SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JANUARY 14, 2005
ALLIS-CHALMERS ENERGY INC.
--------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 1-2199
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER)
OF INCORPORATION)
39-0126090
(I.R.S. EMPLOYER
IDENTIFICATION NO.)
5075 WESTHEIMER, SUITE 890
HOUSTON, TEXAS 77056
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 369-0550
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the Company under any of the
following provisions (SEE General Instruction A.2. below):
[ ] Written Communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the exchange ct (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS
ITEM 1.01 - ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
(a) The Company is party to a Stockholders Agreement dated April 2, 2004,
whereby Energy Spectrum Partners, LP has the right to designate three nominees
to the Board of Directors and the right to require the Company to retain an
investment bank to investigate the sale of the Company if the Company has not
effected a public offering of its securities prior to such date. Energy Spectrum
has verbally agreed to enter into an amendment to the Stockholders Agreement to
eliminate the requirement that an investment bank be retained to sell the
Company. Two of Energy Spectrum's three designated directors on the Board
resigned January 14, 2005, and Energy Spectrum has additionally agreed not to
utilize its right to appoint two replacement directors unless and until it
notifies the Company of its determination to reassert such right. The Company is
currently in the process of preparing a written amendment to the Stockholders
Agreement which will be filed with the Commission when finalized. Please see
Item 5.02(b) and (d), of this Form 8-K for additional information on three new
directors appointed to the Board of Directors of the Company.
SECTION 2 - FINANCIAL INFORMATION
ITEM 2.01 - COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
The Company entered into a Purchase Agreement on December 10, 2004 to acquire
all the equity interests of Downhole Injection Systems, LLC ("DIS") from an
investor group in Midland, Texas (65%) and Chevron USA, Inc. (35%) for
approximately $1.1 million in cash, 508,466 shares of Company's Common Stock and
payment or assumption of $950,000 of DIS debt. The total investment by the
Company in the acquisition of DIS was $3,950,000. DIS is headquartered in
Midland, Texas and provides solutions to downhole chemical treating problems
through the installation of small diameter, stainless steel coiled tubing into
producing oil and gas wells.
The Company filed a Form 8-K on December 16, 2004, describing the DIS
acquisition as a "Material Definitive Agreement". Registrant will file the
financial statements of DIS and pro forma financial information required with
this Form 8-K, if any, on or prior to 71 days following the date the original
Report on Form 8-K was due.
A copy of the Purchase Agreement was attached as Exhibit 10.63 to the previously
filed Form 8-K.
The Company on January 19, 2005, agreed to issue to one of the shareholders of
DIS an additional 60,000 shares of Common Stock, as a result of the
recalculation of the number of shares due to such owner. The total number of
shares of Common Stock issued to the owners of DIS in connection with the
acquisition will now total 568,466. The total investment in DIS by the Company
will not change.
ITEM 3.02 - UNREGISTERED SALE OF EQUITY SECURITIES
(a) The Company reported on Form 8-K filed with the SEC that it issued 508,466
shares of Common Stock, $.01 par value ("Common Stock") to the owners of DIS in
consideration for their equity interests in DIS. As described in Item 2.01
above, the Company has agreed to issue an additional 60,000 shares of Common
Stock. These shares of Common Stock will also be issued in reliance on
Regulation D promulgated under the Securities Act and obtained representation
from the owner as to his status as an "accredited investor" as that term is
defined in Regulation D.
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SECTION 5 - CORPORATE GOVERNANCE AND MANAGEMENT
ITEM 5.02 - DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS
(b) Christina E. Woods and James W. Spann resigned as directors of the Company
effective January 14, 2005. Ms. Woods was a member of the Company's Audit
Committee of the Board of Directors.
The Company elected Dave Wilde the President and Chief Operating Officer on
January 14, 2005, in place of Jens H. Mortensen, Jr. who was elected Vice
Chairman of the Board of Directors and remains President of Jens' Oil Field
Service, Inc. Leonard Toboroff was also elected as Vice Chairman of the
Board of Directors.
(c) The Company elected David Wilde as President and Chief Operating Officer
effective January 14, 2005. Mr. Wilde is 48 years old and has served as
President and Chief Executive Officer of the Company's subsidiary Strata
Directional Technology, Inc. ("Strata") since October 2003 and served as
Strata's President and Chief Operating Officer from July 2003 until October
2003. From February 2002 until July 2003 Mr. Wilde served as the Company's
Executive Vice President of Sales and Marketing. From May 1999 until February
2002, Mr. Wilde served as Sales and Operations Manager of Strata's Gulf Coast
Division. From March 1998 until May 1999 Mr. Wilde was Sales Manager at Strata.
Mr. Wilde has more than 25 years experience in the drilling sector of the oil
service industry and 21 years experience in the directional and horizontal
drilling and rental tool business.
Mr. Wilde serves as President and Chief Executive Officer of Strata pursuant to
the terms of a three-year employment agreement dated as of April 1, 2004. Under
the terms of the employment agreement, Mr. Wilde receives an annual base salary
of $200,000 subject to annual review and potentially an increase by our Board of
Directors. In addition, Mr. Wilde is entitled to receive a bonus in an amount
equal to 5% of Strata's earnings before taxes, interest and depreciation
provided that Strata meets designated minimum earnings targets and provided
further that such bonus may not exceed 120% of Mr. Wilde's base salary. The
bonus calculation is subject to adjustment in subsequent years and in the event
of acquisitions or other extraordinary transactions. Mr. Wilde received a
signing bonus of $75,000. In addition, in December 2003 the Company granted Mr.
Wilde options to acquire 100,000 shares of Common Stock at a purchase price of
$2.75 per share, and on October 11, 2004, granted to Mr. Wilde options to
purchase an additional 110,000 shares at an exercise price of $4.85 per share.
Both options granted to Mr. Wilde vest as to one-third of the shares subject to
the option on the grant date and will vest as to one-third of the shares subject
to the option on each of the first two anniversaries of the grant date. If Mr.
Wilde's employment is terminated by the Company for any reason other than
"cause", as defined in Mr. Wilde's employment agreement, or death or disability,
or if Mr. Wilde is "constructively terminated," as defined in the agreement
(which definition includes a change in control with us if Mr. Wilde does not
continue employment with the Company or its successor), the he is entitled to
receive his then current salary for the entire term of his contract, reduced by
any amounts he earns for services during the severance period.
(d) The Company's Board of Directors elected Jeffrey R. Freedman, Victor F.
Germack and Thomas E. Kelly as directors of the Company on January 14, 2005 to
fill vacancies on the Board of Directors. Mr. Kelly has been appointed to the
Compensation Committee of the Board of Directors, replacing Saeed M. Sheikh, who
resigned as a director in December 2004, and Mr. Germack has been appointed to
the Audit Committee of the Board of Directors, replacing Ms. Woods.
The Company has a Stockholders Agreement dated April 2, 2004, whereby Energy
Spectrum Partners, LP has the right to designate three nominees to the Board of
Directors as long as Energy Spectrum holds certain amounts of Common Stock of
Company. Two of Energy Spectrum's nominees resigned effective January 14, 2005
(See Item 1.01 regarding amendment of the Stockholders Agreement and Item
5.02(b)of this Form 8-K). Energy Spectrum has notified the Company that it will
designate only one of the three directors it is entitled to designate unless and
until it notifies the Company of its determination to reassert its right to
designate three directors.
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ITEM 9.01 - FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements. The Company will file the financial statements
required by this item in regards to the matters in Item 2.01 of this Form 8-K,
if any, not later than 71 calendar days after the initial report on Form 8-K was
required to be filed.
(b) Pro Forma Financial Information. The Company will file the pro formal
financial information statements required by this item in regards to the matters
in Item 2.01 of this Form 8-K, if any, not later than 71 calendar days after the
initial report on Form 8-K was required to be filed.
(c) Exhibits. The Company will file the written amendment to the Stockholders
Agreement referred to in Item 1.01 hereof when completed.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ALLIS-CHALMERS ENERGY INC.
/S/ VICTOR M. PEREZ
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BY: VICTOR M. PEREZ
CHIEF FINANCIAL OFFICER
DATE: JANUARY 21, 2005
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