þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, 2009 | ||
OR
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
Delaware | 54-2091194 | |
(State or other jurisdiction
of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
|
500 W. Illinois, Suite 100
Midland, Texas (Address of principal executive offices) |
79701
(Zip code) |
Common Stock, $0.01 par value per share | New York Stock Exchange | |
(Title of Class)
|
(Name of each exchange on which registered) |
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o | Smaller reporting company o |
2 | ||||||||
2 | ||||||||
17 | ||||||||
24 | ||||||||
24 | ||||||||
24 | ||||||||
26 | ||||||||
26 | ||||||||
29 | ||||||||
30 | ||||||||
49 | ||||||||
50 | ||||||||
89 | ||||||||
89 | ||||||||
89 | ||||||||
89 | ||||||||
90 | ||||||||
90 | ||||||||
94 | ||||||||
EX-4.8 | ||||||||
EX-10.27 | ||||||||
EX-10.28 | ||||||||
EX-12.1 | ||||||||
EX-23.1 | ||||||||
EX-31.1 | ||||||||
EX-31.2 | ||||||||
EX-32.1 | ||||||||
EX-32.2 |
i
| a decline in, or substantial volatility of, oil and natural 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. |
1
Well Servicing.
Our well servicing segment
(30% of our revenues in 2009) currently operates our fleet
of 405 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 natural gas.
These services are performed to establish, maintain and improve
production throughout the productive life of an oil and natural
gas well and to plug and abandon a well at the end of its
productive life. Our well servicing equipment and capabilities
also facilitate most other services performed on a well.
Fluid Services.
Our fluid services segment
(41% of our revenues in 2009) currently utilizes our fleet
of 791 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 (26% of our revenues in
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 (3% of our revenues in 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.
2
Table of Contents
3
Table of Contents
JetStar Consolidated Holdings, Inc., a pressure pumping company
operating in our completion and remedial line of business;
Sledge Drilling Holding Corp., a contract drilling company
operating in our contract drilling line of business; and
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.
4
Table of Contents
Cushing WTI Spot
Average Wellhead Price
Oil Price ($/bbl)
Natural Gas ($/mcf)
56.64
7.51
66.05
6.42
72.34
6.38
99.67
8.07
61.65
3.65
5
Table of Contents
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.
Market Area
Permian
Gulf
Ark-La-
Mid-
Rocky
Rated Capacity
Basin
Coast
Tex
Continent
Mountain
Stacked
Total
N/A
4
1
5
4
0
0
14
<90 tons
3
1
0
10
0
10
24
³
90<125
tons
107
36
20
51
50
35
299
³
125
tons
28
4
4
3
8
9
56
³
125
tons
2
3
0
1
0
2
8
³
125
tons
0
4
0
0
0
0
4
144
49
29
69
58
56
405
6
Table of Contents
7
Table of Contents
transportation of fluids used in drilling and workover
operations and of salt water produced as a by-product of oil and
natural 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.
Market Area
Rocky
Permian
Ark-La-
Gulf
Mid-
Mountain
Basin
Tex
Coast
Continent
Total
101
248
221
146
75
791
0
21
25
8
11
65
0
36
0
2
0
38
267
534
1,129
273
213
2,416
8
Table of Contents
9
Table of Contents
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.
10
Table of Contents
Market Area
Rocky
Permian
Ark-La-Tex
Mid-Continent
Gulf Coast
Mountain
Basin
Total
21
118
0
3
0
142
0
4
0
0
0
4
0
10
0
25
5
40
0
15
0
0
0
15
0
8
1
3
8
20
9
0
0
0
0
9
11
Table of Contents
personal injury or loss of life;
damage to or destruction of property, equipment and the
environment; and
suspension of operations.
12
Table of Contents
13
Table of Contents
14
Table of Contents
15
Table of Contents
16
Table of Contents
ITEM 1A.
RISK
FACTORS
17
Table of Contents
18
Table of Contents
19
Table of Contents
personal injury or loss of life;
damage to or destruction of property, equipment and the
environment; and
suspension of operations.
20
Table of Contents
21
Table of Contents
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 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 transfers of assets without
the lenders consent; and
limitations on dividends and distributions.
22
Table of Contents
a classified board of directors, so that only approximately
one-third of our directors are elected each year;
limitations on the removal of directors;
the prohibition of stockholder action by written consent;
limitations on the ability of our stockholders to call special
meetings; and
23
Table of Contents
advance notice provisions for stockholder proposals and
nominations for elections to the board of directors to be acted
upon at meetings of stockholders.
ITEM 1B.
UNRESOLVED
STAFF COMMENTS
ITEM 3.
LEGAL
PROCEEDINGS
ITEM 4.
[RESERVED]
57
President, Chief Executive Officer and Director
54
Senior Vice President, Chief Financial Officer, Treasurer and
Secretary
35
Senior Vice President Rig and Truck Operations
45
Group Vice President Completion and Remedial Services
54
Vice President Contract Drilling
46
Vice President Marketing
59
Vice President Human Resources
24
Table of Contents
25
Table of Contents
30
ITEM 5.
MARKET
PRICE FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
High
Low
$
22.39
$
17.95
$
32.82
$
22.61
$
31.25
$
20.36
$
19.87
$
8.04
$
14.94
$
5.45
$
12.79
$
6.53
$
9.68
$
6.15
$
9.40
$
6.59
Number of
Number of
Securities
Securities to be
Weighted
Remaining
Issued upon
Average Exercise
Available for
Exercise of
Price of
Future Issuance
Outstanding
Outstanding
Under Equity
Options
Options
Compensation Plans
1,480,925
$
11.37
2,143,551
1,480,925
$
11.37
2,143,551
(1)
Consists of the Basic Energy Services, Inc. Fourth Amended and
Restated 2003 Incentive Plan (as amended effective May 26,
2009).
26
Table of Contents
Approximate Dollar
Total Number of
Value of Shares
Average
Shares Purchased as
that May Yet be
Total Number of
Price Paid
Part of Publicly
Purchased Under the
Shares Purchased(1)
per Share
Announced Program
Program
439
$
8.96
0
$
0
0
$
0.00
0
$
0
1,078
$
7.36
0
$
0
1,517
$
7.82
0
$
0
(1)
These shares were repurchased from various employees to provide
such employees the cash amounts necessary to pay certain tax
liabilities associated with the vesting of restricted shares
owned by them. The shares were repurchased on various dates
based on the closing price per share on the date of repurchase.
27
Table of Contents
Basic Energy
Peer
Services
Group
Russell 2000
$
100.00
$
100.00
$
100.00
$
92.79
$
97.03
$
98.43
$
114.65
$
108.25
$
114.36
$
102.09
$
85.52
$
111.22
$
60.65
$
32.87
$
72.51
$
41.40
$
58.29
$
90.80
28
Table of Contents
ITEM 6.
SELECTED
FINANCIAL DATA
Year Ended December 31,
2009
2008
2007
2006
2005
(Dollars in thousands, except per share data)
$
160,614
$
343,113
$
342,697
$
323,755
$
221,993
214,822
315,768
259,324
245,011
177,927
134,818
304,326
240,692
154,412
59,832
16,373
41,735
34,460
6,970
526,627
1,004,942
877,173
730,148
459,752
121,618
215,243
205,132
178,028
137,392
159,079
203,205
165,327
153,445
114,551
95,287
165,574
125,948
74,981
30,900
13,604
28,629
22,510
8,400
104,253
115,319
99,042
81,318
55,411
132,520
118,607
93,048
62,087
37,072
2,650
76
477
277
(222
)
204,014
22,522
833,025
869,175
711,484
558,536
375,104
(306,398
)
135,767
165,689
171,612
84,648
(32,386
)
(24,630
)
(25,136
)
(15,504
)
(12,660
)
(3,481
)
(230
)
(2,705
)
(627
)
1,198
12,235
176
169
220
(341,067
)
123,372
140,499
153,572
71,581
87,529
(55,134
)
(52,766
)
(54,742
)
(26,800
)
(253,538
)
68,238
87,733
98,830
44,781
$
(253,538
)
$
68,238
$
87,733
$
98,830
$
44,781
$
(6.39
)
$
1.67
$
2.19
$
2.87
$
1.57
$
(6.39
)
$
1.64
$
2.13
$
2.56
$
1.35
29
Table of Contents
Year Ended December 31,
2009
2008
2007
2006
2005
(Dollars in thousands, except per share data)
$
89,205
$
212,827
$
198,591
$
145,678
$
99,189
(62,864
)
(197,302
)
(294,103
)
(241,351
)
(107,679
)
(12,119
)
3,669
136,088
114,193
21,188
7,816
110,913
199,673
135,568
25,378
43,367
91,890
98,536
104,574
83,095
(a)
Includes approximately $5,152, $4,149, $3,964, $3,429, and
$2,890, of non-cash stock compensation expense for the years
ended December 31, 2009, 2008, 2007, 2006, and 2005,
respectively.
As of December 31,
2009
2008
2007
2006
2005
(Dollars in thousands)
$
125,357
$
111,135
$
91,941
$
51,365
$
32,845
666,642
740,879
636,924
475,431
309,075
1,039,541
1,310,711
1,143,609
796,260
496,957
475,845
454,260
406,306
250,742
119,241
340,149
595,004
524,821
379,250
258,575
ITEM 7.
MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Table of Contents
Year Ended December 31,
2009
2008
2007
$
160.6
30
%
$
343.1
34
%
$
342.7
39
%
$
214.8
41
%
315.8
32
%
259.3
29
%
$
134.8
26
%
304.3
30
%
240.7
28
%
$
16.4
3
%
41.7
4
%
34.5
4
%
$
526.6
100
%
$
1,004.9
100
%
$
877.2
100
%
31
Table of Contents
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.
32
Table of Contents
33
Table of Contents
Weighted
Average
Rig
Profits
Number of
Rig
Utilization
Revenue Per
Per Rig
Segment
Rigs
Hours
Rate
Rig Hour
Hour
Profits %
364
210,800
81.0
%
$
411
$
174
42.2
%
371
207,700
78.3
%
$
415
$
163
39.5
%
383
212,100
77.7
%
$
414
$
166
40.0
%
386
200,600
72.7
%
$
409
$
159
38.8
%
376
831,200
77.3
%
$
412
$
166
40.1
%
392
202,500
72.2
%
$
398
$
158
39.8
%
403
222,300
77.1
%
$
400
$
152
37.9
%
412
233,000
79.1
%
$
418
$
156
37.3
%
414
182,400
61.6
%
$
418
$
141
33.8
%
405
840,200
72.5
%
$
408
$
152
37.3
%
414
132,300
44.7
%
$
369
$
90
24.4
%
414
110,500
37.3
%
$
329
$
78
23.6
%
414
122,900
41.5
%
$
313
$
76
24.4
%
410
119,500
40.8
%
$
309
$
77
24.7
%
413
485,200
41.1
%
$
331
$
80
24.3
%
34
Table of Contents
Segment
Weighted
Profits
Average
Per
Number of
Revenue Per
Fluid
Fluid Service
Fluid Service
Service
Segment
Trucks
Truck
Truck
Profits %
652
$
98
$
37
37.5
%
657
$
96
$
35
36.1
%
653
$
97
$
35
35.7
%
656
$
104
$
37
35.7
%
655
$
396
$
144
36.2
%
644
$
111
$
39
35.0
%
663
$
109
$
36
33.1
%
683
$
121
$
43
35.8
%
804
$
111
$
42
38.1
%
699
$
452
$
161
35.6
%
814
$
80
$
25
31.4
%
808
$
61
$
17
27.9
%
805
$
62
$
14
22.7
%
794
$
64
$
13
20.3
%
805
$
267
$
69
26.0
%
35
Table of Contents
Segment
Revenues
Profits %
$
46,137
49.9
%
$
63,735
47.6
%
$
66,304
47.6
%
$
64,515
46.2
%
$
240,692
47.7
%
$
68,458
47.7
%
$
79,579
46.4
%
$
85,541
45.3
%
$
70,748
43.0
%
$
304,326
45.6
%
$
37,259
30.5
%
$
29,373
26.9
%
$
32,592
29.1
%
$
35,594
30.3
%
$
134,818
29.3
%
36
Table of Contents
Weighted
Average
Rig
Number of
Operating
Revenue
Profits (Loss)
Segment
Rigs
Days
Per Day
Per Day
Profits %
3
168
$
11,500
$
(5,200
)
44.9
%
8
594
$
17,200
$
6,900
39.5
%
9
723
$
15,700
$
6,700
42.4
%
10
748
$
14,600
$
5,300
36.3
%
8
2,233
$
15,400
$
5,400
34.7
%
9
645
$
14,700
$
3,800
25.7
%
9
699
$
14,800
$
4,000
27.2
%
9
767
$
15,600
$
5,600
35.6
%
9
666
$
14,900
$
5,400
36.2
%
9
2,777
$
15,000
$
4,700
31.4
%
9
248
$
14,700
$
1,500
10.1
%
9
314
$
12,700
$
2,100
16.3
%
9
391
$
10,600
$
2,200
20.4
%
9
417
$
11,000
$
2,200
19.7
%
9
1,370
$
12,000
$
2,000
16.9
%
37
Table of Contents
38
Table of Contents
39
Table of Contents
40
Table of Contents
41
Table of Contents
42
Table of Contents
43
Table of Contents
Obligations Due In Periods Ended
December 31,
Total
2010
2011-2012
2013-2014
Thereafter
$
450,000
$
$
$
225,000
$
225,000
234,985
42,188
84,375
84,375
24,047
63,175
25,967
32,581
4,627
15,451
3,862
5,189
3,064
3,336
1,970
464
164
52
1,290
6,027
3,270
1,696
1,061
$
771,608
$
75,751
$
124,005
$
318,179
$
253,673
incur additional indebtedness;
pay dividends or repurchase or redeem capital stock;
make certain investments;
44
Table of Contents
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.
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;
45
Table of Contents
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.
at least 65% of the aggregate principal amount of the Senior
Secured Notes issued under the Senior Secured Notes 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.
all Commercial Tort Claims;
46
Table of Contents
all Contracts (as defined in the Security Agreement);
all Documents;
all Equipment (other than the Aircraft Collateral);
all General Intangibles (excluding Payment Intangibles except to
the extent included pursuant to the final bullet point below);
all Goods (as defined in the Security Agreement);
all Intellectual Property (as defined in the Security Agreement);
all Investment Property;
all
Letter-of-Credit
Rights (whether or not the letter of credit is evidenced by a
writing);
all Supporting Obligations;
each Asset Sale Proceeds Account (as defined in the Security
Agreement) and all deposits, Securities and Financial Assets (as
defined in the Security Agreement) therein and interest or other
income thereon and investments thereof, and all property of
every type and description in which any proceeds of any
Collateral Disposition (as defined) or other disposition of
Collateral are invested or upon which the trustee is at any time
granted, or required to be granted, a Lien to secure the
Obligations (as defined in the Security Agreement) as set forth
in Section 4.12 of the Senior Secured Notes Indenture and
all proceeds and products of the Collateral described in this
bullet point;
all other personal property (other than Excluded Property),
whether tangible or intangible, not otherwise described above;
whatever is received (whether voluntary or involuntary, whether
cash or non cash, including proceeds of insurance and
condemnation awards, rental or lease payments, accounts, chattel
paper, instruments, documents, contract rights, general
intangibles, equipment
and/or
inventory) upon the lease, sale, charter, exchange, transfer, or
other disposition of any of the Collateral described in the
bullet points above;
all books and records pertaining to the Collateral; and
to the extent not otherwise included, all Proceeds, Supporting
Obligations and products (including, without limitation, any
Accounts, Chattel Paper, Instruments or Payment Intangibles
constituting Proceeds, Supporting Obligations or products) of
any and all of the foregoing and all collateral security and
guarantees given by any Person with respect to any of the
foregoing; provided, that notwithstanding the foregoing
provisions, Collateral shall not include Excluded Property.
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;
property
and/or
transactions to which Article 9 of the UCC does not apply
pursuant to
Section 9-109
thereof;
47
Table of Contents
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.
48
Table of Contents
the quoted price of an investment in the identical liability
traded as an asset,
the quoted prices for similar liabilities, or
other fair value technique per principles in accountings
standards, such as discounted cash flow.
ITEM 7A.
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
49
Table of Contents
ITEM 8.
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
51
52
54
55
56
57
58
50
Table of Contents
INTERNAL CONTROL OVER FINANCIAL REPORTING
Chief Executive Officer
Chief Financial Officer
51
Table of Contents
52
Table of Contents
53
Table of Contents
54
Table of Contents
Years Ended December 31
2009
2008
2007
(Dollars in thousands, except per share amounts)
$
160,614
$
343,113
$
342,697
214,822
315,768
259,324
134,818
304,326
240,692
16,373
41,735
34,460
526,627
1,004,942
877,173
121,618
215,243
205,132
159,079
203,205
165,327
95,287
165,574
125,948
13,604
28,629
22,510
104,253
115,319
99,042
132,520
118,607
93,048
2,650
76
477
204,014
22,522
833,025
869,175
711,484
(306,398
)
135,767
165,689
(32,949
)
(26,766
)
(27,416
)
563
2,136
2,280
(3,481
)
(230
)
1,198
12,235
176
(341,067
)
123,372
140,499
87,529
(55,134
)
(52,766
)
(253,538
)
68,238
87,733
$
(6.39
)
$
1.67
$
2.19
$
(6.39
)
$
1.64
$
2.13
55
Table of Contents
Additional
Retained
Total
Common Stock
Paid-In
Treasury
Earnings
Stockholders
Shares
Amount
Capital
Stock
(Deficit)
Equity
(In thousands, except share data)
38,297,605
$
383
$
256,527
$
$
122,340
$
379,250
229,100
2
(2
)
3,873
3,873
4,000
91
91
1,794,759
18
41,011
41,029
430,191
4
10,161
10,165
(462
)
(462
)
169,875
2
3,044
462
(366
)
3,142
87,733
87,733
40,925,530
409
314,705
209,707
524,821
361,700
4
(25
)
21
4,064
4,064
89
-
(4
)
85
(9,994
)
(9,994
)
447,255
4
7,041
1,513
(768
)
7,790
68,238
68,238
41,734,485
417
325,785
(8,371
)
277,173
595,004
660,324
7
(7
)
462
(462
)
5,127
5,127
43
(19
)
24
(6,151
)
(6,151
)
(352
)
54
(19
)
(317
)
(253,538
)
(253,538
)
42,394,809
$
424
$
330,553
$
(13,963
)
$
23,135
$
340,149
56
Table of Contents
Years Ended December 31,
2009
2008
2007
(In thousands)
$
(253,538
)
$
68,238
$
87,733
132,520
118,607
93,048
204,014
22,522
149
131
115
(1,081
)
(252
)
2,127
1,414
968
962
740
5,152
4,149
3,964
3,481
230
2,650
76
477
(25,230
)
30,165
15,285
88,149
(32,411
)
4,396
975
(558
)
(328
)
(1,444
)
2,348
6,325
(1,010
)
47
(753
)
(5,441
)
4,759
(1,237
)
351
(5,062
)
(2,169
)
(58,981
)
2,963
(11,262
)
(343
)
1,217
(332
)
(3,322
)
(5,080
)
10
89,205
212,827
198,591
(43,367
)
(91,890
)
(98,536
)
4,134
8,184
6,815
(14,123
)
(1,692
)
(2,683
)
(2,709
)
(7,816
)
(110,913
)
(199,673
)
(62,864
)
(197,302
)
(294,103
)
241,697
30,000
150,000
(239,543
)
(24,126
)
(15,838
)
(6,151
)
(9,994
)
(462
)
(351
)
5,062
2,169
(5
)
(4,174
)
(1,290
)
38
6,901
2,265
(7,804
)
(756
)
(12,119
)
3,669
136,088
14,222
19,194
40,576
111,135
91,941
51,365
$
125,357
$
111,135
$
91,941
57
Table of Contents
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
58
Table of Contents
December 31, 2009
December 31, 2008
Carrying Amount
Fair Value
Carrying Amount
Fair Value
(In thousands)
$
225,000
$
187,313
$
225,000
$
126,563
225,000
241,313
59
Table of Contents
20-30 years
3-15 years
5-10 years
15 years
10 years
5-10 years
3-10 years
3-10 years
10-15 years
3-7 years
3-15 years
20 years
3 years
60
Table of Contents
61
Table of Contents
Completion and
Well
Fluid
Remedial
Contract
Servicing
Services
Services
Drilling
Total
$
29,888
$
49,334
$
123,527
$
$
202,749
(464
)
(259
)
3,520
2,797
(29,424
)
(48,986
)
(124,330
)
(202,740
)
$
$
89
$
2,717
$
$
2,806
62
Table of Contents
63
Table of Contents
the quoted price of an investment in the identical liability
traded as an asset,
the quoted prices for similar liabilities, or
other fair value technique per principles in accountings
standards, such as discounted cash flow.
64
Table of Contents
3.
Acquisitions
Total Cash Paid
(net of cash
Closing Date
acquired)
January 3, 2007
20,594
January 17, 2007
4,164
March 6, 2007
86,316
April 2, 2007
50,632
May 30, 2007
3,813
June 1, 2007
17,283
June 21, 2007
600
September 26, 2007
19,041
$
202,443
January 28, 2008
$
21,473
January 30, 2008
4,328
April 30, 2008
7,071
May 27, 2008
17,315
September 26, 2008
60,977
$
111,164
December 28, 2009
$
6,985
$
6,985
65
Table of Contents
$
12,547
58,785
17,857
61,720
150,909
(4,581
)
(18,649
)
(37,563
)
(60,793
)
$
90,116
(1)
Consists of Customer Relationship of $17,543, amortizable over
15 years, and Non-Compete Agreements of $314, amortizable
over five years.
(2)
Approximately $25,955 is expected to be deductible for tax
purposes
(3)
Total balance was paid by Basic on the closing date
$
6,807
30,638
6,365
22,522
66,332
(587
)
(3,804
)
(19,093
)
(23,484
)
$
42,848
(1)
Consists of Customer Relationship of $6,269, amortizable over
15 years, and Non-Compete Agreements of $96, amortizable
over five years.
66
Table of Contents
(2)
None of which is expected to be deducted for tax purposes
(3)
Total balance was paid by Basic on the closing date
$
54,456
1,862
4,659
$
60,977
(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 deducted for tax purposes.
Twelve Months Ended
December 31,
2008
$
1,040,160
$
70,680
$
1.73
$
1.70
67
Table of Contents
Maximum
exposure of
Termination date of
contingent
Amount paid or
contingent earn-out
earn-out
accrued through
arrangement
arrangement
December 31, 2009
February 28, 2011
21,000
5,093
$
21,000
$
5,093
4.
Property
and Equipment
December 31,
December 31,
2009
2008
$
5,992
$
4,689
34,694
29,913
384,195
379,167
135,246
136,814
10,606
10,203
132,057
128,845
163,869
156,406
25,641
22,483
60,133
60,340
57,457
49,878
38,383
41,129
38,660
36,898
4,251
4,119
29,769
21,758
1,120,953
1,082,642
454,311
341,763
$
666,642
$
740,879
68
Table of Contents
December 31,
December 31,
2009
2008
$
25,019
$
30,141
2,100
1,194
64,734
56,010
17,440
20,492
1,034
3,679
10,231
9,464
705
120,558
121,685
45,603
37,370
$
74,955
$
84,315
5.
Long-Term
Debt
December 31,
December 31,
2009
2008
$
$
180,000
225,000
225,000
225,000
(11,363
)
63,175
75,323
501,812
480,323
25,967
26,063
$
475,845
$
454,260
69
Table of Contents
70
Table of Contents
71
Table of Contents
72
Table of Contents
Debt
Capital Leases
$
$
25,967
18,591
13,990
4,578
225,000
49
225,000
$
450,000
$
63,175
73
Table of Contents
Years Ended December 31,
2009
2008
2007
$
21,357
$
24,484
$
25,594
159
211
249
2,153
968
962
9,277
1,157
540
3
(54
)
71
$
32,949
$
26,766
$
27,416
6.
Income
Taxes
Years Ended December 31,
2009
2008
2007
$
(58,972
)
$
20,533
$
33,157
(3,327
)
4,436
5,160
(62,299
)
24,969
38,317
(23,217
)
28,792
14,207
(2,013
)
1,373
242
(25,230
)
30,165
14,449
$
(87,529
)
$
55,134
$
52,766
74
Table of Contents
Years Ended December 31,
2009
2008
2007
$
(119,374
)
$
43,180
$
49,174
374
542
532
(4,227
)
4,726
4,062
35,586
7,883
112
(1,197
)
(1,002
)
$
(87,529
)
$
55,134
$
52,766
December 31,
2009
2008
$
1,679
$
2,151
42
42
386
331
7,193
8,696
2,227
788
16,797
4,786
3,497
33,110
15,505
(146,390
)
(135,354
)
(18,541
)
(120
)
(146,390
)
(154,015
)
(113,280
)
(138,510
)
8,941
11,081
(122,221
)
(149,591
)
$
(113,280
)
$
(138,510
)
75
Table of Contents
7.
Commitments
and Contingencies
$
3,862
3,129
2,060
1,718
1,346
3,336
76
Table of Contents
8.
Stockholders
Equity
77
Table of Contents
78
Table of Contents
9.
Stockholders
Agreement
10.
Incentive
Plan
79
Table of Contents
Years Ended
December 31,
4.5
%
6.65
45.3
%
Weighted
Weighted
Average
Aggregate
Number of
Average
Remaining
Instrinsic
Options
Exercise
Contractual
Value
Granted
Price
Term (Years)
(000s)
1,608,675
$
11.11
$
(23,000
)
$
13.89
(5,000
)
$
6.98
(99,750
)
$
6.83
1,480,925
$
11.37
4.83
$
3,522
1,115,550
$
9.13
4.45
$
3,245
1,471,425
$
11.29
4.82
$
3,522
80
Table of Contents
Weighted Average
Number of
Grant Date Fair
Shares
Value Per Share
599,325
$
21.41
698,824
6.48
(92,841
)
18.20
(75,200
)
14.27
14,025
21.17
1,144,133
$
13.02
(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
Companys 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.
11.
Related
Party Transactions
12.
Profit
Sharing Plan
81
Table of Contents
13.
Deferred
Compensation Plan
14.
Earnings
Per Share
Years Ended December 31,
2009
2008
2007
$
(253,538
)
$
68,238
$
87,733
39,684,231
40,754,890
40,013,054
682,958
831,026
225,842
268,324
39,684,231
41,663,690
41,112,404
$
(6.39
)
$
1.67
$
2.19
$
(6.39
)
$
1.64
$
2.13
15.
Business
Segment Information
82
Table of Contents
83
Table of Contents
Completion and
Well
Fluid
Remedial
Contract
Corporate
Servicing
Services
Services
Drilling
and Other
Total
$
160,614
$
214,822
$
134,818
$
16,373
$
$
526,627
(121,618
)
(159,079
)
(95,287
)
(13,604
)
(389,588
)
$
38,996
$
55,743
$
39,531
$
2,769
$
$
137,039
$
49,005
$
37,594
$
31,313
$
7,237
$
7,371
$
132,520
$
16,037
$
12,303
$
10,247
$
2,368
$
2,412
$
43,367
$
244,556
$
195,107
$
194,988
$
41,320
$
363,570
$
1,039,541
$
343,113
$
315,768
$
304,326
$
41,735
$
$
1,004,942
(215,243
)
(203,205
)
(165,574
)
(28,629
)
(612,651
)
$
127,870
$
112,563
$
138,752
$
13,106
$
$
392,291
$
45,298
$
33,629
$
27,473
$
6,816
$
5,391
$
118,607
$
35,094
$
26,054
$
21,285
$
5,281
$
4,176
$
91,890
$
310,964
$
262,377
$
334,120
$
47,027
$
356,223
$
1,310,711
$
342,697
$
259,324
$
240,692
$
34,460
$
$
877,173
(205,132
)
(165,327
)
(125,948
)
(22,510
)
(518,917
)
$
137,565
$
93,997
$
114,744
$
11,950
$
$
358,256
$
37,586
$
23,858
$
21,138
$
6,433
$
4,033
$
93,048
$
39,803
$
25,266
$
22,384
$
6,813
$
4,270
$
98,536
$
284,058
$
207,380
$
284,321
$
73,787
$
294,063
$
1,143,609
Year Ended December 31,
2009
2008
2007
$
137,039
$
392,291
$
358,256
(104,253
)
(115,319
)
(99,042
)
(132,520
)
(118,607
)
(93,048
)
(2,650
)
(76
)
(477
)
(204,014
)
(22,522
)
$
(306,398
)
$
135,767
$
165,689
84
Table of Contents
16.
Accrued
Expenses
December 31,
2009
2008
$
12,709
$
19,832
3,327
4,248
6,165
6,690
4,976
543
137
1,226
588
2,698
2,474
48
38
343
185
346
1,438
974
897
14,360
5,083
10
$
42,196
$
47,139
17.
Supplemental
Schedule of Cash Flow Information
Year Ended December 31,
2009
2008
2007
(In thousands)
$
18,594
$
50,730
$
26,814
$
$
$
2,194
$
$
183
$
1,032
$
149
$
143
$
101
$
$
$
51,193
85
Table of Contents
18.
Quarterly
Financial Data (Unaudited)
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
Year
$
154,688
$
118,848
$
124,958
$
128,133
$
526,627
$
44,021
$
30,820
$
31,025
$
31,173
$
137,039
$
(182,825
)
$
(21,236
)
$
(25,325
)
$
(24,152
)
$
(253,538
)
$
(182,825
)
$
(21,236
)
$
(25,325
)
$
(24,152
)
$
(253,538
)
$
(4.57
)
$
(0.54
)
$
(0.64
)
$
(0.61
)
$
(6.39
)
$
(4.57
)
$
(0.54
)
$
(0.64
)
$
(0.61
)
$
(6.39
)
39,970
39,575
39,595
39,605
39,684
39,970
39,575
39,595
39,605
39,684
$
229,873
$
251,522
$
277,575
$
245,972
$
1,004,942
$
92,126
$
97,495
$
108,980
$
93,690
$
392,291
$
19,656
$
18,713
$
25,942
$
3,927
$
68,238
$
19,656
$
18,713
$
25,942
$
3,927
$
68,238
$
0.48
$
0.46
$
0.63
$
0.10
$
1.67
$
0.47
$
0.45
$
0.62
$
0.10
$
1.64
40,577
40,721
40,988
40,731
40,755
41,464
41,659
41,787
41,100
41,664
(a)
The sum of individual quarterly net income per share may not
agree to the total for the year due to each periods
computation being based on the weighted average number of common
shares outstanding during each period.
19.
Fair
Value Measurements
86
Table of Contents
$
1,552
143
131
(30
)
$
1,796
24
149
$
1,969
20.
Subsequent
Events
87
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, 2009
|
||||||||||||||||||||
Allowance for Bad Debt
|
$ | 5,838 | $ | 1,917 | $ | | $ | (2,998 | ) | $ | 4,757 | |||||||||
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 |
(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 |
88
ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
ITEM 9A. | CONTROLS AND PROCEDURES |
ITEM 9B. | OTHER INFORMATION |
89
91
92
93
ITEM 15.
EXHIBITS,
FINANCIAL STATEMENT SCHEDULES
Exhibit
2
.1*
Agreement and Plan of Merger, dated as of January 8, 2007,
by and among Basic Energy Services, Inc., JS Acquisition LLC and
JetStar Consolidated Holdings, Inc. (Incorporated by reference
to Exhibit 2.1 of the Companys Current Report on
Form 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 Companys Current Report on
Form 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 Companys Registration
Statement on
Form 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 Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on December 18, 2007)
4
.1*
Specimen Stock Certificate representing common stock of the
Company. (Incorporated by reference to Exhibit 4.1 of the
Companys Registration Statement on
Form 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 Companys Current
Report on
Form 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 Companys
Current Report on
Form 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 Companys Current
Report on
Form 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 Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on May 1, 2007)
4
.6*
Third Supplemental 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 Companys Current
Report on
Form 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
Companys Annual Report on
Form 10-K
(SEC File
No. 001-32693),
filed on March 9, 2009)
90
Table of Contents
Exhibit
4
.8
Fifth Supplemental Indenture dated as of July 23, 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.
4
.9*
Indenture dated as of July 31, 2009, by and among the
Company as Issuer, 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
Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on August 4, 2009)
4
.10*
Form of 11.625% Senior Secured Note due 2014 (included as
Exhibit A to Exhibit 4.1 of the Companys Current
Report on
Form 8-K
(SEC File
No. 001-32693),
filed on August 4, 2009)
4
.11*
Security Agreement dated as of July 31, 2009, by and
between the Company 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 Companys Current Report on
Form 8-K
(SEC File No. 001-32693),
filed on August 4, 2009)
10
.1*
Form of Indemnification Agreement. (Incorporated by reference to
Exhibit 10.1 of the Companys Registration Statement
on
Form 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 Companys Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on August 12, 2005)
10
.3*
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 Companys Current
Report on
Form 8-K
(SEC File
No. 001-32693),
filed on February 12, 2007)
10
.4*
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 Companys Current
Report on
Form 8-K
(SEC File No. 001-32693),
filed on May 7, 2009)
10
.5*
Fourth Amended and Restated Basic Energy Services, Inc. 2003
Incentive Plan. (Incorporated by reference to Exhibit 10.1
of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on June 1, 2009)
10
.6*
Form of Non-Qualified Option Grant Agreement (Executive
Officer Pre-March 1, 2005). (Incorporated by
reference to Exhibit 10.12 of the Companys
Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on September 28, 2005)
10
.7*
Form of Non-Qualified Option Grant Agreement (Executive
Officer Post-March 1, 2005). (Incorporated by
reference to Exhibit 10.13 of the Companys
Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on September 28, 2005)
10
.8*
Form of Non-Qualified Option Grant Agreement (Non-Employee
Director Pre-March 1, 2005). (Incorporated by
reference to Exhibit 10.14 of the Companys
Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on September 28, 2005)
10
.9*
Form of Non-Qualified Option Grant Agreement (Non-Employee
Director Post-March 1, 2005). (Incorporated by
reference to Exhibit 10.15 of the Companys
Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on September 28, 2005)
10
.10*
Form of Restricted Stock Grant Agreement. (Incorporated by
reference to Exhibit 10.16 of the Companys
Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on September 28, 2005)
10
.11*
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 Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on January 4, 2006)
10
.12*
Form of Nonqualified Stock Option Agreement (Director form
effective March 2006). (Incorporated by reference to
Exhibit 10.13 of the Companys Annual Report on
Form 10-K
(SEC File
No. 001-32693),
filed on March 7, 2008)
Table of Contents
Exhibit
10
.13*
Form of Nonqualified Stock Option Agreement (Employee form
effective March 2006). (Incorporated by reference to
Exhibit 10.14 of the Companys Annual Report on
Form 10-K
(SEC File
No. 001-32693),
filed on March 7, 2008)
10
.14*
Form of Restricted Stock Grant Agreement (Officers and
Employees Post-March 1, 2007). (Incorporated by
reference to Exhibit 10.5 to the Companys Quarterly
Report on
Form 10-Q
(SEC File No. 001-32693),
filed on May 10, 2007)
10
.15*
Form of Restricted Stock Grant Agreement (Non-Employee
Directors Post-March 1, 2007). (Incorporated by
reference to Exhibit 10.6 to the Companys Quarterly
Report on
Form 10-Q
(SEC File
No. 001-32693),
filed on May 10, 2007)
10
.16*
Form of Non-Qualified Stock Option Grant Agreement
(Post-March 1, 2007). (Incorporated by reference to
Exhibit 10.7 to the Companys Quarterly Report on
Form 10-Q
(SEC File
No. 001-32693),
filed on May 10, 2007)
10
.17*
Form of Performance-Based Award Agreement (Officers and
Employees). (Incorporated by reference to Exhibit 10.1 of
the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on March 17, 2008)
10
.18*
Form of Restricted Stock Grant Agreement (Officers and
Employees). (Incorporated by reference to Exhibit 10.2 of
the Companys Quarterly Report on
Form 10-Q
(SEC File
No. 001-32693),
filed on May 8, 2008)
10
.19*
Form of Restricted Stock Grant Agreement (Non-Employee
Directors). (Incorporated by reference to Exhibit 10.3 of
the Companys Quarterly Report on
Form 10-Q
(SEC File
No. 001-32693),
filed on May 8. 2008)
10
.20*
Form of Performance-Based Award Agreement (effective March 2009)
(Incorporated by reference to Exhibit 10.1 of the
Companys Current Report on
Form 8-K
(SEC File
No. 001-32963),
filed on March 19, 2009)
10
.21*
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
Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on March 2, 2006)
10
.22*
Employment Agreement of Kenneth V. Huseman, effective as of
December 31, 2006. (Incorporated by reference to
Exhibit 10.1 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on January 4, 2007)
10
.23*
Employment Agreement of Alan Krenek, effective as of
December 31, 2006. (Incorporated by reference to
Exhibit 10.2 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on January 4, 2007)
10
.24*
Employment Agreement of James E. Tyner, effective as of
December 31, 2006. (Incorporated by reference to
Exhibit 10.5 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on January 4, 2007)
10
.25*
Amended and Restated Employment Agreement of Thomas Monroe
Patterson, effective as of November 21, 2008. (Incorporated
by reference to Exhibit 10.2 of the Companys Current
Report on
Form 8-K
(SEC File
No. 001-32693),
filed on November 24, 2008)
10
.26*
First Amendment to Employment Agreement of Kenneth V. Huseman,
effective as of January 23, 2007. (Incorporated by
reference to Exhibit 10.1 of the Companys Current
Report on
Form 8-K
(SEC File No. 001-32693),
filed on January 29, 2007)
10
.27
Amended and Restated Employment Agreement of James F. Newman,
effective as of November 24, 2008.
10
.28
Employment Agreement of Douglas B. Rogers, effective as of
March 16, 2009.
12
.1
Ratio of Earnings to Fixed Charges
21
.1*
Subsidiaries of the Company, (Incorporated by reference to
Exhibit 21.1 of the Companys Registration Statement
on
Form S-4
(SEC File No. 333-161693), filed on September 2, 2009)
23
.1
Consent of KPMG LLP
Table of Contents
Exhibit
31
.1
Certification by Chief Executive Officer required by
Rule 13a-14(a)
and 15d-14(a) under the Exchange Act
31
.2
Certification by Chief Financial Officer required by
Rule 13a-14(a)
and 15d-14(a) under the Exchange Act
32
.1
Certification by Chief Executive Officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
32
.2
Certification of Chief Financial Officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
*
Incorporated by reference
Management contract or compensatory plan or arrangement
Table of Contents
By:
Title:
President, Chief Executive Officer and
President, Chief Executive Officer and Director (Principal
Executive Officer)
February 26, 2010
Senior Vice President,
Chief Financial Officer,
Treasurer and Secretary
(Principal Financial Officer
and Principal Accounting Officer)
February 26, 2010
Chairman of the Board
February 26, 2010
Director
February 26, 2010
Director
February 26, 2010
Director
February 26, 2010
Director
February 26, 2010
Director
February 26, 2010
Director
February 26, 2010
94
Table of Contents
Exhibit
2
.1*
Agreement and Plan of Merger, dated as of January 8, 2007,
by and among Basic Energy Services, Inc., JS Acquisition LLC and
JetStar Consolidated Holdings, Inc. (Incorporated by reference
to Exhibit 2.1 of the Companys Current Report on
Form 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 Companys Current Report on
Form 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 Companys Registration
Statement on
Form 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 Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on December 18, 2007)
4
.1*
Specimen Stock Certificate representing common stock of the
Company. (Incorporated by reference to Exhibit 4.1 of the
Companys Registration Statement on
Form 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 Companys Current
Report on
Form 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 Companys
Current Report on
Form 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 Companys Current
Report on
Form 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 Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on May 1, 2007)
4
.6*
Third Supplemental 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 Companys Current
Report on
Form 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
Companys Annual Report on
Form 10-K
(SEC File
No. 001-32693),
filed on March 9, 2009)
4
.8
Fifth Supplemental Indenture dated as of July 23, 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.
4
.9*
Indenture dated as of July 31, 2009, by and among the
Company as Issuer, 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
Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on August 4, 2009)
4
.10*
Form of 11.625% Senior Secured Note due 2014 (included as
Exhibit A to Exhibit 4.1 of the Companys Current
Report on
Form 8-K
(SEC File
No. 001-32693),
filed on August 4, 2009)
4
.11*
Security Agreement dated as of July 31, 2009, by and
between the Company 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 Companys Current Report on
Form 8-K
(SEC File No. 001-32693),
filed on August 4, 2009)
10
.1*
Form of Indemnification Agreement. (Incorporated by reference to
Exhibit 10.1 of the Companys Registration Statement
on
Form S-1
(SEC File
No. 333-127517),
filed on September 28, 2005)
Table of Contents
Exhibit
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 Companys Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on August 12, 2005)
10
.3*
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 Companys Current
Report on
Form 8-K
(SEC File
No. 001-32693),
filed on February 12, 2007)
10
.4*
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 Companys Current
Report on
Form 8-K
(SEC File
No. 001-32693),
filed on May 7, 2009)
10
.5*
Fourth Amended and Restated Basic Energy Services, Inc. 2003
Incentive Plan. (Incorporated by reference to Exhibit 10.1
of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on June 1, 2009)
10
.6*
Form of Non-Qualified Option Grant Agreement (Executive
Officer Pre-March 1, 2005). (Incorporated by
reference to Exhibit 10.12 of the Companys
Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on September 28, 2005)
10
.7*
Form of Non-Qualified Option Grant Agreement (Executive
Officer Post-March 1, 2005). (Incorporated by
reference to Exhibit 10.13 of the Companys
Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on September 28, 2005)
10
.8*
Form of Non-Qualified Option Grant Agreement (Non-Employee
Director Pre-March 1, 2005). (Incorporated by
reference to Exhibit 10.14 of the Companys
Registration Statement on
Form S-1
(SEC File No. 333-127517),
filed on September 28, 2005)
10
.9*
Form of Non-Qualified Option Grant Agreement (Non-Employee
Director Post-March 1, 2005). (Incorporated by
reference to Exhibit 10.15 of the Companys
Registration Statement on
Form S-1
(SEC File No. 333-127517),
filed on September 28, 2005)
10
.10*
Form of Restricted Stock Grant Agreement. (Incorporated by
reference to Exhibit 10.16 of the Companys
Registration Statement on
Form S-1
(SEC File
No. 333-127517),
filed on September 28, 2005)
10
.11*
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 Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on January 4, 2006)
10
.12*
Form of Nonqualified Stock Option Agreement (Director form
effective March 2006). (Incorporated by reference to
Exhibit 10.13 of the Companys Annual Report on
Form 10-K
(SEC File
No. 001-32693),
filed on March 7, 2008)
10
.13*
Form of Nonqualified Stock Option Agreement (Employee form
effective March 2006). (Incorporated by reference to
Exhibit 10.14 of the Companys Annual Report on
Form 10-K
(SEC File
No. 001-32693),
filed on March 7, 2008)
10
.14*
Form of Restricted Stock Grant Agreement (Officers and
Employees Post-March 1, 2007). (Incorporated by
reference to Exhibit 10.5 to the Companys Quarterly
Report on
Form 10-Q
(SEC File No. 001-32693),
filed on May 10, 2007)
10
.15*
Form of Restricted Stock Grant Agreement (Non-Employee
Directors Post-March 1, 2007). (Incorporated by
reference to Exhibit 10.6 to the Companys Quarterly
Report on
Form 10-Q
(SEC File
No. 001-32693),
filed on May 10, 2007)
10
.16*
Form of Non-Qualified Stock Option Grant Agreement
(Post-March 1, 2007). (Incorporated by reference to
Exhibit 10.7 to the Companys Quarterly Report on
Form 10-Q
(SEC File
No. 001-32693),
filed on May 10, 2007)
10
.17*
Form of Performance-Based Award Agreement (Officers and
Employees). (Incorporated by reference to Exhibit 10.1 of
the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on March 17, 2008)
Table of Contents
Exhibit
10
.18*
Form of Restricted Stock Grant Agreement (Officers and
Employees). (Incorporated by reference to Exhibit 10.2 of
the Companys Quarterly Report on
Form 10-Q
(SEC File
No. 001-32693),
filed on May 8, 2008)
10
.19*
Form of Restricted Stock Grant Agreement (Non-Employee
Directors). (Incorporated by reference to Exhibit 10.3 of
the Companys Quarterly Report on
Form 10-Q
(SEC File
No. 001-32693),
filed on May 8. 2008)
10
.20*
Form of Performance-Based Award Agreement (effective March 2009)
(Incorporated by reference to Exhibit 10.1 of the
Companys Current Report on
Form 8-K
(SEC File
No. 001-32963),
filed on March 19, 2009)
10
.21*
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
Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on March 2, 2006)
10
.22*
Employment Agreement of Kenneth V. Huseman, effective as of
December 31, 2006. (Incorporated by reference to
Exhibit 10.1 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on January 4, 2007)
10
.23*
Employment Agreement of Alan Krenek, effective as of
December 31, 2006. (Incorporated by reference to
Exhibit 10.2 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on January 4, 2007)
10
.24*
Employment Agreement of James E. Tyner, effective as of
December 31, 2006. (Incorporated by reference to
Exhibit 10.5 of the Companys Current Report on
Form 8-K
(SEC File
No. 001-32693),
filed on January 4, 2007)
10
.25*
Amended and Restated Employment Agreement of Thomas Monroe
Patterson, effective as of November 21, 2008. (Incorporated
by reference to Exhibit 10.2 of the Companys Current
Report on
Form 8-K
(SEC File
No. 001-32693),
filed on November 24, 2008)
10
.26*
First Amendment to Employment Agreement of Kenneth V. Huseman,
effective as of January 23, 2007. (Incorporated by
reference to Exhibit 10.1 of the Companys Current
Report on
Form 8-K
(SEC File
No. 001-32693),
filed on January 29, 2007)
10
.27
Amended and Restated Employment Agreement of James F. Newman,
effective as of November 24, 2008.
10
.28
Employment Agreement of Douglas B. Rogers, effective as of
March 16, 2009.
12
.1
Ratio of Earnings to Fixed Charges
21
.1*
Subsidiaries of the Company, (Incorporated by reference to
Exhibit 21.1 of the Companys Registration Statement
on
Form S-4
(SEC File No. 333-161693), filed on September 2, 2009)
23
.1
Consent of KPMG LLP
31
.1
Certification by Chief Executive Officer required by
Rule 13a-14(a)
and 15d-14(a) under the Exchange Act
31
.2
Certification by Chief Financial Officer required by
Rule 13a-14(a)
and 15d-14(a) under the Exchange Act
32
.1
Certification by Chief Executive Officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
32
.2
Certification of Chief Financial Officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
*
Incorporated by reference
Management contract or compensatory plan or arrangement
2
BASIC ENERGY SERVICES, INC. | ||||||
|
||||||
|
By: | /s/ Kenneth V. Huseman | ||||
|
||||||
Name: Kenneth V. Huseman | ||||||
Title: President and Chief Executive Officer | ||||||
|
||||||
NEW GUARANTOR: | ||||||
|
||||||
PERMIAN PLAZA, LLC | ||||||
|
||||||
|
By: | /s/ Kenneth V. Huseman | ||||
|
||||||
Name: Kenneth V. Huseman | ||||||
Title: President |
EXISTING GUARANTORS: | ||||||
|
||||||
BASIC ENERGY SERVICES GP, LLC | ||||||
By: |
BASIC ENERGY SERVICES,
INC., its sole Member |
|||||
BASIC ENERGY SERVICES, L.P. | ||||||
By: |
BASIC ENERGY SERVICES GP,
LLC , its General Partner |
|||||
By: |
BASIC ENERGY SERVICES,
INC., its sole Member |
|||||
BASIC ESA, INC. | ||||||
BASIC MARINE SERVICES, INC. | ||||||
FIRST ENERGY SERVICES COMPANY | ||||||
LEBUS OIL FIELD SERVICE CO. | ||||||
OILWELL FRACTURING SERVICES, INC. | ||||||
GLOBE WELL SERVICE, INC. | ||||||
SCH DISPOSAL, L.L.C. | ||||||
JS ACQUISITION LLC | ||||||
ACID SERVICES, LLC | ||||||
JETSTAR ENERGY SERVICES, INC. | ||||||
JETSTAR HOLDINGS, INC. | ||||||
SLEDGE DRILLING CORP. | ||||||
CHAPARRAL SERVICE, INC. | ||||||
HENNESSEY RENTAL TOOLS, INC. | ||||||
WILDHORSE SERVICES, INC. | ||||||
XTERRA FISHING AND RENTAL TOOLS CO. | ||||||
|
||||||
|
By: | /s/ Kenneth V. Huseman | ||||
|
||||||
Name: Kenneth V. Huseman | ||||||
Title: President | ||||||
|
||||||
BASIC ENERGY SERVICES LP, LLC | ||||||
|
||||||
|
By: | /s/ Jerry Tufly | ||||
|
||||||
Name: Jerry Tufly | ||||||
Title: President |
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. , as Trustee | ||||||
|
||||||
|
By: | /s/ Rafael Martinez | ||||
|
||||||
Name: Rafael Martinez | ||||||
Title: Assistant Treasurer |
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
(1) |
If to Company, addressed to:
Basic Energy Services, Inc. Attn: Chief Executive Officer P.O. Box 10460 Midland, Texas 79702 |
21
(2) | If to Executive, addressed to the address set forth below his name on the execution page hereof; |
22
EXECUTIVE: | ||||
|
||||
Signature: James F. Newman | ||||
|
||||
|
Name: | James F. Newman | ||
|
||||
|
Date: | Nov. 24, 2008 | ||
|
||||
Address for Notices: | ||||
|
||||
|
2610 W. Shandon | |||
|
Midland, Texas 79705 | |||
|
||||
BASIC ENERGY SERVICES, INC. | ||||
|
||||
|
By: | /s/ Kenneth V. Huseman | ||
|
||||
|
Kenneth V. Huseman, President and | |||
|
Chief Executive Officer | |||
|
||||
|
Date: | 11/24/2008 |
23
- 1 -
- 2 -
- 3 -
- 4 -
- 5 -
- 6 -
- 7 -
- 8 -
- 9 -
- 10 -
- 11 -
- 12 -
- 13 -
- 14 -
- 15 -
- 16 -
- 17 -
(1) | If to Company, addressed to: | ||
Basic Energy Services, Inc.
Attn: Chairman of the Board P.O. Box 10460 Midland, Texas 79702 |
|||
(2) | If to Executive, addressed to the address set forth below his name on the execution page hereof; |
- 18 -
- 19 -
EXECUTIVE: | ||||||
|
||||||
|
Signature: | /s/ Douglas Rogers | ||||
|
||||||
|
Name: | Douglas Rogers | ||||
|
Date: | 7/24/09 | ||||
|
||||||
Address for Notices: | ||||||
|
||||||
P.O. Box 10964 | ||||||
Midland, Texas 79702 | ||||||
|
||||||
COMPANY: | ||||||
|
||||||
|
By: | /s/ Kenneth V. Huseman | ||||
|
||||||
|
Its: | President & CEO | ||||
|
Name: | Kenneth V. Huseman | ||||
|
Date: | 7/24/09 |
- 20-
Year-Ended December, 31, | ||||||||||||||||||||||||
(unaudited) | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||
Earnings:
|
||||||||||||||||||||||||
Income from continuing operations
before income taxes |
(341,067 | ) | 123,372 | 140,499 | 153,572 | 71,581 | 20,916 | |||||||||||||||||
Fixed charges
|
37,403 | 33,525 | 33,216 | 22,099 | 15,398 | 11,581 | ||||||||||||||||||
|
||||||||||||||||||||||||
Earnings
|
(303,664 | ) | 156,897 | 173,715 | 175,671 | 86,979 | 32,497 | |||||||||||||||||
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||
Fixed charges:
|
||||||||||||||||||||||||
Rental expense
|
4,454 | 6,759 | 5,800 | 4,633 | 2,333 | 1,867 | ||||||||||||||||||
Interest expense
|
32,949 | 26,766 | 27,416 | 17,466 | 13,065 | 9,714 | ||||||||||||||||||
|
||||||||||||||||||||||||
Fixed charges
|
37,403 | 33,525 | 33,216 | 22,099 | 15,398 | 11,581 | ||||||||||||||||||
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||
Ratio of earnings to fixed charges
|
(8.1 | )x | 4.7 | x | 5.2 | x | 7.9 | x | 5.6 | x | 2.8 | x |