Good day, ladies and gentlemen, and welcome to the Precision Drilling Acquisition Announcement Call. As a reminder, today's conference may be recorded. I would now like to turn the call over to Ms. Ashley Connolly, Manager of Investor Relations. Ma'am, you may begin.
Thank you. Good morning, and thank you for joining our call today. Participating today on the call with me are Kevin Nevew, President and Chief Executive Officer and Carey Ford, Senior Vice President and Chief Financial Officer. I would first like to note that there will be no question and answer period at the end of this call. This morning, we announced the combination of Precision Drilling and Trinidad Drilling.
We are excited about the transaction and believe the combination creates significant value for shareholders and fits within our corporate strategy and strategic priorities we have been discussing with you over the course of 2018. We have posted a presentation on our website that will be referenced by Kevin and Carrie throughout this morning's call. Our comments today will include forward looking statements regarding Precision's future results and prospects. We caution you that these forward looking statements are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from our expectations. Please see our news release and other regulatory filings for more information on forward looking statements and these risk factors.
With that, I'll turn the call over to Kevin.
Thank you, Ashley, and good morning. So as Ashley mentioned, we believe this transaction creates exceptional value for both Trinidad and Precision shareholders. But let me begin by commenting that we've said many times that M and A or acquisitions are not a priority for Precision. But in this case, the value creation opportunity was simply too compelling for us to ignore. So throughout our call this morning and over the coming weeks, we expect to help you understand the immediate value creation in this combination and how we'll continue to create shareholder value for the long term.
So beginning on Page three of the slide deck, and as we've said now a couple of times, the transaction we believe does create exceptional value for both Trinidad and Precision shareholders. The combination is a truly unique oil services opportunity, combining two highly focused drilling contractors, both pursuing similar growth strategies with similar competitive strategies and most important, very similar Tier one rig assets. The combination will immediately create synergies. We expect upwards of $30,000,000 And over the longer term, the substantially increased scale business operating leverage as our customer drilling as customer drilling requirements continue to transition to the most efficient, high performance rigs and crews the industry has to offer. Debt reduction remains a top priority for Precision, and the strength in cash flow generated by this combination will ensure we meet or exceed our long term targets we're improving our financial flexibility to pursue the most attractive growth opportunities.
Both Precision and Trinidad are focused on The United States and The Middle East as our primary growth geographies. This combined platform substantially reinforces our scale and market relevance in these key regions, positioning us for sustained growth and technology deployment. Now circling back to my earlier comments regarding similar strategies, the operating cultures of both organizations are remarkably similar with an intense focus on safety, efficiency, customer satisfaction, and technology. We expect a smooth integration with these similar field cultures. Now we will drill down and explain these value levers in detail during this call, and we expect the truly unique value of this foundation will be clear for the listeners.
Thanks, Kevin. I'll move on to Slide four on the transaction overview and give a brief overview of some of the transaction details and remind the listeners that all dollar amounts in this presentation are Canadian dollars unless otherwise stated. So Precision is acquiring Trinidad in an all share transaction. The total transaction value is $1,028,000,000 including the assumption of $477,000,000 of Trinidad's net debt. Trinidad will own 29% of Precision's shares.
We believe the transaction will be significantly accretive to 2019 cash flow per share. Trinidad shareholders will receive 0.445 shares of Precision for each outstanding Trinidad share, representing equity consideration of $1.98 per share as of Precision's October 4 closing price on the TSX. Regarding governance, one Trinidad director will be appointed to the Precision Board, and an additional Trinidad director will be nominated for election. The transaction is expected to be completed in late twenty eighteen and will be subject to covenant, regulatory and shareholder approvals as well as satisfaction of other customary closing initiatives. I'll hand it over to Kevin for the next slide.
So turning to Slide five. We see this combination as fitting into both Precision's competitive strategy and our short and long term priorities. So Precision's strategy, simply stated, is high performance, high value, and the themes of highly skilled people, standardization and leveraging scale are core to our strategy. Under our near term priorities of technology commercialization, enhanced utilization and debt reduction stand right alongside that strategy. If you turn to Page six of the presentation, you can see the Trinidad strategy.
And in Trinidad, we see a company with a stated strategy much like ours, driven to outperform. Trinidad combines high performance people, equipment, and manufacturing. And on a closer look, Trinidad Life Precision focuses on highly trained and skilled crews. They have an exemplary safety culture and outstanding reputation of customers for high performance operations. But most importantly, you'll know that the cornerstone to Precision to Precision's operational strategy is rig standardization.
Precision standardization protocol includes the rig design, rig equipment specifications and model types, interchangeability, brand selection, maintenance requirements, training requirements, and spare part needs. Trinidad's AC high spec rigs are a very good fit for precision standardization protocol. Following our detailed review analysis, we concluded that the 61 Trinidad AC rigs are over 90% compliant with our protocol. Major key components such as top drives, engines, generators, pumps, our and catwalks match our requirements. The rigs are of a very similar modular design and layout and employ a similar plug and play component arrangement.
The primary difference is the base rig digital control system. And for the foreseeable future, we expect to continue to use the NOV system on the precision rigs to operate the Trinidad system of those rigs. We expect that through our normal long term maintenance rig maintenance programs, we'll slowly transition the Trinidad control systems over to our MTR controls on an as needed basis. The very close fit of the Trinidad HD rigs was a key determinant in this combination. As a final point, the Trinidad organization like Precision understands the opportunities of technology.
I'll speak a little more on this later in the presentation. On Slide seven, we can see that when we combine the Precision and Trinidad fleets, we expect to have three forty eight rigs with 178 position in The US, 27 marketed internationally, and we expect to have 152 rigs in Canada, excluding, approximately 50 rigs in the cease to market and look to sell. Terry will talk more about that later. Overall, today, the combined activity would be approximately two fifteen rigs. This is a step change in scale for the Precision shareholders and affords a new paradigm of scale to the Trinidad shareholders.
Turning to Slide eight. When the transaction closes, Precision will become a top three driller in The U. S. With 170 market rigs on a high stack AC fleet of over 100 rigs and importantly, an increased scope of upgradeable rigs. We'll have strong coverage in our US show point.
In the Permian, we'll we'll be the number three grower and with with 76 active rigs. And overall, The US, our market share will be approximately 20 approximately 12% with 128 rigs offered in today, almost doubling our market share two years ago. Turning to Slide nine. I'll ask Terry to speak the best line. Okay.
Talking about the Canadian market. I can tell you we're very excited about the Canadian market and the combined fleet, customer reputation and quality of people that we will have. Additionally, the combination allows us to leverage our existing infrastructure and maintain fixed costs, strong free cash flows. We believe capital expenditures will remain relatively low in the coming years as the combined fleet quality is high, minimizing investment requirements. We expect the combined fleet to be 152 rigs and have identified 50 rigs held for sale, as Kevin mentioned earlier.
This group of rigs consists of rigs from both Trinidad and Precision, which we plan to divest. The remaining 152 high performance rigs will be capable of addressing every drilling program across Canada and will be particularly well suited for high efficiency development drilling opportunities. Okay. Turning to Slide 10. We think the international component and the, Halberton JV are exciting opportunities for Precision to extend its footprint.
As most of you know, Kuwait has been a particular focus for Precision. We currently have five rigs under long term contract and one new build under construction for deployment mid next year. Trinidad has two of its Mexico rigs undergoing a full reset with redeployment to Kuwait also in mid-twenty nineteen. This will bring our combined Kuwait operation up to essentially up to eight essentially brand new ultra high specification deep capacity rigs, all operating under long term contracts. We will operate a consolidated support infrastructure utilizing the existing Precision base and infrastructure.
Precision's Kuwait business will be a jewel in our portfolio. In addition to Kuwait, by midyear twenty nineteen, our operations will include three rigs in Saudi Arabia, one operating in Bahrain and one in Mexico for a total of 13 rigs, almost doubling Precision's current international operations. Long term, the thirteen hour mix are all good candidates for the tenders we've been pursuing throughout The Middle East and Mexico. Turning to Slide 11. Precision and Trinidad's strong lines on technology is clear, but it's fair to say we've taken a different approach, a different executional approach to technology development, but we're very well aligned on both the direction and value creation opportunity.
We will look to take the best aspects of both approaches, leveraging our standardized PAC platform. It's likely that many have turned our software applications with FitBench Precision's PAC as marketable drilling applications, similar to the other apps we are developing. I'm particularly intrigued with the RigBinder EDR with the Criterion software. And as we have previously disclosed, by the 2018, we expect to have 33 rigs running the Precision Nobles automation system. And this transaction expands our runway to a combined total of 167 AC rigs, which can easily be automated.
We believe Precision is the industry's first mover, leader, and now has the longest runway for, drilling automation technology. I'll turn over to slide 12. So as Kevin mentioned, we've seen significant cost savings opportunities in this combination with annual cost synergies greater than $30,000,000 We also see opportunities to generate increased cash flow through sale of idle assets and facilities of the combined company. Longer term, we believe we will realize additional cost synergies will be realized through leveraging the combined company's scale and precision systems. We have a long history inside precision, leveraging scale throughout our organization and plan to do the same with this combination.
We will do this through leveraging our recently upgraded IT infrastructure ERP system, our technical support centers in Houston and ISQ, our ability to project manage major capital projects and our supply stores in both Texas and Alberta. Now moving to the next page to talk a bit about the financial position of the combined company. We believe this transaction improves our financial profile and enhances our ability to meet or exceed our deleveraging targets. The cash flow generation capacity of the combined business is substantial and will allow us to both delever and address the most attractive growth opportunities for the company going forward. We also announced this morning that we have expanded our senior credit facility from $500,000,000 to $600,000,000 And with that cash on hand and with the cash on hand, the combined company will have $847,000,000 in liquidity pro form a as of June 3038.
Finally, the combined company will have a long term debt structure that provides ample runway to reduce debt and grow the business with no maturities for over three years. Now I'll hand it over to Ted. All right. So turning to Page 14. Wrap up and comment on where we have just scratched the surface of this transformational combination.
I believe we've provided a good overview of how the combination immediately accelerates Precision's growth as a high value provider of land drilling services and creates exceptional value for both Precision and Trinidad shareholders. I expect to have many questions and inquiries over the coming weeks, and we hope to address all of those with both our analysts and our investors. Thank you for listening to our call this morning. I'll turn the call
back to Ashley. Thanks, Kevin. I'd just like to mention that we'll be posting the transcript of the call on our website here later this morning. Thanks very much, and we'll talk to you soon.
Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program, and you may all disconnect. Everyone, have a great day.