Chesapeake Energy Corp. (NYSE:CHK) entered into a definitive agreement to buy Bronco Drilling Company (Nasdaq: BRNC) for $315 million, an offering of $11 per each share of Bronco Drilling share. After the news came out Bronco shares rose 6.4%, to $11.07 in morning trading, while Chesapeake rose to $32.72.

This offered price is 24% premium 90 day’s closing price average of Bronco’s shares or 6% premium over the closing price of Bronco shares on Thursday. The deal has been approved by boards of directors of both companies.

Bronco Drilling Company’s 22 high-quality drilling rigs will be integrated with another Chesapeake subsidiary, Nomac Drilling. Chesapeake is currently Bronco’s second largest customer and is currently operating 160 drilling rigs and plans to utilize 200 rigs by 2012.

Chesapeake’s wholly owned subsidiary, Nomac Drilling, L.L.C., currently owns 95 drilling rigs.

With this vertical integration strategy Chesapeake will own two-thirds of the rigs which it operates in its drilling business.

In a forward looking statement during the announcement of first-quarter results, Chesapeake said that by fiscal 2015, the company will be on track to deliver at least $10 billion of EBITDA. The company expects to deliver at least 250,000 barrels per day in fiscal 2015.

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