concurrently with the execution of the
Merger Agreement, certain affiliates of Axar Capital Management,
LLC, Blue Mountain Capital Management, LLC and Mudrick Capital
Management, L.P. (each, a Voting Agreement Stockholder), which,
together, hold approximately 61% of the outstanding shares of SSE
Common Stock, entered into Voting and Support Agreements (the
Voting Agreements) with Patterson-UTI in connection with the
Merger Agreement.

Among other things, each Voting Agreement requires that the
Voting Agreement Stockholder that is party to such Voting
Agreement vote or cause to be voted all SSE Common Stock owned by
such Voting Agreement Stockholder in favor of the Merger
Agreement and against alternative transactions. In the event that
SSEs board of directors changes its recommendation that SSE
stockholders adopt the Merger Agreement, all of the Voting
Agreement Stockholders, taken together, will only be required to
vote shares that, in the aggregate, represent

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39.99% of the outstanding SSE Common Stock in favor of the
adoption of the Merger Agreement, with the Voting Agreement
Stockholders being able to vote the balance of their shares of
SSE Common Stock on such matter in each Voting Agreement
Stockholders sole discretion.

Subject to certain exceptions, each Voting Agreement also
contains prohibitions applicable to each Voting Agreement
Stockholder that are consistent with the non-solicitation
provisions of the Merger Agreement. to each Voting Agreement,
each Voting Agreement Stockholder is restricted from selling or
transferring SSE Common Stock owned by such Voting Agreement
Stockholder, subject to certain exceptions.

Except in certain instances, the expiration date of each Voting
Agreement will terminate upon the earliest to occur of (i)the
consummation of the Merger, (ii)six months following the date of
termination of the Merger Agreement, if such termination is a
result of (a)a change in recommendation by SSEs board of
directors, (b)SSE failing to include the recommendation of its
board of directors in the joint proxy statement in breach of the
Merger Agreement, (c)a material breach by certain of SSEs
affiliates of the non-solicitation covenant in the Merger
Agreement, (d)a material breach by SSE of its covenant related to
the SSE special meeting, or (e)if the requisite approval of
adoption of the Merger Agreement from SSE stockholders is not
obtained, (iii)the termination of the Merger Agreement if such
termination is not made to (ii)above, and (iv)with respect to
each Voting Agreement Stockholder, the entry into, without the
prior written consent of such Voting Agreement Stockholder, any
decrease in or change in composition of the Merger Consideration.

Each Voting Agreement restricts the Voting Agreement Stockholders
from transferring Patterson-UTI Common Stock for the period
commencing on the closing date of the Merger Agreement and ending
on the earlier to occur of: (i)30 days following the date that
Patterson-UTI raises $400 million in gross proceeds through
equity issuances or the incurrence of long-term debt and (ii)90
days following the closing date of the Merger; provided, that if
the 30-day period referred to in clause (i)expires prior to the
closing date of the Merger, then the Voting Agreement
Stockholders will not be subject to any post-closing transfer
restrictions with respect to Patterson-UTI Common Stock.

The foregoing description of each Voting Agreement is only a
summary, does not purport to be complete, and is subject to, and
qualified in its entirety by reference to, such Voting Agreement.
The Voting Agreements are filed as Exhibit 99.2 through Exhibit
99.4 to this Current Report on Form 8-K and are incorporated
herein by reference.

***

The Merger Agreement and the Voting Agreements and the above
descriptions have been included to provide investors and security
holders with information regarding the terms of the Merger
Agreement and Voting Agreements. They are not intended to provide
any other factual information about SSE, Patterson-UTI or their
respective subsidiaries, affiliates or equity holders. The
representations, warranties and covenants contained in the Merger
Agreement and Voting Agreements were made only for purposes of
those agreements and as of specific dates; were solely for the
benefit of the respective parties to such agreements; and may be
subject to limitations agreed upon by the parties, including
being qualified by confidential disclosures made by each party to
the other for the purposes of allocating contractual risk between
them that differ from those applicable to investors. Investors
should be aware that the representations, warranties and
covenants or any description thereof may not reflect the actual
state of facts or condition of SSE, Patterson-UTI or any of their
respective subsidiaries, affiliates, businesses or equity
holders. Moreover, information concerning the subject matter of
the representations, warranties and covenants may change after
the date of the Merger Agreement and Voting Agreements, which
subsequent information may or may not be fully reflected in
public disclosures by SSE or Patterson-UTI. Accordingly,
investors should not rely on the representations and warranties
in the Merger Agreement and Voting Agreements as
characterizations of the actual state of facts or condition of
SSE, Patterson-UTI and their respective affiliates and
subsidiaries.

On December12, 2016, SSE and Patterson-UTI announced that they
had entered into the Merger Agreement. A copy of the joint press
release is attached hereto as Exhibit 99.1.

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Important Information for Investors and
Stockholders

This Current Report on Form 8-K (Form 8-K) does not constitute an
offer to sell or the solicitation of an offer to buy any
securities or a solicitation of any vote or approval. The
proposed transaction will be submitted to the stockholders of
each of Patterson-UTI and SSE for their consideration.
Patterson-UTI will prepare and file a Registration Statement on
Form S-4 that will include a prospectus and proxy statement
jointly prepared by Patterson-UTI and SSE. SSE and Patterson-UTI
may also file other documents with the Securities and Exchange
Commission (the SEC) regarding the proposed transaction.

INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT WILL
BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE PROPOSED TRANSACTION.

Investors and security holders may obtain free copies of the
proxy statement/prospectus and other documents containing
important information about SSE and Patterson-UTI once such
documents are filed with the SEC through the website maintained
by the SEC at www.sec.gov. Copies of the documents filed with the
SEC by Patterson-UTI will be available free of charge on
Patterson-UTIs website at www.patenergy.com under the tab
Investors and then through the link titled SEC Filings or by
contacting Patterson-UTIs Investor Relations Department by email
at [email protected], or by phone at (281)765-7100.
Copies of the documents filed with the SEC by SSE will be
available free of charge on SSEs website at www.77nrg.com under
the tab Investors and then through the link titled SEC Filings or
by contacting SSEs Investor Relations Department by email at
[email protected], or by phone at (405)608-7730.

Participants in the Solicitation

Patterson-UTI, SSE and certain of their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies from the stockholders of Patterson-UTI in
connection with the proposed transaction. Information about the
directors and executive officers of Patterson-UTI is set forth in
the Proxy Statement on Schedule 14A for Patterson-UTIs 2015
annual meeting of stockholders, which was filed with the SEC on
April15, 2016. Information about the directors and executive
officers of SSE is set forth in the 2015 Annual Report on Form
10-K/A for SSE, which was filed with the SEC on April29, 2016 and
the Current Report on Form 8-K for SSE, which was filed with the
SEC on August1, 2016. These documents can be obtained free of
charge from the sources indicated above. Other information
regarding the participants in the proxy solicitation and a
description of their direct and indirect interests, by security
holdings or otherwise, will be contained in the proxy
statement/prospectus and other relevant materials to be filed
with the SEC when they become available.

Cautionary Statement Regarding Forward-Looking
Statements

This Form 8-K contains forward-looking statements which are
protected as forward-looking statements under the Private
Securities Litigation Reform Act of 1995 that are not limited to
historical facts, but reflect Patterson-UTIs and SSEs current
beliefs, expectations or intentions regarding future events.
Words such as may, will, could, should, expect, plan, project,
intend, anticipate, believe, estimate, predict, potential, ,
target, continue, and similar expressions are intended to
identify such forward-looking statements. The statements in this
press release that are not historical statements, including
statements regarding the expected timetable for completing the
proposed transaction, benefits and synergies of the proposed
transaction, costs and other anticipated financial impacts of the
proposed transaction; the combined companys plans, objectives,
future opportunities for the combined company and services,
future financial performance and operating results and any other
statements regarding Patterson-UTIs and SSEs future expectations,
beliefs, plans, objectives, financial conditions, assumptions or
future events or performance that are not historical facts, are
forward-looking statements within the meaning of the federal
securities laws. These statements are subject to numerous risks
and uncertainties, many of which are beyond Patterson-UTIs or
SSEs control, which could cause actual results to differ
materially from the results expressed or implied by the
statements. These risks and uncertainties include, but are not
limited to: failure to obtain the required votes of
Patterson-UTIs or SSEs stockholders; the timing to consummate the
proposed transaction; satisfaction of the conditions to closing
of the proposed transaction may not be satisfied or that the
closing of the proposed transaction otherwise does not occur; the
risk that a regulatory approval that may be required for the
proposed transaction is not obtained or is obtained subject to
conditions that are not anticipated; the diversion of management
time on transaction-related issues; the ultimate timing, outcome
and results of integrating the operations of Patterson-UTI and
SSE; the effects of the business combination of Patterson-UTI and
SSE following the consummation of the proposed transaction,
including the combined companys future financial condition,

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results of operations, strategy and plans; potential adverse
reactions or changes to business relationships resulting from the
announcement or completion of the proposed transaction; expected
synergies and other benefits from the proposed transaction and
the ability of Patterson-UTI to realize such synergies and other
benefits; expectations regarding regulatory approval of the
transaction; results of litigation, settlements and
investigations; actions by third parties, including governmental
agencies; volatility in customer spending and in oil and natural
gas prices, which could adversely affect demand for
Patterson-UTIs and SSEs services and their associated effect on
rates, utilization, margins and planned capital expenditures;
global economic conditions; excess availability of land drilling
rigs and pressure pumping equipment, including as a result of low
commodity prices, reactivation or construction; liabilities from
operations; decline in, and ability to realize, backlog;
equipment specialization and new technologies; adverse industry
conditions; adverse credit and equity market conditions;
difficulty in building and deploying new equipment; difficulty in
integrating acquisitions; shortages, delays in delivery and
interruptions of supply of equipment, supplies and materials;
weather; loss of, or reduction in business with, key customers;
legal proceedings; ability to effectively identify and enter new
markets; governmental regulation; and ability to retain
management and field personnel. Additional information concerning
factors that could cause actual results to differ materially from
those in the forward-looking statements is contained from time to
time in Patterson-UTIs and SSEs SEC filings. Patterson- UTIs
filings may be obtained by contacting Patterson-UTI or the SEC or
through Patterson-UTIs web site at http://www.patenergy.com or
through the SECs Electronic Data Gathering and Analysis Retrieval
System (EDGAR) at http://www.sec.gov. SSEs filings may be
obtained by contacting SSE or the SEC or through SSEs web site at
www.77nrg.com or through EDGAR at http://www.sec.gov.
Patterson-UTI and SSE undertake no obligation to publicly update
or revise any forward-looking statement.

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to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.

December13, 2016

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EXHIBIT INDEX

About Seventy Seven Energy Inc. (OTCMKTS:SSEIQ)

Seventy Seven Energy Inc. is a diversified oilfield services company. The Company provides a range of well site services and equipment to the United States land-based exploration and production (E&P) customers operating in unconventional resource plays. The Company’s segments include Drilling, Hydraulic Fracturing and Oilfield Rentals. The drilling segment is operated through its subsidiary, Nomac Drilling, L.L.C., and provides land drilling services for oil and natural gas E&P activities. The hydraulic fracturing segment is operated through its subsidiary, Performance Technologies, L.L.C. (PTL), and provides high-pressure hydraulic fracturing or frac services and other well stimulation services. The Company’s oilfield rentals segment is operated through its subsidiary, Great Plains Oilfield Rental, L.L.C. (GPOR), and provides premium rental tools and specialized services for land-based oil and natural gas drilling, completion and workover activities.

Seventy Seven Energy Inc. (OTCMKTS:SSEIQ) Recent Trading Information

Seventy Seven Energy Inc. (OTCMKTS:SSEIQ) closed its last trading session at 0.0000 with 1,138,200 shares trading hands.