Good day, ladies and gentlemen, and welcome to the Precision Drilling acquisition announcement call. At this time, all participants are in a listen-only mode. If anyone should require operator assistance during the call, please press star then zero on your telephone keypad. 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 Neveu, 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 Carey 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. As Ashley mentioned, we believe this transaction creates exceptional value for both Trinidad and Precision shareholders. Let me begin by commenting that we've said many times that M&A or acquisitions are not a priority for Precision. In this case, the value creation opportunity was simply too compelling for us to ignore. Throughout our call this morning and over the coming weeks, we expect to help you understand the immediate value creation from this combination and how we'll continue to create shareholder value over the long term. 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 1 rig assets. The combination will immediately create synergies we expect upwards of CAD 30 million, and over the longer term, a substantially increased scale, which is operating leverage as our 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 and cash flow generated by this combination will ensure we meet or exceed our long-term targets while improving our financial flexibility to pursue the most attractive growth opportunities. Both Precision and Trinidad are focused on the U.S. 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 technological deployment. 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. We will drill down and explain these value levers in detail during this call, and we expect the truly unique value of this combination will be clear to 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 listener that all dollar amounts in this presentation are Canadian dollars unless otherwise stated. Precision is acquiring Trinidad in an all-share transaction. The total transaction value is CAD 1.028 billion, including the assumption of CAD 477 million 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 CAD 1.98 per share as of Precision's October 4th 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 2018 and will be subject to government, regulatory, and shareholder approvals, as well as satisfaction of other customary closing conditions. I'll hand it over to Kevin for the next slide.
Turning to slide five, we see this combination as fitting into both Precision's competitive strategy and our short and long-term priorities. 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. Our near-term priorities of technology commercialization, enhanced utilization, and debt reduction stand right alongside that strategy. If we turn to page six of the presentation, we can see the Trinidad strategy. In Trinidad, we see a company with a stated strategy much like ours, driven to outperform. Trinidad combines high performance people, equipment, and manufacturing. On a closer look, Trinidad, like Precision, focuses on highly trained and skilled crews. They have an exemplary safety culture and outstanding reputation with customers for high-performance operations. Most importantly, you'll note that the cornerstone to Precision's operational strategy is rig standardization.
Precision's standardization protocol includes the rig design, rig equipment specifications and model types Interchangeability, rig selection, maintenance requirements, training requirements, and spare part needs. Trinidad AC Hi-Spec rigs are a very good fit with Precision's 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, power electronics, 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, that for the foreseeable future, we expect to continue to use the NOVOS system on the Precision rigs and will operate the Trinidad system on those rigs.
We expect that through our normal long-term rig maintenance programs, we'll slowly transition the Trinidad control systems over to our FTR controls on an as-needed basis. The very close fit of the Trinidad AC rigs was a key determinant in this combination. The final point, the Trinidad organization, like Precision, understands the opportunities with technology, and we'll speak a little more to this later in the presentation. On slide seven, we can see that when we combine the Precision and Trinidad fleets, we expect to have 348 rigs, with 170 positioned in the U.S., 27 marketed internationally, and we expect to have 152 rigs in Canada, excluding approximately 50 rigs we'll cease to market and look to sell. Carey will talk more about that later. Overall today, the combined activity would be approximately 215 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 3 driller in the U.S. with 170 market rigs and a Hi-Spec AC fleet of over 100 rigs, and importantly, an increased scope of upgradable rigs. We'll have strong coverage in every U.S. play, and the Permian will be the number 3 driller, and with 76 active rigs and overall in the U.S., our market share will be approximately 12% with 128 rigs operating today, almost doubling our market share two years ago. Turning to slide nine, I'll ask Carey to speak to this slide.
Okay. Talk 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, supporting strong free cash flow. 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 for sale, as Kevin mentioned earlier. This group of rigs consists of rigs from both Trinidad and Precision, which we planned to sell. 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 Albertan JV are exciting opportunities for Precision to expand its footprint. As most of you know, Kuwait's 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 refit with redeployment to Kuwait also mid-2019. This will bring our combined Kuwait operation 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 mid-year 2019, 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 13 idle rigs 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 alignment on technology is clear. It's fair to say we've taken 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 of Trinidad's software applications will fit onto Precision's PAC as marketable drilling applications, similar to the other apps we are developing, and particularly in trade with the RigMinder EDR and Criterion software.
As we have previously disclosed, by the end of 2018, we expect to have 33 rigs running the Precision NOVOS automation system. This transaction expands our runway to a combined total of 167 AC rigs, which can easily be automated. We believe Precision is the industry first mover, leader, and now has the longest runway for drilling automation technology. I'll turn it over to Carey for slide 12.
As Kevin Neveu mentioned, we see significant cost-savings opportunities in this combination with annual cost synergies greater than CAD 30 million. 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 of 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 Nisku, our ability to project manage major capital projects, and our supply source in both Texas and Alberta. Moving on 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 de-leveraging targets. The cash flow generation capacity of the combined business is substantial and will allow us to both de-lever 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 million to $600 million, and with the cash on hand, the combined company will have $847 million in liquidity pro forma as of June 30, 2018. 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. With that, I will hand it over to Kevin Neveu.
Turning to page 14. I will wrap up and comment that we have only just scratched the surface of this transformational combination. I believe we have 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 you will 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 will turn the call back to Ashley Connolly.
Thanks, Kevin Neveu. I would just like to mention that we will be posting a transcript of this call on our website here later this morning. Thanks very much, and we will talk to you soon.
Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program, and you may disconnect. Everyone, have a great day.