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Delaware | 1389 | 54-2091194 | ||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification No.) |
500 W. Illinois, Suite 100 Midland, Texas 79701 (432) 620-5500 (Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices) | Kenneth V. Huseman President 500 W. Illinois, Suite 100 Midland, Texas 79701 (432) 620-5500 (Name, address, including zip code, and telephone number, including area code of agent for service) |
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o | Smaller reporting company o |
Exchange ActRule 13e-4(i) (Cross-Border Issuer Tender Offer) | o | |||
Exchange ActRule 14d-1(d) (Cross-Border Third-Party Tender Offer) | o |
Proposed Maximum | Proposed Maximum | Amount of | ||||||||||||||||||
Title of Each Class of | Amount | Offering | Aggregate | Registration | ||||||||||||||||
Securities to be Registered | to be Registered | Price per Unit | Offering Price | Fee | ||||||||||||||||
11.625% Senior Secured Notes due 2014 | $ | 225,000,000 | 100 | % | $ | 225,000,000 | $ | 12,555 | (1) | |||||||||||
Guarantees by certain subsidiaries of Basic Energy Services, Inc.* | — | — | — | — | (2) | |||||||||||||||
(1) | The registration fee was calculated pursuant to Rule 457(f) under the Securities Act of 1933. For purposes of this calculation, the offering price per note was assumed to be the stated principal amount of each original note that may be received by the registrant in the exchange transaction in which the notes will be offered. | |
(2) | Pursuant to Rule 457(n) under the Securities Act of 1933, no separate fee for the guarantees is payable because the guarantees relate to other securities that are being registered concurrently. | |
* | The guarantor subsidiaries of Basic Energy Services, Inc. are identified on the following page. |
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State or Other | Primary Standard | |||||||
Jurisdiction of | Industrial | |||||||
Exact Name of Additional | Incorporation or | Classification | I.R.S. Employer | |||||
Registrant as Specified in its Charter | Organization | Code Number | Identification No. | |||||
Basic Energy Services GP, LLC(1) | Delaware | 1389 | 54-2091197 | |||||
Basic Energy Services LP, LLC(1) | Delaware | 1389 | 54-2091195 | |||||
Basic Energy Services, L.P.(1) | Delaware | 1389 | 75-2441819 | |||||
Basic ESA, Inc.(1) | Texas | 1389 | 75-1772279 | |||||
Chaparral Service, Inc.(1) | New Mexico | 1389 | 85-0206424 | |||||
Basic Marine Services, Inc.(1) | Delaware | 1389 | 20-2274888 | |||||
First Energy Services Company(1) | Delaware | 1389 | 84-1544437 | |||||
Hennessey Rental Tools, Inc.(1) | Oklahoma | 1389 | 73-1435063 | |||||
Oilwell Fracturing Services, Inc.(1) | Oklahoma | 1311 | 73-1142826 | |||||
Wildhorse Services, Inc.(1) | Oklahoma | 1389 | 06-1641442 | |||||
LeBus Oil Field Service Co.(1) | Texas | 4214 | 75-2073125 | |||||
Globe Well Service, Inc.(1) | Texas | 1389 | 75-1634275 | |||||
SCH Disposal, L.L.C.(1) | Texas | 1389 | 75-2788335 | |||||
JS Acquisition LLC(1) | Delaware | 1389 | 26-2529500 | |||||
JetStar Holdings, Inc.(1) | Delaware | 1389 | 74-3144248 | |||||
Acid Services, LLC(1) | Kansas | 1389 | 48-1180455 | |||||
JetStar Energy Services, Inc.(1) | Texas | 1389 | 68-0605237 | |||||
Sledge Drilling Corp.(1) | Texas | 1381 | 20-4223140 | |||||
Permian Plaza, LLC(1) | Texas | 6512 | 26-0753425 | |||||
Xterra Fishing & Rental Tools Co.(1) | Texas | 1389 | 76-0647818 |
(1) | The address for such Subsidiary Guarantor is 500 W. Illinois, Suite 100, Midland, Texas 79701. |
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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. |
• | We are offering to exchange up to $225.0 million aggregate principal amount of registered 11.625% Senior Secured Notes due 2014, which we refer to as the new notes, for any and all of our $225.0 million aggregate principal amount of unregistered 11.625% Senior Secured Notes due 2014, which we refer to as the old notes, that were issued on July 31, 2009. | |
• | We will exchange all outstanding old notes that are validly tendered and not validly withdrawn prior to the expiration of the exchange offer for an equal principal amount of new notes. | |
• | The terms of the new notes will be substantially identical to those of the outstanding old notes, except that the transfer restrictions, registration rights and liquidated damages provisions relating to the old notes will not apply to the new notes. | |
• | You may withdraw tenders of old notes at any time prior to the expiration of the exchange offer. | |
• | The exchange of new notes for old notes will not be a taxable transaction for U.S. federal income tax purposes. | |
• | We will not receive any cash proceeds from the exchange offer. | |
• | The old notes are, and the new notes will be, guaranteed on a senior secured basis by all of our current subsidiaries, other than two immaterial subsidiaries, and by all of our current and certain future material restricted subsidiaries that guarantee any of our other indebtedness. | |
• | There is no established trading market for the new notes or the old notes. | |
• | We do not intend to apply for listing of the new notes on any national securities exchange or for quotation through any quotation system. |
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• | Well Servicing. Our well servicing segment (34% of our revenues in 2008 and 31% of our revenues in the first six months of 2009) currently operates our fleet of 414 well servicing rigs and related equipment. This business segment encompasses a full range of services performed with a mobile well servicing rig, including the installation and removal of downhole equipment and elimination of obstructions in the well bore to facilitate the flow of oil and gas. These services are performed to establish, maintain and improve production throughout the productive life of an oil and gas well and to plug and abandon a well at the end of its productive life. Our well servicing equipment and capabilities are essential to facilitate most other services performed on a well. | |
• | Fluid Services. Our fluid services segment (32% of our revenues in 2008 and 42% of our revenues in the first six months of 2009) currently utilizes our fleet of 805 fluid service trucks and related assets, including specialized tank trucks, storage tanks, water wells, disposal facilities, construction and other related equipment. These assets provide, transport, store and dispose of a variety of fluids, as well as provide well site construction and maintenance services. These services are required in most workover, completion and remedial projects and are routinely used in daily producing well operations. | |
• | Completion and Remedial Services. Our completion and remedial services segment (30% of our revenues in 2008 and 24% of our revenues in the first six months of 2009) currently operates our fleet of pressure pumping units, an array of specialized rental equipment and fishing tools, air compressor packages specially configured for underbalanced drilling operations, and cased-hole wireline units. The largest portion of this business segment consists of pressure pumping services focused on cementing, acidizing and fracturing services in niche markets. We entered the rental and fishing tool business through an acquisition in the first quarter of 2006. | |
• | Contract Drilling. Our contract drilling segment (4% of our revenues in 2008 and 3% of our revenues in the first six months of 2009) currently operates nine drilling rigs and related equipment. We use these assets to penetrate the earth to a desired depth and initiate production from a well. We greatly increased our presence in this line of business through the Sledge Drilling acquisition in the second quarter of 2007. |
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• | Significant Market Position. We maintain a significant market share for our well servicing operations in our core operating areas throughout Texas and a growing market share in the other markets that we serve. Our fleet of 414 well servicing rigs as of June 30, 2009 represents the third-largest fleet in the United States, and our goal is to be one of the top two providers of well site services in each of our core operating areas. Our market position allows us to expand the range of services performed on a well throughout its life, such as drilling, maintenance, workover, completion and plugging and abandonment services. | |
• | Modern and Active Well Servicing Fleet. We operate a modern and active fleet of well servicing rigs. We believe over 75% of the active U.S. well servicing rig fleet was built prior to 1985. Greater than 50% of our rigs at December 31, 2008 were either 2000 model year or newer, or have undergone major refurbishments during the last five years. As of March 31, 2009, we had taken delivery of all 134 newbuild well servicing rigs since October 2004 as part of a newbuild commitment, driven by our desire to maintain one of the most efficient, reliable and safest fleets in the industry. In addition to our regular maintenance program, we have an established program to routinely monitor and evaluate the condition of our fleet. We selectively refurbish rigs and other assets to maintain the quality of our service and to provide a safe work environment for our personnel and have made major refurbishments on 70 of our rigs since the beginning of 2004. Since 2003, we have obtained annual independent reviews and evaluations of substantially all of our assets, which confirmed the location and condition of these assets. | |
• | Extensive Domestic Footprint in the Most Prolific Basins. Our operations are concentrated in the major United States onshore oil and gas producing regions in Texas, New Mexico, Oklahoma, Arkansas, Kansas and Louisiana and the Rocky Mountain states. We operate in states that accounted for approximately 58% of the approximately 900,000 existing onshore oil and gas wells in the 48 contiguous states and approximately 73% of onshore oil production and 90% of onshore gas production in 2008. We believe that our operations are located in the most active U.S. well services markets, as we currently focus our |
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operations on onshore domestic oil and gas production areas that include both the highest concentration of existing oil and gas production activities and the largest prospective acreage for new drilling activity. This extensive footprint allows us to offer our suite of services to more than 2,000 customers who are active in those areas and allows us to redeploy equipment between markets as activity shifts. |
• | Diversified Service Offering for Further Revenue Growth. We believe our range of well site services provides us a competitive advantage over smaller companies that typically offer fewer services. Our experience, equipment and network of 115 area offices position us to market our full range of well site services to our existing customers. By utilizing a wider range of our services, our customers can use fewer service providers, which enables them to reduce their administrative costs and simplify their logistics. Furthermore, offering a broader range of services allows us to capitalize on our existing customer base and management structure to grow within existing markets, generate more business from existing customers, and increase our operating profits as we spread our overhead costs over a larger revenue base. | |
• | Decentralized Management with Strong Corporate Infrastructure. Our corporate group is responsible for maintaining a unified infrastructure to support our diversified operations through standardized financial and accounting, safety, environmental and maintenance processes and controls. Below our corporate level, we operate a decentralized operational organization in which our nine regional or division managers are responsible for their operations, including asset management, cost control, policy compliance and training and other aspects of quality control. With an average of over 25 years of industry experience, each regional manager has extensive knowledge of the customer base, job requirements and working conditions in each local market. Below our nine regional or division managers, our area managers are directly responsible for customer relationships, personnel management, accident prevention and equipment maintenance, the key drivers of our operating profitability. This management structure allows us to monitor operating performance on a daily basis, maintain financial, accounting and asset management controls, integrate acquisitions, prepare timely financial reports and manage contractual risk. |
• | Establish and Maintain Leadership Position in Core Operating Areas. We strive to establish and maintain market leadership positions within our core operating areas. To achieve this goal, we maintain close customer relationships, seek to expand the breadth of our services and offer high quality services and equipment that meet the scope of customer specifications and requirements. In addition, our significant presence in our core operating areas facilitates employee retention and attraction, a key factor for success in our business. Our significant presence in our core operating areas also provides us with brand recognition that we intend to utilize in creating leading positions in new operating areas. | |
• | Expand Within Our Regional Markets. We intend to continue strengthening our presence within our existing geographic footprint through internal growth and acquisitions of businesses with strong customer relationships, well-maintained equipment and experienced and skilled personnel. We typically enter into new markets through the acquisition of businesses with strong management teams that will allow us to expand within these markets. Management of acquired companies often remain with us and retain key positions within our organization, which enhances our attractiveness as an acquisition partner. We have a record of successfully implementing this strategy. During the past three fiscal years, we have made 23 acquisitions including: |
• | LeBus Oil Field Service Co., a fluid service company operating in our Ark-La-Tex region, and | |
• | G&L Tool, Ltd., a rental and fishing tool company included in our completion and remedial line of business; |
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• | JetStar Consolidated Holdings, Inc., a pressure pumping company operating in our completion and remedial line of business, and | |
• | Sledge Drilling Holding Corp., a contract drilling company operating in our contract drilling line of business; |
• | Azurite Services Company, Inc., Azurite Leasing Company, LLC and Freestone Disposal, L.P. (collectively “Azurite”), a fluid service business operating in our Ark-La-Tex and Mid-Continent regions. |
• | Develop Additional Service Offerings Within the Well Servicing Market. We intend to continue broadening the portfolio of services we provide to our clients by leveraging our well servicing infrastructure. A customer typically begins a new maintenance or workover project by securing access to a well servicing rig, which generally stays on site for the duration of the project. As a result, our rigs are often the first equipment to arrive at the well site and typically the last to leave, providing us the opportunity to offer our customers other complementary services. We believe the fragmented nature of the well servicing market creates an opportunity to sell more services to our core customers and to expand our total service offering within each of our markets. We have expanded our suite of services available to our customers and increased our opportunities to cross-sell new services to our core well servicing customers through recent acquisitions and internal growth. We expect to continue to develop or selectively acquire capabilities to provide additional services to expand and further strengthen our customer relationships. | |
• | Pursue Growth Through Selective Capital Deployment. We intend to continue growing our business through selective acquisitions, continuing a newbuild programand/or upgrading our existing assets. Our capital investment decisions are determined by an analysis of the projected return on capital employed of each of those alternatives. Acquisitions are evaluated for “fit” with our area and regional operations management and are thoroughly reviewed by corporate level financial, equipment, safety and environmental specialists to ensure consideration is given to identified risks. We also evaluate the cost to acquire existing assets from a third party, the capital required to build new equipment and the point in the oil and gas commodity price cycle. Based on these factors, we make capital investment decisions that we believe will support our long-term growth strategy, and these decisions may involve a combination of asset acquisitions and the purchase of new equipment. As the oil and gas commodity cycle has declined in recent quarters, we have taken a disciplined approach to acquisitions, with our last acquisition completed in September 2008. We expect to continue this strategy in order to maintain existing operating assets while this cycle continues. |
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Old Notes | 11.625% Senior Secured Notes due August 1, 2014, which were issued on July 31, 2009. | |
New Notes | 11.625% Senior Secured Notes due August 1, 2014. The terms of the new notes are substantially identical to the terms of the outstanding old notes, except that the transfer restrictions, registration rights and liquidated damages provisions relating to the old notes will not apply to the new notes. | |
Exchange Offer | We are offering to exchange up to $225.0 million aggregate principal amount of our new notes that have been registered under the Securities Act for an equal amount of our outstanding old notes that have not been registered under the Securities Act to satisfy our obligations under the registration rights agreement. | |
The new notes will evidence the same debt as the old notes and will be issued under, and be entitled to the benefits of, the same indenture that governs the old notes. Holders of the old notes do not have any appraisal or dissenter’s rights in connection with the exchange offer. Because the new notes will be registered, the new notes will not be subject to transfer restrictions, and holders of old notes that have tendered and had their old notes accepted in the exchange offer will have no registration rights. | ||
Expiration Date | The exchange offer will expire at 5:00 p.m., New York City time, on , 2009, unless we decide to extend it. | |
Conditions to the Exchange Offer | The exchange offer is subject to customary conditions, which we may waive. Please read “The Exchange Offer — Conditions to the Exchange Offer” for more information regarding the conditions to the exchange offer. | |
Procedures for Tendering Old Notes | Unless you comply with the procedures described under the caption “The Exchange Offer — Procedures for Tendering — Guaranteed Delivery,” you must do one of the following on or prior to the expiration of the exchange offer to participate in the exchange offer: | |
• tender your old notes by sending the certificates for your old notes, in proper form for transfer, a properly completed and duly executed letter of transmittal, with any required signature guarantees, and all other documents required by the letter of transmittal, to The Bank of New York Mellon Trust Company, N.A., as registrar and exchange agent, at the address listed under the caption “The Exchange Offer — Exchange Agent”; or | ||
• tender your old notes by using the book-entry transfer procedures described below and transmitting a properly completed and duly executed letter of transmittal, with any required signature guarantees, or an agent’s message instead of the letter of transmittal, to the exchange agent. In order for a book-entry transfer to constitute a valid tender of your old notes in the exchange offer, The Bank of New York Mellon Trust Company, N.A., as registrar and |
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exchange agent, must receive a confirmation of book-entry transfer of your old notes into the exchange agent’s account at The Depository Trust Company prior to the expiration of the exchange offer. For more information regarding the use of book-entry transfer procedures, including a description of the required agent’s message, please read the discussion under the caption “The Exchange Offer — Procedures for Tendering — Book-entry Transfer.” | ||
Guaranteed Delivery Procedures | If you are a registered holder of the old notes and wish to tender your old notes in the exchange offer, but | |
• the old notes are not immediately available, | ||
• time will not permit your old notes or other required documents to reach the exchange agent before the expiration of the exchange offer, or | ||
• the procedure for book-entry transfer cannot be completed prior to the expiration of the exchange offer, | ||
then you may tender old notes by following the procedures described under the caption “The Exchange Offer — Procedures for Tendering — Guaranteed Delivery.” | ||
Special Procedures for Beneficial Owners | If you are a beneficial owner whose old notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender your old notes in the exchange offer, you should promptly contact the person in whose name the old notes are registered and instruct that person to tender on your behalf. | |
If you wish to tender in the exchange offer on your own behalf, prior to completing and executing the letter of transmittal and delivering the certificates for your old notes, you must either make appropriate arrangements to register ownership of the old notes in your name or obtain a properly completed bond power from the person in whose name the old notes are registered. | ||
Withdrawal; Non-Acceptance | You may withdraw any old notes tendered in the exchange offer at any time prior to 5:00 p.m., New York City time, on , 2009. If we decide for any reason not to accept any old notes tendered for exchange, the old notes will be returned to the registered holder at our expense promptly after the expiration or termination of the exchange offer. In the case of old notes tendered by book-entry transfer into the exchange agent’s account at The Depository Trust Company, any withdrawn or unaccepted old notes will be credited to the tendering holder’s account at The Depository Trust Company. For further information regarding the withdrawal of tendered old notes, please read “The Exchange Offer — Withdrawal Rights.” | |
U.S. Federal Income Tax Consequences | The exchange of new notes for old notes in the exchange offer will not be a taxable event for U.S. federal income tax purposes. Please read the discussion under the caption “Material United States Federal Income Tax Consequences” for more information regarding the tax consequences to you of the exchange offer. | |
Use of Proceeds | The issuance of the new notes will not provide us with any new proceeds. We are making this exchange offer solely to satisfy our obligations under the registration rights agreement. |
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Fees and Expenses | We will pay all of our expenses incident to the exchange offer. | |
Exchange Agent | We have appointed The Bank of New York Mellon Trust Company, N.A. as exchange agent for the exchange offer. For the address, telephone number and fax number of the exchange agent, please read “The Exchange Offer — Exchange Agent.” | |
Resales of New Notes | Based on interpretations by the staff of the SEC, as set forth inno-action letters issued to third parties that are not related to us, we believe that the new notes you receive in the exchange offer may be offered for resale, resold or otherwise transferred by you without compliance with the registration and prospectus delivery provisions of the Securities Act so long as: | |
• the new notes are being acquired in the ordinary course of business; | ||
• you are not participating, do not intend to participate, and have no arrangement or understanding with any person to participate in the distribution of the new notes issued to you in the exchange offer; | ||
• you are not our affiliate or an affiliate of any of our subsidiary guarantors; and | ||
• you are not a broker-dealer tendering old notes acquired directly from us for your account. | ||
The SEC has not considered this exchange offer in the context of a no-action letter, and we cannot assure you that the SEC would make similar determinations with respect to this exchange offer. If any of these conditions are not satisfied, or if our belief is not accurate, and you transfer any new notes issued to you in the exchange offer without delivering a resale prospectus meeting the requirements of the Securities Act or without an exemption from registration of your new notes from those requirements, you may incur liability under the Securities Act. We will not assume, nor will we indemnify you against, any such liability. Each broker-dealer that receives new notes for its own account in exchange for old notes, where the old notes were acquired by such broker-dealer as a result of market-making or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such new notes. Please read “Plan of Distribution.” | ||
Please read “The Exchange Offer — Resales of New Notes” for more information regarding resales of the new notes. | ||
Consequences of Not Exchanging Your Old Notes | If you do not exchange your old notes in this exchange offer, you will no longer be able to require us to register your old notes under the Securities Act, except in the limited circumstances provided under the registration rights agreement. In addition, you will not be able to resell, offer to resell or otherwise transfer your old notes unless we have registered the old notes under the Securities Act, or unless you resell, offer to resell or otherwise transfer them under an exemption from the registration requirements of, or in a transaction not subject to, the Securities Act. | |
For information regarding the consequences of not tendering your old notes and our obligation to file a registration statement, please read “The Exchange Offer — Consequences of Failure to Exchange Outstanding Securities” and “Description of the New Notes.” |
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Issuer | Basic Energy Services, Inc. | |
Securities Offered | $225,000,000 aggregate principal amount of our 11.625% Senior Secured Notes due 2014. | |
Interest | The new notes will accrue interest from the date of their issuance at the rate of 11.625% per year. Interest on the new notes will be payable semi-annually in arrears on each February 1 and August 1, commencing on February 1, 2010. | |
We have agreed to make additional interest payments to holders of the new notes under certain circumstances if we do not comply with our obligations under the registration rights agreement. | ||
Maturity Date | August 1, 2014. | |
Guarantees | The new notes will be guaranteed by all of our current subsidiaries, other than two immaterial subsidiaries. The new notes will be guaranteed by all of our current and certain material future restricted subsidiaries that guarantee any of our other indebtedness. | |
Collateral | The new notes and the guarantees will be secured by a first-priority lien, subject to limited exceptions, on all of the current and future personal property of our company and our guarantor subsidiaries, except for cash and cash equivalents, accounts receivable, inventory, maritime assets (including our existing inland barge rigs), titled vehicles and the stock or other equity interests of our subsidiaries. As of June 30, 2009, the net book value of the collateral included approximately $509 million of property and equipment, which represents 71% of our total property and equipment. | |
Ranking | The new notes will be our senior secured indebtedness. Both the new notes and the subsidiary guarantees will rank: | |
• equally in right of payment with any of our and the subsidiary guarantors’ existing and future senior indebtedness, including our existing senior notes and the related guarantees; and | ||
• effectively junior to all existing or future liabilities of our subsidiaries that do not guarantee the notes and to our existing or future indebtedness that is secured by assets other than the collateral securing the new notes to the extent of the value of the collateral therefor. |
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As of June 30, 2009 as adjusted to give effect to the offering of the old notes and the use of the net proceeds from the offering, (i) we and our subsidiaries would have had no secured indebtedness outstanding other than the old notes and related guarantees, $75.3 million of capital lease obligations and letters of credit collateralized by $16.2 million of cash and (ii) we and our subsidiary guarantors would have had $225.0 million of unsecured senior indebtedness outstanding. | ||
Optional Redemption | We may redeem the notes, in whole or in part, at any time on or after February 1, 2012 at a redemption price equal to 100% of the principal amount thereof, plus a premium declining ratably to par and accrued and unpaid interest to the date of redemption. | |
At any time before February 1, 2012, we may redeem up to 35% of the aggregate principal amount of the notes issued under the indenture with the net cash proceeds of one or more qualified equity offerings at a redemption price equal to 111.625% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to the date of redemption; provided that: | ||
• at least 65% of the aggregate principal amount of the notes issued under the indenture remains outstanding immediately after the occurrence of such redemption; and | ||
• such redemption occurs within 90 days of the date of the closing of any such qualified equity offering. | ||
In addition, at any time before February 1, 2012, we may redeem some or all of the notes at a redemption price equal to 100% of the principal amount of the notes, plus an applicable premium and accrued and unpaid interest to the date of redemption. | ||
Change of Control | Upon a change of control, if we do not redeem the notes, each holder of notes will be entitled to require us to purchase all or a portion of its notes at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of repurchase. Our ability to purchase the notes upon a change of control will be limited by the terms of our then outstanding debt agreements. We cannot assure you that we will have the financial resources to purchase the notes in such circumstances. | |
Certain Covenants | The indenture contains covenants that, among other things, limit our ability and the ability of certain of our subsidiaries to: | |
• incur additional indebtedness; | ||
• pay dividends or repurchase or redeem capital stock; | ||
• make certain investments; | ||
• incur liens; | ||
• enter into certain types of transactions with our affiliates; | ||
• limit dividends or other payments by our restricted subsidiaries to us; and | ||
• sell assets or consolidate or merge with or into other companies. |
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These and other covenants that are contained in the indenture are subject to important exceptions and qualifications, which are described under “Description of the New Notes.” | ||
Absence of a Public Market for the NewNotes | There is no public trading market for the new notes, and we do not intend to apply for listing of the new notes on any national securities exchange or for quotation of the new notes on any automated dealer quotation system. See “Risk Factors — Risks Relating to the Exchange Offer and the New Notes — An active trading market may not develop for the new notes.” | |
Risk Factors | See “Risk Factors” beginning on page 15 for discussion of factors you should carefully consider before deciding to participate in the exchange offer. |
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Year Ended December 31, | Six Months Ended June 30, | |||||||||||||||||||
2008 | 2007 | 2006 | 2009 | 2008 | ||||||||||||||||
(Dollars in thousands) | (Unaudited) | |||||||||||||||||||
Statement of Operations Data: | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Well servicing | $ | 343,113 | $ | 342,697 | $ | 323,755 | $ | 85,213 | $ | 169,537 | ||||||||||
Fluid services | 315,768 | 259,324 | 245,011 | 114,065 | 143,980 | |||||||||||||||
Completion and remedial services | 304,326 | 240,692 | 154,412 | 66,632 | 148,037 | |||||||||||||||
Contract drilling | 41,735 | 34,460 | 6,970 | 7,626 | 19,841 | |||||||||||||||
Total revenues | 1,004,942 | 877,173 | 730,148 | 273,536 | 481,395 | |||||||||||||||
Expenses: | ||||||||||||||||||||
Well servicing | 215,243 | 205,132 | 178,028 | 64,742 | 103,759 | |||||||||||||||
Fluid services | 203,205 | 165,327 | 153,445 | 79,968 | 94,987 | |||||||||||||||
Completion and remedial services | 165,574 | 125,948 | 74,981 | 47,378 | 78,439 | |||||||||||||||
Contract drilling | 28,629 | 22,510 | 8,400 | 6,607 | 14,589 | |||||||||||||||
General and administrative(1) | 115,319 | 99,042 | 81,318 | 56,503 | 52,663 | |||||||||||||||
Depreciation and amortization | 118,607 | 93,048 | 62,087 | 65,150 | 56,764 | |||||||||||||||
Loss (gain) on disposal of assets | 76 | 477 | 277 | 1,339 | (584 | ) | ||||||||||||||
Goodwill impairment | 22,522 | — | — | 204,014 | — | |||||||||||||||
Total expenses | 869,175 | 711,484 | 558,536 | 525,701 | 400,617 | |||||||||||||||
Operating income (loss) | 135,767 | 165,689 | 171,612 | (252,165 | ) | 80,778 | ||||||||||||||
Other income (expense): | ||||||||||||||||||||
Net interest expense | (24,630 | ) | (25,136 | ) | (15,504 | ) | (11,317 | ) | (12,630 | ) | ||||||||||
Loss on early extinguishment of debt | — | (230 | ) | (2,705 | ) | — | — | |||||||||||||
Other income (expense) | 12,235 | 176 | 169 | 252 | (6,431 | ) | ||||||||||||||
Income (loss) from continuing operations before income taxes | 123,372 | 140,499 | 153,572 | (263,230 | ) | 61,717 | ||||||||||||||
Income tax benefit (expense) | (55,134 | ) | (52,766 | ) | (54,742 | ) | 59,169 | (23,348 | ) | |||||||||||
Net Income (loss) | $ | 68,238 | $ | 87,733 | $ | 98,830 | $ | (204,061 | ) | $ | 38,369 | |||||||||
Statement of Cash Flow Data: | ||||||||||||||||||||
Cash flows from operating activities | $ | 212,827 | $ | 198,591 | $ | 145,678 | $ | 73,049 | $ | 87,328 | ||||||||||
Cash flows from investing activities | (197,302 | ) | (294,103 | ) | (241,351 | ) | (25,460 | ) | (91,840 | ) | ||||||||||
Cash flows from financing activities | 3,669 | 136,088 | 114,193 | (24,420 | ) | (9,645 | ) | |||||||||||||
Capital expenditures: | ||||||||||||||||||||
Acquisitions, net of cash acquired | 110,913 | 199,673 | 135,568 | 1,190 | 51,239 | |||||||||||||||
Property and equipment | 91,890 | 98,536 | 104,574 | 25,187 | 45,023 | |||||||||||||||
Other Financial Data: | ||||||||||||||||||||
Ratio of earnings to fixed charges | 4.7x | 5.2x | 7.9x | (2 | ) |
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As of December 31, | As of June 30, | |||||||||||||||||||
2009 | ||||||||||||||||||||
2008 | 2007 | 2006 | 2009 | (As Adjusted)(3) | ||||||||||||||||
(Dollars in thousands) | (Unaudited) | |||||||||||||||||||
Balance Sheet Data: | ||||||||||||||||||||
Cash and cash equivalents | $ | 111,135 | $ | 91,941 | $ | 51,365 | $ | 134,304 | $ | 162,719 | ||||||||||
Property and equipment, net | 740,879 | 636,924 | 475,431 | 714,560 | 714,560 | |||||||||||||||
Total assets | 1,310,711 | 1,143,609 | 796,260 | 1,068,393 | 1,101,290 | |||||||||||||||
Long-term debt, including current portion | 480,323 | 423,719 | 262,743 | 480,274 | 513,171 | |||||||||||||||
Stockholders’ equity | 595,004 | 524,821 | 379,250 | 387,219 | 387,219 |
(1) | Includes approximately $4,149,000, $3,964,000, $3,429,000, $2,665,000 and $2,264,000 of non-cash stock compensation expense for the years ended December 31, 2008, 2007 and 2006 and the six months ended June 30, 2009 and 2008, respectively. | |
(2) | Earnings were inadequate to cover fixed charges for the six months ended June 30, 2009 by $249.3 million. | |
(3) | Gives effect to the offering of the old notes and the application of the net proceeds therefrom as if each had occurred on June 30, 2009. |
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• | we charge our well servicing customers on an hourly basis, and rig hours reflect actual billed hours; | |
• | our rig utilization rate is calculated using a55-hour work week per rig; | |
• | our fluid services segment includes an array of services billed on an hourly, daily and per barrel basis; accordingly, we believe that revenue per truck is a more meaningful measure for this segment; | |
• | in our completion and remedial services segment, we charge different rates for our pressure pumping trucks based on the type of services performed and varying horsepower requirements, making segment profits the most meaningful measure of performance; and | |
• | in our contract drilling segment, revenues are derived primarily from the drilling of new wells, making rig operating days, revenue per drilling day and segment profits as a percent of revenues the most meaningful measures of performance. |
Six Months Ended | ||||||||||||||||||||
Year Ended December 31, | June 30, | |||||||||||||||||||
2008 | 2007 | 2006 | 2009 | 2008 | ||||||||||||||||
Well Servicing: | ||||||||||||||||||||
Weighted average number of rigs | 405 | 376 | 344 | 414 | 398 | |||||||||||||||
Rig hours (000’s) | 840.2 | 831.2 | 868.2 | 242.8 | 424.8 | |||||||||||||||
Rig utilization rate | 72.5 | % | 77.3 | % | 88.2 | % | 41.0 | % | 74.6 | % | ||||||||||
Revenue per rig hour | $ | 408 | $ | 412 | $ | 373 | $ | 351 | $ | 399 | ||||||||||
Segment profits per rig hour | $ | 152 | $ | 166 | $ | 168 | $ | 84 | $ | 155 | ||||||||||
Segment profits as a percent of revenue | 37.3 | % | 40.1 | % | 45.0 | % | 24.0 | % | 38.8 | % | ||||||||||
Fluid Services: | ||||||||||||||||||||
Weighted average number of fluid service trucks | 699 | 655 | 588 | 811 | 654 | |||||||||||||||
Revenue per fluid service truck (000’s) | $ | 452 | $ | 396 | $ | 417 | $ | 141 | $ | 220 | ||||||||||
Segment profits per fluid service truck (000’s) | $ | 161 | $ | 144 | $ | 156 | $ | 42 | $ | 75 | ||||||||||
Segment profits as a percent of revenue | 35.6 | % | 36.2 | % | 37.4 | % | 29.9 | % | 34.0 | % | ||||||||||
Completion and Remedial Services: | ||||||||||||||||||||
Segment profits as a percent of revenue | 45.6 | % | 47.7 | % | 51.5 | % | 28.9 | % | 47.0 | % | ||||||||||
Contract Drilling: | ||||||||||||||||||||
Weighted average number of rigs | 9 | 8 | 2 | 9 | 9 | |||||||||||||||
Rig operating days | 2,777 | 2,233 | 484 | 562 | 1,344 | |||||||||||||||
Revenue per day (000’s) | $ | 15 | $ | 15 | $ | 14 | $ | 14 | $ | 15 | ||||||||||
Profits (loss) per day (000’s) | $ | 5 | $ | 5 | $ | (3 | ) | $ | 2 | $ | 4 | |||||||||
Segment profits as a percent of revenue | 31.4 | % | 34.7 | % | (20.5 | )% | 13.4 | % | 26.5 | % |
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• | impair our ability to make investments and obtain additional financing for working capital, capital expenditures, acquisitions or other general corporate purposes; | |
• | limit our ability to use operating cash flow in other areas of our business because we must dedicate a substantial portion of these funds to make principal and interest payments on our indebtedness; | |
• | make us more vulnerable to a downturn in our business, our industry or the economy in general as a substantial portion of our operating cash flow will be required to make principal and interest payments |
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on our indebtedness, making it more difficult to react to changes in our business and in industry and market conditions; |
• | limit our ability to obtain additional financing that may be necessary to operate or expand our business; | |
• | put us at a competitive disadvantage to competitors that have less debt; and | |
• | increase our vulnerability to interest rate increases to the extent that we incur variable rate indebtedness. |
• | limitations on the incurrence of additional indebtedness; | |
• | restrictions on mergers, sales or transfer of assets without the lenders’ consent; and | |
• | limitation on dividends and distributions. |
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• | personal injury or loss of life; | |
• | damage to or destruction of property and equipment (including the collateral securing the notes) and the environment; and | |
• | suspension of operations. |
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• | a decline in, or substantial volatility of, oil and gas prices, and any related changes in expenditures by our customers; | |
• | the effects of future acquisitions on our business; | |
• | changes in customer requirements in markets or industries we serve; | |
• | competition within our industry; | |
• | general economic and market conditions; | |
• | our access to current or future financing arrangements; | |
• | our ability to replace or add workers at economic rates; and | |
• | environmental and other governmental regulations. |
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Six | ||||||||||||||||||||||||
Months | ||||||||||||||||||||||||
Ended | ||||||||||||||||||||||||
Year Ended December 31, | June 30, | |||||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | 2009 | |||||||||||||||||||
Ratio of earnings to fixed charges | 4.7 | x | 5.2 | x | 7.9 | x | 5.6 | x | 2.8 | x | — | (a) |
(a) | Earnings were inadequate to cover fixed charges for the six months ended June 30, 2009 by $249.3 million. |
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• | on an actual basis; and | |
• | on an as adjusted basis to give effect to the offering of our 11.625% Senior Secured Notes due 2014 and the use of proceeds therefrom. |
As of June 30, 2009 | ||||||||
Actual | As Adjusted | |||||||
(In thousands) | ||||||||
Cash and cash equivalents | $ | 134,304 | $ | 162,719 | ||||
Total long-term debt, including current portion: | ||||||||
Notes payable: | ||||||||
Tranche A and Tranche B loans under revolving credit facility(1) | 180,000 | — | ||||||
11.625% Senior Secured Notes due 2014 | — | 212,897 | (2) | |||||
7.125% Senior Notes due 2016 | 225,000 | 225,000 | ||||||
Other debt and obligations under capital leases | 75,274 | 75,274 | ||||||
Total | 480,274 | 513,171 | ||||||
Stockholders’ equity: | ||||||||
Common stock, $.01 par value, 80,000,000 shares authorized; 42,394,809 shares issued and 40,703,187 shares outstanding | 424 | 424 | ||||||
Additional paid-in capital | 328,101 | 328,101 | ||||||
Deferred compensation | — | — | ||||||
Retained earnings | 72,642 | 72,642 | ||||||
Treasury stock, 1,691,622 shares, at cost | (13,948 | ) | (13,948 | ) | ||||
Accumulated other comprehensive income | — | — | ||||||
Total stockholders’ equity | 387,219 | 387,219 | ||||||
Total capitalization | $ | 867,493 | $ | 900,390 | ||||
(1) | As of the closing on July 31, 2009, we had borrowings of an aggregate of $208.8 million under the revolving credit facility, all of which were repaid with the proceeds from the offering. We terminated the revolving credit facility after closing our senior secured notes offering, and we pledged cash collateral with respect to the approximately $16.2 of million letters of credit that were outstanding under the revolving credit facility before closing the senior secured notes offering. | |
(2) | The $225.0 million of notes are recorded at their discounted amount, with the discount to be amortized over the life of the notes. |
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Six Months Ended | ||||||||||||||||||||||||||||
Year Ended December 31, | June 30, | |||||||||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | 2009 | 2008 | ||||||||||||||||||||||
(Dollars in thousands) | (Unaudited) | |||||||||||||||||||||||||||
Statement of Operations Data: | ||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||
Well servicing | $ | 343,113 | $ | 342,697 | $ | 323,755 | $ | 221,993 | $ | 142,551 | $ | 85,213 | $ | 169,537 | ||||||||||||||
Fluid services | 315,768 | 259,324 | 245,011 | 177,927 | 139,610 | 114,065 | 143,980 | |||||||||||||||||||||
Completion and remedial services | 304,326 | 240,692 | 154,412 | 59,832 | 29,341 | 66,632 | 148,037 | |||||||||||||||||||||
Contract drilling | 41,735 | 34,460 | 6,970 | — | — | 7,626 | 19,841 | |||||||||||||||||||||
Total revenues | 1,004,942 | 877,173 | 730,148 | 459,752 | 311,502 | 273,536 | 481,395 | |||||||||||||||||||||
Expenses: | ||||||||||||||||||||||||||||
Well servicing | 215,243 | 205,132 | 178,028 | 137,392 | 98,058 | 64,742 | 103,759 | |||||||||||||||||||||
Fluid services | 203,205 | 165,327 | 153,445 | 114,551 | 96,621 | 79,968 | 94,987 | |||||||||||||||||||||
Completion and remedial services | 165,574 | 125,948 | 74,981 | 30,900 | 17,481 | 47,378 | 78,439 | |||||||||||||||||||||
Contract drilling | 28,629 | 22,510 | 8,400 | — | — | 6,607 | 14,589 | |||||||||||||||||||||
General and administrative(a) | 115,319 | 99,042 | 81,318 | 55,411 | 37,186 | 56,503 | 52,663 | |||||||||||||||||||||
Depreciation and amortization | 118,607 | 93,048 | 62,087 | 37,072 | 28,676 | 65,150 | 56,764 | |||||||||||||||||||||
Loss (gain) on disposal of assets | 76 | 477 | 277 | (222 | ) | 2,616 | 1,339 | (584 | ) | |||||||||||||||||||
Goodwill impairment | 22,522 | — | — | — | — | 204,014 | — | |||||||||||||||||||||
Total expenses | 869,175 | 711,484 | 558,536 | 375,104 | 280,638 | 525,701 | 400,617 | |||||||||||||||||||||
Operating income (loss) | 135,767 | 165,689 | 171,612 | 84,648 | 30,864 | (252,165 | ) | 80,778 | ||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||
Net interest expense | (24,630 | ) | (25,136 | ) | (15,504 | ) | (12,660 | ) | (9,550 | ) | (11,317 | ) | (12,630 | ) | ||||||||||||||
Gain (loss) on early extinguishment of debt | — | (230 | ) | (2,705 | ) | (627 | ) | — | — | — | ||||||||||||||||||
Other income (expense) | 12,235 | 176 | 169 | 220 | (398 | ) | 252 | (6,431 | ) | |||||||||||||||||||
Income (loss) from continuing operations before income taxes | 123,372 | 140,499 | 153,572 | 71,581 | 20,916 | (263,230 | ) | 61,717 | ||||||||||||||||||||
Income tax benefit (expense) | (55,134 | ) | (52,766 | ) | (54,742 | ) | (26,800 | ) | (7,984 | ) | 59,169 | (23,348 | ) | |||||||||||||||
Income (loss) from continuing operations | 68,238 | 87,733 | 98,830 | 44,781 | 12,932 | (204,061 | ) | 38,369 | ||||||||||||||||||||
Discontinued operations, net of tax | — | — | — | — | (71 | ) | — | — | ||||||||||||||||||||
Net income (loss) | $ | 68,238 | $ | 87,733 | $ | 98,830 | $ | 44,781 | $ | 12,861 | $ | (204,061 | ) | $ | 38,369 | |||||||||||||
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Six Months Ended | ||||||||||||||||||||||||||||
Year Ended December 31, | June 30, | |||||||||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | 2009 | 2008 | ||||||||||||||||||||||
(Dollars in thousands) | (Unaudited) | |||||||||||||||||||||||||||
Other Financial Data: | ||||||||||||||||||||||||||||
Cash flows from operating activities | $ | 212,827 | $ | 198,591 | $ | 145,678 | $ | 99,189 | $ | 46,539 | $ | 73,049 | $ | 87,328 | ||||||||||||||
Cash flows from investing activities | (197,302 | ) | (294,103 | ) | (241,351 | ) | (107,679 | ) | (73,587 | ) | (25,460 | ) | (91,840 | ) | ||||||||||||||
Cash flows from financing activities | 3,669 | 136,088 | 114,193 | 21,188 | 21,498 | (24,420 | ) | (9,645 | ) | |||||||||||||||||||
Capital expenditures: | ||||||||||||||||||||||||||||
Acquisitions, net of cash acquired | 110,913 | 199,673 | 135,568 | 25,378 | 19,284 | 1,190 | 51,239 | |||||||||||||||||||||
Property and equipment | 91,890 | 98,536 | 104,574 | 83,095 | 55,674 | 25,187 | 45,023 |
As of December 31, | As of June 30, | |||||||||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | 2009 | 2008 | ||||||||||||||||||||||
(Dollars in thousands) | (Unaudited) | |||||||||||||||||||||||||||
Balance Sheet Data: | ||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 111,135 | $ | 91,941 | $ | 51,365 | $ | 32,845 | $ | 20,147 | $ | 134,304 | $ | 77,784 | ||||||||||||||
Property and equipment, net | 740,879 | 636,924 | 475,431 | 309,075 | 233,451 | 714,560 | 665,922 | |||||||||||||||||||||
Total assets | 1,310,711 | 1,143,609 | 796,260 | 496,957 | 367,601 | 1,068,393 | 1,209,776 | |||||||||||||||||||||
Long-term debt, including current portion | 480,323 | 423,719 | 262,743 | 126,887 | 182,476 | 480,274 | 433,367 | |||||||||||||||||||||
Stockholders’ equity | 595,004 | 524,821 | 379,250 | 258,575 | 121,786 | 387,219 | 566,683 |
(a) | Includes approximately $4,149,000, $3,964,000, $3,429,000, $2,890,000 and $1,587,000 of non-cash stock compensation expense for the years ended December 31, 2008, 2007, 2006, 2005 and 2004, respectively, and $2,665,000 and $2,264,000 in the six months ended June 30, 2009 and 2008, respectively. |
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FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Year Ended December 31, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||
2008 | 2007 | 2006 | 2009 | 2008 | ||||||||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||||
Well servicing | $ | 343.1 | 34 | % | $ | 342.7 | 39 | % | $ | 323.7 | 44 | % | $ | 85.2 | 31 | % | $ | 169.5 | 35 | % | ||||||||||||||||||||
Fluid services | 315.8 | 32 | % | 259.3 | 29 | % | 245.0 | 34 | % | 114.1 | 42 | % | 144.0 | 30 | % | |||||||||||||||||||||||||
Completion and remedial | 304.3 | 30 | % | 240.7 | 28 | % | 154.4 | 21 | % | 66.6 | 24 | % | 148.0 | 31 | % | |||||||||||||||||||||||||
Contract drilling | 41.7 | 4 | % | 34.5 | 4 | % | 7.0 | 1 | % | 7.6 | 3 | % | 19.8 | 4 | % | |||||||||||||||||||||||||
Total revenues | $ | 1,004.9 | 100 | % | $ | 877.2 | 100 | % | $ | 730.1 | 100 | % | $ | 273.5 | 100 | % | $ | 481.3 | 100 | % |
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• | Well Servicing —rig hours, rig utilization rate, revenue per rig hour and segment profits as a percent of revenues; | |
• | Fluid Services —revenue per truck and segment profits as a percent of revenues; | |
• | Completion and Remedial Services —segment profits as a percent of revenues; and | |
• | Contract Drilling —rig operating days, revenue per drilling day and segment profits as a percent of revenues. |
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Weighted | ||||||||||||||||||||||||
�� | Average | Rig | Revenue | Profits | ||||||||||||||||||||
Number of | Rig | Utilization | per Rig | per Rig | Segment | |||||||||||||||||||
Rigs | Hours | Rate | Hour | Hour | Profits % | |||||||||||||||||||
2006: | ||||||||||||||||||||||||
First Quarter | 325 | 208,700 | 89.8 | % | $ | 349 | $ | 157 | 44.9 | % | ||||||||||||||
Second Quarter | 337 | 219,300 | 91.0 | % | $ | 365 | $ | 165 | 45.2 | % | ||||||||||||||
Third Quarter | 351 | 226,300 | 90.2 | % | $ | 379 | $ | 175 | 46.1 | % | ||||||||||||||
Fourth Quarter | 360 | 213,900 | 83.1 | % | $ | 398 | $ | 174 | 43.8 | % | ||||||||||||||
Full Year | 344 | 868,200 | 88.2 | % | $ | 373 | $ | 168 | 45.0 | % | ||||||||||||||
2007: | ||||||||||||||||||||||||
First Quarter | 364 | 210,800 | 81.0 | % | $ | 411 | $ | 174 | 42.2 | % | ||||||||||||||
Second Quarter | 371 | 207,700 | 78.3 | % | $ | 415 | $ | 163 | 39.5 | % | ||||||||||||||
Third Quarter | 383 | 212,100 | 77.7 | % | $ | 414 | $ | 166 | 40.0 | % | ||||||||||||||
Fourth Quarter | 386 | 200,600 | 72.7 | % | $ | 409 | $ | 159 | 38.8 | % | ||||||||||||||
Full Year | 376 | 831,200 | 77.3 | % | $ | 412 | $ | 166 | 40.1 | % | ||||||||||||||
2008: | ||||||||||||||||||||||||
First Quarter | 392 | 202,500 | 72.2 | % | $ | 398 | $ | 158 | 39.8 | % | ||||||||||||||
Second Quarter | 403 | 222,300 | 77.1 | % | $ | 400 | $ | 152 | 37.9 | % | ||||||||||||||
Third Quarter | 412 | 233,000 | 79.1 | % | $ | 418 | $ | 156 | 37.3 | % | ||||||||||||||
Fourth Quarter | 414 | 182,400 | 61.6 | % | $ | 418 | $ | 141 | 33.8 | % | ||||||||||||||
Full Year | 405 | 840,200 | 72.5 | % | $ | 408 | $ | 152 | 37.3 | % | ||||||||||||||
2009: | ||||||||||||||||||||||||
First Quarter | 414 | 132,300 | 44.7 | % | $ | 369 | $ | 90 | 24.4 | % | ||||||||||||||
Second Quarter | 414 | 110,500 | 37.3 | % | $ | 329 | $ | 78 | 23.6 | % |
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Weighted | Segment | |||||||||||||||
Average | Revenue | Profits | ||||||||||||||
Number of | per Fluid | per Fluid | ||||||||||||||
Fluid Service | Service | Service | Segment | |||||||||||||
Trucks | Truck | Truck | Profits % | |||||||||||||
2006: | ||||||||||||||||
First Quarter | 529 | $ | 101 | $ | 37 | 36.4 | % | |||||||||
Second Quarter | 568 | $ | 109 | $ | 42 | 38.2 | % | |||||||||
Third Quarter | 614 | $ | 105 | $ | 38 | 36.7 | % | |||||||||
Fourth Quarter | 640 | $ | 103 | $ | 39 | 38.0 | % | |||||||||
Full Year | 588 | $ | 417 | $ | 156 | 37.4 | % | |||||||||
2007: | ||||||||||||||||
First Quarter | 652 | $ | 98 | $ | 37 | 37.5 | % | |||||||||
Second Quarter | 657 | $ | 96 | $ | 35 | 36.1 | % | |||||||||
Third Quarter | 653 | $ | 97 | $ | 35 | 35.7 | % | |||||||||
Fourth Quarter | 656 | $ | 104 | $ | 37 | 35.7 | % | |||||||||
Full Year | 655 | $ | 396 | $ | 144 | 36.2 | % | |||||||||
2008: | ||||||||||||||||
First Quarter | 644 | $ | 111 | $ | 39 | 35.0 | % | |||||||||
Second Quarter | 663 | $ | 109 | $ | 36 | 33.1 | % | |||||||||
Third Quarter | 683 | $ | 121 | $ | 43 | 35.8 | % | |||||||||
Fourth Quarter | 804 | $ | 111 | $ | 42 | 38.1 | % | |||||||||
Full Year | 699 | $ | 452 | $ | 161 | 35.6 | % | |||||||||
2009: | ||||||||||||||||
First Quarter | 814 | $ | 80 | $ | 25 | 31.4 | % | |||||||||
Second Quarter | 808 | $ | 61 | $ | 17 | 27.9 | % |
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Segment | ||||||||
Revenues | Profits % | |||||||
2006: | ||||||||
First Quarter | $ | 27,455 | 49.5 | % | ||||
Second Quarter | $ | 40,939 | 53.1 | % | ||||
Third Quarter | $ | 42,109 | 51.3 | % | ||||
Fourth Quarter | $ | 43,909 | 51.2 | % | ||||
Full Year | $ | 154,412 | 51.5 | % | ||||
2007: | ||||||||
First Quarter | $ | 46,137 | 49.9 | % | ||||
Second Quarter | $ | 63,735 | 47.6 | % | ||||
Third Quarter | $ | 66,304 | 47.6 | % | ||||
Fourth Quarter | $ | 64,515 | 46.2 | % | ||||
Full Year | $ | 240,692 | 47.7 | % | ||||
2008: | ||||||||
First Quarter | $ | 68,458 | 47.7 | % | ||||
Second Quarter | $ | 79,579 | 46.4 | % | ||||
Third Quarter | $ | 85,541 | 45.3 | % | ||||
Fourth Quarter | $ | 70,748 | 43.0 | % | ||||
Full Year | $ | 304,326 | 45.6 | % | ||||
2009: | ||||||||
First Quarter | $ | 37,259 | 30.5 | % | ||||
Second Quarter | $ | 29,373 | 26.9 | % |
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Weighted | ||||||||||||||||||||
Average | Rig | Revenue | Profits | |||||||||||||||||
Number of | Operating | per | (Loss) | Segment | ||||||||||||||||
Rigs | Days | Day | per Day | Profits % | ||||||||||||||||
2006: | ||||||||||||||||||||
First Quarter | 2 | 12 | N.M. | N.M. | N.M. | |||||||||||||||
Second Quarter | 2 | 104 | $ | 11,700 | $ | (4,900 | ) | (45.2 | )% | |||||||||||
Third Quarter | 2 | 160 | $ | 14,700 | $ | 1,600 | 10.9 | % | ||||||||||||
Fourth Quarter | 3 | 208 | $ | 13,300 | $ | (1,600 | ) | (11.7 | )% | |||||||||||
Full Year | 2 | 484 | $ | 14,400 | $ | (3,000 | ) | (20.5 | )% | |||||||||||
2007: | ||||||||||||||||||||
First Quarter | 3 | 168 | $ | 11,500 | $ | (5,200 | ) | (44.9 | )% | |||||||||||
Second Quarter | 8 | 594 | $ | 17,200 | $ | 6,900 | 39.5 | % | ||||||||||||
Third Quarter | 9 | 723 | $ | 15,700 | $ | 6,700 | 42.4 | % | ||||||||||||
Fourth Quarter | 10 | 748 | $ | 14,600 | $ | 5,300 | 36.3 | % | ||||||||||||
Full Year | 8 | 2,233 | $ | 15,400 | $ | 5,400 | 34.7 | % | ||||||||||||
2008: | ||||||||||||||||||||
First Quarter | 9 | 645 | $ | 14,700 | $ | 3,800 | 25.7 | % | ||||||||||||
Second Quarter | 9 | 699 | $ | 14,800 | $ | 4,000 | 27.2 | % | ||||||||||||
Third Quarter | 9 | 767 | $ | 15,600 | $ | 5,600 | 35.6 | % | ||||||||||||
Fourth Quarter | 9 | 666 | $ | 14,900 | $ | 5,400 | 36.2 | % | ||||||||||||
Full Year | 9 | 2,777 | $ | 15,000 | $ | 4,700 | 31.4 | % | ||||||||||||
2009: | ||||||||||||||||||||
First Quarter | 9 | 248 | $ | 14,700 | $ | 1,500 | 10.1 | % | ||||||||||||
Second Quarter | 9 | 314 | $ | 12,700 | $ | 2,100 | 16.3 | % |
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• | incur additional indebtedness; | |
• | pay dividends or repurchase or redeem capital stock; | |
• | make certain investments; | |
• | incur liens; | |
• | enter into certain types of transactions with affiliates; | |
• | limit dividends or other payments by restricted subsidiaries; and | |
• | sell assets or consolidate or merge with or into other companies. |
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• | incur additional indebtedness; | |
• | pay dividends or repurchase or redeem capital stock; | |
• | make certain investments; | |
• | incur liens; | |
• | enter into certain types of transactions with our affiliates; | |
• | limit dividends or other payments by our restricted subsidiaries to us; and | |
• | sell assets (including Collateral under the Security Agreement), or consolidate or merge with or into other companies. |
• | acquiring additional assets of a type constituting Collateral (“Additional Assets”), provided the trustee has or is immediately granted a perfected first-priority security interest (subject only to Permitted Collateral Liens) in such Additional Assets; and | |
• | repurchasing or redeeming the Senior Secured Notes. |
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• | at least 65% of the aggregate principal amount of the Senior Secured Notes issued under the Indenture remains outstanding immediately after the occurrence of such redemption; and | |
• | such redemption occurs within 90 days of the date of the closing of any such qualified equity offering. |
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• | Maritime Assets (as defined in the Security Agreement); | |
• | cash and cash equivalents (as such terms are defined by GAAP) other than those maintained in an Asset Sales Proceeds Account; | |
• | Securities Accounts containing only cash and cash equivalents other than any Asset Sale Proceeds Account and Security Entitlements relating to any such Securities Account; | |
• | equity interests in any subsidiary of any Grantor; | |
• | Inventory; | |
• | trucks, trailers and other motor vehicles covered by a certificate of title law of any state; | |
• | propertyand/or transactions to which Article 9 of the UCC does not apply pursuant toSection 9-109 thereof; | |
• | certain computer software and Equipment acquired prior to the date thereof and subject to a lien securing purchase money indebtedness as of the date thereof if (but only to the extent that) the applicable documentation relating to such lien prohibits the granting of a lien on such Equipment; | |
• | Equipment leased by any Grantor, other than pursuant to a capitalized lease, if (but only to the extent that) the lien securing the Equipment prohibits the granting of a lien on such Equipment; | |
• | certain General Intangibles, governmental approvals or other rights arising under any contracts, instruments, permits, licenses or other documents if the granting of a security interest therein would cause a breach of a restriction on the granting of a security interest therein or the assignment thereof in favor of a third party, subject to exceptions as set forth in the Security Agreement; and | |
• | Accounts, Chattel Paper, Instruments and Payment Intangibles to the extent they are not Proceeds, Supporting Obligations or products of the Collateral. |
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• | Well Servicing. Our well servicing segment (34% of our revenues in 2008 and 31% of our revenues in the first six months of 2009) currently operates our fleet of 414 well servicing rigs and related equipment. This business segment encompasses a full range of services performed with a mobile well servicing rig, including the installation and removal of downhole equipment and elimination of obstructions in the well bore to facilitate the flow of oil and gas. These services are performed to establish, maintain and improve production throughout the productive life of an oil and gas well and to plug and abandon a well at the end of its productive life. Our well servicing equipment and capabilities are essential to facilitate most other services performed on a well. | |
• | Fluid Services. Our fluid services segment (32% of our revenues in 2008 and 42% of our revenues in the first six months of 2009) currently utilizes our fleet of 805 fluid service trucks and related assets, including specialized tank trucks, storage tanks, water wells, disposal facilities, construction and other related equipment. These assets provide, transport, store and dispose of a variety of fluids, as well as provide well site construction and maintenance services. These services are required in most workover, completion and remedial projects and are routinely used in daily producing well operations. | |
• | Completion and Remedial Services. Our completion and remedial services segment (30% of our revenues in 2008 and 24% of our revenues in the first six months of 2009) currently operates our fleet of pressure pumping units, an array of specialized rental equipment and fishing tools, air compressor packages specially configured for underbalanced drilling operations, and cased-hole wireline units. The largest portion of this business segment consists of pressure pumping services focused on cementing, acidizing and fracturing services in niche markets. We entered the rental and fishing tool business through an acquisition in the first quarter of 2006. | |
• | Contract Drilling. Our contract drilling segment (4% of our revenues in 2008 and 3% of our revenues in the first six months of 2009) currently operates nine drilling rigs and related equipment. We use these assets to penetrate the earth to a desired depth and initiate production from a well. We greatly increased our presence in this line of business through the Sledge Drilling acquisition in the second quarter of 2007. |
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• | Significant Market Position. We maintain a significant market share for our well servicing operations in our core operating areas throughout Texas and a growing market share in the other markets that we serve. Our fleet of 414 well servicing rigs as of June 30, 2009 represents the third-largest fleet in the United States, and our goal is to be one of the top two providers of well site services in each of our core operating areas. Our market position allows us to expand the range of services performed on a well throughout its life, such as drilling, maintenance, workover, completion and plugging and abandonment services. | |
• | Modern and Active Well Servicing Fleet. We operate a modern and active fleet of well servicing rigs. We believe over 75% of the active U.S. well servicing rig fleet was built prior to 1985. Greater than 50% of our rigs at December 31, 2008 were either 2000 model year or newer, or have undergone major refurbishments during the last five years. As of March 31, 2009, we had taken delivery of all 134 newbuild well servicing rigs since October 2004 as part of a newbuild commitment, driven by our desire to maintain one of the most efficient, reliable and safest fleets in the industry. In addition to our regular maintenance program, we have an established program to routinely monitor and evaluate the condition of our fleet. We selectively refurbish rigs and other assets to maintain the quality of our service and to provide a safe work environment for our personnel and have made major refurbishments on 70 of our rigs since the beginning of 2004. Since 2003, we have obtained annual independent reviews and evaluations of substantially all of our assets, which confirmed the location and condition of these assets. | |
• | Extensive Domestic Footprint in the Most Prolific Basins. Our operations are concentrated in the major United States onshore oil and gas producing regions in Texas, New Mexico, Oklahoma, Arkansas, Kansas and Louisiana and the Rocky Mountain states. We operate in states that accounted for approximately 58% of the approximately 900,000 existing onshore oil and gas wells in the 48 contiguous states and approximately 73% of onshore oil production and 90% of onshore gas production in 2008. We believe that our operations are located in the most active U.S. well services markets, as we currently focus our operations on onshore domestic oil and gas production areas that include both the highest concentration of existing oil and gas production activities and the largest prospective acreage for new drilling activity. This extensive footprint allows us to offer our suite of services to more than 2,000 customers who are active in those areas and allows us to redeploy equipment between markets as activity shifts. | |
• | Diversified Service Offering for Further Revenue Growth. We believe our range of well site services provides us a competitive advantage over smaller companies that typically offer fewer services. Our experience, equipment and network of 115 area offices position us to market our full range of well site services to our existing customers. By utilizing a wider range of our services, our customers can use fewer service providers, which enables them to reduce their administrative costs and simplify their logistics. Furthermore, offering a broader range of services allows us to capitalize on our existing customer base and management structure to grow within existing markets, generate more business from existing customers, and increase our operating profits as we spread our overhead costs over a larger revenue base. | |
• | Decentralized Management with Strong Corporate Infrastructure. Our corporate group is responsible for maintaining a unified infrastructure to support our diversified operations through standardized financial and accounting, safety, environmental and maintenance processes and controls. Below our corporate level, we operate a decentralized operational organization in which our nine regional or division managers are responsible for their operations, including asset management, cost control, policy compliance and training and other aspects of quality control. With an average of over 25 years of industry experience, each regional manager has extensive knowledge of the customer base, job requirements and working conditions in each local market. Below our nine regional or division managers, our area managers are directly responsible for customer relationships, personnel management, |
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accident prevention and equipment maintenance, the key drivers of our operating profitability. This management structure allows us to monitor operating performance on a daily basis, maintain financial, accounting and asset management controls, integrate acquisitions, prepare timely financial reports and manage contractual risk. |
• | Establish and Maintain Leadership Position in Core Operating Areas. We strive to establish and maintain market leadership positions within our core operating areas. To achieve this goal, we maintain close customer relationships, seek to expand the breadth of our services and offer high quality services and equipment that meet the scope of customer specifications and requirements. In addition, our significant presence in our core operating areas facilitates employee retention and attraction, a key factor for success in our business. Our significant presence in our core operating areas also provides us with brand recognition that we intend to utilize in creating leading positions in new operating areas. | |
• | Expand Within Our Regional Markets. We intend to continue strengthening our presence within our existing geographic footprint through internal growth and acquisitions of businesses with strong customer relationships, well-maintained equipment and experienced and skilled personnel. We typically enter into new markets through the acquisition of businesses with strong management teams that will allow us to expand within these markets. Management of acquired companies often remain with us and retain key positions within our organization, which enhances our attractiveness as an acquisition partner. We have a record of successfully implementing this strategy. During the past three fiscal years, we have made 23 acquisitions including: |
• | LeBus Oil Field Service Co., a fluid service company operating in our Ark-La-Tex region, and | |
• | G&L Tool, Ltd., a rental and fishing tool company included in our completion and remedial line of business; |
• | JetStar Consolidated Holdings, Inc., a pressure pumping company operating in our completion and remedial line of business, and | |
• | Sledge Drilling Holding Corp., a contract drilling company operating in our contract drilling line of business; |
• | Azurite Services Company, Inc., Azurite Leasing Company, LLC and Freestone Disposal, L.P., a fluid service business operating in our Ark-La-Tex and Mid-Continent regions. |
• | Develop Additional Service Offerings Within the Well Servicing Market. We intend to continue broadening the portfolio of services we provide to our clients by leveraging our well servicing infrastructure. A customer typically begins a new maintenance or workover project by securing access to a well servicing rig, which generally stays on site for the duration of the project. As a result, our rigs are often the first equipment to arrive at the well site and typically the last to leave, providing us the opportunity to offer our customers other complementary services. We believe the fragmented nature of the well servicing market creates an opportunity to sell more services to our core customers and to expand our total service offering within each of our markets. We have expanded our suite of services available to our customers and increased our opportunities to cross-sell new services to our core well servicing customers through recent acquisitions and internal growth. We expect to continue to develop |
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or selectively acquire capabilities to provide additional services to expand and further strengthen our customer relationships. |
• | Pursue Growth Through Selective Capital Deployment. We intend to continue growing our business through selective acquisitions, continuing a newbuild programand/or upgrading our existing assets. Our capital investment decisions are determined by an analysis of the projected return on capital employed of each of those alternatives. Acquisitions are evaluated for “fit” with our area and regional operations management and are thoroughly reviewed by corporate level financial, equipment, safety and environmental specialists to ensure consideration is given to identified risks. We also evaluate the cost to acquire existing assets from a third party, the capital required to build new equipment and the point in the oil and gas commodity price cycle. Based on these factors, we make capital investment decisions that we believe will support our long-term growth strategy, and these decisions may involve a combination of asset acquisitions and the purchase of new equipment. As the oil and gas commodity cycle has declined in recent quarters, we have taken a disciplined approach to acquisitions, with our last acquisition completed in September 2008. We expect to continue this strategy in order to maintain existing operating assets while this cycle continues. |
Cushing WTI Spot | Average Wellhead Price | |||||||
Period | Oil Price ($/bbl) | Natural Gas ($/mcf) | ||||||
1/1/04 — 12/31/04 | $ | 41.51 | $ | 5.49 | ||||
1/1/05 — 12/31/05 | 56.64 | 7.51 | ||||||
1/1/06 — 12/31/06 | 66.05 | 6.42 | ||||||
1/1/07 — 12/31/07 | 72.34 | 6.38 | ||||||
1/1/08 — 12/31/08 | 99.67 | 8.07 | ||||||
1/1/09 — 6/30/09 (5/31/09 for Natural Gas) | 51.18 | 3.99 |
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• | maintenance work involving removal, repair and replacement of down-hole equipment and returning the well to production after these operations are completed; | |
• | hoisting tools and equipment required by the operation into and out of the well, or removing equipment from the well bore, to facilitate specialized production enhancement and well repair operations performed by other oilfield service companies; and | |
• | plugging and abandonment services when a well has reached the end of its productive life. |
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Market Area | ||||||||||||||||||||||||||||
Permian | South | Ark-La- | Mid- | Rocky | ||||||||||||||||||||||||
Rig Type | Rated Capacity | Basin | Texas | Tex | Continent | Mountain | Total | |||||||||||||||||||||
Swab | N/A | 3 | 1 | 6 | 4 | 0 | 14 | |||||||||||||||||||||
Light Duty | <90 tons | 5 | 2 | 0 | 17 | 1 | 25 | |||||||||||||||||||||
Medium Duty | ³90<125 tons | 133 | 38 | 29 | 58 | 54 | 312 | |||||||||||||||||||||
Heavy Duty | ³125 tons | 29 | 4 | 6 | 4 | 8 | 51 | |||||||||||||||||||||
24-Hour | ³125 tons | 2 | 3 | 0 | 2 | 1 | 8 | |||||||||||||||||||||
Inland Barge | ³125 tons | 0 | 0 | 4 | 0 | 0 | 4 | |||||||||||||||||||||
Total | 172 | 48 | 45 | 85 | 64 | 414 | ||||||||||||||||||||||
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• | transportation of fluids used in drilling and workover operations and of salt water produced as a by-product of oil and gas production; | |
• | sale and transportation of fresh and brine water used in drilling and workover activities; | |
• | rental of portable frac tanks and test tanks used to store fluids on well sites; | |
• | operation of company-owned fresh water and brine source wells and of non-hazardous wastewater disposal wells; and | |
• | preparation, construction and maintenance of access roads, drilling locations, and production facilities. |
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Market Area | ||||||||||||||||||||||||
Rocky | Permian | Ark-La- | South | Mid- | ||||||||||||||||||||
Mountain | Basin | Tex | Texas | Continent | Total | |||||||||||||||||||
Fluid Service Trucks | 94 | 262 | 259 | 125 | 79 | 819 | ||||||||||||||||||
Salt Water Disposal Wells | 0 | 19 | 24 | 8 | 10 | 61 | ||||||||||||||||||
Fresh/Brine Water Stations | 0 | 37 | 0 | 2 | 0 | 39 | ||||||||||||||||||
Fluid Storage Tanks | 268 | 499 | 1,119 | 230 | 224 | 2,340 |
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• | pressure pumping services, such as cementing, acidizing, fracturing, coiled tubing, nitrogen and pressure testing; | |
• | rental and fishing tools; | |
• | cased-hole wireline services; and | |
• | underbalanced drilling in low pressure and fluid sensitive reservoirs. |
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Market Area | ||||||||||||||||||||
Ark-La- | Mid- | Rocky | Permian | |||||||||||||||||
Tex | Continent | Mountain | Basin | Total | ||||||||||||||||
Pressure Pumping Units | 21 | 118 | 3 | 0 | 142 | |||||||||||||||
Coiled Tubing Units | 0 | 4 | 0 | 0 | 4 | |||||||||||||||
Air/Foam Packages | 0 | 6 | 34 | 6 | 46 | |||||||||||||||
Wireline Units | 0 | 15 | 0 | 0 | 15 | |||||||||||||||
Rental and Fishing Tool Stores | 0 | 9 | 3 | 8 | 20 |
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• | personal injury or loss of life; | |
• | damage to or destruction of property and equipment (including the collateral securing the notes) and the environment; and | |
• | suspension of operations. |
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Name | Age | Position | ||||
Kenneth V. Huseman | 57 | President, Chief Executive Officer and Director | ||||
Alan Krenek | 54 | Senior Vice President, Chief Financial Officer, Treasurer and Secretary | ||||
T.M. “Roe” Patterson | 35 | Senior Vice President — Rig and Truck Operations | ||||
James F. Newman | 45 | Group Vice President — Completion and Remedial Services | ||||
Stephen J. McCoy | 54 | Vice President — Contract Drilling | ||||
Charles W. Swift | 61 | Vice President — Gulf Coast Region | ||||
Mark D. Rankin | 56 | Vice President — Risk Management | ||||
James E. Tyner | 59 | Vice President — Human Resources | ||||
Steven A. Webster | 57 | Chairman of the Board | ||||
Sylvester P. Johnson, IV | 53 | Director | ||||
William E. Chiles | 60 | Director | ||||
Robert F. Fulton | 58 | Director | ||||
James S. D’Agostino | 63 | Director | ||||
Thomas P. Moore, Jr. | 70 | Director | ||||
Antonio O. Garza, Jr. | 50 | Director |
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Amount and | ||||||||
Nature of | Percent of | |||||||
Beneficial | Shares | |||||||
Name | Ownership | Outstanding | ||||||
DLJ Merchant Banking Partners III, L.P. and affiliated funds(1) | 18,059,424 | 44.4 | % | |||||
FMR LLC(2) | 4,000,000 | 9.8 | % | |||||
Barclays Global Investors, NA.(3) | 2,372,189 | 5.8 | % | |||||
Kenneth V. Huseman(4) | 882,873 | 2.2 | % | |||||
Alan Krenek(5) | 182,290 | * | ||||||
Charles W. Swift(6) | 193,006 | * | ||||||
T.M. “Roe” Patterson(7) | 63,360 | * | ||||||
James E. Tyner(8) | 36,477 | * | ||||||
James F. Newman(9) | 28,475 | * | ||||||
Mark D. Rankin(10) | 55,881 | * | ||||||
Douglas B. Rogers(11) | 24,749 | * | ||||||
Stephen J. McCoy(12) | 5,488 | * | ||||||
Steven A. Webster(13)(14) | 302,750 | * | ||||||
James S. D’Agostino, Jr.(13)(15) | 84,950 | * | ||||||
William E. Chiles(13)(16) | 20,750 | * | ||||||
Robert F. Fulton(13)(17) | 100,750 | * | ||||||
Sylvester P. Johnson, IV(13)(17) | 100,750 | * | ||||||
Thomas P. Moore, Jr.(13)(18) | 105,000 | * | ||||||
Antonio O. Garza, Jr.(19) | 37,500 | * | ||||||
Directors and Executive Officers as a Group (16 persons)(20) | 2,225,049 | 5.4 | % |
* | Less than one percent. | |
(1) | Includes 18,059,424 shares of common stock owned by DLJ Merchant Banking and its affiliates as follows: DLJ Merchant Banking Partners III, L.P. (12,650,117 shares); DLJ ESC II, L.P. (1,493,185 shares); DLJ Offshore Partners III, C.V. (884,531 shares); DLJ Offshore Partners III-1, C.V. (228,284 shares); DLJ Offshore Partners III-2, C.V. (162,622 shares); DLJMB Partners III GmbH & Co. KG (107,898 shares); DLJMB Funding III, Inc. (132,220 shares); Millennium Partners II, L.P. (21,516 shares); MBP III Plan Investors, L.P. (2,379,051 shares). | |
Credit Suisse, a Swiss bank, owns the majority of the voting stock of Credit Suisse Holdings (USA), Inc., a Delaware corporation which in turn owns all of the voting stock of Credit Suisse (USA) Inc., a Delaware corporation (“CS-USA”). The entities discussed in the above paragraph are merchant banking funds managed by indirect subsidiaries of CS-USA and form part of Credit Suisse’s Alternative Capital Division. The ultimate parent company of Credit Suisse is Credit Suisse Group (“CSG”). CSG disclaims beneficial ownership of the reported common stock that is beneficially owned by its direct and indirect subsidiaries. Steven A. Webster served as the Chairman of Global Energy Partners, a specialty group within Credit Suisse’s Alternative Capital Division, from 1999 until June 30, 2005. | ||
All of the DLJ Merchant Banking entities can be contacted at Eleven Madison Avenue, New York, New York10010-3629 except for the three “Offshore Partners” entities, which can be contacted at John B. Gosiraweg, 14, Willemstad, Curacao, Netherlands Antilles. |
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(2) | Fidelity Management & Research Company (“Fidelity”), a wholly-owned subsidiary of FMR LLC, is the beneficial owner of all 4,000,000 shares as a result of acting as investment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940. The ownership of one investment company, Fidelity Low Priced Stock Fund, amounted to 4,000,000 shares of common stock. Edward C. Johnson 3d and FMR LLC, through its control of Fidelity, and the funds each has sole power to dispose of the 4,000,000 shares owned by Fidelity. | |
Members of the family of Edward C. Johnson 3d, Chairman of FMR LLC, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B shareholders have entered into a shareholders’ voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the shareholders’ voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR LLC. Neither FMR LLC nor Edward C. Johnson 3d, Chairman of FMR LLC, has the sole power to vote or direct the voting of the shares owned directly by the Fidelity Funds, which power resides with the Funds’ Boards of Trustees. Fidelity carries out the voting of the shares under written guidelines established by the Funds’ Boards of Trustees. FMR LLC’s address is 82 Devonshire Street, Boston, Massachusetts 02109 | ||
(3) | Includes 969,239 shares beneficially owned by Barclays Global Investors, NA.; 1,387,267 shares beneficially owned by Barclays Global Fund Advisors; and 15,683 shares beneficially owned by Barclays Global Investors, Ltd. | |
(4) | Includes 390,948 shares of restricted stock, a portion of which are subject to forfeiture and generally vest over the next four years. Includes 268,200 shares issuable within 60 days upon the exercise of options granted under our 2003 Incentive Plan. Does not include 100,000 shares underlying options that are not exercisable within 60 days granted under our 2003 Incentive Plan. Includes 476,415 shares owned subject to bank pledges. | |
(5) | Includes 70,840 shares of restricted stock, a portion of which are subject to forfeiture and generally vest over the next four years. Includes 111,250 shares issuable within 60 days upon the exercise of options granted under our 2003 Incentive Plan. Does not include 30,000 shares underlying options that are not exercisable within 60 days granted under our 2003 Incentive Plan. | |
(6) | Includes 81,376 shares of restricted stock, a portion of which are subject to forfeiture and generally vest over the next four years. Includes 96,750 shares issuable within 60 days upon the exercise of options granted under our 2003 Incentive Plan. Does not include 25,250 shares underlying options that are not exercisable within 60 days granted under our 2003 Incentive Plan. | |
(7) | Includes 48,060 shares of restricted stock, a portion of which are subject to forfeiture and generally vest over the next four years. Includes 8,750 shares issuable within 60 days upon the exercise of options granted under our 2003 Incentive Plan. Does not include 11,250 shares underlying options that are not exercisable within 60 days granted under our 2003 Incentive Plan. | |
(8) | Includes 23,477 shares of restricted stock, a portion of which are subject to forfeiture and generally vest over the next four years. Includes 12,500 shares issuable within 60 days upon the exercise of options granted under our 2003 Incentive Plan. Does not include 10,000 shares underlying options that are not exercisable within 60 days granted under our 2003 Incentive Plan. | |
(9) | Includes 10,975 shares of restricted stock, a portion of which are subject to forfeiture and generally vest over the next four years. | |
(10) | Includes 15,381 shares of restricted stock, a portion of which are subject to forfeiture and generally vest over the next four years. Includes 40,000 shares issuable within 60 days upon the exercise of options granted under our 2003 Incentive Plan. Does not include 10,000 shares underlying options that are not exercisable within 60 days granted under our 2003 Incentive Plan. | |
(11) | Includes 20,592 shares of restricted stock, a portion of which are subject to forfeiture and generally vest over the next four years. |
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(12) | Includes 5,488 shares of restricted stock, a portion of which are subject to forfeiture and generally vest over the next four years. | |
(13) | Includes 12,000 shares of restricted stock, a portion of which are subject to forfeiture and generally vest over the next four years. | |
(14) | Includes 88,750 shares issuable within 60 days upon the exercise of options granted under our 2003 Incentive Plan. Does not include 8,750 shares underlying options that are not exercisable within 60 days granted under our 2003 Incentive Plan. | |
(15) | Includes 68,750 shares issuable within 60 days upon the exercise of options granted under our 2003 Incentive Plan. Does not include 8,750 shares underlying options that are not exercisable within 60 days granted under our 2003 Incentive Plan. | |
(16) | Includes 8,750 shares issuable within 60 days upon the exercise of options granted under our 2003 Incentive Plan. Does not include 8,750 shares underlying options that are not exercisable within 60 days granted under our 2003 Incentive Plan. | |
(17) | Includes 88,750 shares issuable within 60 days upon the exercise of options granted under our 2003 Incentive Plan. Does not include 8,750 shares underlying options that are not exercisable within 60 days granted under our 2003 Incentive Plan. | |
(18) | Includes 40,000 shares issuable within 60 days upon the exercise of options granted under our 2003 Incentive Plan. Does not include 2,500 shares underlying options that are not exercisable within 60 days granted under our 2003 Incentive Plan. | |
(19) | Includes 37,500 shares of restricted stock, all of which are subject to forfeiture and generally vest over the next three years. | |
(20) | Includes an aggregate of 776,637 restricted shares, of which 453,071 remain subject to vesting, and an aggregate of 921,200 shares issuable within 60 days upon the exercise of options granted under our 2003 Incentive Plan. Does not include 232,750 shares underlying options that are not exercisable within 60 days granted under our 2003 Incentive Plan. |
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• | attract, reward and retain individuals of the highest quality in these key positions; | |
• | recognize individual performance and the performance of the Company relative to the performance of other companies of comparable size, complexity and quality; | |
• | provide motivation toward, and reward the accomplishment of, corporate annual objectives; | |
• | align the executive officers’ compensation to shareholder interests; and | |
• | align the executives’ incentives with both the short-term and long-term goals of the Company. |
• | provide a significant percentage of long-term equity compensation that is at-risk based on predetermined performance criteria; | |
• | maintain an opportunity for increased equity ownership by the Company’s executives; and | |
• | set compensation levels that are competitive within the market in which positions are located. |
• | base salary; | |
• | quarterly incentive bonus plan cash awards to certain executive officers (excluding our CEO and CFO); | |
• | annual cash incentive bonuses; | |
• | long-term incentive awards (which during 2008 consisted solely of restricted stock awards); and | |
• | beginning in 2008, a performance-based incentive program (the “Three-Year PB Incentive Program”) which reflects a three-year performance period and is based on performance factors contained in the 2003 Incentive Plan; if the performance measures are met, the participants will “earn” their restricted stock awards, which shares of restricted stock will then be issued and remain subject to time-based vesting in one-third increments in each of the subsequent three years. |
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For the CEO: | Base pay = 25% to 30% Bonus compensation at target = 20% to 30% Long-term compensation annualized = 40% to 50% | |
For the other named executives: | Base pay = 35% to 45% Bonus compensation at target = 20% to 25% (excluding special 2008 bonuses) Long-term compensation annualized = 30% to 45% |
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• | earnings per share (25%); | |
• | peer-group prior3-year average return on capital employed (25%); | |
• | safety record (based on total reportable incident rates) (10%); | |
• | preventable motor vehicle accident rate (10%); | |
• | revenue growth (10%); and | |
• | personal performance, based on board discretion (20%). |
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• | EBITDA return on capital employed (EBITDA/net debt and equity); | |
• | accident record, including both the overall frequency rates and levels of preventable accidents; | |
• | revenue growth; | |
• | return on equity; and | |
• | individual performance, including extraordinary efforts and results. |
• | a performance-based plan looking at a three-year performance period, which we refer to as our Three-Year PB Incentive Program, that is based on performance factors contained in the 2003 Incentive Plan; and | |
• | discretionary, time-based restricted stock awards. |
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• | earnings per share (“EPS”) growth (50% of performance-based awards), subject to forfeiture or a negative adjustment of 100% if the Company either (i) has EPS growth less than the worst performing PB Peer Group member or (ii) incurs a net loss based on the Company’s average EPS for the three-year period; and | |
• | return on capital employed (“ROCE”) (50% of performance-based awards), subject to forfeiture or a negative adjustment of 100% if (i) the Company’s ROCE for the three-year period is equal to or less than the worst performing PB Peer Group member and (ii) the Company’s ROCE is less than 75% of the next lowest PB Peer Group member. |
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that may be Retained Based on Relative EPS growth/ROCE Ranking
Peer EPS Change
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Annual director fee: | $35,000 | |
Committee Chairmen annual fees: | ||
Audit Committee | $15,000 | |
Compensation Committee | $10,000 | |
Nominating and Corporate Governance Committee | $10,000 | |
Attendance fees (per meeting): | ||
Board | $2,000 (whether in person or telephonic) | |
Committee | $2,000 (whether in person or telephonic) | |
Equity-based compensation: | ||
Upon election | 37,500 shares of the Company’s common stock at the market price on the date of grant that vest ratably over three years. This prior policy remains subject to change whenever applicable for future directors based on the stock price at such time. | |
Annual awards | In March 2008, each non-employee director was granted 4,000 shares of restricted stock that vest ratably in four increments of 1,000 shares on March 15, 2010, 2011, 2012 and 2013. In March 2009, each non-employee director was granted 4,000 shares of restricted stock that vest ratably in four increments of 1,000 shares on March 15, 2011, 2012, 2013 and 2014. Our Chairman was also granted an additional 4,000 shares of restricted stock in each of March 2008 and 2009 that was vested upon issuance as consideration for services in his capacity as Chairman and in lieu of the 2008 and 2009 annual director fees, respectively. |
James S. D’Agostino, Jr.
H. H. Wommack, III
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Change in | ||||||||||||||||||||||||||||||||||||
Pension | ||||||||||||||||||||||||||||||||||||
Value and | ||||||||||||||||||||||||||||||||||||
Non-Equity | Nonqualified | |||||||||||||||||||||||||||||||||||
Incentive | Deferred | |||||||||||||||||||||||||||||||||||
Stock | Option | Plan | Compensation | All Other | ||||||||||||||||||||||||||||||||
Salary | Bonus | Awards | Awards | Compensation | Earnings | Compensation | Total | |||||||||||||||||||||||||||||
Name and Principal Position | Year | ($)(1) | ($)(2) | ($)(3) | ($)(3) | ($)(4) | ($) | ($)(5) | ($) | |||||||||||||||||||||||||||
Kenneth V. Huseman, | 2008 | $ | 550,000 | — | $ | 380,585 | $ | 449,536 | $ | 330,000 | $ | — | $ | 9,200 | $ | 1,719,321 | ||||||||||||||||||||
President and Chief | 2007 | $ | 515,384 | — | $ | 799,460 | $ | 322,565 | $ | 400,000 | $ | — | $ | 8,800 | $ | 2,046,209 | ||||||||||||||||||||
Executive Officer | 2006 | $ | 382,692 | — | $ | 785,250 | $ | 256,281 | $ | 400,000 | $ | — | $ | 16,142 | $ | 1,840,365 | ||||||||||||||||||||
Alan Krenek, | 2008 | $ | 300,000 | $ | 50,000 | $ | 161,516 | $ | 142,579 | $ | 170,000 | $ | — | $ | 9,200 | $ | 833,295 | |||||||||||||||||||
Senior Vice President, | 2007 | $ | 258,462 | — | $ | 28,704 | $ | 244,738 | $ | 240,000 | $ | — | $ | 8,800 | $ | 780,704 | ||||||||||||||||||||
Chief Financial Officer, Treasurer and Secretary | 2006 | $ | 227,308 | — | $ | — | $ | 235,719 | $ | 240,000 | $ | — | $ | 10,619 | $ | 713,646 | ||||||||||||||||||||
Charles W. Swift, | 2008 | $ | 250,000 | — | $ | 140,765 | $ | 116,962 | $ | 75,000 | $ | — | $ | 20,796 | $ | 603,523 | ||||||||||||||||||||
Senior Vice President, | 2007 | $ | 200,000 | — | $ | 104,474 | $ | 87,058 | $ | 160,000 | $ | — | $ | 10,597 | $ | 562,129 | ||||||||||||||||||||
Operations Support | 2006 | $ | 176,154 | — | $ | 87,250 | $ | 76,067 | $ | 200,000 | $ | — | $ | 12,081 | $ | 551,552 | ||||||||||||||||||||
T.M. “Roe” Patterson, | 2008 | $ | 243,846 | — | $ | 109,553 | $ | 57,663 | $ | 150,000 | $ | — | $ | 20,233 | $ | 581,295 | ||||||||||||||||||||
Senior Vice President, | 2007 | $ | 167,692 | — | $ | 17,224 | $ | 32,051 | $ | 140,000 | $ | — | $ | 18,764 | $ | 375,731 | ||||||||||||||||||||
Rig and Truck Operations | 2006 | $ | 118,462 | — | $ | — | $ | 34,079 | $ | 140,000 | $ | — | $ | 4,542 | $ | 297,083 | ||||||||||||||||||||
James E. Tyner | 2008 | $ | 190,000 | $ | 30,000 | $ | 55,228 | $ | 57,297 | $ | 80,000 | $ | — | $ | 9,546 | $ | 422,071 | |||||||||||||||||||
Vice President, | 2007 | $ | 158,462 | — | $ | 11,480 | $ | 35,937 | $ | 80,000 | $ | — | $ | 7,219 | $ | 293,098 | ||||||||||||||||||||
Human Resources | 2006 | $ | 135,891 | — | $ | — | $ | 60,313 | $ | 140,000 | $ | — | $ | 6,484 | $ | 342,688 |
(1) | Under the terms of their employment agreements, Messrs. Huseman, Krenek, Swift, Patterson and Tyner are entitled to the compensation described under “Employment Agreements” below. | |
(2) | Reflects special bonuses paid during 2008 relating to the terminated merger with Grey Wolf, Inc. | |
(3) | Reflects the dollar amounts recognized for financial reporting purposes with respect to the fiscal year in accordance with FAS 123R. For Stock Awards, includes performance-based awards granted in March 2008 that were earned and issued in March 2009 at 100% of target shares. During 2008 it was estimated that 85% of the target shares would be granted in March 2009. There were no forfeitures in 2008. For Option Awards, assumptions made in the valuation are included in Note 10 to the Company’s audited financial statements for the year ended December 31, 2008. | |
(4) | Reflects aggregate bonus payments made utilizing metrics under our annual incentive compensation plan and division-level Quarterly Incentive Bonus Plan. Messrs. Huseman and Krenek did not participate in any of the Quarterly Incentive Bonus Plans during 2006, 2007 or 2008 and received only an annual cash bonus in early 2007, 2008 and 2009, respectively. Mr. Swift participated in the division-level Quarterly Incentive Bonus Plan for the first three quarters of 2006 and received an annual cash bonus in early 2007 and participated in the Quarterly Incentive Bonus Plan in the third and fourth quarters of 2007 and all of 2008 and received an annual cash bonus in early 2008 and 2009. Messrs. Patterson and Tyner each participated in the Quarterly Incentive Bonus Plans in 2006, 2007 and 2008 and received an annual cash bonus in early 2007, 2008 and 2009, respectively. | |
(5) | Includes employer contributions to Executive Deferred Compensation Plan for 2006 as follows: for Huseman, $16,142; for Krenek, $10,619; for Swift, $2,481; and for Tyner, $6,484. Includes employer contributions to Executive Deferred Compensation Plan for 2007 as follows: for Huseman, $8,800; for Krenek, $8,800; for Swift, $457; for Patterson, $8,624; and for Tyner, $7,219. Includes employer contributions to Executive Deferred Compensation Plan for 2008 as follows: for Huseman, $9,200; for Krenek, $9,200; for Swift, $9,936; for Patterson, $9,373; and for Tyner, $9,546. Includes vehicle allowance of $9,600 for 2006, $10,140 for 2007 and $10,860 for 2008 for Mr. Swift and of $4,542 for 2006, $10,140 for 2007 and $10,860 for 2008 for Mr. Patterson. |
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All Other | All Other | |||||||||||||||||||||||||||||||||||||||||||
Stock | Option | |||||||||||||||||||||||||||||||||||||||||||
Awards: | Awards: | |||||||||||||||||||||||||||||||||||||||||||
Estimated Future Payouts | Estimated Future Payouts | Number of | Number of | Exercise or | Grant Date | |||||||||||||||||||||||||||||||||||||||
Under Non-Equity Incentive | Under Equity Incentive | Shares of | Securities | Base Price | Fair Value | |||||||||||||||||||||||||||||||||||||||
Plan Awards | Plan Awards | Stock or | Underlying | of Option | of Stock | |||||||||||||||||||||||||||||||||||||||
Grant | Threshold | Target | Maximum | Threshold | Target | Maximum | Units | Options | Awards | and Option | ||||||||||||||||||||||||||||||||||
Name | Date | ($) | ($) | ($) | (#) | (#) | (#) | (#) | (#) | ($/Sh) | Awards | |||||||||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | |||||||||||||||||||||||||||||||||
Kenneth V. Huseman | 03/18/08 | (1) | $ | — | $ | — | $ | — | — | 45,000 | — | — | — | — | $ | 927,900 | ||||||||||||||||||||||||||||
03/11/08 | (2) | $ | — | $ | — | $ | — | — | 22,500 | 33,750 | — | — | — | $ | 404,876 | |||||||||||||||||||||||||||||
03/11/08 | (3) | $ | 0 | $ | 330,000 | $ | 495,000 | — | — | — | — | — | — | $ | — | |||||||||||||||||||||||||||||
Alan Krenek | 03/18/08 | (1) | $ | — | $ | — | $ | — | — | 22,500 | — | — | — | — | $ | 463,950 | ||||||||||||||||||||||||||||
03/11/08 | (2) | $ | — | $ | — | $ | — | — | 12,000 | 18,000 | — | — | — | $ | 215,934 | |||||||||||||||||||||||||||||
03/11/08 | (3) | $ | 0 | $ | 150,000 | $ | 225,000 | — | — | — | — | — | — | $ | — | |||||||||||||||||||||||||||||
Charles W. Swift | 03/18/08 | (1) | $ | — | $ | — | $ | — | — | 17,500 | — | — | — | — | $ | 360,850 | ||||||||||||||||||||||||||||
03/11/08 | (2) | $ | — | $ | — | $ | — | — | 10,000 | 15,000 | — | — | — | $ | 179,945 | |||||||||||||||||||||||||||||
03/11/08 | (3) | $ | 0 | $ | 125,000 | $ | 187,500 | — | — | — | — | — | — | $ | — | |||||||||||||||||||||||||||||
T.M. “Roe” Patterson | 03/18/08 | (1) | $ | — | $ | — | $ | — | — | 16,500 | — | — | — | — | $ | 340,230 | ||||||||||||||||||||||||||||
03/11/08 | (2) | $ | — | $ | — | $ | — | — | 8,000 | 12,000 | — | — | — | $ | 143,956 | |||||||||||||||||||||||||||||
03/11/08 | (3) | $ | 0 | $ | 137,500 | $ | 206,250 | — | — | — | — | — | — | $ | — | |||||||||||||||||||||||||||||
James E. Tyner | 03/18/08 | (1) | $ | — | $ | — | $ | — | — | 7,000 | — | — | — | — | $ | 144,340 | ||||||||||||||||||||||||||||
03/11/08 | (2) | $ | — | $ | — | $ | — | — | 4,000 | 6,000 | — | — | — | $ | 71,978 | |||||||||||||||||||||||||||||
03/11/08 | (3) | $ | 0 | $ | 76,000 | $ | 142,500 | — | — | — | — | — | — | $ | — |
(1) | Shares of restricted stock were granted by our Compensation Committee to certain of our employees, including our named executive officers, on March 18, 2008. The shares of restricted stock vest in one-fourth increments on each of March 15, 2010, 2011, 2012 and 2013. The shares of restricted stock were granted pursuant to our 2003 Incentive Plan. | |
(2) | Performance-based stock awards approved by our Compensation Committee to certain members of management including our named executive officers on March 11, 2008. The performance-based awards consist of the Company achieving certain earnings per share growth targets and certain return on capital employed performance, over the performance period from January 1, 2006 through December 31, 2008 as compared to other member of a defined peer group. The number of shares to be issued could have ranged from 0% to 150% of the target number of shares depending on the performance noted above. The number of target shares set forth for each named executive officer was earned and issued in March 2009. These shares will vest in one-third increments on each of March 15, 2010, 2011, and 2012. | |
(3) | Cash incentive bonuses are determined by our Compensation Committee utilizing a set of metrics along with board discretion. These bonuses for 2008 performance were paid in March 2009. Performance targets were communicated to the named executive officers and other members of management that participate in the bonus on March 11, 2008. Potential annual cash awards for our CEO ranged from zero to 90% of base pay with a target level of 60%. Potential annual cash awards for our Tier II named executive officers (Messrs. Krenek, Swift and Patterson) ranged from zero to 75% of base salary, with a target level of 50%. Potential annual cash awards for our Tier III named executive officer (Mr. Tyner) ranged from zero to 60% of base salary, with a target level of 40%. |
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Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||
Equity | |||||||||||||||||||||||||||||||||||||
Incentive | |||||||||||||||||||||||||||||||||||||
Plan | |||||||||||||||||||||||||||||||||||||
Equity | Awards: | ||||||||||||||||||||||||||||||||||||
Equity | Incentive | Market | |||||||||||||||||||||||||||||||||||
Incentive | Plan | or Payout | |||||||||||||||||||||||||||||||||||
Plan | Awards: | Value of | |||||||||||||||||||||||||||||||||||
Awards: | Market | Number of | Unearned | ||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Number of | Value of | Unearned | Shares, | |||||||||||||||||||||||||||||||
Securities | Securities | Securities | Shares | Shares or | Shares, | Units or | |||||||||||||||||||||||||||||||
Underlying | Underlying | Underlying | or Units of | Units of | Units or | Other | |||||||||||||||||||||||||||||||
Unexercised | Unexercised | Unexercised | Option | Stock That | Stock That | Other Rights | Rights | ||||||||||||||||||||||||||||||
Options | Options | Unearned | Exercise | Option | Have Not | Have Not | that Have | That Have | |||||||||||||||||||||||||||||
(#) | (#) | Options | Price | Expiration | Vested | Vested | Not Vested | Not Vested | |||||||||||||||||||||||||||||
Name | Exercisable | Unexercisable | (#) | ($) | Date | (#) | ($) | (#) | ($) | ||||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | ||||||||||||||||||||||||||||
Kenneth V. Huseman | |||||||||||||||||||||||||||||||||||||
5/5/2003 | 148,200 | — | — | $ | 4.00 | 5/4/2013 | — | — | — | — | |||||||||||||||||||||||||||
3/2/2005(1) | 50,000 | 50,000 | — | $ | 6.98 | 3/1/2015 | — | — | — | — | |||||||||||||||||||||||||||
3/15/2006(2) | 15,000 | 45,000 | — | $ | 26.84 | 3/14/2016 | — | — | — | — | |||||||||||||||||||||||||||
3/15/2007(3) | — | — | — | $ | — | — | 5,000 | $ | 65,200 | — | — | ||||||||||||||||||||||||||
3/15/2007(4) | — | 60,000 | — | $ | 22.66 | 3/15/2017 | — | — | — | — | |||||||||||||||||||||||||||
3/11/2008(5) | — | — | — | $ | — | — | 22,500 | $ | 293,400 | — | — | ||||||||||||||||||||||||||
3/18/2008(6) | — | — | — | $ | — | — | 45,000 | $ | 586,800 | — | — | ||||||||||||||||||||||||||
Alan Krenek | |||||||||||||||||||||||||||||||||||||
1/26/2005 | 76,250 | — | — | $ | 5.16 | 1/25/2015 | — | — | — | — | |||||||||||||||||||||||||||
3/2/2005(1) | 12,500 | 12,500 | — | $ | 6.98 | 3/1/2015 | — | — | — | — | |||||||||||||||||||||||||||
3/15/2006(2) | 6,250 | 18,750 | — | $ | 26.84 | 3/14/2016 | — | — | — | — | |||||||||||||||||||||||||||
3/15/2007(3) | — | — | — | $ | — | — | 10,000 | $ | 130,400 | — | — | ||||||||||||||||||||||||||
3/15/2007(4) | — | 15,000 | — | $ | 22.66 | 3/15/2017 | — | — | — | — | |||||||||||||||||||||||||||
3/11/2008(5) | — | — | — | $ | — | — | 12,000 | $ | 156,480 | — | — | ||||||||||||||||||||||||||
3/18/2008(6) | — | — | — | $ | — | — | 22,500 | $ | 293,400 | — | — |
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Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||
Equity | |||||||||||||||||||||||||||||||||||||
Incentive | |||||||||||||||||||||||||||||||||||||
Plan | |||||||||||||||||||||||||||||||||||||
Equity | Awards: | ||||||||||||||||||||||||||||||||||||
Equity | Incentive | Market | |||||||||||||||||||||||||||||||||||
Incentive | Plan | or Payout | |||||||||||||||||||||||||||||||||||
Plan | Awards: | Value of | |||||||||||||||||||||||||||||||||||
Awards: | Market | Number of | Unearned | ||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Number of | Value of | Unearned | Shares, | |||||||||||||||||||||||||||||||
Securities | Securities | Securities | Shares | Shares or | Shares, | Units or | |||||||||||||||||||||||||||||||
Underlying | Underlying | Underlying | or Units of | Units of | Units or | Other | |||||||||||||||||||||||||||||||
Unexercised | Unexercised | Unexercised | Option | Stock That | Stock That | Other Rights | Rights | ||||||||||||||||||||||||||||||
Options | Options | Unearned | Exercise | Option | Have Not | Have Not | that Have | That Have | |||||||||||||||||||||||||||||
(#) | (#) | Options | Price | Expiration | Vested | Vested | Not Vested | Not Vested | |||||||||||||||||||||||||||||
Name | Exercisable | Unexercisable | (#) | ($) | Date | (#) | ($) | (#) | ($) | ||||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | ||||||||||||||||||||||||||||
Charles W. Swift | |||||||||||||||||||||||||||||||||||||
8/13/2001 | 10,000 | — | — | $ | 4.00 | 8/12/2011 | — | — | — | — | |||||||||||||||||||||||||||
5/5/2003 | 50,000 | — | — | $ | 4.00 | 5/4/2013 | — | — | — | — | |||||||||||||||||||||||||||
3/2/2005(1) | 17,500 | 17,500 | — | $ | 6.98 | 3/1/2015 | — | — | — | — | |||||||||||||||||||||||||||
3/15/2006(2) | 3,750 | 11,250 | — | $ | 26.84 | 3/14/2016 | — | — | — | — | |||||||||||||||||||||||||||
3/15/2007(3) | — | — | — | $ | — | — | 6,000 | $ | 78,240 | — | — | ||||||||||||||||||||||||||
3/15/2007(4) | — | 12,000 | — | $ | 22.66 | 3/15/2017 | — | — | — | — | |||||||||||||||||||||||||||
3/11/2008(5) | — | — | — | $ | — | 10,000 | $ | 130,400 | — | — | |||||||||||||||||||||||||||
3/18/2008(6) | — | — | — | $ | — | — | 17,500 | $ | 228,200 | — | — | ||||||||||||||||||||||||||
T.M. “Roe” Patterson | |||||||||||||||||||||||||||||||||||||
3/15/2006(2) | 3,750 | 11,250 | — | $ | 26.84 | 3/14/2016 | — | — | — | — | |||||||||||||||||||||||||||
3/15/2007(3) | — | — | — | $ | — | — | 6,000 | $ | 78,240 | — | — | ||||||||||||||||||||||||||
3/15/2007(4) | — | 5,000 | — | $ | 22.66 | 3/15/2017 | — | — | — | — | |||||||||||||||||||||||||||
3/11/2008(5) | — | — | — | — | — | 8,000 | $ | 104,320 | — | — | |||||||||||||||||||||||||||
3/18/2008(6) | — | — | — | $ | — | — | 16,500 | $ | 215,160 | — | — | ||||||||||||||||||||||||||
James E. Tyner | |||||||||||||||||||||||||||||||||||||
3/2/2005(1) | 5,000 | 5,000 | — | $ | 6.98 | 3/1/2015 | — | — | — | — | |||||||||||||||||||||||||||
3/15/2006(2) | 3,750 | 11,250 | — | $ | 26.84 | 3/14/2016 | — | — | — | — | |||||||||||||||||||||||||||
3/15/2007(3) | — | — | — | $ | — | — | 4,000 | $ | 52,160 | — | — | ||||||||||||||||||||||||||
3/11/2008(5) | — | — | — | $ | — | — | 4,000 | $ | 52,160 | — | — | ||||||||||||||||||||||||||
3/18/2008(6) | — | — | — | $ | — | — | 7,000 | $ | 91,280 | — | — |
(1) | One half of the unvested options vested on January 1, 2009. The remainder will vest on January 1, 2010. | |
(2) | One third of the unvested options vested on January 1, 2009. The remainder will vest in equal increments on January 1, 2010 and 2011. | |
(3) | One fourth of the unvested shares of restricted stock vested on March 15, 2009. The remainder will vest in equal increments on March 15, 2010, 2011 and 2012. | |
(4) | One fourth of the unvested options vested on January 1, 2009. The remainder will vest in equal increments on January 1, 2010, 2011 and 2012. | |
(5) | Unvested shares of restricted stock will vest in three equal increments on March 15, 2010, 2011 and 2012. | |
(6) | Unvested shares of restricted stock will vest in four equal increments on March 15, 2010, 2011, 2012 and 2013. |
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Option Awards | Stock Awards | |||||||||||||||
Number of | Number of | |||||||||||||||
Shares | Value | Shares | Value | |||||||||||||
Acquired | Realized on | Acquired | Realized on | |||||||||||||
on Exercise | Exercise | on Vesting | Vesting | |||||||||||||
Name | (#) | ($) | (#) | ($) | ||||||||||||
(a) | (b) | (c) | (d) | (e) | ||||||||||||
Kenneth V. Huseman | 316,205 | $ | 6,345,422 | 112,500 | $ | 2,352,375 | ||||||||||
Alan Krenek | 11,750 | $ | 187,330 | — | $ | — | ||||||||||
Charles W. Swift | 23,225 | $ | 534,392 | 12,500 | $ | 261,375 | ||||||||||
T.M. “Roe” Patterson | — | $ | — | — | $ | — | ||||||||||
James E. Tyner | 500 | $ | 9,010 | — | $ | — |
Executive | Registrant | Aggregate | Aggregate | Aggregate | ||||||||||||||||
Contributions | Contributions | Earnings in | Withdrawals/ | Balance at | ||||||||||||||||
in Last FY | in Last FY | Last FY | Distributions | Last FY | ||||||||||||||||
Name | ($) | ($) | ($) | ($) | ($) | |||||||||||||||
(a) | (b)(1) | (c)(2) | (d) | (e) | (f)(3) | |||||||||||||||
Kenneth V. Huseman | $ | 85,308 | $ | 9,200 | $ | (147,114 | ) | $ | — | $ | 170,398 | |||||||||
Alan Krenek | $ | 46,192 | $ | 9,200 | $ | (60,580 | ) | $ | — | $ | 96,128 | |||||||||
Charles W. Swift | $ | 39,205 | $ | 9,936 | $ | (44,085 | ) | $ | — | $ | 84,226 | |||||||||
T.M. “Roe” Patterson | $ | 20,798 | $ | 9,373 | $ | (14,277 | ) | $ | — | $ | 36,055 | |||||||||
James E. Tyner | $ | 99,591 | $ | 9,546 | $ | (105,606 | ) | $ | — | $ | 170,843 |
(1) | Executive contributions during 2008 are included in the executive’s salary and bonus amounts, as applicable, as reported in the Summary Compensation Table. | |
(2) | Registrant contributions during 2008 are included in all other compensation in the Summary Compensation Table. | |
(3) | All amounts were previously reported as compensation in the Summary Compensation Tables for previous years. |
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CIC with | ||||||||||||||||||||||||||||||||||||
Termination | ||||||||||||||||||||||||||||||||||||
Termination | Termination | Change in | for Good | |||||||||||||||||||||||||||||||||
by Company | by Executive | Control | Reason or | |||||||||||||||||||||||||||||||||
Voluntary | Termination | Except for | for Good | without | without | |||||||||||||||||||||||||||||||
Termination | Retirement(1) | for Cause(2) | Cause | Reason(3) | Termination(4) | Cause | Death | Disability | ||||||||||||||||||||||||||||
Compensation: | ||||||||||||||||||||||||||||||||||||
Severance(5) | $ | — | N/A | $ | — | $ | 2,640,000 | $ | 2,640,000 | $ | — | $ | 2,850,000 | $ | — | $ | — | |||||||||||||||||||
Bonus(6) | $ | — | $ | 330,000 | $ | — | $ | 330,000 | $ | 330,000 | $ | — | $ | 330,000 | $ | 330,000 | $ | 330,000 | ||||||||||||||||||
Long-term Incentive(7) | ||||||||||||||||||||||||||||||||||||
Acceleration of Unvested Stock Options | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 303,000 | $ | — | $ | — | ||||||||||||||||||
Acceleration of Unvested Restricted Stock | $ | — | $ | — | $ | — | $ | 880,200 | $ | — | $ | 1,092,100 | $ | 1,092,100 | $ | 945,400 | $ | 945,400 | ||||||||||||||||||
Benefits & Perquisites(8): | ||||||||||||||||||||||||||||||||||||
Employer Contributions to Executive Deferred Compensation Plan | $ | — | N/A | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||
COBRA Continuation | N/A | N/A | N/A | $ | 21,062 | $ | 21,062 | N/A | $ | 21,062 | $ | — | $ | — | ||||||||||||||||||||||
280G TaxGross-up | N/A | N/A | N/A | N/A | N/A | N/A | $ | — | N/A | N/A | ||||||||||||||||||||||||||
Total | $ | — | $ | 330,000 | $ | — | $ | 3,871,262 | $ | 2,991,062 | $ | 1,092,100 | $ | 4,596,162 | $ | 1,275,400 | $ | 1,275,400 | ||||||||||||||||||
CIC with | ||||||||||||||||||||||||||||||||||||
Termination | ||||||||||||||||||||||||||||||||||||
Termination | Termination | Change in | for Good | |||||||||||||||||||||||||||||||||
Termination | by Company | by Executive | Control | Reason or | ||||||||||||||||||||||||||||||||
Voluntary | for | Except for | for Good | without | without | |||||||||||||||||||||||||||||||
Termination | Retirement(1) | Cause(2) | Cause | Reason(3) | Termination(4) | Cause | Death | Disability | ||||||||||||||||||||||||||||
Compensation: | ||||||||||||||||||||||||||||||||||||
Severance(5) | $ | — | N/A | $ | — | $ | 675,000 | $ | 675,000 | $ | — | $ | 1,080,000 | $ | — | $ | — | |||||||||||||||||||
Bonus(6) | $ | — | $ | 150,000 | $ | — | $ | 150,000 | $ | 150,000 | $ | — | $ | 150,000 | $ | 150,000 | $ | 150,000 | ||||||||||||||||||
Long-term Incentive(7) | ||||||||||||||||||||||||||||||||||||
Acceleration of Unvested Stock Options | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 75,750 | $ | — | $ | — | ||||||||||||||||||
Acceleration of Unvested Restricted Stock | $ | — | $ | — | $ | — | $ | 449,880 | $ | — | $ | 658,520 | $ | 658,520 | $ | 580,280 | $ | 580,280 | ||||||||||||||||||
Benefits & Perquisites(8): | ||||||||||||||||||||||||||||||||||||
Employer Contributions to Executive Deferred Compensation Plan | $ | — | $ | 10,071 | $ | — | $ | — | $ | — | $ | — | $ | 10,071 | $ | 10,071 | $ | 10,071 | ||||||||||||||||||
COBRA Continuation | N/A | N/A | N/A | $ | 21,062 | $ | 21,062 | N/A | $ | 21,062 | $ | — | $ | — | ||||||||||||||||||||||
280G TaxGross-up | N/A | N/A | N/A | N/A | N/A | N/A | $ | — | N/A | N/A | ||||||||||||||||||||||||||
Total | $ | — | $ | 160,071 | $ | — | $ | 1,295,942 | $ | 846,062 | $ | 658,520 | $ | 1,995,403 | $ | 740,351 | $ | 740,351 | ||||||||||||||||||
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CIC with | ||||||||||||||||||||||||||||||||||||
Termination | ||||||||||||||||||||||||||||||||||||
Termination | Termination | Change in | for Good | |||||||||||||||||||||||||||||||||
Termination | by Company | by Executive | Control | Reason or | ||||||||||||||||||||||||||||||||
Voluntary | for | Except for | for Good | without | without | |||||||||||||||||||||||||||||||
Termination | Retirement(1) | Cause(2) | Cause | Reason(3) | Termination(4) | Cause | Death | Disability | ||||||||||||||||||||||||||||
Compensation: | ||||||||||||||||||||||||||||||||||||
Severance(5) | $ | — | N/A | $ | — | $ | 562,500 | $ | 562,500 | $ | — | $ | 900,000 | $ | — | $ | — | |||||||||||||||||||
Bonus(6) | $ | — | $ | 125,000 | $ | — | $ | 125,000 | $ | 125,000 | $ | — | $ | 125,000 | $ | 125,000 | $ | 125,000 | ||||||||||||||||||
Long-term Incentive(7) | ||||||||||||||||||||||||||||||||||||
Acceleration of Unvested Stock Options | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 106,050 | $ | — | $ | — | ||||||||||||||||||
Acceleration of Unvested Restricted Stock | $ | — | $ | — | $ | — | $ | 358,600 | $ | — | $ | 502,040 | $ | 502,040 | $ | 436,840 | $ | 436,840 | ||||||||||||||||||
Benefits & Perquisites(8): | ||||||||||||||||||||||||||||||||||||
Employer Contributions to Executive Deferred Compensation Plan | $ | — | N/A | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||
COBRA Continuation | N/A | N/A | N/A | $ | 15,096 | $ | 15,096 | N/A | $ | 15,096 | $ | — | $ | — | ||||||||||||||||||||||
280G TaxGross-up | N/A | N/A | N/A | N/A | N/A | N/A | $ | — | N/A | N/A | ||||||||||||||||||||||||||
Total | $ | — | $ | 125,000 | $ | — | $ | 1,061,196 | $ | 702,596 | $ | 502,040 | $ | 1,648,186 | $ | 561,840 | $ | 561,840 | ||||||||||||||||||
CIC with | ||||||||||||||||||||||||||||||||||||
Termination | ||||||||||||||||||||||||||||||||||||
Termination | Termination | Change in | for Good | |||||||||||||||||||||||||||||||||
Termination | by Company | by Executive | Control | Reason or | ||||||||||||||||||||||||||||||||
Voluntary | for | Except for | for Good | without | without | |||||||||||||||||||||||||||||||
Termination | Retirement(1) | Cause(2) | Cause | Reason(3) | Termination(4) | Cause | Death | Disability | ||||||||||||||||||||||||||||
Compensation: | ||||||||||||||||||||||||||||||||||||
Severance(5) | $ | — | N/A | $ | — | $ | 618,750 | $ | 618,750 | $ | — | $ | 830,000 | $ | — | $ | — | |||||||||||||||||||
Bonus(6) | $ | — | $ | 137,500 | $ | — | $ | 137,500 | $ | 137,500 | $ | — | $ | 137,500 | $ | 137,500 | $ | 137,500 | ||||||||||||||||||
Long-term Incentive(7) | ||||||||||||||||||||||||||||||||||||
Acceleration of Unvested Stock Options | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
Acceleration of Unvested Restricted Stock | $ | — | $ | — | $ | — | $ | 319,480 | $ | — | $ | 449,880 | $ | 449,880 | $ | 397,720 | $ | 397,720 | ||||||||||||||||||
Benefits & Perquisites(8): | ||||||||||||||||||||||||||||||||||||
Employer Contributions to Executive Deferred Compensation Plan | $ | — | $ | 9,570 | $ | — | $ | — | $ | — | $ | — | $ | 9,570 | $ | 9,570 | $ | 9,570 | ||||||||||||||||||
COBRA Continuation | N/A | N/A | N/A | $ | 21,062 | $ | 21,062 | N/A | $ | 21,062 | $ | — | $ | — | ||||||||||||||||||||||
280G TaxGross-up | N/A | N/A | N/A | $ | N/A | $ | N/A | N/A | $ | 395,583 | $ | — | $ | — | ||||||||||||||||||||||
Total | $ | — | $ | 147,070 | $ | — | $ | 1,096,792 | $ | 777,312 | $ | 449,880 | $ | 1,843,595 | $ | 544,790 | $ | 544,790 | ||||||||||||||||||
CIC with | ||||||||||||||||||||||||||||||||||||
Termination | ||||||||||||||||||||||||||||||||||||
Termination | Termination | Change in | for Good | |||||||||||||||||||||||||||||||||
Termination | by Company | by Executive | Control | Reason or | ||||||||||||||||||||||||||||||||
Voluntary | for | Except for | for Good | without | Without | |||||||||||||||||||||||||||||||
Termination | Retirement(1) | Cause(2) | Cause | Reason(3) | Termination(4) | Cause | Death | Disability | ||||||||||||||||||||||||||||
Compensation: | ||||||||||||||||||||||||||||||||||||
Severance(5) | $ | — | N/A | $ | — | $ | 199,500 | $ | 199,500 | $ | — | $ | 330,000 | $ | — | $ | — | |||||||||||||||||||
Bonus(6) | $ | — | $ | 76,000 | $ | — | $ | 76,000 | $ | 76,000 | $ | — | $ | 76,000 | $ | 76,000 | $ | 76,000 | ||||||||||||||||||
Long-term Incentive(7) | ||||||||||||||||||||||||||||||||||||
Acceleration of Unvested Stock Options | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 30,300 | $ | — | $ | — | ||||||||||||||||||
Acceleration of Unvested Restricted Stock | $ | — | $ | — | $ | — | $ | 143,440 | $ | — | $ | 221,680 | $ | 221,680 | $ | 195,600 | $ | 195,600 | ||||||||||||||||||
Benefits & Perquisites(8): | ||||||||||||||||||||||||||||||||||||
Employer Contributions to Executive Deferred Compensation Plan | $ | — | $ | 5,337 | $ | — | $ | — | $ | — | $ | — | $ | 5,337 | $ | 5,337 | $ | 5,337 | ||||||||||||||||||
COBRA Continuation | N/A | N/A | N/A | $ | 15,096 | $ | 15,096 | N/A | $ | 15,096 | $ | — | $ | — | ||||||||||||||||||||||
�� | ||||||||||||||||||||||||||||||||||||
Total | $ | — | $ | 81,337 | $ | — | $ | 434,036 | $ | 290,596 | $ | 221,680 | $ | 678,413 | $ | 276,937 | $ | 276,937 | ||||||||||||||||||
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(1) | Retirement. “Retirement” is defined for purposes of Mr. Huseman’s employment agreement as his voluntary termination of his employment after attaining age 60 and accruing five years of service with us, and for purposes of each other executive’s employment agreement, as such executive’s voluntary termination of his employment after attaining age 65 and accruing ten years of service with us. For purposes of the acceleration of unvested stock options, “Retirement” means the voluntary termination of his employment by an executive after he has attained the age of 65. | |
(2) | Cause. Under each executive’s employment agreement, the definition of “Cause” includes, among other things, conviction of the executive of a crime involving moral turpitude or a felony, commission by the executive of fraud upon, or misappropriation of funds of, the Company, knowing engagement by the executive in any activity in direct competition with the Company, and a material breach by the executive of such employment agreement. For purposes of the acceleration of unvested stock options, “Cause” has the same meaning as it has for purposes of the 2003 Incentive Plan. For purposes of the acceleration of unvested restricted stock, “Cause” has the same meaning as it has for purposes of the executive’s employment agreement. | |
(3) | Good Reason. Under each executive’s employment agreement, the definition of “Good Reason” includes, among other things, a reduction in the executive’s base salary or bonus opportunity, a relocation of more than fifty miles of the executive’s principal office, a substantial and adverse change in the executive’s duties, control, authority, status or position, the failure of the Company to continue in effect any pension plan, life insurance plan,health-and-accident plan, retirement plan, disability plan, stock option plan, deferred compensation plan or executive incentive compensation plan under which the executive was receiving material benefits, or the Company’s material reduction of the executive’s benefits under any such plan, and any material breach by the Company of any other material provision of such employment agreement. Prior to terminating his employment for Good Reason, the executive must comply with the notice provisions of his employment agreement. For purposes of the acceleration of unvested stock options, “Good Reason” has the same meaning as it has for purposes of the 2003 Incentive Plan, except that any reduction in the executive’s salary, bonus opportunity or benefit must follow a change in control. For purposes of the acceleration of unvested restricted stock, “Good Reason” has the same meaning as it has for purposes of the executive’s employment agreement. | |
(4) | Change in Control. Under each executive’s employment agreement, the definition of “Change in Control” (or “CIC”) includes, subject to certain exceptions, (i) acquisition by any individual, entity or group of beneficial ownership of 50% or more of either the then outstanding shares of common stock of the Company or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors, (ii) approval by the shareholders of the Company of a merger, unless immediately following such merger, substantially all of the holders of the Company’s securities immediately prior to merger beneficially own more than 50% of the common stock of the corporation resulting from such merger, and (iii) the sale or other disposition of all or substantially all of the assets of the Company. For purposes of the acceleration of unvested stock options, “Change in Control” has the same meaning as it has for purposes of the 2003 Incentive Plan. For purposes of the acceleration of unvested restricted stock, “Change in Control” has the same meaning as it has for purposes of the executive’s employment agreement. For purposes of the executive deferred compensation plan, “Change in Control” means, subject to certain exceptions, (i) the acquisition by any person other than DLJ Merchant Banking and its affiliates of 40% or more of the combined voting power of the Company’s securities, (ii) the directors serving on the Company’s Board of Directors at the time the plan was adopted ceasing to constitute a majority of the Company’s Board of Directors, or (iii) the liquidation or dissolution of, or the sale of substantially all of the assets of, the Company. | |
(5) | Severance. | |
Termination except for Cause or termination of his own employment for Good Reason or Retirement | ||
Each executive would be entitled to a lump sum severance payment equal to a multiple of the sum of his base salary plus his current annual incentive target bonus for the full year in which the termination of employment occurred. For Mr. Huseman, the multiple is three, for Messrs. Krenek, Swift and Patterson, the multiple is 1.50, and for Mr. Tyner, the multiple is 0.75. During 2008, the annual incentive target |
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bonus for our named executive officers utilized was 60% for Mr. Huseman, 50% for Messrs. Krenek, Swift and Patterson and 40% for Mr. Tyner, in each case of their annual salary as of the end of the fiscal year. We paid annual incentive bonuses to our named executive officers of between approximately 30% and 60% of their annual salaries as of the end of the fiscal year. | ||
Termination except for Cause, or termination of his own employment for Good Reason or Retirement, within the six months preceding or the twelve months following a Change in Control | ||
Each executive would be entitled to a lump sum severance payment equal to a multiple of the sum of his base salary plus the higher of (i) his current annual incentive target bonus for the full year in which the termination of employment occurred or (ii) the highest annual incentive bonus received by him for any of the last three fiscal years. For Mr. Huseman, the multiple is three, for Messrs. Krenek, Swift and Patterson, the multiple is two, and for Mr. Tyner, the multiple is one. | ||
(6) | Bonus. In addition to severance payments, the named executive officers are entitled to a pro rata portion of their estimated bonus upon certain events of termination. The above tables reflect the annual incentive target bonus for the named executive officers for 2008. | |
(7) | Long-Term Incentive. | |
Stock Options | ||
In the event of a termination of the executive by the Company for Cause or voluntary termination by the executive (other than for Retirement), all vested and unvested stock options expire on the termination date. In the event of Retirement, all unvested stock options expire on the termination date and all vested options expire six months after the termination date. In the event of death or disability, all unvested stock options expire on the termination date and all vested options expire one year after the termination date. In the event of any other involuntary or voluntary termination, all unvested stock options expire on the termination date and all vested options expire 90 days after the termination date. If the executive’s employment is terminated by the Company other than for Cause or terminated by the executive for Good Reason, in either case within two years after a Change in Control, all unvested stock options will immediately vest pursuant to the terms of the grant agreement and the 2003 Incentive Plan. | ||
Restricted Stock | ||
All unvested shares of restricted stock will be forfeited by the executive if the executive’s employment is terminated by the Company for Cause or by the executive other than for Good Reason or as a result of a Change in Control. For awards granted after March 1, 2005, if the executive’s employment is terminated by the Company other than for Cause or terminated by the executive for Good Reason, in either case within two years after a Change in Control, all unvested shares of restricted stock will immediately vest pursuant to the terms of the grant agreement. For awards on or prior to March 1, 2005, in the event of a Change in Control, all unvested shares of restricted stock will immediately vest pursuant to the 2003 Incentive Plan. | ||
(8) | Other Benefits and Perquisites. | |
Employer Contributions to Executive Deferred Compensation Plan | ||
Each executive will become fully vested in all unvested matching and discretionary contributions made by the Company into his plan account upon (i) obtaining the age of 65, (ii) his death or disability or (iii) a termination for any reason whatsoever within 24 months following a Change in Control. Otherwise, each executive will forfeit any unvested portion of his plan account upon a termination for any reason. Additionally, certain key employees, including the named executive officers, may not receive distributions before a date six months after the date they separate service from the Company for any reason other than death or disability. | ||
COBRA Continuation | ||
In addition to the above cash benefits paid pursuant to each executive’s employment agreement, the Company will continue to provide the executive and his dependents with health benefits for up to 18 months. | ||
280G TaxGross-up | ||
The employment agreements for Messrs. Huseman, Krenek, Swift and Patterson provide for gross up payments to the extent Section 280G of the Internal Revenue Code would apply to any payments as excess “parachute” payments. The employment agreement for Mr. Tyner does not contain this provision. |
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Change in | ||||||||||||||||||||||||||||
Pension Value | ||||||||||||||||||||||||||||
Fees | and | |||||||||||||||||||||||||||
Earned or | Non-Equity | Nonqualified | ||||||||||||||||||||||||||
Paid in | Stock | Option | Incentive Plan | Deferred | All Other | |||||||||||||||||||||||
Cash | Awards | Awards | Compensation | Compensation | Compensation | Total | ||||||||||||||||||||||
Name | ($) | ($) | ($) | ($) | Earnings | ($) | ($) | |||||||||||||||||||||
(a) | (b) | (c)(1) | (d)(2) | (e) | (f) | (g) | (h) | |||||||||||||||||||||
Steven A. Webster | $ | 8,000 | $ | 114,639 | $ | 44,337 | $ | — | $ | — | $ | — | $ | 166,976 | ||||||||||||||
H.H. Wommack, III(3) | $ | 59,000 | $ | 29,959 | $ | 44,337 | $ | — | $ | — | $ | — | $ | 133,296 | ||||||||||||||
Sylvester P. Johnson, IV | $ | 67,000 | $ | 29,959 | $ | 44,337 | $ | — | $ | — | $ | — | $ | 141,296 | ||||||||||||||
William E. Chiles | $ | 77,000 | $ | 29,959 | $ | 44,337 | $ | — | $ | — | $ | — | $ | 151,296 | ||||||||||||||
Robert F. Fulton | $ | 49,000 | $ | 29,959 | $ | 44,337 | $ | — | $ | — | $ | — | $ | 123,296 | ||||||||||||||
James S. D’Agostino, Jr. | $ | 69,000 | $ | 29,959 | $ | 44,337 | $ | — | $ | — | $ | — | $ | 143,296 | ||||||||||||||
Thomas P. Moore, Jr. | $ | 82,000 | $ | 29,959 | $ | 75,012 | $ | — | $ | — | $ | — | $ | 186,971 |
(1) | The grant date fair value of stock awards granted in 2008 were as follows: Steven A. Webster: $169,360; all other directors: $84,680 each. Each of our directors had the following aggregate number of restricted stock awards outstanding at December 31, 2008: Steven A. Webster: 16,000; H. H. Wommack, III: 8,000; Sylvester P. Johnson, IV: 8,000; William E. Chiles: 8,000; Robert F. Fulton: 8,000; James S. D’Agostino, Jr.: 8,000; and Thomas P. Moore, Jr.: 8,000. | |
(2) | Each of our directors had the following aggregate number of option awards outstanding at December 31, 2008: Steven A. Webster: 97,500; H. H. Wommack, III: 97,500; Sylvester P. Johnson, IV: 97,500; William E. Chiles: 17,500; Robert F. Fulton: 97,500; James S. D’Agostino, Jr.: 77,500; and Thomas P. Moore, Jr.: 42,500. | |
(3) | Effective June 3, 2009, Mr. Wommack resigned from the board of directors. |
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• | incur additional indebtedness; | |
• | pay dividends or repurchase or redeem capital stock; | |
• | make certain investments; | |
• | incur liens; | |
• | enter into certain types of transactions with affiliates; | |
• | limit dividends or other payments by restricted subsidiaries; and | |
• | sell assets or consolidate or merge with or into other companies. |
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• | you are acquiring the new notes in the exchange offer in the ordinary course of your business; | |
• | you do not have and to your knowledge, no one receiving new notes from you has, any arrangement or understanding with any person to participate in the distribution of the new notes; | |
• | you are not one of our or our subsidiary guarantor’s “affiliates,” as defined in Rule 405 of the Securities Act; | |
• | if you are not a broker-dealer, you are not engaged in, and do not intend to engage in, a distribution of the new notes; and | |
• | if you are a broker-dealer that will receive new notes for your own account in exchange for old notes acquired as a result of market-making or other trading activities, you will deliver a prospectus in connection with any resale of the new notes. |
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• | the new notes being issued in the exchange offer will have been registered under the Securities Act; | |
• | the new notes being issued in the exchange offer will not bear the restrictive legends restricting their transfer under the Securities Act; | |
• | the new notes being issued in the exchange offer will not contain the registration rights contained in the old notes; and | |
• | the new notes being issued in the exchange offer will not contain the liquidated damages provisions relating to the old notes. |
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• | a properly completed and duly executed letter of transmittal, including all other documents required by the letter of transmittal; or | |
• | if old notes are tendered in accordance with the book-entry procedures listed below, an agent’s message transmitted through DTC’s Automated Tender Offer Program, referred to as ATOP. |
• | deliver certificates, if any, for the old notes to the exchange agent at or before the expiration time; or | |
• | deliver a timely confirmation of the book-entry transfer of the old notes into the exchange agent’s account at DTC, the book-entry transfer facility, along with the letter of transmittal or an agent’s message; or | |
• | comply with the guaranteed delivery procedures described below. |
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• | by a registered holder of the old notes who has not completed the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” on the letter of transmittal, or | |
• | for the account of an “eligible institution.” |
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• | be transmitted to and received by the exchange agent at the address listed under “— Exchange Agent” at or prior to the expiration time; or | |
• | comply with the guaranteed delivery procedures described below. |
• | the tender is made through an eligible institution; | |
• | prior to the expiration time, the exchange agent receives by facsimile transmission, mail or hand delivery from such eligible institution a properly and validly completed and duly executed notice of guaranteed delivery, substantially in the form provided by us: |
1. | stating the name and address of the holder of old notes and the amount of old notes tendered, | |
2. | stating that the tender is being made, and | |
3. | guaranteeing that within three New York Stock Exchange trading days after the expiration time, the certificates for all physically tendered old notes, in proper form for transfer, or a book-entry confirmation, as the case may be, and a properly completed and duly executed letter of transmittal, or an agent’s message, and any other documents required by the letter of transmittal will be deposited by the eligible institution with the exchange agent; and |
• | the certificates for all physically tendered old notes, in proper form for transfer, or a book-entry confirmation, as the case may be, and a properly completed and duly executed letter of transmittal, or an agent’s message, and all other documents required by the letter of transmittal, are received by the exchange agent within three New York Stock Exchange trading days after the date of execution of the notice of guaranteed delivery. |
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• | a certificate for the old notes, or a timely book-entry confirmation of the old notes, into the exchange agent’s account at the book-entry transfer facility; | |
• | a properly completed and duly executed letter of transmittal or an agent’s message; and | |
• | all other required documents. |
• | specify the name of the person, referred to as the depositor, having tendered the old notes to be withdrawn; |
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• | identify the old notes to be withdrawn, including certificate numbers and principal amount of the old notes; | |
• | contain a statement that the holder is withdrawing its election to have the old notes exchanged; | |
• | other than a notice transmitted through DTC’s ATOP system, be signed by the holder in the same manner as the original signature on the letter of transmittal by which the old notes were tendered, including any required signature guarantees, or be accompanied by documents of transfer to have the trustee with respect to the old notes register the transfer of the old notes in the name of the person withdrawing the tender; and | |
• | specify the name in which the old notes are registered, if different from that of the depositor. |
• | there shall occur a change in the current interpretation by the staff of the SEC which permits the new notes issued pursuant to the exchange offer in exchange for old notes to be offered for resale, resold and otherwise transferred by the holders (other than broker-dealers and any holder which is an affiliate) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such new notes are acquired in the ordinary course of such holders’ business and such holders have no arrangement or understanding with any person to participate in the distribution of the new notes; | |
• | any action or proceeding shall have been instituted or threatened in any court or by or before any governmental agency or body seeking to enjoin, make illegal or delay completion of the exchange offer or otherwise relating to the exchange offer; | |
• | any law, statute, rule or regulation shall have been adopted or enacted which, in our judgment, would reasonably be expected to impair our ability to proceed with such exchange offer; | |
• | a banking moratorium shall have been declared by United States federal or New York State authorities; | |
• | trading on the New York Stock Exchange or generally in the United Statesover-the-counter market shall have been suspended, or a limitation on prices for securities imposed, by order of the SEC or any other governmental authority; |
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• | an attack on the United States, an outbreak or escalation of hostilities or acts of terrorism involving the United States, or any declaration by the United States of a national emergency or war shall have occurred; | |
• | a stop order shall have been issued by the SEC or any state securities authority suspending the effectiveness of the registration statement of which this prospectus is a part or proceedings shall have been initiated or, to our knowledge, threatened for that purpose or any governmental approval has not been obtained, which approval we shall, in our sole discretion, deem necessary for the consummation of the exchange offer; or | |
• | any change, or any development involving a prospective change, in our business or financial affairs or any of our subsidiaries has occurred which is or may be adverse to us or we shall have become aware of facts that have or may have an adverse impact on the value of the old notes or the new notes, which in our sole judgment in any case makes it inadvisable to proceed with the exchange offer, with the acceptance of old notes for exchange or with the exchange of old notes for new notes. |
• | terminate the exchange offer and promptly return all tendered old notes to tendering holders; | |
• | completeand/or extend the exchange offer and, subject to your withdrawal rights, retain all tendered old notes until the extended exchange offer expires; | |
• | amend the terms of the exchange offer; or | |
• | waive any unsatisfied condition and, subject to any requirement to extend the period of time during which the exchange offer is open, complete the exchange offer. |
• | the new notes are acquired in the ordinary course of the holders’ business; | |
• | the holders have no arrangement or understanding with any person to participate in the distribution of the new notes; |
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• | the holders are not “affiliates” of ours or of any of our subsidiary guarantors within the meaning of Rule 405 under the Securities Act; and | |
• | the holders are not broker-dealers who purchased old notes directly from us for resale pursuant to Rule 144A or any other available exemption under the Securities Act. |
• | cannot rely on the applicable interpretations of the staff of the SEC mentioned above; | |
• | will not be permitted or entitled to tender the old notes in the exchange offer; and | |
• | must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. |
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By Facsimile (for Eligible Institutions): (212) 298-1915 Attention: | By Mail/Overnight Delivery/Hand: The Bank of New York Mellon Corporate Trust Operations Reorganization Unit 101 Barclay Street - 7 East New York, NY 10286 Attention: | Confirm By Telephone: (212) 815-XXXX |
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• | an Unrestricted Subsidiary will not be subject to many of the restrictive covenants in the Indenture; | |
• | an Unrestricted Subsidiary will not guarantee the Notes; | |
• | a Subsidiary that has previously been a Guarantor and that is designated an Unrestricted Subsidiary will be released from its Note Guarantee and its obligations under the Indenture and the Registration Rights Agreement; and | |
• | the assets, income, cash flow and other financial results of an Unrestricted Subsidiary will not be consolidated with those of the Issuer for purposes of calculating compliance with the restrictive covenants contained in the Indenture. |
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Optional | ||||
Redemption | ||||
Year | Price | |||
2012 | 105.813 | % | ||
2013 | 102.906 | % | ||
2014 and thereafter | 100.000 | % |
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• | a limited purpose trust company organized under the laws of the State of New York; | |
• | a “banking organization” within the meaning of the New York Banking Law; | |
• | a member of the Federal Reserve System; | |
• | a “clearing corporation” within the meaning of the New York Uniform Commercial Code, as amended; and | |
• | a “clearing agency” registered pursuant to Section 17A of the Securities Exchange Act of 1934. |
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• | DTC notifies us at any time that it is unwilling or unable to continue as depositary for the global notes and a successor depositary is not appointed within 90 days; | |
• | DTC ceases to be registered as a clearing agency under the Exchange Act and a successor depositary is not appointed within 90 days; | |
• | we, at our option, notify the Trustee that we elect to cause the issuance of certificated notes; or | |
• | certain other events provided in the indenture should occur. |
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Page | ||||
Audited Consolidated Financial Statements | ||||
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F-9 | ||||
F-37 | ||||
Unaudited Consolidated Financial Statements | ||||
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INTERNAL CONTROL OVER FINANCIAL REPORTING
/s/ Kenneth V. Huseman Kenneth V. Huseman Chief Executive Officer | /s/ Alan Krenek Alan KrenekChief Financial Officer |
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December 31, | ||||||||
2008 | 2007 | |||||||
(In thousands, except | ||||||||
share data) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 111,135 | $ | 91,941 | ||||
Trade accounts receivable, net of allowance of $5,838 and $6,090, respectively | 172,930 | 138,384 | ||||||
Accounts receivable — related parties | 148 | 91 | ||||||
Federal income tax receivable | 3,324 | 1,130 | ||||||
Inventories | 11,937 | 11,034 | ||||||
Prepaid expenses | 6,838 | 6,999 | ||||||
Other current assets | 6,508 | 6,353 | ||||||
Deferred tax assets | 11,081 | 10,593 | ||||||
Total current assets | 323,901 | 266,525 | ||||||
Property and equipment, net | 740,879 | 636,924 | ||||||
Deferred debt costs, net of amortization | 5,132 | 6,100 | ||||||
Goodwill | 202,749 | 204,963 | ||||||
Other intangible assets | 36,004 | 26,975 | ||||||
Other assets | 2,046 | 2,122 | ||||||
Total assets | $ | 1,310,711 | $ | 1,143,609 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 28,291 | $ | 22,146 | ||||
Accrued expenses | 47,139 | 51,003 | ||||||
Current portion of long-term debt | 26,063 | 17,413 | ||||||
Other current liabilities | 658 | 1,474 | ||||||
Total current liabilities | 102,151 | 92,036 | ||||||
Long-term debt | 454,260 | 406,306 | ||||||
Deferred tax liabilities | 149,591 | 114,604 | ||||||
Other long-term liabilities | 9,705 | 5,842 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock; $.01 par value; 5,000,000 shares authorized; none designated or issued at December 31, 2008 and December 31, 2007, respectively | — | — | ||||||
Common stock; $.01 par value; 80,000,000 shares authorized; 41,734,485 shares issued and 40,851,862 shares outstanding at December 31, 2008; and 40,925,530 shares issued and 40,896,217 shares outstanding at December 31, 2007 | 417 | 409 | ||||||
Additional paid-in capital | 325,785 | 314,705 | ||||||
Retained earnings | 277,173 | 209,707 | ||||||
Treasury stock, 882,623 and 29,313 shares at December 31, 2008 and 2007, respectively | (8,371 | ) | — | |||||
Total stockholders’ equity | 595,004 | 524,821 | ||||||
Total liabilities and stockholders’ equity | $ | 1,310,711 | $ | 1,143,609 | ||||
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Years Ended December 31 | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(Dollars in thousands, except | ||||||||||||
per share amounts) | ||||||||||||
Revenues: | ||||||||||||
Well servicing | $ | 343,113 | $ | 342,697 | $ | 323,755 | ||||||
Fluid services | 315,768 | 259,324 | 245,011 | |||||||||
Completion and remedial services | 304,326 | 240,692 | 154,412 | |||||||||
Contract drilling | 41,735 | 34,460 | 6,970 | |||||||||
Total revenues | 1,004,942 | 877,173 | 730,148 | |||||||||
Expenses: | ||||||||||||
Well servicing | 215,243 | 205,132 | 178,028 | |||||||||
Fluid services | 203,205 | 165,327 | 153,445 | |||||||||
Completion and remedial services | 165,574 | 125,948 | 74,981 | |||||||||
Contract drilling | 28,629 | 22,510 | 8,400 | |||||||||
General and administrative, including stock-based compensation of $4,149, $3,964 and $3,429 in 2008, 2007 and 2006, respectively | 115,319 | 99,042 | 81,318 | |||||||||
Depreciation and amortization | 118,607 | 93,048 | 62,087 | |||||||||
Loss on disposal of assets | 76 | 477 | 277 | |||||||||
Goodwill impairment | 22,522 | — | — | |||||||||
Total expenses | 869,175 | 711,484 | 558,536 | |||||||||
Operating income | 135,767 | 165,689 | 171,612 | |||||||||
Other income (expense): | ||||||||||||
Interest expense | (26,766 | ) | (27,416 | ) | (17,466 | ) | ||||||
Interest income | 2,136 | 2,280 | 1,962 | |||||||||
Loss on early extinguishment of debt | — | (230 | ) | (2,705 | ) | |||||||
Other income | 12,235 | 176 | 169 | |||||||||
Income from continuing operations before income taxes | 123,372 | 140,499 | 153,572 | |||||||||
Income tax expense | (55,134 | ) | (52,766 | ) | (54,742 | ) | ||||||
Net income | 68,238 | 87,733 | 98,830 | |||||||||
Basic earnings per share of common stock: | ||||||||||||
Net income available to common stockholders | $ | 1.67 | $ | 2.19 | $ | 2.87 | ||||||
Diluted earnings per share of common stock: | ||||||||||||
Net income available to common stockholders | $ | 1.64 | $ | 2.13 | $ | 2.56 | ||||||
Comprehensive income: | ||||||||||||
Net income | $ | 68,238 | $ | 87,733 | $ | 98,830 | ||||||
Unrealized gains on hedging activities | — | — | 51 | |||||||||
Less: reclassification adjustment for gain included in net income | — | — | (287 | ) | ||||||||
Comprehensive income: | $ | 68,238 | $ | 87,733 | $ | 98,594 | ||||||
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Accumulated | ||||||||||||||||||||||||||||||||
Additional | Retained | Other | Total | |||||||||||||||||||||||||||||
Common Stock | Paid-In | Deferred | Treasury | Earnings | Comprehensive | Stockholders’ | ||||||||||||||||||||||||||
Shares | Amount | Capital | Compensation | Stock | (Deficit) | Income | Equity | |||||||||||||||||||||||||
(In thousands, except share data) | ||||||||||||||||||||||||||||||||
Balance — December 31, 2005 | 33,931,935 | $ | 339 | $ | 239,218 | $ | (7,341 | ) | $ | (2,531 | ) | $ | 28,654 | $ | 236 | $ | 258,575 | |||||||||||||||
Adoption of Statement of Financial Accounting Standard No. 123R | — | — | (7,341 | ) | 7,341 | — | — | — | — | |||||||||||||||||||||||
Amortization of deferred compensation | — | — | 3,429 | — | — | — | — | 3,429 | ||||||||||||||||||||||||
Unrealized gain on interest rate swap agreement | — | — | — | — | — | — | 51 | 51 | ||||||||||||||||||||||||
Settlement of interest rate swap agreement | — | — | — | — | — | — | (287 | ) | (287 | ) | ||||||||||||||||||||||
Offering costs | — | — | (227 | ) | — | — | — | — | (227 | ) | ||||||||||||||||||||||
Exercise of stock warrants | 4,350,000 | 44 | 17,357 | — | — | — | — | 17,401 | ||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | (3,218 | ) | — | — | (3,218 | ) | ||||||||||||||||||||||
Exercise of stock options | 15,670 | — | 4,091 | — | 5,749 | (5,144 | ) | — | 4,696 | |||||||||||||||||||||||
Net income | — | — | — | — | — | 98,830 | — | 98,830 | ||||||||||||||||||||||||
Balance — December 31, 2006 | 38,297,605 | 383 | 256,527 | — | — | 122,340 | — | 379,250 | ||||||||||||||||||||||||
Issuance of restricted stock | 229,100 | 2 | (2 | ) | — | — | — | — | — | |||||||||||||||||||||||
Amortization of share based compensation | — | — | 3,873 | — | — | — | — | 3,873 | ||||||||||||||||||||||||
Stock issued as compensation to Chairman of the Board | 4,000 | — | 91 | — | — | — | — | 91 | ||||||||||||||||||||||||
Stock issued in JetStar Consolidated Holdings, Inc. acquisition | 1,794,759 | 18 | 41,011 | — | — | — | — | 41,029 | ||||||||||||||||||||||||
Stock issued in Sledge Drilling Holding Corp acquisition | 430,191 | 4 | 10,161 | — | — | — | — | 10,165 | ||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | (462 | ) | — | — | (462 | ) | |||||||||||||||||||||||
Exercise of stock options | 169,875 | 2 | 3,044 | — | 462 | (366 | ) | — | 3,142 | |||||||||||||||||||||||
Net income | — | — | — | — | 87,733 | — | 87,733 | |||||||||||||||||||||||||
Balance — December 31, 2007 | 40,925,530 | 409 | 314,705 | — | — | 209,707 | — | 524,821 | ||||||||||||||||||||||||
Issuances of restricted stock | 361,700 | 4 | (25 | ) | — | 21 | — | — | — | |||||||||||||||||||||||
Amortization of share based compensation | — | — | 4,064 | — | — | — | — | 4,064 | ||||||||||||||||||||||||
Treasury stock issued as compensation to Chairman of the Board | — | — | — | — | 89 | (4 | ) | — | 85 | |||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | (9,994 | ) | — | — | (9,994 | ) | ||||||||||||||||||||||
Exercise of stock options | 447,255 | 4 | 7,041 | — | 1,513 | (768 | ) | — | 7,790 | |||||||||||||||||||||||
Net income | — | — | — | — | — | 68,238 | — | 68,238 | ||||||||||||||||||||||||
Balance — December 31, 2008 | 41,734,485 | $ | 417 | $ | 325,785 | $ | — | $ | (8,371 | ) | $ | 277,173 | $ | — | $ | 595,004 | ||||||||||||||||
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Years Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(In thousands) | ||||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 68,238 | $ | 87,733 | $ | 98,830 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||||
Depreciation and amortization | 118,607 | 93,048 | 62,087 | |||||||||
Goodwill impairment | 22,522 | — | — | |||||||||
Accretion on asset retirement obligation | 131 | 115 | 78 | |||||||||
Change in allowance for doubtful accounts | (252 | ) | 2,127 | 1,188 | ||||||||
Amortization of deferred financing costs | 968 | 962 | 804 | |||||||||
Non-cash compensation | 4,149 | 3,964 | 3,429 | |||||||||
Loss on early extinguishment of debt | — | 230 | 2,705 | |||||||||
Loss on disposal of assets | 76 | 477 | 277 | |||||||||
Deferred income taxes | 30,165 | 15,285 | 2,611 | |||||||||
Changes in operating assets and liabilities, net of acquisitions: | ||||||||||||
Accounts receivable | (32,411 | ) | 4,396 | (32,933 | ) | |||||||
Inventories | (558 | ) | (328 | ) | (714 | ) | ||||||
Prepaid expenses and other current assets | 2,348 | 6,325 | (6,771 | ) | ||||||||
Other assets | 47 | (753 | ) | (450 | ) | |||||||
Accounts payable | 4,759 | (1,237 | ) | 5,128 | ||||||||
Excess tax benefits from exercise of employee stock options | (5,062 | ) | (2,169 | ) | (4,022 | ) | ||||||
Income tax payable | 2,963 | (11,262 | ) | 6,344 | ||||||||
Other liabilities | 1,217 | (332 | ) | (171 | ) | |||||||
Accrued expenses | (5,080 | ) | 10 | 7,258 | ||||||||
Net cash provided by operating activities | 212,827 | 198,591 | 145,678 | |||||||||
Cash flows from investing activities: | ||||||||||||
Purchase of property and equipment | (91,890 | ) | (98,536 | ) | (104,574 | ) | ||||||
Proceeds from sale of assets | 8,184 | 6,815 | 5,560 | |||||||||
Payments for other long-term assets | (2,683 | ) | (2,709 | ) | (6,769 | ) | ||||||
Payments for businesses, net of cash acquired | (110,913 | ) | (199,673 | ) | (135,568 | ) | ||||||
Net cash used in investing activities | (197,302 | ) | (294,103 | ) | (241,351 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from debt | 30,000 | 150,000 | 305,546 | |||||||||
Payments of debt | (24,126 | ) | (15,838 | ) | (204,793 | ) | ||||||
Purchase of treasury stock | (9,994 | ) | (462 | ) | (3,218 | ) | ||||||
Offering costs related to initial public offering | — | — | (227 | ) | ||||||||
Excess tax benefits from exercise of employee stock options | 5,062 | 2,169 | 4,022 | |||||||||
Tax withholding from exercise of stock options | (4,174 | ) | (1,290 | ) | (1,310 | ) | ||||||
Exercise of employee stock options | 6,901 | 2,265 | 1,984 | |||||||||
Proceeds from exercise stock warrants | — | — | 17,401 | |||||||||
Deferred loan costs and other financing activities | — | (756 | ) | (5,212 | ) | |||||||
Net cash provided by financing activities | 3,669 | 136,088 | 114,193 | |||||||||
Net increase (decrease) in cash and equivalents | 19,194 | 40,576 | 18,520 | |||||||||
Cash and cash equivalents — beginning of year | 91,941 | 51,365 | 32,845 | |||||||||
Cash and cash equivalents — end of year | $ | 111,135 | $ | 91,941 | $ | 51,365 | ||||||
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1. | Nature of Operations |
2. | Summary of Significant Accounting Policies |
• | Depreciation and amortization of property and equipment and intangible assets | |
• | Impairment of property and equipment, goodwill and intangible assets | |
• | Allowance for doubtful accounts | |
• | Litigation and self-insured risk reserves | |
• | Fair value of assets acquired and liabilities assumed | |
• | Stock-based compensation | |
• | Income taxes | |
• | Asset retirement obligation |
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Building and improvements | 20-30 years | |||
Well servicing units and equipment | 3-15 years | |||
Fluid services equipment | 5-10 years | |||
Brine and fresh water stations | 15 years | |||
Frac/test tanks | 10 years | |||
Pressure pumping equipment | 5-10 years | |||
Construction equipment | 3-10 years | |||
Contract drilling equipment | 3-10 years | |||
Disposal facilities | 10-15 years | |||
Vehicles | 3-7 years | |||
Rental equipment | 3-15 years | |||
Aircraft | 20 years | |||
Software and computers | 3 years |
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Amortizable Intangible Assets at December 31, 2008 (in thousands): | ||||
Customer Relationships | $ | 35,441 | ||
Accumulated Amortization Customer Relationships | (1,879 | ) | ||
Non-Compete Agreements | 4,392 | |||
Accumulated Amortization Non-Compete Agreements | (1,950 | ) | ||
Total Amortizable Intangible Assets | $ | 36,004 | ||
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Balance, December 31, 2006 | $ | 1,336 | ||
Additional asset retirement obligations recognized through acquisitions | 101 | |||
Accretion expense | 115 | |||
Balance, December 31, 2007 | $ | 1,552 | ||
Additional asset retirement obligations recognized through acquisitions | 143 | |||
Accretion expense | 131 | |||
Settlements | (30 | ) | ||
Balance, December 31, 2008 | $ | 1,796 | ||
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3. | Acquisitions |
Total Cash Paid | ||||||||
(Net of Cash | ||||||||
Closing Date | Acquired) | |||||||
LeBus Oil Field Services Co. | January 31, 2006 | $ | 24,618 | |||||
G&L Tool, Ltd. | February 28, 2006 | 58,514 | ||||||
Arkla Cementing, Inc. | March 27, 2006 | 5,012 | ||||||
Globe Well Service, Inc. | May 30, 2006 | 11,674 | ||||||
Hydro-Static Tubing Testers, Inc. | July 6, 2006 | 1,143 | ||||||
Hennessey Rental Tools, Inc. | August 1, 2006 | 8,205 | ||||||
Stimulation Services, LLC | August 1, 2006 | 4,500 | ||||||
Chaparral Service, Inc. | August 15, 2006 | 17,605 | ||||||
Reddline Services, LLC | August 24, 2006 | 1,900 | ||||||
Rebel Testers, Ltd. | September 14, 2006 | 2,397 | ||||||
Total 2006 | $ | 135,568 | ||||||
Parker Drilling Offshore USA, LLC | January 3, 2007 | 20,594 | ||||||
Davis Tool Company, Inc. | January 17, 2007 | 4,164 | ||||||
JetStar Consolidated Holdings, Inc. | March 6, 2007 | 86,316 | ||||||
Sledge Drilling Holding Corp. | April 2, 2007 | 50,632 | ||||||
Eagle Frac Tank Rentals, LP | May 30, 2007 | 3,813 | ||||||
Wildhorse Services, Inc. | June 1, 2007 | 17,283 | ||||||
Bilco Machine, Inc. | June 21, 2007 | 600 | ||||||
Steve Carter Inc. and Hughes Services Inc. | September 26, 2007 | 19,041 | ||||||
Total 2007 | $ | 202,443 | ||||||
Xterra Fishing and Rental Tools Co. | January 28, 2008 | $ | 21,110 | |||||
Lackey Construction, LLC | January 30, 2008 | 4,328 | ||||||
B&S Disposal, LLC and B&S Equipment, Ltd | April 30, 2008 | 7,067 | ||||||
Triple N Services, Inc. | May 27, 2008 | 17,315 | ||||||
Azurite Services Company, Inc., Azurite Leasing Company, LLC and Freestone Disposal, L.P. (collectively, “Azurite”) | September 26, 2008 | 60,155 | ||||||
Total 2008 | $ | 109,975 | ||||||
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Current Assets | $ | 12,547 | ||
Property and Equipment | 58,785 | |||
Amortizable Intangible Assets(1) | 17,857 | |||
Goodwill(2) | 61,720 | |||
Total Assets Acquired | 150,909 | |||
Current Liabilities | (4,581 | ) | ||
Deferred Income Taxes | (18,649 | ) | ||
Current and Long Term Debt(3) | (37,563 | ) | ||
Total Liabilities Assumed | (60,793 | ) | ||
Net Assets Acquired | $ | 90,116 | ||
(1) | Consists of Customer Relationship of $17,543, amortizable over 15 years, and Non-Compete Agreements of $314, amortizable over 5 years. | |
(2) | Approximately $25,955 is expected to be deductible for tax purposes | |
(3) | Total balance was paid by Basic on the closing date |
F-18
Table of Contents
Current Assets | $ | 6,807 | ||
Property and Equipment | 30,638 | |||
Intangible Assets(1) | 6,365 | |||
Goodwill(2) | 22,522 | |||
Total Assets Acquired | 66,332 | |||
Current Liabilities | (587 | ) | ||
Deferred Income Taxes | (3,804 | ) | ||
Current and Long Term Debt(3) | (19,093 | ) | ||
Total Liabilities Assumed | (23,484 | ) | ||
Net Assets Acquired | $ | 42,848 | ||
(1) | Consists of Customer Relationship of $6,269, amortizable over 15 years, and Non-Compete Agreements of $96, amortizable over 5 years. | |
(2) | None of which is expected to be deducted for tax purposes | |
(3) | Total balance was paid by Basic on the closing date |
Property and Equipment | $ | 53,127 | ||
Intangible Assets(1) | 1,862 | |||
Goodwill(2) | 5,166 | |||
Total Assets Acquired | $ | 60,155 | ||
(1) | Consists of customer relationship of $1,832, amortizable over 15 years, and non-compete agreements of $30, amortizable over five years. | |
(2) | All of which is expected to be deductible for tax purposes. |
F-19
Table of Contents
Twelve Months Ended December 31, | ||||||||
2008 | 2007 | |||||||
Revenues | $ | 1,040,160 | $ | 933,697 | ||||
Net income | $ | 70,680 | $ | 92,064 | ||||
Earnings per common share — basic | $ | 1.73 | $ | 2.28 | ||||
Earnings per common share — diluted | $ | 1.70 | $ | 2.22 |
Maximum | ||||||||||
Exposure of | ||||||||||
Termination Date of | Contingent | Amount Paid or | ||||||||
Contingent Earn-Out | Earn-Out | Accrued through | ||||||||
Acquisition | Arrangement | Arrangement | December 31, 2008 | |||||||
Rolling Plains | April 30, 2009 | * | $ | 6,732 | ||||||
Chaparral Services, Inc. | August 31, 2011 | $ | 1,000 | — | ||||||
G&L Tool, Ltd. | February 28, 2011 | 21,000 | 5,093 | |||||||
$ | 22,000 | $ | 11,825 | |||||||
* | Basic will pay to the sellers an amount for each of the five consecutive12-month periods beginning on May 1, 2004 equal to 50% of the amount by which annual EBITDA exceeds an annual targeted EBITDA. There is no guarantee or assurance that the targeted EBITDA will be reached. |
F-20
Table of Contents
4. | Property and Equipment |
December 31, | December 31, | |||||||
2008 | 2007 | |||||||
Land | $ | 4,689 | $ | 3,475 | ||||
Buildings and improvements | 29,913 | 21,655 | ||||||
Well service units and equipment | 379,167 | 328,468 | ||||||
Fluid services equipment | 136,814 | 91,830 | ||||||
Brine and fresh water stations | 10,203 | 8,964 | ||||||
Frac/test tanks | 128,845 | 85,649 | ||||||
Pressure pumping equipment | 156,406 | 132,746 | ||||||
Construction equipment | 22,483 | 28,798 | ||||||
Contract drilling equipment | 60,340 | 59,231 | ||||||
Disposal facilities | 49,878 | 27,790 | ||||||
Vehicles | 41,129 | 36,440 | ||||||
Rental equipment | 36,898 | 33,381 | ||||||
Aircraft | 4,119 | 4,119 | ||||||
Other | 21,758 | 15,858 | ||||||
1,082,642 | 878,404 | |||||||
Less accumulated depreciation and amortization | 341,763 | 241,480 | ||||||
Property and equipment, net | $ | 740,879 | $ | 636,924 | ||||
December 31, | December 31, | |||||||
2008 | 2007 | |||||||
Light vehicles | $ | 30,141 | $ | 25,768 | ||||
Well service units and equipment | 1,194 | 1,016 | ||||||
Fluid services equipment | 56,010 | 34,668 | ||||||
Pressure pumping equipment | 20,492 | 4,540 | ||||||
Construction equipment | 3,679 | 4,440 | ||||||
Software | 9,464 | 6,308 | ||||||
Other | 705 | — | ||||||
121,685 | 76,740 | |||||||
Less accumulated amortization | 37,370 | 22,660 | ||||||
$ | 84,315 | $ | 54,080 | |||||
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Table of Contents
5. | Long-Term Debt |
December 31, | December 31, | |||||||
2008 | 2007 | |||||||
2007 Credit Facility | $ | 180,000 | $ | 150,000 | ||||
7.125% Senior Notes | 225,000 | 225,000 | ||||||
Capital leases and other notes | 75,323 | 48,719 | ||||||
480,323 | 423,719 | |||||||
Less current portion | 26,063 | 17,413 | ||||||
$ | 454,260 | $ | 406,306 | |||||
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F-23
Table of Contents
Debt | Capital Leases | |||||||
2009 | $ | — | $ | 26,063 | ||||
2010 | 180,000 | 21,985 | ||||||
2011 | — | 14,307 | ||||||
2012 | — | 10,450 | ||||||
2013 | — | 2,518 | ||||||
Thereafter | 225,000 | — | ||||||
$ | 405,000 | $ | 75,323 | |||||
Years Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Cash payments for interest | $ | 24,484 | $ | 25,594 | $ | 12,587 | ||||||
Commitment and other fees paid | 211 | 249 | 566 | |||||||||
Amortization of debt issuance costs | 968 | 962 | 804 | |||||||||
Accrued interest | 1,157 | 540 | 3,384 | |||||||||
Other | (54 | ) | 71 | 125 | ||||||||
$ | 26,766 | $ | 27,416 | $ | 17,466 | |||||||
6. | Income Taxes |
Years Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Current: | ||||||||||||
Federal | $ | 20,533 | $ | 33,157 | $ | 50,499 | ||||||
State | 4,436 | 5,160 | 1,632 | |||||||||
Total | $ | 24,969 | $ | 38,317 | $ | 52,131 | ||||||
Deferred: | ||||||||||||
Federal | $ | 28,792 | $ | 14,207 | $ | 3,594 | ||||||
State | 1,373 | 242 | (983 | ) | ||||||||
Total | $ | 30,165 | $ | 14,449 | $ | 2,611 | ||||||
Total income tax expense | $ | 55,134 | $ | 52,766 | $ | 54,742 | ||||||
F-24
Table of Contents
Years Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Statutory federal income tax | $ | 43,180 | $ | 49,174 | $ | 53,750 | ||||||
Meals and entertainment | 542 | 532 | 430 | |||||||||
State taxes, net of federal benefit | 4,726 | 4,062 | 778 | |||||||||
Impairment of non-deductible goodwill | 7,883 | — | — | |||||||||
Changes in estimates and other | (1,197 | ) | (1,002 | ) | (216 | ) | ||||||
$ | 55,134 | $ | 52,766 | $ | 54,742 | |||||||
December 31, | ||||||||
2008 | 2007 | |||||||
Deferred tax assets: | ||||||||
Receivables allowance | $ | 2,151 | $ | 2,314 | ||||
Inventory | 42 | 41 | ||||||
Asset retirement obligation | 331 | 283 | ||||||
Accrued liabilities | 8,696 | 8,044 | ||||||
Operating loss carryforward | 788 | 1,100 | ||||||
Deferred compensation | 3,497 | 2,648 | ||||||
Total deferred tax assets | 15,505 | 14,430 | ||||||
Deferred tax liabilities: | ||||||||
Property and equipment | (135,354 | ) | (104,476 | ) | ||||
Goodwill and intangibles | (18,541 | ) | (13,846 | ) | ||||
Prepaid expenses | (120 | ) | (119 | ) | ||||
Total deferred tax liabilities | (154,015 | ) | (118,441 | ) | ||||
Net deferred tax liability | $ | (138,510 | ) | $ | (104,011 | ) | ||
Recognized as: | ||||||||
Deferred tax assets — current | 11,081 | 10,593 | ||||||
Deferred tax liabilities — non-current | (149,591 | ) | (114,604 | ) | ||||
Net deferred tax liability | $ | (138,510 | ) | $ | (104,011 | ) | ||
F-25
Table of Contents
7. | Commitments and Contingencies |
Year Ended December 31, | ||||
2009 | $ | 4,543 | ||
2010 | 4,257 | |||
2011 | 3,588 | |||
2012 | 2,550 | |||
2013 | 2,164 | |||
Thereafter | 5,220 |
F-26
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F-27
Table of Contents
8. | Stockholders’ Equity |
F-28
Table of Contents
9. | Stockholders’ Agreement |
10. | Incentive Plan |
F-29
Table of Contents
Years Ended December 31, | ||||||||
2007 | 2006 | |||||||
Risk-free interest rate | 4.5 | % | 4.7 | % | ||||
Expected term | 6.65 | 6.65 | ||||||
Expected volatility | 45.3 | % | 47.0 | % | ||||
Expected dividend yield | — | — |
Weighted | ||||||||||||||||
Weighted | Average | Aggregate | ||||||||||||||
Number of | Average | Remaining | Intrinsic | |||||||||||||
Options | Exercise | Contractual | Value | |||||||||||||
Granted | Price | Term (Years) | (000’s) | |||||||||||||
Non-statutory stock options: | ||||||||||||||||
Outstanding, beginning of period | 2,257,355 | $ | 9.58 | |||||||||||||
Options granted | — | $ | — | |||||||||||||
Options forfeited | (53,750 | ) | $ | 15.29 | ||||||||||||
Options exercised | (585,930 | ) | $ | 4.65 | ||||||||||||
Options expired | (9,000 | ) | $ | 21.32 | ||||||||||||
Outstanding, end of period | 1,608,675 | $ | 11.11 | 5.76 | $ | 8,714 | ||||||||||
Exercisable, end of period | 957,925 | $ | 7.44 | 5.03 | $ | 6,782 | ||||||||||
Vested or expected to vest, end of period | 1,584,425 | $ | 10.88 | 5.73 | $ | 8,714 | ||||||||||
F-30
Table of Contents
Weighted | ||||||||
Average | ||||||||
Grant Date | ||||||||
Number of | Fair Value | |||||||
Nonvested Shares | Shares | per Share | ||||||
Nonvested at beginning of period | 378,000 | $ | 15.74 | |||||
Granted during period | 456,975 | 20.85 | ||||||
Vested during period | (178,300 | ) | 7.90 | |||||
Forfeited during period | (57,350 | ) | 21.55 | |||||
Nonvested at end of period | 599,325 | $ | 21.41 | |||||
11. | Related Party Transactions |
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12. | Profit Sharing Plan |
13. | Deferred Compensation Plan |
14. | Earnings Per Share |
Years Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Numerator (both basic and diluted): | ||||||||||||
Net income available to common stockholders | $ | 68,238 | $ | 87,733 | $ | 98,830 | ||||||
Denominator: | ||||||||||||
Denominator for basic earnings per share | 40,754,890 | 40,013,054 | 34,471,771 | |||||||||
Stock options | 682,958 | 831,026 | 1,054,040 | |||||||||
Unvested restricted stock | 225,842 | 268,324 | 244,153 | |||||||||
Common stock warrants | — | — | 2,823,029 | |||||||||
Denominator for diluted earnings per share | 41,663,690 | 41,112,404 | 38,592,993 | |||||||||
Basic earnings per common share: | ||||||||||||
Net income available to common stockholders | $ | 1.67 | $ | 2.19 | $ | 2.87 | ||||||
Diluted earnings per common share: | ||||||||||||
Net income available to common stockholders | $ | 1.64 | $ | 2.13 | $ | 2.56 | ||||||
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15. | Business Segment Information |
F-33
Table of Contents
Completion | ||||||||||||||||||||||||
Well | Fluid | and Remedial | Contract | Corporate | ||||||||||||||||||||
Servicing | Services | Services | Drilling | and Other | Total | |||||||||||||||||||
Year ended December 31, 2008 | ||||||||||||||||||||||||
Operating revenues | $ | 343,113 | $ | 315,768 | $ | 304,326 | $ | 41,735 | $ | — | $ | 1,004,942 | ||||||||||||
Direct operating costs | (215,243 | ) | (203,205 | ) | (165,574 | ) | (28,629 | ) | — | (612,651 | ) | |||||||||||||
Segment profits | $ | 127,870 | $ | 112,563 | $ | 138,752 | $ | 13,106 | $ | — | $ | 392,291 | ||||||||||||
Depreciation and amortization | $ | 45,298 | $ | 33,629 | $ | 27,473 | $ | 6,816 | $ | 5,391 | $ | 118,607 | ||||||||||||
Capital expenditures, (excluding acquisitions) | $ | 35,094 | $ | 26,054 | $ | 21,285 | $ | 5,281 | $ | 4,176 | $ | 91,890 | ||||||||||||
Identifiable assets | $ | 310,964 | $ | 262,377 | $ | 334,120 | $ | 47,027 | $ | 356,223 | $ | 1,310,711 | ||||||||||||
Year ended December 31, 2007 | ||||||||||||||||||||||||
Operating revenues | $ | 342,697 | $ | 259,324 | $ | 240,692 | $ | 34,460 | $ | — | $ | 877,173 | ||||||||||||
Direct operating costs | (205,132 | ) | (165,327 | ) | (125,948 | ) | (22,510 | ) | — | (518,917 | ) | |||||||||||||
Segment profits | $ | 137,565 | $ | 93,997 | $ | 114,744 | $ | 11,950 | $ | — | $ | 358,256 | ||||||||||||
Depreciation and amortization | $ | 37,586 | $ | 23,858 | $ | 21,138 | $ | 6,433 | $ | 4,033 | $ | 93,048 | ||||||||||||
Capital expenditures, (excluding acquisitions) | $ | 39,803 | $ | 25,266 | $ | 22,384 | $ | 6,813 | $ | 4,270 | $ | 98,536 | ||||||||||||
Identifiable assets | $ | 284,058 | $ | 207,380 | $ | 284,321 | $ | 73,787 | $ | 294,063 | $ | 1,143,609 | ||||||||||||
Year ended December 31, 2006 | ||||||||||||||||||||||||
Operating revenues | $ | 323,755 | $ | 245,011 | $ | 154,412 | $ | 6,970 | $ | — | $ | 730,148 | ||||||||||||
Direct operating costs | (178,028 | ) | (153,445 | ) | (74,981 | ) | (8,400 | ) | — | (414,854 | ) | |||||||||||||
Segment profits | $ | 145,727 | $ | 91,566 | $ | 79,431 | $ | (1,430 | ) | $ | — | $ | 315,294 | |||||||||||
Depreciation and amortization | $ | 26,992 | $ | 19,692 | $ | 11,070 | $ | 1,938 | $ | 2,395 | $ | 62,087 | ||||||||||||
Capital expenditures, (excluding acquisitions) | $ | 29,677 | $ | 33,167 | $ | 18,646 | $ | 19,050 | $ | 4,034 | $ | 104,574 | ||||||||||||
Identifiable assets | $ | 226,566 | $ | 193,927 | $ | 129,471 | $ | 17,112 | $ | 229,184 | $ | 796,260 |
Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Segment profits | $ | 392,291 | $ | 358,256 | $ | 315,294 | ||||||
General and administrative expenses | (115,319 | ) | (99,042 | ) | (81,318 | ) | ||||||
Depreciation and amortization | (118,607 | ) | (93,048 | ) | (62,087 | ) | ||||||
Gain (loss) on disposal of assets | (76 | ) | (477 | ) | (277 | ) | ||||||
Goodwill Impairment (Contract drilling segment) | (22,522 | ) | — | — | ||||||||
Operating income | $ | 135,767 | $ | 165,689 | $ | 171,612 | ||||||
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Table of Contents
16. | Accrued Expenses |
December 31, | ||||||||
2008 | 2007 | |||||||
Compensation related | $ | 19,832 | $ | 16,790 | ||||
Workers’ compensation self-insured risk reserve | 4,248 | 9,326 | ||||||
Health self-insured risk reserve | 6,690 | 6,054 | ||||||
Accrual for receipts | 4,976 | 3,955 | ||||||
Authority for expenditure accrual | 543 | 211 | ||||||
Ad valorem taxes | 137 | 73 | ||||||
Sales tax | 588 | 1,140 | ||||||
Insurance obligations | 2,474 | 995 | ||||||
Purchase order accrual | 38 | 45 | ||||||
Professional fee accrual | 185 | 424 | ||||||
Contingent earnout obligation | 1,438 | 1,158 | ||||||
Retainers | — | 172 | ||||||
Fuel accrual | 897 | 1,692 | ||||||
Accrued interest | 5,083 | 3,926 | ||||||
Contingent liability | — | 1,296 | ||||||
Franchise Tax Payable | — | 3,704 | ||||||
Other | 10 | 42 | ||||||
$ | 47,139 | $ | 51,003 | |||||
17. | Supplemental Schedule of Cash Flow Information |
Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(In thousands) | ||||||||||||
Capital leases issued for equipment | $ | 50,730 | $ | 26,814 | $ | 26,420 | ||||||
Value of shares that may be issued | $ | — | $ | 2,194 | $ | — | ||||||
Contingent earnout accrual | $ | 183 | $ | 1,032 | $ | 2,256 | ||||||
Asset retirement obligation additions | $ | 143 | $ | 101 | $ | 767 | ||||||
Value of common stock issued in business combinations | $ | — | $ | 51,193 | $ | — |
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18. | Quarterly Financial Data (Unaudited) |
First | Second | Third | Fourth | |||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Year | ||||||||||||||||
Year ended December 31, 2008: | ||||||||||||||||||||
Total revenues | $ | 229,873 | $ | 251,522 | $ | 277,575 | $ | 245,972 | $ | 1,004,942 | ||||||||||
Segment profits | $ | 92,126 | $ | 97,495 | $ | 108,980 | $ | 93,690 | $ | 392,291 | ||||||||||
Income from continuing operations | $ | 19,656 | $ | 18,713 | $ | 25,942 | $ | 3,927 | $ | 68,238 | ||||||||||
Net income available to common stockholders | $ | 19,656 | $ | 18,713 | $ | 25,942 | $ | 3,927 | $ | 68,238 | ||||||||||
Basic earnings per share of common stock(a): | ||||||||||||||||||||
Net income available to common stockholders | $ | 0.48 | $ | 0.46 | $ | 0.63 | $ | 0.10 | $ | 1.67 | ||||||||||
Diluted earnings per share of common stock(a): | ||||||||||||||||||||
Net income (loss) available to common stockholders | $ | 0.47 | $ | 0.45 | $ | 0.62 | $ | 0.10 | $ | 1.64 | ||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||
Basic | 40,577 | 40,721 | 40,988 | 40,731 | 40,755 | |||||||||||||||
Diluted | 41,464 | 41,659 | 41,787 | 41,100 | 41,664 | |||||||||||||||
Year ended December 31, 2007: | ||||||||||||||||||||
Total revenues | $ | 198,930 | $ | 223,256 | $ | 229,232 | $ | 225,755 | $ | 877,173 | ||||||||||
Segment profits | $ | 82,785 | $ | 91,235 | $ | 94,280 | $ | 89,956 | $ | 358,256 | ||||||||||
Income from continuing operations | $ | 22,073 | $ | 21,692 | $ | 24,426 | $ | 19,541 | $ | 87,733 | ||||||||||
Net income available to common stockholders | $ | 22,073 | $ | 21,692 | $ | 24,426 | $ | 19,541 | $ | 87,733 | ||||||||||
Basic earnings per share of common stock(a): | ||||||||||||||||||||
Net income available to common stockholders | $ | 0.57 | $ | 0.54 | $ | 0.60 | $ | 0.48 | $ | 2.19 | ||||||||||
Diluted earnings per share of common stock(a): | ||||||||||||||||||||
Net income available to common stockholders | $ | 0.56 | $ | 0.52 | $ | 0.59 | $ | 0.47 | $ | 2.13 | ||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||
Basic | 38,521 | 40,493 | 40,516 | 40,517 | 40,013 | |||||||||||||||
Diluted | 39,661 | 41,621 | 41,591 | 41,551 | 41,112 |
(a) | The sum of individual quarterly net income per share may not agree to the total for the year due to each period’s computation being based on the weighted average number of common shares outstanding during each period. |
19. | Subsequent Events |
F-36
Table of Contents
Additions | ||||||||||||||||||||
Balance at | Charged to | Charged to | Balance at | |||||||||||||||||
Beginning of | Costs and | Other | End of | |||||||||||||||||
Description | Period | Expenses(a) | Accounts(b) | Deductions(c) | Period | |||||||||||||||
(In thousands) | ||||||||||||||||||||
Year Ended December 31, 2008 | ||||||||||||||||||||
Allowance for Bad Debt | $ | 6,090 | $ | 2,331 | $ | — | $ | (2,583 | ) | $ | 5,838 | |||||||||
Year Ended December 31, 2007 | ||||||||||||||||||||
Allowance for Bad Debt | $ | 3,963 | $ | 3,251 | $ | — | $ | (1,124 | ) | $ | 6,090 | |||||||||
Year Ended December 31, 2006 | ||||||||||||||||||||
Allowance for Bad Debt | $ | 2,775 | $ | 1,909 | $ | — | $ | (721 | ) | $ | 3,963 |
(a) | Charges relate to provisions for doubtful accounts | |
(b) | Reflects the impact of acquisitions | |
(c) | Deductions relate to the write-off of accounts receivable deemed uncollectible |
F-37
Table of Contents
June 30, | December 31, | |||||||
2009 | 2008 | |||||||
(Unaudited) | ||||||||
(In thousands, except share data) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 134,304 | $ | 111,135 | ||||
Trade accounts receivable, net of allowance of $6,396 and $5,838, respectively | 98,997 | 172,930 | ||||||
Accounts receivable — related parties | 138 | 148 | ||||||
Income tax receivable | 27,052 | 3,324 | ||||||
Inventories | 11,279 | 11,937 | ||||||
Prepaid expenses | 4,615 | 6,838 | ||||||
Other current assets | 5,648 | 6,508 | ||||||
Deferred tax assets | 28,076 | 11,081 | ||||||
Total current assets | 310,109 | 323,901 | ||||||
Property and equipment, net | 714,560 | 740,879 | ||||||
Deferred debt costs, net of amortization | 7,058 | 5,132 | ||||||
Goodwill | — | 202,749 | ||||||
Other intangible assets, net of amortization | 34,381 | 36,004 | ||||||
Other assets | 2,285 | 2,046 | ||||||
Total assets | $ | 1,068,393 | $ | 1,310,711 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 17,784 | $ | 28,291 | ||||
Accrued expenses | 37,950 | 47,139 | ||||||
Current portion of long-term debt | 28,316 | 26,063 | ||||||
Other current liabilities | 401 | 658 | ||||||
Total current liabilities | 84,451 | 102,151 | ||||||
Long-term debt | 451,958 | 454,260 | ||||||
Deferred tax liabilities | 135,079 | 149,591 | ||||||
Other long-term liabilities | 9,686 | 9,705 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock; $.01 par value; 5,000,000 shares authorized; none designated or issued at June 30, 2009 and December 31, 2008, respectively | — | — | ||||||
Common stock; $.01 par value; 80,000,000 shares authorized; 42,394,809 shares issued; and 40,703,187 shares outstanding at June 30, 2009; 41,734,485 shares issued; and 40,851,862 shares outstanding at December 31, 2008 | 424 | 417 | ||||||
Additional paid-in capital | 328,101 | 325,785 | ||||||
Retained earnings | 72,642 | 277,173 | ||||||
Treasury stock, at cost, 1,691,622 and 882,623 shares at June 30, 2009 and December 31, 2008, respectively | (13,948 | ) | (8,371 | ) | ||||
Total stockholders’ equity | 387,219 | 595,004 | ||||||
Total liabilities and stockholders’ equity | $ | 1,068,393 | $ | 1,310,711 | ||||
F-38
Table of Contents
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
Revenues: | ||||||||||||||||
Well servicing | $ | 36,399 | $ | 89,018 | $ | 85,213 | $ | 169,537 | ||||||||
Fluid services | 49,088 | 72,581 | 114,065 | 143,980 | ||||||||||||
Completion and remedial services | 29,373 | 79,579 | 66,632 | 148,037 | ||||||||||||
Contract drilling | 3,988 | 10,344 | 7,626 | 19,841 | ||||||||||||
Total revenues | 118,848 | 251,522 | 273,536 | 481,395 | ||||||||||||
Expenses: | ||||||||||||||||
Well servicing | 27,825 | 55,293 | 64,742 | 103,759 | ||||||||||||
Fluid services | 35,381 | 48,554 | 79,968 | 94,987 | ||||||||||||
Completion and remedial services | 21,484 | 42,651 | 47,378 | 78,439 | ||||||||||||
Contract drilling | 3,338 | 7,529 | 6,607 | 14,589 | ||||||||||||
General and administrative, including stock-based compensation of $1,290 and $1,184 in three months ended June 30, 2009 and 2008, and $2,665 and $2,264 in the six months ended June 30, 2009 and 2008, respectively | 27,424 | 26,811 | 56,503 | 52,663 | ||||||||||||
Depreciation and amortization | 32,413 | 28,732 | 65,150 | 56,764 | ||||||||||||
(Gain) loss on disposal of assets | 474 | (809 | ) | 1,339 | (584 | ) | ||||||||||
Goodwill impairment | (82 | ) | — | 204,014 | — | |||||||||||
Total expenses | 148,257 | 208,761 | 525,701 | 400,617 | ||||||||||||
Operating income (loss) | (29,409 | ) | 42,761 | (252,165 | ) | 80,778 | ||||||||||
Other income (expense): | ||||||||||||||||
Interest expense | (5,974 | ) | (6,453 | ) | (11,710 | ) | (13,802 | ) | ||||||||
Interest income | 173 | 471 | 393 | 1,172 | ||||||||||||
Other income (expense) | 118 | (6,469 | ) | 252 | (6,431 | ) | ||||||||||
Income (loss) from continuing operations before income taxes | (35,092 | ) | 30,310 | (263,230 | ) | 61,717 | ||||||||||
Income tax benefit (expense) | 13,856 | (11,597 | ) | 59,169 | (23,348 | ) | ||||||||||
Net income (loss) | $ | (21,236 | ) | $ | 18,713 | $ | (204,061 | ) | $ | 38,369 | ||||||
Earnings per share of common stock: | ||||||||||||||||
Basic | $ | (0.54 | ) | $ | 0.46 | $ | (5.13 | ) | $ | 0.94 | ||||||
Diluted | $ | (0.54 | ) | $ | 0.45 | $ | (5.13 | ) | $ | 0.92 | ||||||
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Additional | Total | |||||||||||||||||||||||
Common Stock | Paid-In | Treasury | Retained | Stockholders’ | ||||||||||||||||||||
Shares | Amount | Capital | Stock | Earnings | Equity | |||||||||||||||||||
(In thousands, except share data) | ||||||||||||||||||||||||
Balance — December 31, 2008 | 41,734,485 | $ | 417 | $ | 325,785 | $ | (8,371 | ) | $ | 277,173 | $ | 595,004 | ||||||||||||
Issuances of restricted stock | 660,324 | 7 | (7 | ) | 431 | (431 | ) | — | ||||||||||||||||
Amortization of share based compensation | — | — | 2,640 | — | — | 2,640 | ||||||||||||||||||
Treasury stock issued as compensation to Chairman of the Board | — | — | — | 43 | (19 | ) | 24 | |||||||||||||||||
Purchase of treasury stock | — | — | — | (6,104 | ) | — | (6,104 | ) | ||||||||||||||||
Exercise of stock options/vesting of restricted stock | — | — | (317 | ) | 53 | (20 | ) | (284 | ) | |||||||||||||||
Net loss | — | — | — | — | (204,061 | ) | (204,061 | ) | ||||||||||||||||
Balance — June 30, 2009 (unaudited) | 42,394,809 | $ | 424 | $ | 328,101 | $ | (13,948 | ) | $ | 72,642 | $ | 387,219 | ||||||||||||
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Six Months Ended June 30, | ||||||||
2009 | 2008 | |||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | (204,061 | ) | $ | 38,369 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 65,150 | 56,764 | ||||||
Goodwill impairment | 204,014 | — | ||||||
Accretion on asset retirement obligation | 73 | 63 | ||||||
Change in allowance for doubtful accounts | 558 | (483 | ) | |||||
Amortization of deferred financing costs | 630 | 482 | ||||||
Non-cash compensation | 2,665 | 2,264 | ||||||
(Gain) loss on disposal of assets | 1,339 | (584 | ) | |||||
Deferred income taxes | (31,507 | ) | 7,666 | |||||
Changes in operating assets and liabilities, net of acquisitions: | ||||||||
Accounts receivable | 73,385 | (23,934 | ) | |||||
Inventories | 658 | 402 | ||||||
Prepaid expenses and other current assets | 3,380 | 5,177 | ||||||
Other assets | (219 | ) | (198 | ) | ||||
Accounts payable | (10,507 | ) | 991 | |||||
Excess tax expense (benefit) from exercise of employee stock options/vesting of restricted stock | 317 | (1,583 | ) | |||||
Income tax payable | (24,213 | ) | 1,015 | |||||
Other liabilities | (243 | ) | (3,414 | ) | ||||
Accrued expenses | (8,370 | ) | 4,331 | |||||
Net cash provided by operating activities | 73,049 | 87,328 | ||||||
Cash flows from investing activities: | ||||||||
Purchase of property and equipment | (25,187 | ) | (45,023 | ) | ||||
Proceeds from sale of assets | 1,912 | 6,470 | ||||||
Payments for other long-term assets | (995 | ) | (2,048 | ) | ||||
Payments for businesses, net of cash acquired | (1,190 | ) | (51,239 | ) | ||||
Net cash used in investing activities | (25,460 | ) | (91,840 | ) | ||||
Cash flows from financing activities: | ||||||||
Payments of debt | (15,475 | ) | (10,874 | ) | ||||
Purchase of treasury stock | (6,104 | ) | (1,149 | ) | ||||
Excess tax (expense) benefit from exercise of employee stock options/vesting of restricted stock | (317 | ) | 1,583 | |||||
Tax withholding from exercise of stock options | (5 | ) | (842 | ) | ||||
Exercise of employee stock options | 37 | 1,637 | ||||||
Deferred loan costs and other financing activities | (2,556 | ) | — | |||||
Net cash used in financing activities | (24,420 | ) | (9,645 | ) | ||||
Net increase (decrease) in cash and equivalents | 23,169 | (14,157 | ) | |||||
Cash and cash equivalents — beginning of period | 111,135 | 91,941 | ||||||
Cash and cash equivalents — end of period | $ | 134,304 | $ | 77,784 | ||||
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1. | Basis of Presentation and Nature of Operations |
2. | Summary of Significant Accounting Policies |
• | Depreciation and amortization of property and equipment and intangible assets | |
• | Impairment of property and equipment, goodwill and intangible assets | |
• | Allowance for doubtful accounts | |
• | Litigation and self-insured risk reserves | |
• | Fair value of assets acquired and liabilities assumed | |
• | Stock-based compensation | |
• | Income taxes | |
• | Asset retirement obligations |
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3. | Acquisitions |
Total Cash Paid | ||||||
Closing Date | (Net of Cash Acquired) | |||||
Xterra Fishing and Rental Tools Co. | January 28, 2008 | $ | 21,473 | |||
Lackey Construction, LLC | January 30, 2008 | 4,328 | ||||
B&S Disposal, LLC and B&S Equipment, Ltd | April 30, 2008 | 7,071 | ||||
Triple N Services, Inc. | May 27, 2008 | 17,315 | ||||
Azurite Services Company, Inc., Azurite Leasing Company, LLC and Freestone Disposal, L.P. (collectively, “Azurite”) | September 26, 2008 | 60,977 | ||||
Total 2008 | $ | 111,164 | ||||
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Property and Equipment | $ | 53,127 | ||
Intangible Assets(1) | 1,862 | |||
Goodwill(2) | 5,988 | |||
Total Assets Acquired | $ | 60,977 | ||
(1) | Consists of customer relationships of $1,832, amortizable over 15 years, and non-compete agreements of $30, amortizable over five years. | |
(2) | All of which is expected to be deductible for tax purposes. |
Six Months Ended | ||||
June 30, 2008 | ||||
Revenues | $ | 504,149 | ||
Net income | $ | 40,020 | ||
Earnings per common share — basic | $ | 0.98 | ||
Earnings per common share — diluted | $ | 0.96 |
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4. | Property and Equipment |
June 30, | December 31, | |||||||
2009 | 2008 | |||||||
Land | $ | 5,275 | $ | 4,689 | ||||
Buildings and improvements | 31,913 | 29,913 | ||||||
Well service units and equipment | 385,750 | 379,167 | ||||||
Fluid services equipment | 138,671 | 136,814 | ||||||
Brine and fresh water stations | 10,443 | 10,203 | ||||||
Frac/test tanks | 117,514 | 128,845 | ||||||
Pressure pumping equipment | 169,636 | 156,406 | ||||||
Construction equipment | 25,475 | 22,483 | ||||||
Contract drilling equipment | 60,467 | 60,340 | ||||||
Disposal facilities | 55,566 | 49,878 | ||||||
Vehicles | 39,998 | 41,129 | ||||||
Rental equipment | 37,317 | 36,898 | ||||||
Aircraft | 4,119 | 4,119 | ||||||
Other | 29,350 | 21,758 | ||||||
1,111,494 | 1,082,642 | |||||||
Less accumulated depreciation and amortization | 396,934 | 341,763 | ||||||
Property and equipment, net | $ | 714,560 | $ | 740,879 | ||||
June 30, | December 31, | |||||||
2009 | 2008 | |||||||
Light vehicles | $ | 26,572 | $ | 30,141 | ||||
Well service units and equipment | 1,713 | 1,194 | ||||||
Fluid services equipment | 56,516 | 56,010 | ||||||
Pressure pumping equipment | 27,276 | 20,492 | ||||||
Construction equipment | 1,034 | 3,679 | ||||||
Software | 13,659 | 9,464 | ||||||
Other | — | 705 | ||||||
126,770 | 121,685 | |||||||
Less accumulated amortization | 38,018 | 37,370 | ||||||
$ | 88,752 | $ | 84,315 | |||||
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5. | Long-Term Debt |
June 30, | December 31, | |||||||
2009 | 2008 | |||||||
Credit Facilities: | ||||||||
Revolver | $ | 180,000 | $ | 180,000 | ||||
7.125% Senior Notes | 225,000 | 225,000 | ||||||
Capital leases and other notes | 75,274 | 75,323 | ||||||
480,274 | 480,323 | |||||||
Less current portion | 28,316 | 26,063 | ||||||
$ | 451,958 | $ | 454,260 | |||||
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Six Months Ended | ||||||||
June 30, | ||||||||
2009 | 2008 | |||||||
Cash payments for interest | $ | 12,263 | $ | 12,935 | ||||
Commitment and other fees paid | 157 | 51 | ||||||
Amortization of debt issuance costs | 630 | 482 | ||||||
Change in accrued interest | (1,345 | ) | 51 | |||||
Other | 5 | 283 | ||||||
$ | 11,710 | $ | 13,802 | |||||
6. | Commitments and Contingencies |
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7. | Stockholders’ Equity |
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8. | Incentive Plan |
Weighted | ||||||||||||||||
Weighted | Average | Aggregate | ||||||||||||||
Number of | Average | Remaining | Instrinsic | |||||||||||||
Options | Exercise | Contractual | Value | |||||||||||||
Granted | Price | Term (Years) | (000’s) | |||||||||||||
Non-statutory stock options: | ||||||||||||||||
Outstanding, beginning of period | 1,608,675 | $ | 11.11 | |||||||||||||
Options granted | — | |||||||||||||||
Options forfeited | (15,500 | ) | $ | 14.03 | ||||||||||||
Options exercised | (5,000 | ) | $ | 6.98 | ||||||||||||
Options expired | (91,250 | ) | $ | 6.05 | ||||||||||||
Outstanding, end of period | 1,496,925 | $ | 11.40 | 5.34 | $ | 1,424 | ||||||||||
Exercisable, end of period | 1,124,050 | $ | 9.18 | 4.96 | $ | 1,424 | ||||||||||
Vested or expected to vest, end of period | 1,483,175 | $ | 11.27 | 5.32 | $ | 1,424 | ||||||||||
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Weighted | ||||||||
Average | ||||||||
Grant Date | ||||||||
Number of | Fair Value | |||||||
Nonvested Shares | Shares | per Share | ||||||
Nonvested at beginning of period | 599,325 | $ | 21.41 | |||||
Granted during period | 616,324 | 6.50 | ||||||
Vested during period | (72,375 | ) | 20.04 | |||||
Forfeited during period | (39,600 | ) | 16.86 | |||||
Performance based earned(1) | 14,025 | 21.17 | ||||||
Nonvested at end of period | 1,117,699 | $ | 13.44 | |||||
(1) | In March 2008 certain members of management were awarded grants of performance based stock awards. The number of shares to be earned ranged from 0% to 150% of target depending on the Company’s achievement of certain EPS and return on capital employed performance compared to a peer group. The performance period for purposes of these grants was January 1, 2006 through December 31, 2008. As of December 31, 2008 it was estimated that 85% of the target shares would be earned and in March 2009 it was determined that 100% of the target shares had been earned. These shares remain subject to vesting over a three-year period, with the first shares vesting in March 2010. |
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9. | Related Party Transactions |
10. | Earnings Per Share |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
Numerator (both basic and diluted): | ||||||||||||||||
Net income (loss) | $ | (21,236 | ) | $ | 18,713 | $ | (204,061 | ) | $ | 38,369 | ||||||
Denominator: | ||||||||||||||||
Denominator for basic earnings per share | 39,574,561 | 40,721,317 | 39,773,857 | 40,649,287 | ||||||||||||
Stock options | — | 827,164 | — | 810,916 | ||||||||||||
Unvested restricted stock | — | 110,114 | — | 197,915 | ||||||||||||
Denominator for diluted earnings per share | 39,574,561 | 41,658,595 | 39,773,857 | 41,658,118 | ||||||||||||
Basic earnings per common share: | $ | (0.54 | ) | $ | 0.46 | $ | (5.13 | ) | $ | 0.94 | ||||||
Diluted earnings per common share: | $ | (0.54 | ) | $ | 0.45 | $ | (5.13 | ) | $ | 0.92 | ||||||
11. | Business Segment Information |
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Completion | ||||||||||||||||||||||||
Well | Fluid | and Remedial | Contract | Corporate | ||||||||||||||||||||
Servicing | Services | Services | Drilling | and Other | Total | |||||||||||||||||||
Three Months Ended June 30, 2009 (Unaudited) | ||||||||||||||||||||||||
Operating revenues | $ | 36,399 | $ | 49,088 | $ | 29,373 | $ | 3,988 | $ | — | $ | 118,848 | ||||||||||||
Direct operating costs | (27,825 | ) | (35,381 | ) | (21,484 | ) | (3,338 | ) | — | $ | (88,028 | ) | ||||||||||||
Segment profits | $ | 8,574 | $ | 13,707 | $ | 7,889 | $ | 650 | $ | — | $ | 30,820 | ||||||||||||
Depreciation and amortization | $ | 12,127 | $ | 9,131 | $ | 7,653 | $ | 1,803 | $ | 1,699 | $ | 32,413 | ||||||||||||
Capital expenditures, (excluding acquisitions) | $ | 4,266 | $ | 3,212 | $ | 2,693 | $ | 634 | $ | 598 | $ | 11,403 | ||||||||||||
Three Months Ended June 30, 2008 (Unaudited) | ||||||||||||||||||||||||
Operating revenues | $ | 89,018 | $ | 72,581 | $ | 79,579 | $ | 10,344 | $ | — | $ | 251,522 | ||||||||||||
Direct operating costs | (55,293 | ) | (48,554 | ) | (42,651 | ) | (7,529 | ) | — | (154,027 | ) | |||||||||||||
Segment profits | $ | 33,725 | $ | 24,027 | $ | 36,928 | $ | 2,815 | $ | — | $ | 97,495 | ||||||||||||
Depreciation and amortization | $ | 11,492 | $ | 7,046 | $ | 7,041 | $ | 1,853 | $ | 1,300 | $ | 28,732 | ||||||||||||
Capital expenditures, (excluding acquisitions) | $ | 10,638 | $ | 6,522 | $ | 6,518 | $ | 1,715 | $ | 1,203 | $ | 26,596 | ||||||||||||
Six Months Ended June 30, 2009 (Unaudited) | ||||||||||||||||||||||||
Operating revenues | $ | 85,213 | $ | 114,065 | $ | 66,632 | $ | 7,626 | $ | — | $ | 273,536 | ||||||||||||
Direct operating costs | (64,742 | ) | (79,968 | ) | (47,378 | ) | (6,607 | ) | — | $ | (198,695 | ) | ||||||||||||
Segment profits | $ | 20,471 | $ | 34,097 | $ | 19,254 | $ | 1,019 | $ | — | $ | 74,841 | ||||||||||||
Depreciation and amortization | $ | 24,375 | $ | 18,353 | $ | 15,383 | $ | 3,624 | $ | 3,415 | $ | 65,150 | ||||||||||||
Capital expenditures, (excluding acquisitions) | $ | 9,423 | $ | 7,095 | $ | 5,947 | $ | 1,401 | $ | 1,321 | $ | 25,187 | ||||||||||||
Identifiable assets | $ | 268,207 | $ | 205,577 | $ | 202,563 | $ | 44,544 | $ | 347,502 | $ | 1,068,393 |
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Completion | ||||||||||||||||||||||||
Well | Fluid | and Remedial | Contract | Corporate | ||||||||||||||||||||
Servicing | Services | Services | Drilling | and Other | Total | |||||||||||||||||||
Six Months Ended June 30, 2008 (Unaudited) | ||||||||||||||||||||||||
Operating revenues | $ | 169,537 | $ | 143,980 | $ | 148,037 | $ | 19,841 | $ | — | $ | 481,395 | ||||||||||||
Direct operating costs | (103,759 | ) | (94,987 | ) | (78,439 | ) | (14,589 | ) | — | (291,774 | ) | |||||||||||||
Segment profits | $ | 65,778 | $ | 48,993 | $ | 69,598 | $ | 5,252 | $ | — | $ | 189,621 | ||||||||||||
Depreciation and amortization | $ | 22,704 | $ | 13,921 | $ | 13,911 | $ | 3,661 | $ | 2,567 | $ | 56,764 | ||||||||||||
Capital expenditures, (excluding acquisitions) | $ | 18,008 | $ | 11,041 | $ | 11,033 | $ | 2,904 | $ | 2,037 | $ | 45,023 | ||||||||||||
Identifiable assets | $ | 301,669 | $ | 209,397 | $ | 322,623 | $ | 70,984 | $ | 305,103 | $ | 1,209,776 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Segment profits | $ | 30,820 | $ | 97,495 | $ | 74,841 | $ | 189,621 | ||||||||
General and administrative expenses | (27,424 | ) | (26,811 | ) | (56,503 | ) | (52,663 | ) | ||||||||
Depreciation and amortization | (32,413 | ) | (28,732 | ) | (65,150 | ) | (56,764 | ) | ||||||||
Loss on disposal of assets | (474 | ) | 809 | (1,339 | ) | 584 | ||||||||||
Goodwill impairment | 82 | — | (204,014 | ) | — | |||||||||||
Operating income (loss) | $ | (29,409 | ) | $ | 42,761 | $ | (252,165 | ) | $ | 80,778 | ||||||
12. | Supplemental Schedule of Cash Flow Information |
Six Months Ended | ||||||||
June 30, | ||||||||
2009 | 2008 | |||||||
(In thousands) | ||||||||
Capital leases issued for equipment | $ | 15,426 | $ | 20,522 | ||||
Contingent earnout accrual | $ | 909 | $ | 1,158 | ||||
Asset retirement obligation additions | $ | 12 | $ | 34 |
13. | Fair Value Measurements |
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Asset | ||||
Retirement | ||||
Obligation | ||||
Balance, December 31, 2008 | $ | 1,796 | ||
Additional asset retirement obligation | 12 | |||
Accretion expense | 73 | |||
Balance, June 30, 2009 | $ | 1,881 | ||
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14. | Subsequent Events |
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ITEM 20. | Indemnification of Directors and Officers. |
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• | us, except for: |
• | claims regarding the indemnitee’s rights under the indemnification agreement; | |
• | claims to enforce a right to indemnification under any statute or law; and | |
• | counter-claims against us in a proceeding brought by us against the indemnitee; or |
• | any other person, except for claims approved by our board of directors. |
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ITEM 21. | Exhibit and Financial Statement Schedules. |
Exhibit | ||||
Number | Description | |||
1 | .1 | Purchase Agreement dated July 23, 2009, by and among Basic Energy Services, Inc., the guarantors party thereto and the initial purchasers party thereto. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report onForm 8-K (SEC FileNo. 001-32693), filed on July 29, 2009) | ||
2 | .1 | Agreement and Plan of Merger, dated as of January 8, 2007, by and among Basic Energy Services, Inc. (the “Company”), JS Acquisition LLC and JetStar Consolidated Holdings, Inc. (Incorporated by reference to Exhibit 2.1 of the Company’s Current Report onForm 8-K (SEC FileNo. 001-32693), filed on March 8, 2007) | ||
2 | .2 | Amendment to Merger Agreement, dated as of March 5, 2007, by and among Basic Energy Services, Inc., JS Acquisition LLC and JetStar Consolidated Holdings, Inc. (Incorporated by reference to Exhibit 2.2 of the Company’s Current Report onForm 8-K (SEC FileNo. 001-32693), filed on March 8, 2007) | ||
3 | .1 | Amended and Restated Certificate of Incorporation of the Company, dated September 22, 2005. (Incorporated by reference to Exhibit 3.1 of the Company’s Registration Statement onForm S-1 (SEC FileNo. 333-127517), filed on September 28, 2005) | ||
3 | .2 | Amended and Restated Bylaws of the Company, effective as of December 17, 2007. (Incorporated by reference to Exhibit 3.1 of the Company’s Current Report onForm 8-K (SEC FileNo. 001-32693), filed on December 18, 2007) | ||
3 | .3 | Certificate of Formation of Basic Energy Services GP, LLC, dated as of January 7, 2003. (Incorporated by reference to Exhibit 3.3 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .4 | Limited Liability Company Agreement of Basic Energy Services GP, LLC, dated as of January 7, 2003. (Incorporated by reference to Exhibit 3.4 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .5 | Certificate of Formation of Basic Energy Services LP, LLC, dated as of January 7, 2003. (Incorporated by reference to Exhibit 3.5 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .6 | Limited Liability Company Agreement of Basic Energy Services LP, LLC, dated as of January 7, 2003. (Incorporated by reference to Exhibit 3.6 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .7 | Certificate of Limited Partnership of Basic Energy Services, L.P., dated as of January 24, 2003. (Incorporated by reference to Exhibit 3.7 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .8 | Agreement of Limited Partnership of Basic Energy Services, L.P., dated as of January 24, 2003. (Incorporated by reference to Exhibit 3.8 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .9 | Articles of Incorporation of Basic ESA, Inc., dated July 10, 1981. (Incorporated by reference to Exhibit 3.9 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .10* | Bylaws of Basic ESA, Inc., as amended. | ||
3 | .11* | Certificate of Formation of JS Acquisition LLC, dated as of January 4, 2007. | ||
3 | .12* | Limited Liability Company Agreement of JS Acquisition LLC. | ||
3 | .13* | Amended and Restated Articles of Organization of Acid Services, LLC, filed April 24, 2006. | ||
3 | .14* | Second Amended and Restated Operating Agreement of Acid Services, LLC. | ||
3 | .15* | Second Amended and Restated Certificate of Incorporation of JetStar Holdings, Inc., dated April 24, 2006. | ||
3 | .16* | Bylaws of JetStar Holdings, Inc. | ||
3 | .17* | Articles of Incorporation of JetStar Energy Services, Inc., dated April 18, 2005. | ||
3 | .18* | Bylaws of JetStar Energy Services, Inc. | ||
3 | .19 | Certificate of Incorporation of Basic Marine Services, Inc., as amended, dated January 28, 2005. (Incorporated by reference to Exhibit 3.15 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .20 | Bylaws of Basic Marine Services, Inc. (Incorporated by reference to Exhibit 3.16 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) |
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Exhibit | ||||
Number | Description | |||
3 | .21 | Amended and Restated Certificate of Incorporation of First Energy Services Company, dated October 24, 2003. (Incorporated by reference to Exhibit 3.17 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .22 | Bylaws of First Energy Services Company. (Incorporated by reference to Exhibit 3.18 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .23 | Articles of Incorporation of Oilwell Fracturing Services, Inc., dated November 20, 1981. (Incorporated by reference to Exhibit 3.19 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .24* | Bylaws of Oilwell Fracturing Services, Inc., as amended. | ||
3 | .25 | Articles of Incorporation of LeBus Oil Field Service Co., dated December 19, 1985. (Incorporated by reference to Exhibit 3.27 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .26 | Bylaws of LeBus Oil Field Service Co. (Incorporated by reference to Exhibit 3.28 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .27 | Articles of Incorporation of Globe Well Service, Inc., as amended, dated February 6, 1979. (Incorporated by reference to Exhibit 3.29 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .28 | Bylaws of Globe Well Service, Inc. (Incorporated by reference to Exhibit 3.30 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .29 | Articles of Organization of SCH Disposal, L.L.C., dated October 30, 1998. (Incorporated by reference to Exhibit 3.31 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .30 | Regulations of SCH Disposal, L.L.C., dated as of November 2, 1998. (Incorporated by reference to Exhibit 3.32 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .31* | Articles of Incorporation of Sledge Drilling Corp., dated November 22, 2005. | ||
3 | .32* | Bylaws of Sledge Drilling Corp. | ||
3 | .33* | Certificate of Incorporation of Wildhorse Services, Inc., dated as of July 30, 2002. | ||
3 | .34* | Bylaws of Wildhorse Services, Inc. | ||
3 | .35* | Articles of Incorporation of Xterra Fishing & Rental Tools Co., as amended, dated June 1, 2000. | ||
3 | .36* | Bylaws of Xterra Fishing & Rental Tools Co. | ||
3 | .37* | Articles of Incorporation of Chaparral Service, Inc., dated July 18, 1969. | ||
3 | .38* | Amended and Restated Bylaws of Chaparral Service, Inc. | ||
3 | .39* | Certificate of Incorporation of Hennessey Rental Tools, Inc., dated September 29, 1993. | ||
3 | .40* | Bylaws of Hennessey Rental Tools, Inc. | ||
3 | .41* | Certificate of Formation of Permian Plaza, LLC, dated August 20, 2007. | ||
3 | .42* | Company Agreement of Permian Plaza, LLC. | ||
4 | .1 | Specimen Stock Certificate representing common stock of the Company. (Incorporated by reference to Exhibit 3.1 of the Company’s Registration Statement onForm S-1 (SEC FileNo. 333-127517), filed on November 4, 2005) | ||
4 | .2 | Indenture dated April 12, 2006, among Basic Energy Services, Inc., the guarantors party thereto, and The Bank of New York Trust Company, N.A., as trustee. (Incorporated by reference to Exhibit 4.1 of the Company’s Current Report onForm 8-K (SEC FileNo. 001-32693), filed on April 13, 2006) | ||
4 | .3 | Form of 7.125% Senior Note due 2016. (Included in the Indenture filed as Exhibit 4.1 of the Company’s Current Report onForm 8-K (SEC FileNo. 001-32693), filed on April 13, 2006) | ||
4 | .4 | First Supplemental Indenture dated as of July 14, 2006 to Indenture dated as of April 12, 2006 among the Company, as Issuer, the Subsidiary Guarantors named therein and The Bank of New York Trust Company, N.A., as trustee. (Incorporated by reference to Exhibit 4.1 of the Company’s Current Report onForm 8-K (SEC FileNo. 001-32693), filed on July 20, 2006) | ||
4 | .5 | Second Supplemental Indenture dated as of April 26, 2007 and effective as of March 7, 2007 to Indenture dated as of April 12, 2006 among the Company as Issuer, the Subsidiary Guarantors named therein and the Bank of New York Trust Company, N.A., as trustee. (Incorporated by reference to Exhibit 4.1 of the Company’s Current Report onForm 8-K (SEC FileNo. 001-32693), filed on May 1, 2007) |
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Exhibit | ||||
Number | Description | |||
4 | .6 | Third Supplement Indenture dated as of April 26, 2007 to Indenture dated as of April 12, 2006 among the Company as Issuer, the Subsidiary Guarantors named therein and the Bank of New York Trust Company, N.A., as trustee. (Incorporated by reference to Exhibit 4.2 of the Company’s Current Report onForm 8-K (SEC FileNo. 001-32693), filed on May 1, 2007) | ||
4 | .7 | Fourth Supplemental Indenture dated as of February 9, 2009 to Indenture dated as of April 12, 2006 among the Company as Issuer, the Subsidiary Guarantors named therein and the Bank of New York Mellon Trust Company, N.A., as Trustee. (Incorporated by reference to Exhibit 4.7 of the Company’s Annual Report onForm 10-K (SEC FileNo. 001-32693), filed March 9, 2009) | ||
4 | .8 | Indenture dated as of July 31, 2009, by and among Basic, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee. (Incorporated by reference to Exhibit 4.1 of the Company’s Current Report onForm 8-K (SEC FileNo. 001-32693), filed on August 4, 2009) | ||
4 | .9 | Form of 11.625% Senior Secured Note due 2014 (included as Exhibit A to Exhibit 4.1 of the Company’s Current Report onForm 8-K (SEC FileNo. 001-32693), filed on August 4, 2009) | ||
4 | .10 | Security Agreement dated as of July 31, 2009, by and between Basic and each of the other Grantors party thereto in favor of The Bank of New York Mellon Trust Company, N.A., as Trustee. (Incorporated by reference to Exhibit 4.3 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on August 4, 2009) | ||
5 | .1* | Opinion of Andrews Kurth LLP regarding the validity of the new notes | ||
8 | .1* | Opinion of Andrews Kurth LLP regarding certain tax matters | ||
10 | .1† | Form of Indemnification Agreement. (Incorporated by reference to Exhibit 10.1 of the Company’s Registration Statement onForm S-1 (SEC FileNo. 333-127517), filed on September 28, 2005) | ||
10 | .2 | Second Amended and Restated Stockholders’ Agreement dated as of April 2, 2004 among the Company and the stockholders listed therein. (Incorporated by reference to Exhibit 10.7 of the Company’s Registration Statement onForm S-1 (SEC FileNo. 333-127517), filed on August 12, 2005) | ||
10 | .3 | Stock Purchase Agreement dated as of September 18, 2003, as amended on October 1, 2003, among the Company, FESCO Holdings, Inc. and the sellers named therein. (Incorporated by reference to Exhibit 10.8 of the Company’s Registration Statement onForm S-1 (SEC FileNo. 333-127517), filed on August 12, 2005) | ||
10 | .4 | Asset Purchase Agreement dated as of August 14, 2003 among the Company and PWI, Inc. (Incorporated by reference to Exhibit 10.9 of the Company’s Registration Statement onForm S-1 (SEC FileNo. 333-127517), filed on August 12, 2005) | ||
10 | .5 | Fourth Amended and Restated Credit Agreement dated as of October 3, 2003, amended and restated as of February 6, 2007, among Basic Energy Services, Inc., the subsidiary guarantors party thereto, Bank of America, N.A., as syndication agent, Capital One, National Association, as documentation agent, BNP Paribas, as documentation agent, UBS AG, Stamford Branch, as issuing bank, administrative agent and collateral agent, and the lenders party thereto. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report onForm 8-K (SEC FileNo. 001-32693), filed on February 12, 2007) | ||
10 | .6 | Amendment and Consent No. 1 to Fourth Amended and Restated Credit Agreement dated May 4, 2009. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report onForm 8-K (SEC FileNo. 001-32693), filed on May 7, 2009) | ||
10 | .7† | Fourth Amended and Restated Basic Energy Services, Inc. 2003 Incentive Plan. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report onForm 8-K (SEC FileNo. 001-32693), filed on June 1, 2009) | ||
10 | .8† | Form of Non-Qualified Option Grant Agreement (Executive Officer — Pre-March 1, 2005). (Incorporated by reference to Exhibit 10.12 of the Company’s Registration Statement onForm S-1 (SEC FileNo. 333-127517), filed on September 28, 2005) | ||
10 | .9† | Form of Non-Qualified Option Grant Agreement (Executive Officer — Post-March 1, 2005). (Incorporated by reference to Exhibit 10.13 of the Company’s Registration Statement onForm S-1 (SEC FileNo. 333-127517), filed on September 28, 2005) | ||
10 | .10† | Form of Non-Qualified Option Grant Agreement (Non-Employee Director — Pre-March 1, 2005). (Incorporated by reference to Exhibit 10.14 of the Company’s Registration Statement onForm S-1 (SEC FileNo. 333-127517), filed on September 28, 2005) | ||
10 | .11† | Form of Non-Qualified Option Grant Agreement (Non-Employee Director — Post-March 1, 2005). (Incorporated by reference to Exhibit 10.15 of the Company’s Registration Statement onForm S-1 (SEC FileNo. 333-127517), filed on September 28, 2005) | ||
10 | .12† | Form of Restricted Stock Grant Agreement. (Incorporated by reference to Exhibit 10.16 of the Company’s Registration Statement onForm S-1 (SEC FileNo. 333-127517), filed on September 28, 2005) |
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Exhibit | ||||
Number | Description | |||
10 | .13† | Form of Amendment to Nonqualified Stock Option Agreement, dated as of December 31, 2005, by and between the Company and the optionees party thereto. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report onForm 8-K (SEC FileNo. 001-32693), filed on January 4, 2006) | ||
10 | .14† | Form of Nonqualified Stock Option Agreement (Director form effective March 2006). (Incorporated by reference to Exhibit 10.13 of the Company’s Annual Report onForm 10-K (SEC FileNo. 001-32693), filed on March 7, 2008) | ||
10 | .15† | Form of Nonqualified Stock Option Agreement (Employee form effective March 2006). (Incorporated by reference to Exhibit 10.14 of the Company’s Annual Report onForm 10-K(SEC File No. 001-32693), filed on March 7, 2008) | ||
10 | .16† | Form of Restricted Stock Grant Agreement (Officers and Employees — Post-March 1, 2007). (Incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report onForm 10-Q(SEC File No. 001-32693), filed on May 10, 2007) | ||
10 | .17† | Form of Restricted Stock Grant Agreement (Non-Employee Directors — Post-March 1, 2007). (Incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report onForm 10-Q(SEC File No. 001-32693), filed on May 10, 2007) | ||
10 | .18† | Form of Non-Qualified Stock Option Grant Agreement (Post-March 1, 2007). (Incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report onForm 10-Q(SEC File No. 001-32693), filed on May 10, 2007) | ||
10 | .19† | Form of Performance-Based Award Agreement (Officers and Employees). (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on March 17,2008) | ||
10 | .20† | Form of Restricted Stock Grant Agreement (Officers and Employees). (Incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report onForm 10-Q(SEC File No. 001-32693), filed on May 8, 2008) | ||
10 | .21† | Form of Restricted Stock Grant Agreement (Non-Employee Directors). (Incorporated by reference to Exhibit 10.3 of the Company’s Quarterly Report onForm 10-Q(SEC File No. 001-32693), filed on May 8. 2008) | ||
10 | .22† | Form of Performance-Based Award Agreement (effective March 2009) (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report onForm 8-K(SEC File No. 001-32963), filed March 19, 2009) | ||
10 | .23 | Workover Unit Package Contract and Acceptance Agreement, dated as of May 17, 2005, between Basic Energy Services, L.P. and Taylor Rigs, LLC. (Incorporated by reference to Exhibit 10.17 of the Company’s Registration Statement onForm S-1(SEC File No. 333-127517), filed on November 4, 2005) | ||
10 | .24 | Share Exchange Agreement, dated as of September 22, 2003, among BES Holding Co. and the Stockholders named therein. (Incorporated by reference to Exhibit 10.18 of the Company’s Registration Statement onForm S-1(SEC File No. 333-127517), filed on September 28, 2005) | ||
10 | .25 | Form of Share Tender and Repurchase Agreement. (Incorporated by reference to Exhibit 10.19 of the Company’s Registration Statement onForm S-1(SEC File No. 333-127517), filed on November 4, 2005) | ||
10 | .26 | Workover Unit Package Contract and Acceptance Agreement, dated as of November 10, 2005, between Basic Energy Services, L.P. and Taylor Rigs, LLC. (Incorporated by reference to Exhibit 10.20 of the Company’s Registration Statement onForm S-1(SEC File No. 333-127517), filed on November 16, 2005) | ||
10 | .27 | Asset Purchase Agreement dated as of February 21, 2006 among Basic Energy Services, LP, Basic Energy Services GP, LLC, G&L Tool, Ltd., DLH Management, LLC and LJH, Ltd. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on March 2, 2006) | ||
10 | .28 | Contingent Earn Out Agreement dated as of February 28, 2006 among Basic Energy Services, LP and G&L Tool, Ltd. (Incorporated by reference to Exhibit 10.2 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on March 2, 2006) | ||
10 | .29 | Fee Reimbursement Agreement, dated as of July 24, 2006, by and among the Company, Southwest Partners II, L.P., Southwest Partners, III, L.P. and Fortress Holdings, LLC. (Incorporated by reference to Exhibit 10.23 of the Company’s Registration Statement onForm S-1(SEC File No. 333-136019), filed on July 25, 2006) | ||
10 | .30† | Employment Agreement of Kenneth V. Huseman, effective as of December 31, 2006. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on January 4, 2007) |
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Exhibit | ||||
Number | Description | |||
10 | .31† | Employment Agreement of Alan Krenek, effective as of December 31, 2006. (Incorporated by reference to Exhibit 10.2 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on January 4, 2007) | ||
10 | .32† | Amended and Restated Employment Agreement of Charles W. Swift, effective as of November 21, 2008. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on November 24, 2008) | ||
10 | .33† | Employment Agreement of Dub William Harrison, effective as of December 31, 2006. (Incorporated by reference to Exhibit 10.4 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on January 4, 2007) | ||
10 | .34† | Employment Agreement of James E. Tyner, effective as of December 31, 2006. (Incorporated by reference to Exhibit 10.5 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on January 4, 2007) | ||
10 | .35† | Amended and Restated Employment Agreement of Thomas Monroe Patterson, effective as of November 21, 2008. (Incorporated by reference to Exhibit 10.2 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on November 24, 2008) | ||
10 | .36† | Employment Agreement of Mark David Rankin, effective as of December 31, 2006. (Incorporated by reference to Exhibit 10.7 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on January 4, 2007) | ||
10 | .37† | First Amendment to Employment Agreement of Kenneth V. Huseman, effective as of January 23, 2007. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on January 29, 2007) | ||
10 | .38 | Registration Rights Agreement, dated as of March 6, 2007, by and among Basic Energy Services, Inc. and the JetStar Stockholders’ Representative. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on March 8, 2007) | ||
10 | .39 | Registration Rights Agreement, dated as of April 2, 2007, by and among the Company and the Holders named therein. (Incorporated by reference to Exhibit 10.1 of the Company’s current Report onForm 8-K(SEC File No. 001-32693), filed on April 5, 2007) | ||
10 | .40 | Registration Rights Agreement dated as of July 31, 2009, by and among Basic, the Guarantors named therein and the initial purchasers party thereto. (Incorporated by reference to Exhibit 4.4 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on August 4, 2009) | ||
10 | .41 | Purchase Agreement, dated April 7, 2006, by and among Basic Energy Services, Inc. (the “Company”), UBS Securities LLC as representative for the Initial Purchasers listed therein, and the Subsidiary Guarantors party thereto (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report onForm 8-K filed on April 13, 2006) | ||
12 | .1* | Statement regarding computation of ratio of earnings to fixed charges | ||
21 | .1* | Subsidiaries of the Company | ||
23 | .1* | Consent of KPMG LLP | ||
23 | .2* | Consent of Andrews Kurth LLP (included in Exhibit 5.1) | ||
24 | .1* | Powers of Attorney (included on signature pages). | ||
25 | .1* | Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of The Bank of New York Mellon Trust Company, N.A. to act as trustee under the Indenture | ||
99 | .1* | Form of Letter of Transmittal | ||
99 | .2* | Guidelines for Certification of Taxpayer Identification Number on SubstituteForm W-9 | ||
99 | .3* | Form of Notice of Guaranteed Delivery | ||
99 | .4* | Form of Letter to Brokers | ||
99 | .5* | Form of Letter to Clients |
* | Indicates exhibits filed herewith. | |
† | Management contract or compensatory plan or arrangement. |
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ITEM 22. | Undertakings. |
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II-11
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By: | /s/ Kenneth V. Huseman |
Title: | President and Chief Executive Officer |
Signature | Title | Date | ||||
/s/ Kenneth V. Huseman Kenneth V. Huseman | President, Chief Executive Officer and Director (Principal Executive Officer) | September 2, 2009 | ||||
/s/ Alan Krenek Alan Krenek | Senior Vice President, Chief Financial Officer, Treasurer and Secretary (Principal Financial Officer and Principal Accounting Officer) | September 2, 2009 | ||||
/s/ Steven A. Webster Steven A. Webster | Chairman of the Board | September 2, 2009 | ||||
/s/ James S. D’Agostino, Jr. James S. D’Agostino, Jr. | Director | September 2, 2009 | ||||
/s/ William E. Chiles William E. Chiles | Director | September 2, 2009 | ||||
/s/ Robert F. Fulton Robert F. Fulton | Director | September 2, 2009 |
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Signature | Title | Date | ||||
/s/ Sylvester P. Johnson, IV Sylvester P. Johnson, IV | Director | September 2, 2009 | ||||
/s/ Thomas P. Moore, Jr. Thomas P. Moore, Jr. | Director | September 2, 2009 | ||||
/s/ Antonio O. Garza, Jr. Antonio O. Garza, Jr. | Director | September 2, 2009 |
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By: | /s/ Kenneth V. Huseman |
Title: | President |
Signature | Title | Date | ||||
/s/ Kenneth V. Huseman Kenneth V. Huseman | President and Director (Principal Executive Officer) | September 2, 2009 | ||||
/s/ Alan Krenek Alan Krenek | Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | September 2, 2009 |
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By: | /s/ Jerry Tufly |
Title: | President |
Signature | Title | Date | ||||
/s/ Jerry Tufly Jerry Tufly | President, Secretary, Treasurer and Sole Manager (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) | September 2, 2009 |
II-16
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Exhibit | ||||
Number | Description | |||
1 | .1 | Purchase Agreement dated July 23, 2009, by and among Basic Energy Services, Inc., the guarantors party thereto and the initial purchasers party thereto. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on July 29, 2009) | ||
2 | .1 | Agreement and Plan of Merger, dated as of January 8, 2007, by and among Basic Energy Services, Inc. (the “Company”), JS Acquisition LLC and JetStar Consolidated Holdings, Inc. (Incorporated by reference to Exhibit 2.1 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on March 8, 2007) | ||
2 | .2 | Amendment to Merger Agreement, dated as of March 5, 2007, by and among Basic Energy Services, Inc., JS Acquisition LLC and JetStar Consolidated Holdings, Inc. (Incorporated by reference to Exhibit 2.2 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on March 8, 2007) | ||
3 | .1 | Amended and Restated Certificate of Incorporation of the Company, dated September 22, 2005. (Incorporated by reference to Exhibit 3.1 of the Company’s Registration Statement onForm S-1(SEC File No. 333-127517), filed on September 28, 2005) | ||
3 | .2 | Amended and Restated Bylaws of the Company, effective as of December 17, 2007. (Incorporated by reference to Exhibit 3.1 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on December 18, 2007) | ||
3 | .3 | Certificate of Formation of Basic Energy Services GP, LLC, dated as of January 7, 2003. (Incorporated by reference to Exhibit 3.3 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .4 | Limited Liability Company Agreement of Basic Energy Services GP, LLC, dated as of January 7, 2003. (Incorporated by reference to Exhibit 3.4 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .5 | Certificate of Formation of Basic Energy Services LP, LLC, dated as of January 7, 2003. (Incorporated by reference to Exhibit 3.5 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .6 | Limited Liability Company Agreement of Basic Energy Services LP, LLC, dated as of January 7, 2003. (Incorporated by reference to Exhibit 3.6 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .7 | Certificate of Limited Partnership of Basic Energy Services, L.P., dated as of January 24, 2003. (Incorporated by reference to Exhibit 3.7 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .8 | Agreement of Limited Partnership of Basic Energy Services, L.P., dated as of January 24, 2003. (Incorporated by reference to Exhibit 3.8 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .9 | Articles of Incorporation of Basic ESA, Inc., dated July 10, 1981. (Incorporated by reference to Exhibit 3.9 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .10* | Bylaws of Basic ESA, Inc., as amended. | ||
3 | .11* | Certificate of Formation of JS Acquisition LLC, dated as of January 4, 2007. | ||
3 | .12* | Limited Liability Company Agreement of JS Acquisition LLC. | ||
3 | .13* | Amended and Restated Articles of Organization of Acid Services, LLC, filed April 24, 2006. | ||
3 | .14* | Second Amended and Restated Operating Agreement of Acid Services, LLC. | ||
3 | .15* | Second Amended and Restated Certificate of Incorporation of JetStar Holdings, Inc., dated April 24, 2006. | ||
3 | .16* | Bylaws of JetStar Holdings, Inc. | ||
3 | .17* | Articles of Incorporation of JetStar Energy Services, Inc., dated April 18, 2005. | ||
3 | .18* | Bylaws of JetStar Energy Services, Inc. | ||
3 | .19 | Certificate of Incorporation of Basic Marine Services, Inc., as amended, dated January 28, 2005. (Incorporated by reference to Exhibit 3.15 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .20 | Bylaws of Basic Marine Services, Inc. (Incorporated by reference to Exhibit 3.16 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .21 | Amended and Restated Certificate of Incorporation of First Energy Services Company, dated October 24, 2003. (Incorporated by reference to Exhibit 3.17 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .22 | Bylaws of First Energy Services Company. (Incorporated by reference to Exhibit 3.18 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) |
Table of Contents
Exhibit | ||||
Number | Description | |||
3 | .23 | Articles of Incorporation of Oilwell Fracturing Services, Inc., dated November 20, 1981. (Incorporated by reference to Exhibit 3.19 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .24* | Bylaws of Oilwell Fracturing Services, Inc., as amended. | ||
3 | .25 | Articles of Incorporation of LeBus Oil Field Service Co., dated December 19, 1985. (Incorporated by reference to Exhibit 3.27 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .26 | Bylaws of LeBus Oil Field Service Co. (Incorporated by reference to Exhibit 3.28 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .27 | Articles of Incorporation of Globe Well Service, Inc., as amended, dated February 6, 1979. (Incorporated by reference to Exhibit 3.29 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .28 | Bylaws of Globe Well Service, Inc. (Incorporated by reference to Exhibit 3.30 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .29 | Articles of Organization of SCH Disposal, L.L.C., dated October 30, 1998. (Incorporated by reference to Exhibit 3.31 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .30 | Regulations of SCH Disposal, L.L.C., dated as of November 2, 1998. (Incorporated by reference to Exhibit 3.32 of the Company’s Registration Statement onForm S-4 (SEC FileNo. 333-135807), filed on July 17, 2006) | ||
3 | .31* | Articles of Incorporation of Sledge Drilling Corp., dated November 22, 2005. | ||
3 | .32* | Bylaws of Sledge Drilling Corp. | ||
3 | .33* | Certificate of Incorporation of Wildhorse Services, Inc., dated as of July 30, 2002. | ||
3 | .34* | Bylaws of Wildhorse Services, Inc. | ||
3 | .35* | Articles of Incorporation of Xterra Fishing & Rental Tools Co., as amended, dated June 1, 2000. | ||
3 | .36* | Bylaws of Xterra Fishing & Rental Tools Co. | ||
3 | .37* | Articles of Incorporation of Chaparral Service, Inc., dated July 18, 1969. | ||
3 | .38* | Amended and Restated Bylaws of Chaparral Service, Inc. | ||
3 | .39* | Certificate of Incorporation of Hennessey Rental Tools, Inc., dated September 29, 1993. | ||
3 | .40* | Bylaws of Hennessey Rental Tools, Inc. | ||
3 | .41* | Certificate of Formation of Permian Plaza, LLC, dated August 20, 2007. | ||
3 | .42* | Company Agreement of Permian Plaza, LLC. | ||
4 | .1 | Specimen Stock Certificate representing common stock of the Company. (Incorporated by reference to Exhibit 3.1 of the Company’s Registration Statement onForm S-1(SEC File No. 333-127517), filed on November 4, 2005) | ||
4 | .2 | Indenture dated April 12, 2006, among Basic Energy Services, Inc., the guarantors party thereto, and The Bank of New York Trust Company, N.A., as trustee. (Incorporated by reference to Exhibit 4.1 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on April 13, 2006) | ||
4 | .3 | Form of 7.125% Senior Note due 2016. (Included in the Indenture filed as Exhibit 4.1 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on April 13, 2006) | ||
4 | .4 | First Supplemental Indenture dated as of July 14, 2006 to Indenture dated as of April 12, 2006 among the Company, as Issuer, the Subsidiary Guarantors named therein and The Bank of New York Trust Company, N.A., as trustee. (Incorporated by reference to Exhibit 4.1 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on July 20, 2006) | ||
4 | .5 | Second Supplemental Indenture dated as of April 26, 2007 and effective as of March 7, 2007 to Indenture dated as of April 12, 2006 among the Company as Issuer, the Subsidiary Guarantors named therein and the Bank of New York Trust Company, N.A., as trustee. (Incorporated by reference to Exhibit 4.1 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on May 1, 2007) | ||
4 | .6 | Third Supplement Indenture dated as of April 26, 2007 to Indenture dated as of April 12, 2006 among the Company as Issuer, the Subsidiary Guarantors named therein and the Bank of New York Trust Company, N.A., as trustee. (Incorporated by reference to Exhibit 4.2 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on May 1, 2007) | ||
4 | .7 | Fourth Supplemental Indenture dated as of February 9, 2009 to Indenture dated as of April 12, 2006 among the Company as Issuer, the Subsidiary Guarantors named therein and the Bank of New York Mellon Trust Company, N.A., as Trustee. (Incorporated by reference to Exhibit 4.7 of the Company’s Annual Report onForm 10-K(SEC File No. 001-32693), filed March 9, 2009) |
Table of Contents
Exhibit | ||||
Number | Description | |||
4 | .8 | Indenture dated as of July 31, 2009, by and among Basic, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee. (Incorporated by reference to Exhibit 4.1 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on August 4, 2009) | ||
4 | .9 | Form of 11.625% Senior Secured Note due 2014 (included as Exhibit A to Exhibit 4.1 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on August 4, 2009) | ||
4 | .10 | Security Agreement dated as of July 31, 2009, by and between Basic and each of the other Grantors party thereto in favor of The Bank of New York Mellon Trust Company, N.A., as Trustee. (Incorporated by reference to Exhibit 4.3 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on August 4, 2009) | ||
5 | .1* | Opinion of Andrews Kurth LLP regarding the validity of the new notes | ||
8 | .1* | Opinion of Andrews Kurth LLP regarding certain tax matters | ||
10 | .1† | Form of Indemnification Agreement. (Incorporated by reference to Exhibit 10.1 of the Company’s Registration Statement onForm S-1(SEC File No. 333-127517), filed on September 28, 2005) | ||
10 | .2 | Second Amended and Restated Stockholders’ Agreement dated as of April 2, 2004 among the Company and the stockholders listed therein. (Incorporated by reference to Exhibit 10.7 of the Company’s Registration Statement onForm S-1(SEC File No. 333-127517), filed on August 12, 2005) | ||
10 | .3 | Stock Purchase Agreement dated as of September 18, 2003, as amended on October 1, 2003, among the Company, FESCO Holdings, Inc. and the sellers named therein. (Incorporated by reference to Exhibit 10.8 of the Company’s Registration Statement onForm S-1(SEC File No. 333-127517), filed on August 12, 2005) | ||
10 | .4 | Asset Purchase Agreement dated as of August 14, 2003 among the Company and PWI, Inc. (Incorporated by reference to Exhibit 10.9 of the Company’s Registration Statement onForm S-1(SEC File No. 333-127517), filed on August 12, 2005) | ||
10 | .5 | Fourth Amended and Restated Credit Agreement dated as of October 3, 2003, amended and restated as of February 6, 2007, among Basic Energy Services, Inc., the subsidiary guarantors party thereto, Bank of America, N.A., as syndication agent, Capital One, National Association, as documentation agent, BNP Paribas, as documentation agent, UBS AG, Stamford Branch, as issuing bank, administrative agent and collateral agent, and the lenders party thereto. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on February 12, 2007) | ||
10 | .6 | Amendment and Consent No. 1 to Fourth Amended and Restated Credit Agreement dated May 4, 2009. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on May 7, 2009) | ||
10 | .7† | Fourth Amended and Restated Basic Energy Services, Inc. 2003 Incentive Plan. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on June 1, 2009) | ||
10 | .8† | Form of Non-Qualified Option Grant Agreement (Executive Officer — Pre-March 1, 2005). (Incorporated by reference to Exhibit 10.12 of the Company’s Registration Statement onForm S-1(SEC File No. 333-127517), filed on September 28, 2005) | ||
10 | .9† | Form of Non-Qualified Option Grant Agreement (Executive Officer — Post-March 1, 2005). (Incorporated by reference to Exhibit 10.13 of the Company’s Registration Statement onForm S-1(SEC File No. 333-127517), filed on September 28, 2005) | ||
10 | .10† | Form of Non-Qualified Option Grant Agreement (Non-Employee Director — Pre-March 1, 2005). (Incorporated by reference to Exhibit 10.14 of the Company’s Registration Statement onForm S-1(SEC File No. 333-127517), filed on September 28, 2005) | ||
10 | .11† | Form of Non-Qualified Option Grant Agreement (Non-Employee Director — Post-March 1, 2005). (Incorporated by reference to Exhibit 10.15 of the Company’s Registration Statement onForm S-1(SEC File No. 333-127517), filed on September 28, 2005) | ||
10 | .12† | Form of Restricted Stock Grant Agreement. (Incorporated by reference to Exhibit 10.16 of the Company’s Registration Statement onForm S-1(SEC File No. 333-127517), filed on September 28, 2005) | ||
10 | .13† | Form of Amendment to Nonqualified Stock Option Agreement, dated as of December 31, 2005, by and between the Company and the optionees party thereto. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on January 4, 2006) | ||
10 | .14† | Form of Nonqualified Stock Option Agreement (Director form effective March 2006). (Incorporated by reference to Exhibit 10.13 of the Company’s Annual Report onForm 10-K(SEC File No. 001-32693), filed on March 7, 2008) | ||
10 | .15† | Form of Nonqualified Stock Option Agreement (Employee form effective March 2006). (Incorporated by reference to Exhibit 10.14 of the Company’s Annual Report onForm 10-K(SEC File No. 001-32693), filed on March 7, 2008) |
Table of Contents
Exhibit | ||||
Number | Description | |||
10 | .16† | Form of Restricted Stock Grant Agreement (Officers and Employees — Post-March 1, 2007). (Incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report onForm 10-Q(SEC File No. 001-32693), filed on May 10, 2007) | ||
10 | .17† | Form of Restricted Stock Grant Agreement (Non-Employee Directors — Post-March 1, 2007). (Incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report onForm 10-Q(SEC File No. 001-32693), filed on May 10, 2007) | ||
10 | .18† | Form of Non-Qualified Stock Option Grant Agreement (Post-March 1, 2007). (Incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report onForm 10-Q(SEC File No. 001-32693), filed on May 10, 2007) | ||
10 | .19† | Form of Performance-Based Award Agreement (Officers and Employees). (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on March 17,2008) | ||
10 | .20† | Form of Restricted Stock Grant Agreement (Officers and Employees). (Incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report onForm 10-Q(SEC File No. 001-32693), filed on May 8, 2008) | ||
10 | .21† | Form of Restricted Stock Grant Agreement (Non-Employee Directors). (Incorporated by reference to Exhibit 10.3 of the Company’s Quarterly Report onForm 10-Q(SEC File No. 001-32693), filed on May 8. 2008) | ||
10 | .22† | Form of Performance-Based Award Agreement (effective March 2009) (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report onForm 8-K(SEC File No. 001-32963), filed March 19, 2009) | ||
10 | .23 | Workover Unit Package Contract and Acceptance Agreement, dated as of May 17, 2005, between Basic Energy Services, L.P. and Taylor Rigs, LLC. (Incorporated by reference to Exhibit 10.17 of the Company’s Registration Statement onForm S-1(SEC File No. 333-127517), filed on November 4, 2005) | ||
10 | .24 | Share Exchange Agreement, dated as of September 22, 2003, among BES Holding Co. and the Stockholders named therein. (Incorporated by reference to Exhibit 10.18 of the Company’s Registration Statement onForm S-1(SEC File No. 333-127517), filed on September 28, 2005) | ||
10 | .25 | Form of Share Tender and Repurchase Agreement. (Incorporated by reference to Exhibit 10.19 of the Company’s Registration Statement onForm S-1(SEC File No. 333-127517), filed on November 4, 2005) | ||
10 | .26 | Workover Unit Package Contract and Acceptance Agreement, dated as of November 10, 2005, between Basic Energy Services, L.P. and Taylor Rigs, LLC. (Incorporated by reference to Exhibit 10.20 of the Company’s Registration Statement onForm S-1(SEC File No. 333-127517), filed on November 16, 2005) | ||
10 | .27 | Asset Purchase Agreement dated as of February 21, 2006 among Basic Energy Services, LP, Basic Energy Services GP, LLC, G&L Tool, Ltd., DLH Management, LLC and LJH, Ltd. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on March 2, 2006) | ||
10 | .28 | Contingent Earn Out Agreement dated as of February 28, 2006 among Basic Energy Services, LP and G&L Tool, Ltd. (Incorporated by reference to Exhibit 10.2 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on March 2, 2006) | ||
10 | .29 | Fee Reimbursement Agreement, dated as of July 24, 2006, by and among the Company, Southwest Partners II, L.P., Southwest Partners, III, L.P. and Fortress Holdings, LLC. (Incorporated by reference to Exhibit 10.23 of the Company’s Registration Statement onForm S-1(SEC File No. 333-136019), filed on July 25, 2006) | ||
10 | .30† | Employment Agreement of Kenneth V. Huseman, effective as of December 31, 2006. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on January 4, 2007) | ||
10 | .31† | Employment Agreement of Alan Krenek, effective as of December 31, 2006. (Incorporated by reference to Exhibit 10.2 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on January 4, 2007) | ||
10 | .32† | Amended and Restated Employment Agreement of Charles W. Swift, effective as of November 21, 2008. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on November 24, 2008) | ||
10 | .33† | Employment Agreement of Dub William Harrison, effective as of December 31, 2006. (Incorporated by reference to Exhibit 10.4 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on January 4, 2007) | ||
10 | .34† | Employment Agreement of James E. Tyner, effective as of December 31, 2006. (Incorporated by reference to Exhibit 10.5 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on January 4, 2007) |
Table of Contents
Exhibit | ||||
Number | Description | |||
10 | .35† | Amended and Restated Employment Agreement of Thomas Monroe Patterson, effective as of November 21, 2008. (Incorporated by reference to Exhibit 10.2 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on November 24, 2008) | ||
10 | .36† | Employment Agreement of Mark David Rankin, effective as of December 31, 2006. (Incorporated by reference to Exhibit 10.7 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on January 4, 2007) | ||
10 | .37† | First Amendment to Employment Agreement of Kenneth V. Huseman, effective as of January 23, 2007. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on January 29, 2007) | ||
10 | .38 | Registration Rights Agreement, dated as of March 6, 2007, by and among Basic Energy Services, Inc. and the JetStar Stockholders’ Representative. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on March 8, 2007) | ||
10 | .39 | Registration Rights Agreement, dated as of April 2, 2007, by and among the Company and the Holders named therein. (Incorporated by reference to Exhibit 10.1 of the Company’s current Report onForm 8-K(SEC File No. 001-32693), filed on April 5, 2007) | ||
10 | .40 | Registration Rights Agreement dated as of July 31, 2009, by and among Basic, the Guarantors named therein and the initial purchasers party thereto. (Incorporated by reference to Exhibit 4.4 of the Company’s Current Report onForm 8-K(SEC File No. 001-32693), filed on August 4, 2009) | ||
10 | .41 | Purchase Agreement, dated April 7, 2006, by and among Basic Energy Services, Inc. (the “Company”), UBS Securities LLC as representative for the Initial Purchasers listed therein, and the Subsidiary Guarantors party thereto (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report onForm 8-K filed on April 13, 2006) | ||
12 | .1* | Statement regarding computation of ratio of earnings to fixed charges | ||
21 | .1* | Subsidiaries of the Company | ||
23 | .1* | Consent of KPMG LLP | ||
23 | .2* | Consent of Andrews Kurth LLP (included in Exhibit 5.1) | ||
24 | .1* | Powers of Attorney (included on signature pages). | ||
25 | .1* | Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of The Bank of New York Mellon Trust Company, N.A. to act as trustee under the Indenture | ||
99 | .1* | Form of Letter of Transmittal | ||
99 | .2* | Guidelines for Certification of Taxpayer Identification Number on SubstituteForm W-9 | ||
99 | .3* | Form of Notice of Guaranteed Delivery | ||
99 | .4* | Form of Letter to Brokers | ||
99 | .5* | Form of Letter to Clients |
* | Indicates exhibits filed herewith. | |
† | Management contract or compensatory plan or arrangement |