(MARK ONE) | ||
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2010 | ||
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 | 73-0618660 | |
(State or other jurisdiction
of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
|
5 Greenway Plaza,
Suite 100, Houston, Texas (Address of principal executive offices) |
77046
(Zip code) |
Title of Each Class
|
Name of Each Exchange on Which Registered:
|
|
Common Stock, par value $0.16 2 / 3 per share | New York Stock Exchange |
Large accelerated filer
o
|
Accelerated filer þ |
Non-accelerated filer
o
(Do not check if a smaller reporting company) |
Smaller reporting company o |
2
30
ITEM 1.
BUSINESS
International Drilling
U.S. Drilling
Rental Tools
Project Management and Engineering Services
Construction Contract
11 rigs in the Commonwealth of Independent States/Africa-Middle
East (CIS/AME) region, including 8 land rigs and 1
arctic-class barge rig in Kazakhstan and 2 land rigs in
Algeria
10 rigs in the Americas region, including 7 land rigs and 1
barge rig in Mexico and 2 land rigs in Colombia
5 land rigs in the Asia Pacific region, including 2 rigs in
Indonesia, 1 rig in Papua New Guinea and 2 rigs in New Zealand.
Three additional rigs, located in this region, were classified
as assets held for sale as of December 31, 2010
13 barge drilling rigs in the inland shallow waters of the
U.S. Gulf of Mexico (GOM)
1 unassigned land rig currently held in our yard in New Iberia,
Louisiana.
customers who typically are major independent and national oil
and gas companies and integrated service providers;
3
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drilling programs in remote locations with little infrastructure
and/or
harsh
environments requiring specialized drilling equipment with a
large inventory of spare parts and other ancillary equipment and
self-supported service capabilities;
complex wells (i.e., high pressure, deep depths, hazardous or
geologically challenging) requiring specialized equipment and
considerable experience to drill; and
international contracts that generally cover periods of one year
or more.
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expanding and broadening our non-capital intensive project
management and engineering services activities by leveraging our
experience
growing our rental tools operation by locating new service
facilities in markets with growing demand from new and existing
customers
adding new equipment to our drilling rig fleet that improves
opportunities with operators
entering new markets that align with the products and services
we offer.
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The Yastreb rig, which was designed, built and operated by us
for ENL, operator of the Sakhalin-1 Project, set a new world
record for extended-reach drilling with the Odoptu
OP-11 well. OP-11 achieved a total measured depth of
40,502 feet (7.67 miles). OP-11 also set a world
record with a horizontal reach of 37,648 feet
(7.13 miles) under the sea floor. As our customers take the
search for oil and gas into frontier regions, we believe that
this kind of expertise will become more valued in the years
ahead.
We infused our rental tools business with approximately
$49 million in capital investments, most of which went
directly for new equipment to serve the increased demand for
rental tools created by the growth in U.S. unconventional
shale drilling.
We hold the number one position in the U.S. Gulf of Mexico
barge drilling market measured by barge rigs working. According
to industry compiled information, over 50 percent of all
wells drilled by barge rigs in the shallow waters of the Gulf of
Mexico during 2010 were drilled by Parker rigs.
In our International Drilling segment:
-
four drilling contracts in the Americas region were extended
into 2012.
-
three new contracts in our Asia Pacific region, one of which
mobilized a rig that had been ready-stacked since 2009
-
our Caspian Sea arctic barge contract was extended into 2012.
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December 31,
2010
2009
740
1,108
138
140
329
347
250
240
554
537
2,011
2,372
(1)
Our employees in Alaska are supporting the business expansion
into this region.
(2)
Includes 327 and 301 employees located in Russia who
support the Orlan platform and Yastreb rig drilling activities
in 2010 and 2009, respectively.
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Robert L. Parker Jr., 62,
is the executive chairman of
the board of directors. Mr. Parker joined the Company in
1973 as a contract representative, and was appointed manager of
U.S. operations and a vice president later in 1973. He was
elected executive vice president in 1976, and president and
chief operating officer in 1977. In 1991, he was elected chief
executive officer, was appointed chairman in 2006, and has
retained the position of executive chairman since 2009. He has
been a director since 1973.
David C. Mannon, 53,
is president, chief executive
officer and member of the board of directors. Mr. Mannon
joined the Company in 2004 as senior vice president and chief
operating officer, and was elected president in 2007, and chief
executive officer and director in 2009. From 2003 to 2004,
Mr. Mannon held the positions of president and chief
executive officer of Triton Engineering Services Company
(Triton), a subsidiary of Noble Drilling. From 1988 to March
2003 he held various other positions with Triton. From 1980
through 1988, Mr. Mannon served Sedco-Forex, formerly
Sedco, as a drilling engineer.
W. Kirk Brassfield, 55,
was elected senior vice president
and chief financial officer in 2005. Mr. Brassfield joined
the Company in 1998 as controller and principal accounting
officer, and was appointed vice president, finance and
accounting in 2004. From 1991 through 1998, Mr. Brassfield
served in various positions, including subsidiary controller and
director of financial planning of MAPCO Inc., a diversified
energy company. From 1979 through 1991, Mr. Brassfield
served at the public accounting firm KPMG.
Jon-Al Duplantier, 43,
joined the Company in 2009 as vice
president and general counsel. From 1995 to 2009,
Mr. Duplantier served in several legal and business roles
at ConocoPhillips, including senior counsel
Exploration and Production, managing counsel
Indonesia, executive assistant Exploration and
Production, and counsel Dubai. Prior to joining
ConocoPhillips, he served as a patent attorney for DuPont from
1992 to 1995.
Philip Agnew, 42,
joined the Company in December 2010 as
vice president of technical services. Mr. Agnew has more
than 20 years experience in design, construction and
project management. From 2003 to 2010, Mr. Agnew held the
position of President at Aker MH, Inc., a business unit of Aker
Solutions AS. From 1998 to 2003, Mr. Agnew served as
Project Manager and then vice president Project
Development at Signal International (previously Friede Goldman
Offshore; TDI-Halter LP; Texas Drydock, Inc.). Prior to his
career at Signal International, Mr. Agnew served a variety
of leadership roles at Schlumberger Sedco Forex International
Resources, Interface Consulting International, Inc., and
Brown & Root, Inc.
Philip A. Schlom, 46,
joined the Company in 2009 as
principal accounting officer and corporate controller. From 2008
to 2009, he held the position of vice president and corporate
controller for Shared Technologies
13
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Inc. From 1997 to 2008, Mr. Schlom held several senior
financial positions at Flowserve Corporation, a leading
manufacturer of pumps, valves and seals for the energy sector.
From 1988 through 1997, Mr. Schlom worked at the public
accounting firm PricewaterhouseCoopers.
Denis J. Graham, 61,
joined the Company in 2000 as vice
president of engineering. Mr. Graham served in a variety of
positions for Diamond Offshore Drilling Company from 1979 to
2000, including senior vice president of technical services
immediately prior to joining the Company. Mr. Graham is a
Registered Professional Engineer in the State of Texas.
David W. Tucker, 55,
treasurer, joined the Company in
1978 as a financial analyst and served in various financial and
accounting positions before being named chief financial officer
of the Companys wholly-owned subsidiary, Hercules Offshore
Corporation, in February 1998. Mr. Tucker was named
treasurer of the Company in 1999.
J. Daniel Chapman, 40,
joined the Company in 2009 as
chief compliance officer and counsel. Prior to joining the
Company, Mr. Chapman was employed by Baker Hughes from 2002
to 2009 where he served in several legal counsel positions
including compliance counsel, international trade counsel,
division counsel (drilling fluids), and global ethics and
compliance director. Prior to 2002, Mr. Chapman was
employed as a securities and mergers and acquisitions lawyer
with the law firms of Freshfields (London) and King &
Spalding (Atlanta and Houston).
ITEM 1A.
RISK
FACTORS
14
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the demand for oil and natural gas;
the cost of exploring for, producing and delivering oil and
natural gas;
expectations regarding future energy prices;
advances in exploration, development and production technology;
the adoption or repeal of laws and government regulations, both
in the United States and other countries;
the imposition or lifting of economic sanctions against foreign
countries;
the number of ongoing and recently completed rig construction
projects which may create overcapacity;
local and worldwide military, political and economic events,
including events in the oil producing countries in Africa, the
Middle East, Russia, Central Asia, Southeast Asia and Americas;
the ability of the Organization of Petroleum Exporting Countries
(OPEC) to set and maintain production levels and prices;
the level of production by non-OPEC countries;
weather conditions;
expansion or contraction of worldwide economic activity, which
affects levels of consumer and industrial demand;
the rate of discovery of new oil and natural gas reserves;
domestic and foreign tax policies;
acts of terrorism in the United States or elsewhere;
the development and use of alternative energy sources; and
the policies of various governments regarding exploration and
development of their oil and natural gas reserves.
15
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shortages of equipment or skilled labor;
unforeseen engineering problems;
unanticipated change orders;
work stoppages;
adverse weather conditions;
unexpectedly long delivery times for manufactured rig components;
unanticipated repairs to correct defects in construction not
covered by warranty;
failure or delay of third-party equipment vendors or service
providers;
unforeseen increases in the cost of equipment, labor or raw
materials, particularly steel;
16
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disputes with customers, shipyards or suppliers;
latent damages or deterioration to hull, equipment and machinery
in excess of engineering estimates and assumptions;
financial or other difficulties with current customers at
shipyards and suppliers;
loss of revenue associated with downtime to remedy
malfunctioning equipment not covered by warranty;
unanticipated cost increases;
loss of revenue and payments of liquidated damages for downtime
to perform repairs associated with defects, unanticipated
equipment refurbishment and delays in commencement of
operations; and
inability to obtain the required permits or approvals, including
import/export documentation.
$460.9 million of long-term debt and $9.1 million of
unamortized debt discount which is included in equity pursuant
to applicable accounting standards for convertible debt
instruments;
$12.0 million of current portion of long-term debt;
$31.5 million of operating lease commitments; and
$16.3 million of standby letters of credit.
17
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delay spending on capital projects, including maintenance
projects and the acquisition or construction of additional rigs,
rental tools and other assets;
sell equity securities, sell assets; or
restructure or refinance our debt.
result in a reduction of our credit rating, which would make it
more difficult for us to obtain additional financing on
acceptable terms;
require us to dedicate a substantial portion of our cash flows
from operating activities to the repayment of our debt and the
interest associated with our debt;
limit our operating flexibility due to financial and other
restrictive covenants, including restrictions on incurring
additional debt, and create liens on our properties;
place us at a competitive disadvantage compared with our
competitors that have relatively less debt; and
make us more vulnerable to downturns in our business.
cash on hand;
funds generated from our operations;
public offerings or private placements of equity and debt
securities;
commercial bank loans;
capital leases; and
sales of assets.
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political, social and economic instability, war, terrorism and
civil disturbances;
limitations on insurance coverage, such as war risk coverage, in
certain areas;
expropriation, confiscatory taxation and nationalization of our
assets;
foreign laws and governmental regulation, including
inconsistencies and unexpected changes in laws or regulatory
requirements, and changes in interpretations or enforcement of
existing laws or regulations;
increases in governmental royalties;
import-export quotas or trade barriers;
hiring and retaining skilled and experienced workers, many of
whom are represented by foreign labor unions;
work stoppages;
damage to our equipment or violence directed at our employees,
including kidnapping;
piracy of vessels transporting our people or equipment;
unfavorable changes in foreign monetary and tax policies;
solicitation by government officials for improper payments or
other forms of corruption;
foreign currency fluctuations and restrictions on currency
repatriation;
repudiation, nullification, modification or renegotiation of
contracts; and
other forms of governmental regulation and economic conditions
that are beyond our control.
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the other risk factors described in this
Form 10-K,
including changes in oil and natural gas prices;
a shortfall in rig utilization, operating revenue or net income
from that expected by securities analysts and investors;
changes in securities analysts estimates of the financial
performance of us or our competitors or the financial
performance of companies in the oilfield service industry
generally;
changes in actual or market expectations with respect to the
amounts of exploration and development spending by oil and gas
companies;
general conditions in the economy and in energy-related
industries;
general conditions in the securities markets;
political instability, terrorism or war; and
the outcome of pending and future legal proceedings,
investigations, tax assessments and other claims.
24
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25
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make investments and other restricted payments, including
dividends;
incur additional indebtedness;
create liens;
engage in sale leaseback transactions;
sell our assets or consolidate or merge with or into other
companies; and
engage in transactions with affiliates.
stability of prices and demand for oil and natural gas;
levels of oil and natural gas exploration and production
activities;
demand for contract drilling and drilling-related services and
demand for rental tools;
our future operating results and profitability;
our future rig utilization, dayrates and rental tools activity;
entering into new, or extending existing, drilling contracts and
our expectations concerning when our rigs will commence
operations under such contracts;
growth through acquisitions of companies or assets;
construction or upgrades of rigs and expectations regarding when
these rigs will commence operations;
capital expenditures for acquisition of rigs, construction of
new rigs or major upgrades to existing rigs;
scheduled delivery of drilling rigs for operation in Alaska
under the terms of our agreement with BP Exploration (Alaska)
Inc.;
entering into joint venture agreements;
our future liquidity;
availability and sources of funds to reduce our debt and
expectations of when debt will be reduced;
26
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the outcome of pending or future legal proceedings,
investigations, tax assessments and other claims;
the availability of insurance coverage for pending or future
claims;
the enforceability of contractual indemnification in relation to
pending or future claims;
compliance with covenants under our senior secured credit
facility and indentures for our senior notes; and
organic growth of our operations.
worldwide economic and business conditions that adversely affect
market conditions
and/or
the
cost of doing business;
our inability to access the credit markets;
the U.S. economy and the demand for natural gas;
worldwide demand for oil;
fluctuations in the market prices of oil and natural gas;
imposition of unanticipated trade restrictions;
unanticipated operating hazards and uninsured risks;
political instability, terrorism or war;
governmental regulations, including changes in accounting rules
or tax laws or ability to remit funds to the U.S., that
adversely affect the cost of doing business;
changes in the tax laws that would allow double taxation on
foreign sourced income;
the outcome of our investigation and the parallel investigations
by the SEC and the Department of Justice into possible
violations of U.S. law, including the Foreign Corrupt
Practices Act;
contemplated U.S. legislation on carbon emissions;
potential new employer taxes on U.S. health
care plans;
adverse environmental events;
adverse weather conditions;
global health concerns;
changes in the concentration of customer and supplier
relationships;
ability of our customers and suppliers to obtain financing for
their operations;
unexpected cost increases for new construction and upgrade and
refurbishment projects;
delays in obtaining components for capital projects and in
ongoing operational maintenance and equipment certifications;
shortages of skilled labor;
27
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unanticipated cancellation of contracts by operators;
breakdown of equipment;
other operational problems including delays in
start-up
of
operations;
changes in competition;
the effect of litigation and contingencies; and
other similar factors , some of which are discussed in documents
referred to or incorporated by reference into this
Form 10-K
and our other reports and filings with the SEC.
ITEM 1B.
UNRESOLVED
STAFF COMMENTS
ITEM 2.
PROPERTIES
28
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Year entered
Drilling
into service/
depth rating
(in feet)
L
1981/1997
13,000
Indonesia
L
1982/1996
15,000
Indonesia
L
1979/2003
18,000
New Zealand
L
1981/1998
18,000
New Zealand
HH
1989/2010
18,000
Papua New Guinea
L
2007
20,000
Algeria
L
2007
20,000
Algeria
L
1983/2009
15,000
Kazakhstan
L
2001/2009
25,000
Kazakhstan
L
1980/2003
18,000
Kazakhstan
L
1978/2008
18,000
Kazakhstan
L
1981/2008
18,000
Kazakhstan
L
2000/2009
25,000
Kazakhstan
B
1999/2010
30,000
Kazakhstan
L
2001/2009
25,000
Kazakhstan
L
2008
21,000
Kazakhstan
L
1978/2009
30,000
Colombia
L
1982/2009
30,000
Colombia
B
1978/2007
18,000
Mexico
L
1980/2007
18,000
Mexico
L
1980/2008
18,000
Mexico
L
1978/2007
30,000
Mexico
L
1982/2007
30,000
Mexico
L
1978/2007
25,000
Mexico
L
2008
20,000
Mexico
L
2008
20,000
Mexico
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Year entered
Drilling
into service/
depth rating
Type(2)
upgraded
(in feet)
Location
B
1978/2007
14,000
GOM
B
1981/2007
13,000
GOM
B
1979/2007
14,000
GOM
B
1979/2006
18,000
GOM
B
1978/2007
15,000
GOM
B
1981/2006
20,000
GOM
B
1981/2008
20,000
GOM
B
1980/2006
25,000
GOM
B
1981/2010
25,000
GOM
B
1979/2005
25,000
GOM
B
1982/2005
30,000
GOM
B
1977/2009
30,000
GOM
B
2006/2006
30,000
GOM
L
21,000
(1)
Excludes three rigs classified for accounting purposes as assets
held for sale as of December 31, 2010.
(2)
Type is defined as: L land rig; B barge
rig; HH heli-hoist rig.
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YTD
December 31,
2010
2009
13.0
15.0
63
%
35
%
8.0
8.0
37
%
47
%
10.0
10.0
78
%
82
%
11.0
12
45
%
76
%
1.0
1.0
0
%
0
%
30.0
31.0
53
%
68
%
(1)
The number of rigs available for service is determined by
calculating the number of days each rig was in our fleet and was
under contract or available for contract. For example, a rig
under contract or available for contract for six months of a
year is 0.5 rigs available for service during such year. Our
method of computation of rigs available for service may not be
comparable to other similarly titled measures of other companies.
(2)
Rig utilization rates are based on a weighted average basis
assuming 365 days availability for all rigs available for
service. Rigs acquired or disposed of are treated as added to or
removed from the rig fleet as of the date of acquisition or
disposal. Rigs that are in operation or fully or partially
staffed and on a revenue-producing standby status are considered
to be utilized. Rigs under contract that generate revenues
during moves between locations or during mobilization or
demobilization are also considered to be utilized. Our method of
computation of rig utilization may not be comparable to other
similarly titled measures of other companies.
(3)
December 31, 2010 three rigs were removed from the
marketable rig count and classified as assets held for sale.
ITEM 3.
LEGAL
PROCEEDINGS
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75
95
96
97
ITEM 5.
MARKET
FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
2010
2009
High
Low
High
Low
$
5.85
$
4.55
$
3.39
$
1.28
5.76
3.75
5.39
1.80
4.44
3.43
5.89
3.43
4.95
3.85
6.54
4.19
Issuer Purchases of Equity Securities
Total Number
of Shares
Average Price
Purchased
Paid Per Share
51,230
$
4.37
38,429
$
4.02
44,354
$
4.56
134,013
$
4.33
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ITEM 6.
SELECTED
FINANCIAL DATA
Year Ended December 31,
2010
2009(1)
2008(1)(2)
2007(1)
2006(3)
(Dollars in thousands, except per share amounts)
$
659,475
$
752,910
$
829,842
$
654,573
$
586,435
45,107
39,322
59,180
190,983
143,326
(1,105
)
(27,101
)
(33,602
)
(29,495
)
(28,405
)
(24,141
)
(25,891
)
(26,213
)
(560
)
(6,942
)
(36,895
)
(36,409
)
(14,708
)
9,267
22,728
102,846
81,026
(14,461
)
9,267
22,728
102,846
81,026
$
(0.13
)
$
0.08
$
0.20
$
0.94
$
0.76
$
(0.13
)
$
0.08
$
0.20
$
0.94
$
0.76
$
(0.13
)
$
0.08
$
0.20
$
0.93
$
0.75
$
(0.13
)
$
0.08
$
0.20
$
0.93
$
0.75
$
51,431
$
108,803
$
172,298
$
60,124
$
92,203
62,920
816,147
716,798
675,548
585,888
435,473
5,287
4,828
1,274,555
1,243,086
1,205,720
1,067,173
901,301
472,862
423,831
441,394
349,309
329,368
588,066
595,899
582,172
549,322
459,099
(1)
The Company adopted, effective January 1, 2009, newly
issued accounting guidance regarding
Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon
Conversion
which applies to all convertible debt instruments
that have a net settlement feature. We reflected the
impact of the new accounting guidance during each of the
quarterly periods in our respective Quarterly Reports on
Form 10-Q
filed with the SEC during 2009. The adoption of this accounting
guidance impacted the historical accounting for our
$125 million aggregate principal amount of
2.125% Convertible Senior Notes due 2012 issued on
July 5, 2007 by requiring adjustments to related interest
expense, deferred income taxes, long-term debt, and
shareholders equity for 2008 and 2007, which are
illustrated in the notes to the consolidated financial
statements.
(2)
The 2008 results reflect a $100.3 million charge for
impairment of goodwill that is described in the notes to the
consolidated financial statements in Item 8 of this
Form 10-K.
(3)
The 2006 results reflect the reversal of a $12.6 million
valuation allowance at the end of 2006 as it was no longer
considered more likely than not under the accounting
guidance related to accounting for income tax uncertainties and
the utilization of $5.4 million of net operating losses,
both related to Louisiana state net operating loss carryforwards.
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ITEM 7.
MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Rental Tools segment revenues increased 50 percent in 2010
compared to 2009, setting a new record. Rental Tools segment
gross margins, excluding depreciation and amortization,
increased 81 percent over 2009.
Utilization in the Companys U.S. Barge Drilling
segment nearly doubled to 63 percent in 2010 from
35 percent in 2009.
Over 50 percent of all wells drilled in 2010 by barge rigs
in the shallow waters of the Gulf of Mexico were drilled by
Parker rigs.
In our International Drilling segment, the Americas region
extended four contracts into 2012. We also secured three new
contracts in our Asia Pacific region, one of which mobilized a
rig that had been ready-stacked since 2009. In addition, the
contract for Rig 257, the Companys Caspian Sea arctic
barge drilling rig, was extended into 2012.
The Parker-operated Yastreb rig set a new, extended-reach
drilling record of 40,502 feet, nearly eight miles, in
total measured depth, operating incident-free throughout. This
rig, designed, built and operated by us for Exxon Neftegas
Limited, set this record during development drilling of the
Sakhalin-1 Projects Odoptu field.
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35
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Year Ended December 31,
2010
2009
(Dollars in thousands)
$
220,371
33
%
$
293,337
39
%
64,543
10
%
49,628
6
%
172,598
26
%
115,057
15
%
110,873
17
%
109,445
15
%
91,090
14
%
185,443
25
%
$
659,475
100
%
$
752,910
100
%
$
42,786
19
%
$
101,851
35
%
11,209
17
%
1,574
3
%
112,562
65
%
62,317
54
%
21,438
19
%
23,646
22
%
202
0
%
8,132
4
%
(115,030
)
(113,975
)
73,167
83,545
(30,728
)
(45,483
)
(1,952
)
(4,646
)
4,620
5,906
$
45,107
$
39,322
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Project
Management
International
& Engineering
Construction
Drilling
U.S. Drilling
Rental Tools
Services
Contract
(Dollars in thousands)
$
(11,511
)
$
(11,503
)
$
74,541
$
21,438
$
202
54,297
22,712
38,021
$
42,786
$
11,209
$
112,562
$
21,438
$
202
$
50,723
$
(26,797
)
$
27,841
$
23,646
$
8,132
51,128
28,371
34,476
$
101,851
$
1,574
$
62,317
$
23,646
$
8,132
(1)
Operating gross margin is calculated as revenues less direct
operating expenses, including depreciation and amortization
expense.
37
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38
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39
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Year Ended December 31,
2009
2008
(Dollars in thousands)
$
293,337
39
%
$
325,096
39
%
49,628
6
%
173,633
21
%
115,057
15
%
171,554
21
%
109,445
15
%
110,147
13
%
185,443
25
%
49,412
6
%
$
752,910
100
%
$
829,842
100
%
$
101,851
35
%
$
93,687
29
%
1,574
3
%
89,202
51
%
62,317
54
%
104,506
61
%
23,646
22
%
18,470
17
%
8,132
4
%
2,597
5
%
(113,975
)
(116,956
)
83,545
191,506
(45,483
)
(34,708
)
(100,315
)
(4,646
)
5,906
2,697
$
39,322
$
59,180
40
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Project
Management
International
& Engineering
Construction
Drilling
U.S. Drilling
Rental Tools
Services
Contract
(Dollars in thousands)
$
50,723
$
(26,797
)
$
27,841
$
23,646
$
8,132
51,128
28,371
34,476
$
101,851
$
1,574
$
62,317
$
23,646
$
8,132
$
41,786
$
53,964
$
74,689
$
18,470
$
2,597
51,901
35,238
29,817
$
93,687
$
89,202
$
104,506
$
18,470
$
2,597
(1)
Operating gross margin is calculated as revenues less direct
operating expenses, including depreciation and amortization
expense.
41
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42
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2010
2009
2008
(Dollars in thousands)
$
123,550
$
110,872
$
220,318
(212,709
)
(150,718
)
(196,607
)
31,787
(23,649
)
88,463
(57,372
)
(63,495
)
112,174
43
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44
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45
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Notes Conversion Feature
The initial
conversion price for Note holders to convert their notes into
shares is at a common stock share price equivalent of $13.85
(77.2217 shares of common) stock per $1,000 note value.
Conversion rate adjustments occur for any issuances of stock,
warrants, rights or options (except for stock purchase plans or
dividend re-investments) or any other transfer of benefit to
substantially all stockholders, or as a result of a tender or
exchange offer. The Company may, under advice of our Board of
Directors, increase the conversion rate at our sole discretion
for a period of at least 20 days.
Notes Settlement Feature
Upon tender of the
Notes for conversion, we can either settle entirely in shares of
common stock or a combination of cash and shares of common
stock, solely at our option. Our intent is to satisfy conversion
obligation for our Notes in cash, rather than in common stock,
for at least the aggregate principal amount of the Notes. This
reduces the resulting potential earnings dilution to only
include any possible conversion premium, which would be the
difference between the average price of our shares and the
conversion price per share of common stock.
Contingent Conversion Feature
Note holders
may only convert Notes when either sales price or trading price
conditions are met, on or after the Notes due date or upon
certain accounting changes or certain corporate transactions
(fundamental changes) involving stock distributions. Make-whole
provisions are only included in the accounting and fundamental
change conversions such that holders do not lose value as a
result of the changes.
Settlement Feature
Upon conversion, we will
pay either cash or provide shares of our common stock, if any,
based on a daily conversion rate multiplied by a volume weighted
average price of our common stock during a specified period
following the conversion date. Conversions can be settled in
cash or shares, solely at our discretion.
46
Table of Contents
$125.0 million aggregate principal amount of
2.125% Convertible Senior Notes due July 15, 2012,
less an associated $9.1 million in unamortized debt
discount which is included in equity pursuant to applicable
accounting standards for convertible debt instruments;
$300.0 million aggregate principal amount of
9.125% Senior Notes, due April 1, 2018; and
$57.0 million drawn against our 2008 Credit Facility,
including $25.0 million under our Revolving Credit Facility
and $32.0 million under our Term Loan Facility,
$12.0 million of which is classified as current.
Less Than
Years
Years
More Than
Total
1 Year
2 - 3
4 - 5
5 Years
(Dollars in Thousands)
$
482,000
$
12,000
$
170,000
$
$
300,000
207,303
32,321
58,638
54,750
61,594
31,520
7,163
8,040
6,079
10,238
27,890
27,890
$
748,713
$
79,374
$
236,678
$
60,829
$
371,832
$
25,000
$
25,000
16,250
16,250
$
41,250
$
41,250
$
$
$
(1)
Long-term debt includes the principal and interest cash
obligations of the 9.125% Notes and the 2.125% Notes.
The remaining unamortized discount of $9.1 million on the
2.125% Notes is not included in the contractual cash
obligations schedule.
(2)
Operating leases consist of lease agreements in excess of one
year for office space, equipment, vehicles and personal property.
(3)
We have purchase commitments outstanding as of December 31,
2010, related to rig upgrade projects and new rig construction.
(4)
We have an $80.0 million revolving credit facility. As of
December 31, 2010, $25.0 million has been drawn down
and $16.3 million of availability has been used to support
letters of credit that have been issued, resulting in an
estimated $38.7 million of availability. The revolving
credit facility expires May 14, 2013.
47
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48
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49
Table of Contents
ITEM 7A.
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
50
Table of Contents
51
Table of Contents
ITEM 8.
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
52
Table of Contents
53
Table of Contents
Year Ended December 31,
2010
2009
2008
(Dollars in thousands, except per share data)
$
220,371
$
293,337
$
325,096
64,543
49,628
173,633
172,598
115,057
171,554
110,873
109,445
110,147
91,090
185,443
49,412
659,475
752,910
829,842
177,585
191,486
231,409
53,334
48,054
84,431
60,036
52,740
67,048
89,435
85,799
91,677
90,888
177,311
46,815
115,030
113,975
116,956
586,308
669,365
638,336
73,167
83,545
191,506
(30,728
)
(45,483
)
(34,708
)
(100,315
)
(1,952
)
(4,646
)
4,620
5,906
2,697
45,107
39,322
59,180
(26,805
)
(29,450
)
(29,266
)
257
1,041
1,405
(7,209
)
(1,105
)
155
(1,086
)
(544
)
(33,602
)
(29,495
)
(29,510
)
11,505
9,827
29,670
27,521
15,424
(1,539
)
(1,308
)
(14,864
)
8,481
26,213
560
6,942
(14,708
)
9,267
22,728
(247
)
$
(14,461
)
$
9,267
$
22,728
$
(0.13
)
$
0.08
$
0.20
$
(0.13
)
$
0.08
$
0.20
114,258,965
113,000,555
111,400,396
114,258,965
114,925,446
112,430,545
54
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55
Table of Contents
Year Ended December 31,
2010
2009
2008
(Dollars in thousands)
$
(14,708
)
$
9,267
$
22,728
115,030
113,975
116,956
100,315
7,209
(4,620
)
(5,906
)
(2,697
)
(1,308
)
(14,864
)
8,481
1,952
4,646
1,105
14,829
11,626
15,333
20,752
1,656
(14,958
)
(856
)
(3,464
)
(11,271
)
(2,969
)
(29,903
)
(15,737
)
(10,868
)
29,735
(238
)
(4,124
)
(13,004
)
(2,404
)
3,231
7,108
2,705
123,550
110,872
220,318
(219,184
)
(160,054
)
(197,070
)
6,475
9,336
4,512
951
(5,000
)
(212,709
)
(150,718
)
(196,607
)
300,000
50,000
25,000
4,000
73,000
(225,000
)
(12,000
)
(6,000
)
(42,000
)
(20,000
)
(35,000
)
(7,976
)
(1,846
)
(7,466
)
26
199
1,969
1,203
(1,848
)
340
31,787
(23,649
)
88,463
(57,372
)
(63,495
)
112,174
108,803
172,298
60,124
$
51,431
$
108,803
$
172,298
$
30,377
$
28,721
$
27,192
$
41,064
$
17,462
$
45,615
56
Table of Contents
Total
Capital in
Controlling
Total
Common
Excess of
Accumulated
Stockholders
Noncontrolling
Stockholders
Shares
Stock
Par Value
Deficit
Equity
Interest
Equity
(Dollars and shares in thousands)
111,916
$
18,653
$
609,696
$
(79,027
)
$
549,322
$
549,322
1,540
257
2,895
3,152
3,152
340
340
340
6,630
6,630
6,630
22,728
22,728
22,728
113,456
$
18,910
$
619,561
$
(56,299
)
$
582,172
$
$
582,172
2,783
464
1,483
1,947
1,947
(1,848
)
(1,848
)
(1,848
)
4,361
4,361
4,361
9,267
9,267
9,267
116,239
$
19,374
$
623,557
$
(47,032
)
$
595,899
$
$
595,899
130
23
114
137
137
1,203
1,203
1,203
5,535
5,535
5,535
(14,461
)
(14,461
)
(247
)
(14,708
)
116,369
$
19,397
$
630,409
$
(61,493
)
$
588,313
$
(247
)
$
588,066
57
Table of Contents
Note 1
Summary
of Significant Accounting Policies
58
Table of Contents
December 31,
2010
2009
(Dollars in thousands)
$
175,246
$
192,782
650
(7,020
)
(4,095
)
$
168,876
$
188,687
(1)
Additional information on the allowance for doubtful accounts
for the years ended December 31, 2010, 2009 and 2008 is
reported on Schedule II Valuation and
Qualifying Accounts.
3 to 20 years
3 to 20 years
4 to 7 years
15 to 30 years
59
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60
Table of Contents
Note 2
Disposition
of Assets
61
Table of Contents
Note 3
Assets
Held for Sale
Note 4
Goodwill
Note 5
Long-Term
Debt
December 31,
December 31,
2010
2009
(Dollars in thousands)
$
300,000
$
227,427
115,862
110,404
32,000
44,000
25,000
42,000
472,862
423,831
12,000
12,000
$
460,862
$
411,831
62
Table of Contents
2011 $12.0 million
2012 $137.0 million
2013 $33.0 million
2014 $0 million
2015 and thereafter $300.0 million
63
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64
Table of Contents
Notes Conversion Feature
the initial
conversion price for Note holders to convert their notes into
shares is at a common stock share price equivalent of $13.85
(77.2217 shares of common stock) per $1,000 note value.
Conversion rate adjustments occur for any issuances of stock,
warrants, rights or options (except for stock purchase plans or
dividend re-investments) or any other transfer of benefit to
substantially all stockholders, or as a result of a tender or
exchange offer. We may, under advice of our Board of Directors,
increase the conversion rate at our sole discretion for a period
of at least 20 days
Notes Settlement Feature
upon tender of the
Notes for conversion, we can either settle entirely in shares of
common stock or a combination of cash and shares of common
stock, solely at our option. Our intent is to satisfy our
conversion obligation for our Notes in cash, rather than in
common stock, for at least the aggregate principal amount of the
Notes. This reduces the resulting potential earnings dilution to
only include any possible conversion premium, which would be the
difference between the average price of our shares and the
conversion price per share of common stock.
Contingent Conversion Feature
Note holders
may only convert the Notes when either sales price or trading
price conditions are met, on or after the Notes due date
or upon certain accounting changes or certain corporate
transactions (fundamental changes) involving stock
distributions. Make-whole provisions are only included in the
accounting and fundamental change conversions such that holders
do not lose value as a result of the changes.
Settlement Feature
Upon conversion, we will
pay either cash or provide shares of our common stock if any,
based on a daily conversion rate multiplied by a volume weighted
average price of our common stock during a specified period
following the conversion date. Conversions can be settled in
cash or shares, solely at our discretion.
65
Table of Contents
Note 6
Income
Taxes
Year Ended December 31,
2010
2009
2008
(Dollars in thousands)
$
8,985
$
(62,265
)
$
(30,212
)
2,520
72,092
59,882
$
11,505
$
9,827
$
29,670
Year Ended December 31,
2010
2009
2008
(Dollars in thousands)
$
(273
)
$
(4,541
)
$
(3,751
)
184
128
407
27,610
19,837
1,805
(3,981
)
(14,818
)
8,914
1,459
(1,793
)
(784
)
1,214
1,747
351
$
26,213
$
560
$
6,942
66
Table of Contents
Year Ended December 31,
2010
2009
2008
% of Pre-Tax
% of Pre-Tax
% of Pre-Tax
Amount
Income
Amount
Income
Amount
Income
(Dollars in thousands)
$
4,027
35
%
$
3,439
35
%
$
10,384
35
%
18,951
165
%
20,432
208
%
22,391
75
%
(7,996
)
(70
)%
(10,658
)
(108
)%
(4,449
)
(15
)%
1,579
14
%
(1,355
)
(14
)%
(180
)
(1
)%
(15,442
)
(134
)%
(14,152
)
(144
)%
(20,404
)
(69
)%
13,304
116
%
1,022
9
%
506
4
%
638
6
%
(1,835
)
(6
)%
5,116
52
%
2,997
10
%
983
9
%
2,982
30
%
(13,002
)
(44
)%
(165
)
(2
)%
(3,456
)
(12
)%
6,003
52
%
2,893
29
%
3,189
11
%
1,775
15
%
(3,237
)
(33
)%
(5,389
)
(55
)%
1,501
13
%
16
(1,329
)
(4
)%
12,636
43
%
$
26,213
228
%
$
560
6
%
$
6,942
23
%
67
Table of Contents
December 31,
2010
2009
(Dollars in thousands)
$
4,287
$
4,876
4,991
4,774
9,278
9,650
4,337
4,288
7,879
6,291
702
4,913
29,594
14,152
369
2,149
4,925
7,204
18
17
1,156
3,483
10,487
11,245
6,244
6,232
837
969
66,548
60,943
(5,532
)
(5,194
)
61,016
55,749
70,294
65,399
(1,747
)
(1,963
)
(5,484
)
(8,912
)
(6,708
)
(1,039
)
(1,032
)
(46
)
(1,023
)
(3,198
)
(5,109
)
255
(239
)
(20,171
)
(16,074
)
$
50,123
$
49,325
68
Table of Contents
In Millions
$
(14.6
)
(3.6
)
(3.1
)
0.6
0.4
4.8
$
(15.5
)
69
Table of Contents
2008-present
2005-present
2006-present
2004-present
2007-present
1992-present
Note 7
Common
Stock and Stockholders Equity
70
Table of Contents
1997 Stock Plan
Incentive Options
Non-Qualified Options
Weighted
Weighted
Average
Average
Exercise
Exercise
Restricted
Intrinsic
Shares
Price
Shares
Price
Shares
Value
$
130,300
$
3.59
(6,800
)
3.78
$
11,424
(25,000
)
1.99
$
98,500
$
3.98
Outstanding Options
Weighted
Average
Weighted
Remaining
Average
Aggregate
Number of
Contractual
Exercise
Intrinsic
Exercise Prices
Shares
Life
Price
Value
Non-qualified
$
3.34 - $4.20
98,500
0.43 years
$
3.98
$
58,115
Exercisable Options
Weighted
Average
Aggregate
Number of
Exercise
Intrinsic
Exercise Prices
Shares
Price
Value
Non-qualified
$
3.34 - $4.20
98,500
$
3.98
$
58,115
December 31,
2010
2009
9,441,168
3,738,679
24,666
24,666
9,465,834
3,763,345
71
Table of Contents
Note 8
Reconciliation
of Income and Number of Shares Used to Calculate Basic and
Diluted Earnings per Share (EPS)
For the Year Ended December 31, 2010
Income
Shares
Per-Share
(Numerator)
(Denominator)
Amount
$
(14,461,000
)
114,258,965
$
(0.13
)
$
$
(14,461,000
)
114,258,965
$
(0.13
)
For the Year Ended December 31, 2009
Income
Shares
Per-Share
(Numerator)
(Denominator)
Amount
$
9,267,000
113,000,555
$
0.08
1,924,891
$
$
9,267,000
114,925,446
$
0.08
For the Year Ended December 31, 2008
Income
Shares
Per-Share
(Numerator)
(Denominator)
Amount
$
22,728,000
111,400,396
$
0.20
1,030,149
$
$
22,728,000
112,430,545
$
0.20
Note 9
Employee
Benefit Plan
72
Table of Contents
Note 10
Reportable
Segments
Year Ended December 31,
2010
2009
2008
(Dollars in thousands)
$
220,371
$
293,337
$
325,096
64,543
49,628
173,633
172,598
115,057
171,554
110,873
109,445
110,147
91,090
185,443
49,412
659,475
752,910
829,842
(11,511
)
50,723
41,786
(11,503
)
(26,797
)
53,964
74,541
27,841
74,689
21,438
23,646
18,470
202
8,132
2,597
73,167
83,545
191,506
(30,728
)
(45,483
)
(34,708
)
(100,315
)
(1,952
)
(4,646
)
4,620
5,906
2,697
45,107
39,322
59,180
(26,805
)
(29,450
)
(29,266
)
(7,209
)
(1,105
)
412
(45
)
861
$
11,505
$
9,827
$
29,670
$
454,576
$
511,716
113,548
132,386
178,193
96,469
746,317
740,571
528,238
502,515
$
1,274,555
$
1,243,086
(1)
In 2010, BP accounted for approximately 12.4 percent of the
Companys total revenues and approximately
$81.9 million of our construction contract segment
revenues. In 2010, ExxonMobil accounted for
73
Table of Contents
approximately 11.6 percent of our total revenues,
approximately $63.7 million of our project management and
engineering services segment revenues and approximately
$12.7 million of our rental tools segment revenues. In
2009, BP accounted for approximately 23.0 percent of the
Companys total revenues, approximately $150.3 million
of our construction contract segment revenues and approximately
$2.6 million of our rental tools segment revenues. In 2009,
ExxonMobil accounted for approximately 14.6 percent of the
Companys total revenues, approximately $75.7 million
of our project management and engineering services segment
revenues and approximately $20.7 million of our rental
tools segment revenues. In 2008, ExxonMobil accounted for
approximately 12.5 percent of the Companys total
revenues, approximately $62.2 million of our project
management and engineering services segment revenues and
approximately $22.3 million of our rental tools segment
revenues.
(2)
Operating income is calculated as revenues less direct operating
expenses, including depreciation and amortization expense.
Year Ended December 31,
2010
2009
2008
(Dollars in thousands)
50,871
$
29,864
$
75,680
117,713
86,943
82,396
48,872
36,822
36,806
1,728
9,155
2,188
$
219,184
$
162,784
$
197,070
$
52,429
$
48,383
$
50,461
22,165
29,200
34,469
36,558
33,798
29,057
3,878
2,594
2,969
$
115,030
$
113,975
$
116,956
74
Table of Contents
Year Ended December 31,
2010
2009
2008
(Dollars in thousands)
$
22,621
$
32,003
$
40,036
26,416
33,883
56,998
149,963
195,807
210,325
103,885
117,651
122,521
356,590
373,566
399,962
659,475
752,910
829,842
659
(2,795
)
(13,293
)
2,374
7,539
7,668
8,139
44,647
37,068
1,210
20,964
27,072
60,785
13,190
132,991
73,167
83,545
191,506
(30,728
)
(45,483
)
(34,708
)
(100,315
)
(1,952
)
(4,646
)
4,620
5,906
2,697
45,107
39,322
59,180
(26,805
)
(29,450
)
(29,266
)
(7,209
)
(1,105
)
412
(45
)
861
$
11,505
$
9,827
$
29,670
$
32,288
$
36,821
21,883
22,335
151,365
142,888
53,273
61,322
557,338
453,431
$
816,147
$
716,797
(1)
Operating income is calculated as revenues less direct operating
expenses, including depreciation and amortization expense.
(2)
Long-lived assets primarily consist of property, plant and
equipment, net and exclude assets held for sale, if any.
Table of Contents
Note 11
Commitments
and Contingencies
(Dollars in thousands)
7,163
4,411
3,629
3,045
3,034
10,238
$
31,520
76
Table of Contents
77
Table of Contents
78
Table of Contents
79
Table of Contents
Note 12
Related
Party Transactions
Note 13
Supplementary
Information
80
Table of Contents
Note 14
Guarantor/Non-Guarantor
Consolidating Condensed Financial Statements
81
Table of Contents
Year Ended December 31, 2010
Parent
Guarantor
Non-Guarantor
Eliminations
Consolidated
(Unaudited)
(Dollars in Thousands)
$
$
366,947
$
401,617
$
(109,089
)
$
659,475
237,584
342,783
(109,089
)
471,278
63,402
51,628
115,030
65,961
7,206
73,167
(225
)
(30,193
)
(310
)
(30,728
)
(1,952
)
(1,952
)
2,067
2,553
4,620
(225
)
35,883
9,449
45,107
(30,771
)
(35,640
)
(16,185
)
55,791
(26,805
)
42,000
757
23,291
(65,791
)
257
(7,209
)
(7,209
)
88
67
155
(22,962
)
22,962
(18,942
)
(34,795
)
7,173
12,962
(33,602
)
(19,167
)
1,088
16,622
12,962
11,505
139
(189
)
27,571
27,521
(4,845
)
2,323
1,214
(1,308
)
(4,706
)
2,134
28,785
26,213
(14,461
)
(1,046
)
(12,163
)
12,962
(14,708
)
(247
)
(247
)
$
(14,461
)
$
(1,046
)
$
(11,916
)
$
12,962
$
(14,461
)
(1)
General and administration expenses for field operations are
included in operating expenses.
82
Table of Contents
Year Ended December 31, 2009
Parent
Guarantor
Non-Guarantor
Eliminations
Consolidated
(Unaudited)
(Dollars in thousands)
$
$
381,145
$
430,430
$
(58,665
)
$
752,910
300,620
313,435
(58,665
)
555,390
65,595
48,380
113,975
14,930
68,615
83,545
(180
)
(44,973
)
(330
)
(45,483
)
(3,206
)
(1,440
)
(4,646
)
4,190
1,716
5,906
(180
)
(29,059
)
68,561
39,322
(33,203
)
(35,838
)
(13,959
)
53,550
(29,450
)
43,183
1,184
16,585
(59,911
)
1,041
(3
)
(1,133
)
50
(1,086
)
(20,797
)
20,797
(10,820
)
(35,787
)
2,676
14,436
(29,495
)
(11,000
)
(64,846
)
71,237
14,436
9,827
(3,655
)
226
18,853
15,424
(16,612
)
1
1,747
(14,864
)
(20,267
)
227
20,600
560
9,267
(65,073
)
50,637
14,436
9,267
$
9,267
$
(65,073
)
$
50,637
$
14,436
$
9,267
(1)
General and administration expenses for field operations are
included in operating expenses.
83
Table of Contents
Year Ended December 31, 2008
Parent
Guarantor
Non-Guarantor
Eliminations
Consolidated
(Unaudited)
(Dollars in thousands)
$
$
428,389
$
522,509
$
(121,056
)
$
829,842
2
210,644
431,790
(121,056
)
521,380
67,602
49,354
116,956
(2
)
150,143
41,365
191,506
(204
)
(34,107
)
(397
)
(34,708
)
(100,315
)
(100,315
)
1,206
1,491
2,697
(206
)
16,927
42,459
59,180
(33,990
)
(35,643
)
(11,843
)
52,210
(29,266
)
42,575
901
10,139
(52,210
)
1,405
(1,105
)
(1,105
)
(2
)
357
(899
)
(544
)
19,018
(19,018
)
27,601
(34,385
)
(3,708
)
(19,018
)
(29,510
)
27,395
(17,458
)
38,751
(19,018
)
29,670
(3,463
)
1,523
401
(1,539
)
8,130
1
350
8,481
4,667
1,524
751
6,942
22,728
(18,982
)
38,000
(19,018
)
22,728
$
22,728
$
(18,982
)
$
38,000
$
(19,018
)
$
22,728
(1)
General and administration expenses for field operations are
included in operating expenses.
84
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85
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86
Table of Contents
Year Ended December 31, 2010
Parent
Guarantor
Non-Guarantor
Eliminations
Consolidated
(Unaudited)
(Dollars in thousands)
$
(14,461
)
$
(1,046
)
$
(12,163
)
$
12,962
$
(14,708
)
63,402
51,628
115,030
7,209
7,209
(2,067
)
(2,553
)
(4,620
)
(4,845
)
2,323
1,214
(1,308
)
1,952
1,952
14,829
14,829
22,962
(22,962
)
16,178
(14,763
)
19,337
20,752
(2,505
)
(13,454
)
15,365
(594
)
(144
)
7,793
(22,641
)
(14,992
)
39,223
44,140
50,187
(10,000
)
123,550
(169,784
)
(49,400
)
(219,184
)
4,646
1,829
6,475
(10,000
)
10,000
(165,138
)
(57,571
)
10,000
(212,709
)
300,000
300,000
25,000
25,000
(225,000
)
(225,000
)
(12,000
)
(12,000
)
(42,000
)
(42,000
)
(7,976
)
(7,976
)
(7,466
)
(7,466
)
26
26
1,203
1,203
(115,364
)
121,547
(6,183
)
(83,577
)
121,547
(6,183
)
31,787
(44,354
)
549
(13,567
)
(57,372
)
58,189
1,768
48,846
108,803
$
13,835
$
2,317
$
35,279
$
$
51,431
87
Table of Contents
Year Ended December 31, 2009
Parent
Guarantor
Non-Guarantor
Eliminations
Consolidated
(Unaudited)
(Dollars in thousands)
$
9,267
$
(65,073
)
$
50,637
$
14,436
$
9,267
65,596
48,380
113,975
(4,190
)
(1,716
)
(5,906
)
(16,612
)
0
1,747
(14,864
)
3,206
1,440
4,646
11,626
11,626
20,797
(20,797
)
34,435
(38,905
)
6,126
1,656
(35,604
)
906
8,439
(26,259
)
17,203
41,411
(41,883
)
16,731
41,112
2,952
73,170
(6,361
)
110,872
(129,281
)
(30,773
)
(160,054
)
6,918
2,418
9,336
(6,361
)
6,361
(122,363
)
(34,716
)
6,361
(150,718
)
4,000
4,000
(26,000
)
(26,000
)
199
199
(1,848
)
(1,848
)
(70,598
)
114,321
(43,723
)
(94,247
)
114,321
(43,723
)
(23,649
)
(53,135
)
(5,090
)
(5,270
)
(0
)
(63,495
)
111,324
6,858
54,116
172,298
$
58,189
$
1,768
$
48,846
$
(0
)
$
108,803
88
Table of Contents
Year Ended December 31, 2008
Parent
Guarantor
Non-Guarantor
Eliminations
Consolidated
(Unaudited)
(Dollars in thousands)
$
22,728
$
(18,982
)
$
38,000
$
(19,018
)
$
22,728
67,602
49,354
116,956
100,315
100,315
1,237
1,237
(1,206
)
(1,491
)
(2,697
)
8,130
1
350
8,481
1,105
1,105
14,096
14,096
(19,018
)
19,018
27,895
9,197
(52,050
)
(14,958
)
(36,459
)
39,580
(27,424
)
(24,303
)
13,013
(60,528
)
44,873
(2,642
)
31,622
135,979
52,717
220,318
(142,087
)
(54,983
)
(197,070
)
2,551
1,961
4,512
951
951
(5,000
)
(5,000
)
(144,536
)
(52,071
)
(196,607
)
50,000
50,000
(35,000
)
(35,000
)
73,000
73,000
(1,846
)
(1,846
)
1,969
1,969
340
340
(40,087
)
8,613
31,474
48,376
8,613
31,474
88,463
79,998
56
32,120
112,174
31,326
6,802
21,996
60,124
$
111,324
$
6,858
$
54,116
$
$
172,298
89
Table of Contents
Note 15
Selected
Quarterly Financial Data
Quarter
First
Second
Third
Fourth
Total
(Unaudited)
(Dollars in thousands except per share amounts)
$
157,605
$
156,525
$
172,029
$
173,316
$
659,475
$
15,486
$
18,538
$
13,443
$
25,700
$
73,167
$
6,126
$
13,313
$
7,555
$
18,113
$
45,107
$
(2,051
)
$
507
$
492
$
(13,409
)
$
(14,461
)
$
(0.02
)
$
$
$
(0.12
)
$
(0.13
)
$
(0.02
)
$
$
$
(0.12
)
$
(0.13
)
Quarter
First
Second
Third
Fourth
Total
(Unaudited)
(Dollars in thousands except per share amounts)
$
173,925
$
221,791
$
181,409
$
175,785
$
752,910
$
25,626
$
27,290
$
16,226
$
14,403
$
83,545
$
12,644
$
16,868
$
4,882
$
4,928
$
39,322
$
2,106
$
4,391
$
7,094
$
(4,324
)
$
9,267
$
0.02
$
0.04
$
0.06
$
(0.04
)
$
0.08
$
0.02
$
0.04
$
0.06
$
(0.04
)
$
0.08
(1)
As a result of shares issued during the year, earnings per share
for each of the years four quarters, which are based on
weighted average shares outstanding during each quarter, may not
equal the annual earnings per share, which is based on the
weighted average shares outstanding during the year.
Note 16
Recent
Accounting Pronouncements
90
Table of Contents
91
Table of Contents
ITEM 9.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
ITEM 9A.
CONTROLS
AND PROCEDURES
pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and
dispositions of the assets of the Company;
provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in
accordance with accounting principles generally accepted in the
United States, and that receipts and expenditures of the Company
are being made only in accordance with authorization of
management and directors of the Company; and
provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of the
Companys assets that could have a material effect on the
financial statements.
92
Table of Contents
ITEM 9B.
OTHER
INFORMATION
ITEM 10.
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 11.
EXECUTIVE
COMPENSATION
ITEM 12.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
ITEM 13.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
93
Table of Contents
ITEM 14.
PRINCIPAL
ACCOUNTING FEES AND SERVICES
ITEM 15.
EXHIBITS AND
FINANCIAL STATEMENT SCHEDULES
Page
52
54
55
56
57
58
98
Exhibit
3
.1
Restated Certificate of Incorporation of the Company, as amended
on May 16, 2007 (incorporated by reference to Exhibit 3.1 to the
Companys Quarterly Report on Form 10-Q filed on November
9, 2007).
3
.2
By-Laws of the Company, as amended on January 31, 2003
(incorporated by reference to Exhibit 3(d) to the Companys
Annual Report on Form 10-K filed on March 20, 2003).
4
.1
Indenture, dated as of July 5, 2007, among Parker Drilling
Company, the guarantors from time to time party thereto and The
Bank of New York Trust Company, N.A., with respect to the
2.125% Convertible Senior Notes due 2012 (incorporated by
reference to Exhibit 4.1 to the Companys Current Report on
Form 8-K filed on July 5, 2007).
4
.2
Form of 2.125% Convertible Senior Note due 2012 (included
in Exhibit 4(b)).
4
.3
Second Supplemental Indenture, dated as of October 26, 2010,
among Parker Drilling Company and The Bank of New York Mellon
Trust Company, N.A., as trustee supplementing the indenture
dated July 5, 2007 for the 2.125% Convertible Senior Notes
due 2012 (incorporated by reference to Exhibit 4.1 to the
Companys Quarterly Report on Form 10-Q filed on November
8, 2010).
4
.4
Indenture, dated March 22, 2010, among Parker Drilling Company,
the guarantors named therein and The Bank of New York Mellon
Trust Company, N.A., as trustee (incorporated by reference to
Exhibit 4.1 to the Companys Current Report on Form 8-K
filed on March 22, 2010).
4
.5
Form of
9
1
/
8
% Senior
Note due 2018 (included in Exhibit 4(d)).
4
.6
Registration Rights Agreement, dated March 22, 2010, by and
among Parker Drilling Company, the guarantors named therein,
Bank of America Securities LLC, RBS Securities Inc., Barclays
Capital Inc., Credit Suisse Securities (USA), Inc., Deutsche
Bank Securities Inc., HSBC Securities (USA) Inc., Natixis
Bleichroeder LLC and Wells Fargo Securities, LLC (incorporated
by reference to Exhibit 10.1 to the Companys Current
Report on Form 8-K filed on March 22, 2010).
94
Table of Contents
Exhibit
10
.1
Credit Agreement, dated as of May 15, 2008, among Parker
Drilling Company, as Borrower, Bank of America, N.A., as
Administrative Agent and L/C Issuer, the several banks and other
financial institutions or entities from time to time parties
thereto, ABN AMRO BANK N.V., as Documentation Agent, and Banc of
America Securities LLC and Lehman Brothers Inc., as Joint Lead
Arrangers and Book Managers (incorporated by reference to
Exhibit 10.1 to the Companys Current Report on Form 8-K
filed on May 21, 2008).
10
.2
Amended and Restated Parker Drilling Company Stock Bonus Plan
effective as of January 1, 1999 (incorporated by reference to
Exhibit 10(a) to the Companys Quarterly Report on Form
10-Q filed on May 14, 1999).*
10
.3
Parker Drilling Company Incentive Compensation Plan, dated
December 17, 2008, and as amended and restated effective January
1, 2008 (incorporated by reference to Exhibit 10(b) to the
Companys Annual Report on Form 10-K filed on March 2,
2009).*
10
.4
Parker Drilling Company Incentive Compensation Plan (as amended
and restated effective January 1, 2009)*
10
.5
Parker Drilling Company Deferred Compensation Plan (incorporated
herein by reference to Exhibit 10(h) to the Companys
Annual Report on Form 10-K filed on November 9, 1995).*
10
.6
Parker Drilling Company 1994 Non-Employee Director Stock Option
Plan (incorporated by reference to Exhibit 10(i) to the
Companys Annual Report on Form 10-K filed on November 9,
1995).*
10
.7
Parker Drilling Company 1994 Executive Stock Option Plan
(incorporated by reference to Exhibit 10(j) to the
Companys Annual Report on Form 10-K filed on November 9,
1995).*
10
.8
Parker Drilling Company and Subsidiaries 1991 Stock Grant Plan
(incorporated by reference to Exhibit 10(c) to the
Companys Annual Report on Form 10-K dated November 2,
1992).*
10
.9
Parker Drilling Company Third Amended and Restated 1997 Stock
Plan effective July 24, 2002 (incorporated by reference to
Exhibit 10(e) to the Companys Annual Report on Form 10-K
filed on March 20, 2003).*
10
.10
Form of Stock Option Award Agreement under the Parker Drilling
Company Third Amended and Restated 1997 Stock Plan (incorporated
by reference to Exhibit 10(m) to the Companys Annual
Report on Form 10-K filed on March 16, 2005).*
10
.11
Form of Stock Grant Award Agreement under the Parker Drilling
Company Third Amended and Restated 1997 Stock Plan (incorporated
by reference to Exhibit 10(n) to the Companys Annual
Report on Form 10-K filed on March 16, 2005).*
10
.12
Parker Drilling Company 2005 Long Term Incentive Plan 2005 LTIP
(incorporated by reference to the Annex E to the Companys
Definitive Proxy Statement filed on March 25, 2005).*
10
.13
Amendment No. 1 to the Parker Drilling Company 2005 LTIP
(incorporated by reference to Annex B to the Companys
Definitive Proxy Statement filed on March 21, 2008).*
10
.14
Second Amendment to the Parker Drilling Company 2005 LTIP, dated
December 13, 2008 (incorporated by reference to Exhibit 10(j) to
the Companys Annual Report on Form 10-K filed on March 2,
2009).*
10
.15
Form of Parker Drilling Company Restricted Stock Agreement under
the 2005 LTIP (incorporated by reference to Exhibit 10.2 to the
Companys Current Report on Form 8-K filed on May 3, 2005).*
10
.16
Form of Parker Drilling Company Performance Based Restricted
Stock Agreement under the 2005 LTIP (incorporated by reference
to Exhibit 10.3 to the Companys Current Report on Form 8-K
filed on May 3, 2005).*
10
.17
Parker Drilling Company 2010 Long-Term Incentive Plan
(incorporated by reference to Annex A to the Companys
Definitive Proxy Statement filed on March 16, 2010).
10
.18
Form of Parker Drilling Company Performance Unit Award Incentive
Agreement under the 2010 LTIP.*
10
.19
Form of Parker Drilling Company Restricted Stock Unit Incentive
Agreement under the 2010 LTIP.*
10
.20
Form of Indemnification Agreement entered into between Parker
Drilling Company and each director and executive officer of
Parker Drilling Company (incorporated by reference to Exhibit
10(g) to the Companys Annual Report on Form 10-K filed on
March 20, 2003).*
Table of Contents
Exhibit
10
.21
Form of Employment Agreement entered into between Parker
Drilling Company and certain executive and other officers of
Parker Drilling Company.*
10
.22
Employment Agreement, dated as of October 23, 2009, by and
between Parker Drilling Company and Robert L. Parker, Jr.
(incorporated by reference to Exhibit 10.1 to the Companys
Current Report on Form 8-K filed on October 29, 2009).
10
.23
Employment Agreement, dated as of October 23, 2009, by and
between Parker Drilling Company and David C. Mannon
(incorporated by reference to Exhibit 10.2 to the Companys
Current Report on Form 8-K filed on October 29, 2009).
10
.24
Employment Agreement, dated as of December 29, 2010, by and
between Parker Drilling Company and W. Kirk Brassfield
(incorporated by reference to Exhibit 10.1 to the Companys
Current Report on Form 8-K filed on January 4, 2011).
10
.25
Consulting Agreement between Parker Drilling Company and Robert
L. Parker Sr. dated April 12, 2006 (incorporated by reference to
Exhibit 10.1 to the Companys Current Report on Form 8-K
filed on April 12, 2006).*
10
.26
Amendment to Consulting Agreement between Parker Drilling
Company and Robert L. Parker Sr., effective as of May 1, 2008.
(incorporated by reference to Exhibit 10(t) to the
Companys Annual Report on Form 10-K filed on March 2,
2009)*
10
.27
Second Amendment to Consulting Agreement between Parker Drilling
Company and Robert L. Parker Sr., dated May 1, 2009
(incorporated by reference to Exhibit 10(n)(3) to the
Companys Annual Report on Form 10-K filed on March 3,
2010).*
10
.28
Third Amendment to Consulting Agreement between Parker Drilling
Company and Robert L. Parker Sr. dated May 1, 2010.*
10
.29
Termination of Split Dollar Life Insurance Agreement between
Parker Drilling Company, Robert L. Parker Sr., and
Robert L. Parker Sr. and Catherine M. Parker Family Trust dated
April 12, 2006 (incorporated by reference to Exhibit 10.2 to the
Companys Current Report on Form 8-K filed on April 12,
2006).*
10
.30
Confirmation of Convertible Bond Hedge Transaction, dated as of
June 28, 2007, by and between Parker Drilling Company and Bank
of America, N.A (incorporated by reference to Exhibit 10.1 to
the Companys Current Report on Form 8-K filed on July 5,
2007).
10
.31
Confirmation of Convertible Bond Hedge Transaction, dated as of
June 28, 2007, by and between Parker Drilling Company and
Deutsche Bank AG London (incorporated by reference to Exhibit
10.2 to the Companys Current Report on Form 8-K filed on
July 5, 2007).
10
.32
Confirmation of Convertible Bond Hedge Transaction, dated as of
June 28, 2007, by and between Parker Drilling Company and Lehman
Brothers OTC Derivatives Inc. (incorporated by reference to
Exhibit 10.3 to the Companys Current Report on Form
8-K filed on July 5, 2007).
10
.33
Confirmation of Issuer Warrant Transaction dated as of June 28,
2007, by and between Parker Drilling Company and Bank of
America, N.A. (incorporated by reference to Exhibit 10.4 to the
Companys Current Report on Form 8-K filed on July 5, 2007).
10
.34
Confirmation of Issuer Warrant Transaction, dated as of June 28,
2007, by and between Parker Drilling Company and Deutsche Bank
AG London (incorporated by reference to Exhibit 10.5 to the
Companys Current Report on Form 8-K filed on July 5, 2007).
10
.35
Confirmation of Issuer Warrant Transaction dated as of June 28,
2007, by and between Parker Drilling Company and Lehman Brothers
OTC Derivatives Inc. (incorporated by reference to Exhibit 10.6
to the Companys Current Report on Form 8-K filed on July
5, 2007).
10
.36
Amendment to Confirmation of Issuer Warrant Transaction dated as
of June 29, 2007, by and between Parker Drilling Company and
Bank of America, N.A. (incorporated by reference to Exhibit 10.7
to the Companys Current Report on Form 8-K filed on July
5, 2007).
10
.37
Amendment to Confirmation of Issuer Warrant Transaction, dated
as of June 29, 2007, by and between Parker Drilling Company and
Deutsche Bank AG, London Branch (incorporated by reference to
Exhibit 10.8 to the Companys Current Report on Form
8-K filed on July 5, 2007).
Table of Contents
Exhibit
10
.38
Amendment to Confirmation of Issuer Warrant Transaction, dated
as of June 29, 2007, by and between Parker Drilling Company and
Lehman Brothers OTC Derivatives Inc. (incorporated by reference
to Exhibit 10.9 to the Companys Current Report on Form 8-K
filed on July 5, 2007).
21
Subsidiaries of the Registrant.
23
.1
Consent of KPMG LLP.
31
.1
David C. Mannon, President and Chief Executive Officer, Rule
13a-14(a)/15d-14(a) Certification.
31
.2
W. Kirk Brassfield, Senior Vice President and Chief Financial
Officer, Rule 13a-14(a)/15d-14(a) Certification.
32
.1
David C. Mannon, President and Chief Executive Officer, Section
1350 Certification.
32
.2
W. Kirk Brassfield, Senior Vice President and Chief Financial
Officer, Section 1350 Certification.
*
Management contract, compensatory plan or agreement.
Table of Contents
Balance
Charged
at
to cost
Charged
Balance
beginning
and
to other
at end of
of year
expenses
accounts
Deductions
year
(Dollars in thousands)
$
4,095
$
3,244
$
211
$
108
$
7,020
$
$
309
$
$
$
309
$
5,194
$
338
$
$
$
5,532
$
3,169
$
2,246
$
$
1,320
$
4,095
$
$
$
$
$
$
4,556
$
638
$
$
$
5,194
$
3,152
$
76
$
$
59
$
3,169
$
2,607
$
(903
)
$
$
1,704
$
$
6,391
$
$
$
1,835
$
4,556
98
Table of Contents
By:
/s/ W. Kirk Brassfield
By:
Executive Chairman and Director
February 28, 2011
By:
President, Chief Executive Officer, and Director (Principal
Executive Officer)
February 28, 2011
By:
Senior Vice President and Chief Financial Officer (Principal
Financial Officer)
February 28, 2011
By:
Controller (Principal Accounting Officer)
February 28, 2011
By:
Director
February 28, 2011
By:
Director
February 28, 2011
By:
Director
February 28, 2011
By:
Director
February 28, 2011
99
Table of Contents
By:
Director
February 28, 2011
By:
Director
February 28, 2011
By:
Director
February 28, 2011
100
Table of Contents
Exhibit
10
.4
Parker Drilling Company Incentive Compensation Plan (as amended
and restated effective January 1, 2009).
10
.18
Form of Parker Drilling Company Performance Unit Award Incentive
Agreement under the 2010 LTIP.
10
.19
Form of Parker Drilling Company Restricted Stock Unit Incentive
Agreement under the 2010 LTIP.
10
.21
Form of Employment Agreement entered into between Parker
Drilling Company and certain executive and other officers of
Parker Drilling Company.
10
.28
Third Amendment to Consulting Agreement between Parker Drilling
Company and Robert L. Parker Sr. dated May 1, 2010.
21
Subsidiaries of the Registrant.
23
.1
Consent of KPMG LLP Independent Registered Public
Accounting Firm.
31
.1
David C. Mannon, President and Chief Executive Officer, Rule
13a-14(a)/15d-14(a) Certification.
31
.2
W. Kirk Brassfield, Senior Vice President and Chief Financial
Officer, Rule 13a-14(a)/15d-14(a) Certification.
32
.1
David C. Mannon, President and Chief Executive Officer, Section
1350 Certification.
32
.2
W. Kirk Brassfield, Senior Vice President and Chief Financial
Officer, Section 1350 Certification.
101
As used herein: | ||
2.1 | Affiliate shall mean any person or entity that is a member of a controlled group of corporations or other entities with the Company, as described in Code Section 414. | |
2.2 | Base Salary shall mean the aggregate amount of base wages and/or salary (but excluding any bonus, disability pay, severance pay and other non-base compensation) that is earned by a Participant during the applicable Plan Year in which the Participant was eligible to participate in the Plan, as determined in accordance with Section 3. | |
2.3 | Beneficiary shall mean the beneficiary or beneficiaries designated by the Participant, on a form provided by the Company, to receive any Bonus amount distributable under the terms and conditions of the Plan after the Participants death. | |
2.4 | Board of Directors or Board shall mean the Board of Directors of the Company. |
1
2.5 | Bonus shall mean the amount of incentive compensation earned by a Participant under the Plan for a Plan Year, as determined in accordance with Section 4. | |
2.6 | Cause shall mean (a) the Participants conviction by a court of competent jurisdiction as to which no further appeal can be taken of a crime involving moral turpitude or a felony or entering the plea of nolo contedere to such crime by the Participant; (b) the commission by the Participant of a material and demonstrable act of fraud or misrepresentation of or upon the Company or any Affiliate; (c) the Participants gross negligence or willful misconduct in the performance or nonperformance of Participants duties and responsibilities as an employee of the Company or any of its Affiliates; (d) the knowing engagement by the Participant, without the written approval of the Board or Committee, in any material activity that violates (i) a confidentiality, non-solicitation, non-competition or other similar restrictive covenant entered into between the Company (or one of its Affiliates) and such Participant, or (ii) any Company policy or procedure that could result in a material adverse financial or operational effect or expose the Company or its Affiliate to civil or criminal liability, including without limitation, policies and procedures regarding compliance with anti-bribery laws and other laws and regulations; but only under clauses (a), (b), (c) or (d) (above), after (1) Participant has received written notice from the Company of such breach or nonperformance (which notice must specifically identify the manner and set forth specific facts, circumstances and examples of which the Company believes Participant has breached the restrictive covenants or not substantially performed Participants duties) and (2) Participants continued failure to cure such breach or nonperformance within the time period set by the Board or Committee, but in no event less than 10 calendar days after Participants receipt of such notice. | |
2.7 | Change in Control of the Company means the occurrence of any one or more of the following events: |
2
2.8 | Code shall mean the Internal Revenue Code of 1986, as amended. | |
2.9 | Committee shall mean the Compensation Committee of the Board. |
3
2.10 | Company shall mean Parker Drilling Company or its successor in interest. | |
2.11 | Disability shall mean that the Participant is entitled to receive long-term disability ( LTD ) income benefits under the LTD plan or policy maintained by the Company that covers the Participant. If, for any reason, the Participant is not covered under such LTD plan or policy, then Disability shall mean a permanent and total disability as defined in Code Section 22(e)(3) and Treasury regulations thereunder. Evidence of such Disability shall be certified by a physician acceptable to both the Company and the Participant. In the event that the parties are not able to agree on the choice of a physician, each shall select one physician who, in turn, shall select a third physician to render such certification. | |
2.12 | Employee shall mean an individual who is designated on the payroll records of the Company or its Affiliate as an employee. | |
2.13 | Participant shall mean any officer or employee of the Company or its Affiliate who is designated by the Committee as eligible to participate in the Plan for a Plan Year. | |
2.14 | Plan shall mean this Parker Drilling Company Incentive Compensation Plan, as it may be amended from time to time. | |
2.15 | Plan Year shall mean the 12-month calendar year. |
3.1 | Individuals eligible to receive a Bonus pursuant to this Plan shall be such Employees as the Committee shall at any time designate, in its discretion, in consultation with senior management of the Company. The Committee, in consultation with senior management, shall also designate the classification level at which each eligible Employee shall participate. Eligibility for participation in the Plan, and the classification level that an Employee participates, shall be guided by the principle that the Participants shall be Employees whose areas of responsibility provide them with a substantial opportunity to significantly affect the economic profit of the Company or provide them with an opportunity to significantly influence the long-term growth of the financial performance of the Company. | |
3.2 | Each Participant whose employment is terminated due to death or Disability during a Plan Year shall be eligible for a Bonus based upon the Base Salary earned by such Participant during the Plan Year prior to termination. Except as provided in the preceding sentence, unless specifically provided otherwise by his employment agreement with the Company, a Participant shall not be eligible to receive part or all of a Bonus unless the Participant is employed by the Company or its Affiliate on the date the Bonus payment is actually made. No Bonus shall vest in any Participant unless and until paid to him by the Company. If a Participant: (a) violated a confidentiality, non-solicitation, non-competition or similar restrictive covenant between the Company (or one of its Affiliates) and such Participant, including violation of a Company policy relating to such matters, or (b) engaged in willful fraud that causes harm to the Company (or one of its Affiliates) or that is intended to manipulate the |
4
performance results of this Plan, including without limitation, any material breach of fiduciary duty, embezzlement or similar conduct that results in a restatement of the Companys financial statements (each of (a) or (b) shall be defined as Detrimental Conduct ), with such Detrimental Conduct occurring either during employment with the Company (or its Affiliate) or within two (2) years after such employment terminates for any reason, then, in such event, the following rules shall apply under this Plan with respect to such Detrimental Conduct: |
3.3 | The Committee may, in its sole and absolute discretion, terminate a Participants participation in the Plan for Cause, at any time prior to the second anniversary of the conclusion of the performance period applicable to any Bonus under the Plan. Additionally, if payments hereunder have been made to such Participant, the Committee may, in its sole and absolute discretion, direct the Company to send a Recapture Notice to such Participant. Within ten (10) days after receiving a Recapture Notice from the Company, the Participant shall deliver to the Company a cash payment in an amount equal to the net (after tax) cash payment previously made to such Participant hereunder unless the Recapture Notice demands repayment of a lesser |
5
sum. Notwithstanding the foregoing, this Section 3.3 shall not apply after a Change in Control. | ||
3.4 | If any provision of Section 3 or Section 4 is determined in a final action to be unenforceable or invalid under applicable law, such provision shall be enforced and applied to the maximum extent permitted by applicable law, and shall automatically be deemed amended in a manner consistent with its objectives to the extent necessary to conform to any limitations imposed under applicable law. |
4.1 | The individual participation level shall be outlined in the notification to each Participant regarding such Participants participation in the Plan. The participation level is based upon a target Bonus, with the actual Bonus ranging from 0% (minimum) to 200% of target (maximum). For instance, if the participation level is defined as 10%, the Bonus range is from 0% to 20%. In the event a Participant changes levels during the Plan Year, the potential Bonus may, at the discretion of the Committee in consultation with senior management of the Company, be adjusted to reflect the number of months spent in each level. | |
4.2 | The Chief Executive Officer of the Company shall submit to the Committee recommended criteria and target performance levels for each Participant level for each Plan Year. The Committee will consider such recommendation and, after consultation with senior management, may modify the criteria and/or the target performance levels of the Company at which the Bonus awards may be earned for such Plan Year. The Committee shall approve the target levels for each Plan Year within the first ninety (90) days of the Plan Year. Upon approval by the Committee, such target performance levels shall be announced to the Participants. |
5.1 | Within sixty (60) days following the end of each Plan Year, the Chief Financial Officer of the Company shall submit to the Committee a report on the Companys results in achieving the target performance levels and the Bonus awards recommended by senior management for such Plan Year based upon the target performance levels previously approved by the Committee. The Committee shall then calculate the amount of Bonus to be paid to each Participant based on the pre-established performance criteria and target levels for such Plan Year. The Committee has the discretion to consider the impact of any non-recurring item or related charge, write-up or write-down or any other matter, and to take such item into account in order to adjust the total amount of the award pool or specific award for any Participant for such Plan Year. | |
5.2 | The Company shall pay the Bonus to each Participant as soon as practicable after its calculation and approval by the Committee which is intended to be by March 15 th of the Plan Year following the Plan Year in which it was earned, but in no event later than the end of the Plan Year containing such March 15 th date. The Bonus payment shall be |
6
paid in a cash lump sum by payroll check (with all applicable withholdings), except for payments to or on behalf of Participants based on death or Disability. | ||
5.3 | If a Participants employment with the Company and its Affiliates terminates prior to the end of a Plan Year, his eligibility to receive the Bonus shall be determined in accordance with Section 3.2. | |
5.4 | If a Participant is not living at the time his Bonus is payable to him in accordance with the terms and conditions of the Plan, any Bonus which would have been payable shall be paid to his Beneficiary as designated as described below in this Section 5.4. | |
The Participant shall file with the Company a designation of one or more Beneficiaries to whom benefits otherwise payable to the Participant shall be made in the event of his death prior to the complete distribution of his Bonus. A Beneficiary designation shall be on the form prescribed by the Company and shall be effective when received and accepted by the Company. The Participant may, from time to time, revoke or change his Beneficiary designation by filing a new designation form with the Company. The last valid designation that was received and accepted by the Company prior to the Participants death shall be controlling; provided, however, that no Beneficiary designation, or change or revocation thereof, shall be effective unless received prior to the Participants death, and shall not be effective as of a date prior to its receipt and acceptance by the Company. | ||
Notwithstanding any contrary provision of this Section 5.4, no Beneficiary designation made by the Participant while he is married, other than one under which the surviving lawful spouse of the Participant is designated as the sole 100% primary Beneficiary, shall be valid and effective without the prior written consent of such spouse to the designation of another primary Beneficiary on a form provided by the Company for such purpose. | ||
If no valid and effective Beneficiary designation exists at the time of the Participants death, or if no designated Beneficiary survives the Participant, or if such designation conflicts with applicable law, the distribution of the Participants Bonus shall be made to the Participants surviving lawful spouse, if any. If there is no surviving spouse, then payment of the Bonus shall be made to the Participants estate. |
6.1 | The Committee shall direct the administration of the Plan in all respects. | |
6.2 | The Committee shall have full power to amend, modify, rescind, construe, construct and interpret the Plan, including, without limitation, resolving any inconsistency, supplying any omission and correcting any defect. Any action taken or decision made by the Committee arising out of, or in connection with, the construction, administration, interpretation or effect of the Plan or of any rules and regulations adopted thereunder shall be conclusive and binding upon all Participants and all persons claiming under or through a Participant. |
7
6.3 | The Committee may rely upon any information supplied to it by any officer of the Company or an Affiliate, or by the Companys independent registered public accountants or legal counsel, and may rely on the advice of such accountants or legal counsel in connection with the administration of the Plan, and shall be fully protected in relying upon such information or advice. | |
6.4 | No Employee or officer of the Company or an Affiliate, or any member of the Board or Committee, shall have any liability for any decision or action under the Plan if made or done in good faith. The Company shall fully indemnify and defend each director, Employee and officer of the Company or Affiliate acting in good faith pursuant to the terms of the Plan, from and against any and all losses, damages or expenses arising therefrom. These indemnification rights shall be in addition to any other indemnification protection provided by the Company or an Affiliate. | |
6.5 | Nothing in this Plan shall be construed or interpreted as giving any Employee the right to be retained by the Company or any Affiliate, or impair the right of the Company or its Affiliate to control or discipline Employees or to terminate the services of any Employee at any time. The Plan shall not create any rights of future participation herein. | |
6.6 | The laws of the State of Texas, without regard to its conflicts of law provisions, shall govern the validity and construction of this Plan in all respects. If any term or condition herein conflicts with applicable law, the validity of the remaining provisions shall not be affected thereby. | |
6.7 | This Plan shall (a) be amended and restated effective as of January 1, 2009; (b) replace and supersede any and all prior versions hereof or other incentive bonus plans of the Company for Employees of the Company or an Affiliate; and (c) continue in effect until terminated by the Board or Committee. | |
6.8 | No person eligible to receive any payment hereunder shall have any rights to pledge, assign or otherwise dispose of all or any portion of such payment, either directly or by operation of law, including but not by way of limitation, execution, levy, garnishment, attachment, pledge or bankruptcy. | |
6.9 | The Company or Affiliate shall have the right to withhold and deduct from the payment of a Bonus hereunder any federal, state or local taxes required by law to be withheld with respect to such distribution, and any other required withholdings, as determined by the Company or Affiliate. | |
Neither the establishment of the Plan or the granting of any Bonus hereunder shall be deemed to create a trust or other designated fund of whatever nature. The Plan shall constitute an unfunded and unsecured liability of the Company to make payments in accordance with the provisions of the Plan, and no individual shall have any security or other interest in any assets of the Company in connection with the Plan. The Plan is a bonus arrangement and not a nonqualified deferred compensation plan subject to Code Section 409A, or any plan subject to ERISA, and shall be construed and administered accordingly. |
8
6.10 | This Plan is intended to comply with Code Section 409A and any ambiguous provision will be construed in a manner that is compliant with or exempt from the application of Section 409A. For purposes of example and not limitation, to the extent required for compliance with, or exemption under, Code Section 409A, an Employees employment with the Company and its Affiliates hereunder shall be considered terminated only if the Employee has a separation from service as such term is defined under Section 409A. It is intended that the Plan will comply with the provisions of Section 409A and the regulations and other authoritative guidance thereunder. If any provision of this Plan would cause a Participant to incur any additional tax or interest under Section 409A, the Company shall reform such provision to comply with Section 409A to the full extent permitted under Section 409A. In the event any payment hereunder is made to a specified employee (as defined under Section 409A) upon separation from service (as defined under Section 409A), the payment will not be made earlier than six (6) months from the date of separation from service, but only to the extent required for compliance with, or exemption under, Section 409A. |
PARKER DRILLING COMPANY | ||||||
|
||||||
|
By:
Name: |
/s/ David C. Mannon
|
||||
|
Title: | President | ||||
|
Date: | December 9, 2009 |
9
1
2
3
4
5
Parker Drilling Company | ||||||
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By: | |||||
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Name: |
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Title: |
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|||||
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||||||
Grantee |
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||||||
|
Signature | |||||
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Grantees Address for Notices: | ||||||
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||||||
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||||||
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6
1
2
3
4
5
6
7
Parker Drilling Company | ||||||
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By: | |||||
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Name: |
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Title: |
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Grantee |
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Signature | |||||
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Grantees Address for Notices: | ||||||
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||||||
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||||||
8
1.
|
ALY | Allis-Chalmers Energy, Inc. | ||
2.
|
BAS | Basic Energy Services, Inc. | ||
3.
|
HP | Helmerich & Payne Inc. | ||
4.
|
HERO | Hercules Offshore, Inc. | ||
5.
|
KEG | Key Energy Services, Inc. | ||
6.
|
NBR | Nabors Industries Ltd. | ||
7.
|
PDC | Pioneer Drilling Company | ||
8.
|
PDS | Precision Drilling Trust | ||
9.
|
TTI | Tetra Technologies, Inc. |
9
Companys | 9 Peers | |||||
Rank Against | Remaining | 8 Peers | 7 Peers | |||
Peers | (initial case) | Remaining | Remaining | |||
1
|
2.00 | 2.00 | 2.00 | |||
2
|
1.75 | 1.70 | 1.70 | |||
3
|
1.45 | 1.40 | 1.35 | |||
4
|
1.20 | 1.00 | 1.00 | |||
5
|
1.00 | 1.75 | 0.65 | |||
6
|
0.75 | 0.50 | 0.35 | |||
7
|
0.50 | 0.25 | 0.00 | |||
8
|
0.25 | 0.00 | 0.00 | |||
9
|
0.00 | 0.00 | ||||
10
|
0.00 |
10
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
EXECUTIVE : | ||||
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||||
Signature:
|
||||
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||||
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[INSERT NAME] | |||
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Date:
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||||
|
||||
Address for Notices: | ||||
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||||
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||||
|
||||
PARKER DRILLING COMPANY: | ||||
|
By:
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||||
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||||
|
[INSERT OFFICER OF COMPANY] | |||
|
[INSERT OFFICERS TITLE] |
23
Date:
|
||||
|
||||
|
||||
Address for Notices : |
24
A-1
A-2
A-3
A-4
A-5
A-6
B-1
1. | I, individually and on behalf of my heirs, personal representatives, successors, and assigns, release, waive, and discharge Company, its predecessors, successors, parents, subsidiaries, merged entities, operating units, affiliates, divisions, insurers, administrators, trustees, and the agents, representatives, officers, directors, shareholders, employees and attorneys of each of the foregoing (hereinafter Released Parties), from all claims, debts, liabilities, demands, obligations, promises, acts, agreements, costs, expenses, damages, actions, and causes of action, whether in law or in equity, whether known or unknown, suspected or unsuspected, arising from my employment and termination from employment with Company, including but not limited to any and all claims pursuant to Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991 (42 U.S.C. § 2000e, et seq .), which prohibits discrimination in employment based on race, color, national origin, religion or sex; the Civil Rights Act of 1866 (42 U.S.C. §§1981, 1983 and 1985), which prohibits violations of civil rights; the Age Discrimination in Employment Act of 1967, as amended, and as further amended by the Older Workers Benefit Protection Act (29 U.S.C. §621, et seq .), which prohibits age discrimination in employment; the Employee Retirement Income Security Act of 1974, as amended (29 U.S.C. § 1001, et seq . ), which protects certain employee benefits; the Americans with Disabilities Act of 1990, as amended (42 U.S.C. § 12101, et seq .), which prohibits discrimination against the disabled; the Family and Medical Leave Act of 1993 (29 U.S.C. § 2601, et seq .), which provides medical and family leave; the Fair Labor Standards Act (29 U.S.C. § 201, et seq. ), including the wage and hour laws relating to payment of wages; and all other federal, state and local laws and regulations prohibiting employment discrimination. This Release also includes, but is not limited to, a release of any claims for breach of contract, mental pain, suffering and anguish, emotional upset, impairment of economic opportunities, unlawful interference with employment rights, defamation, intentional or negligent infliction of emotional distress, fraud, wrongful termination, wrongful discharge in violation of public policy, breach of any express or implied covenant of good faith and fair dealing, that Company has dealt with me unfairly or in bad faith, and all other common law contract and tort claims. |
C-1
Notwithstanding the foregoing, I am not waiving any rights or claims that may arise after this Release is signed by me. Moreover, this Release does not apply to any claims or rights which, by operation of law, cannot be waived, including the right to file an administrative charge or participate in an administrative investigation or proceeding; however, by signing this Release I disclaim and waive any right to share or participate in any monetary award resulting from the prosecution of such charge or investigation or proceeding. Nothing in this Release shall affect in any way my rights of indemnification and directors and officers liability insurance coverage provided to me pursuant to the Companys by-laws, my employment agreement, and/or pursuant to any other agreements or policies in effect prior to the effective date of my termination, which shall continue in full force and effect, in accordance with their terms, following the effective date of this Waiver and Release. | ||
2. | I forever waive and relinquish any right or claim to reinstatement to active employment with Company, its affiliates, subsidiaries, divisions, parent, and successors. I further acknowledge that Company has no obligation to rehire or return me to active duty at any time in the future. | |
3. | I acknowledge that all agreements applicable to my employment respecting non-competition, non-solicitation, non-recruitment, derogatory statements, and the confidential or proprietary information of the Company shall continue in full force and effect as described in the Employment Agreement. | |
4. | I hereby acknowledge and affirm as follows: |
a. | I have been advised to consult with an attorney prior to signing this Release. | ||
b. | I have been extended a period of 21 days in which to consider this Release. | ||
c. | I understand that for a period of seven days following my execution of this Release, I may revoke the Release by notifying Company, in writing, of my desire to do so. I understand that after the seven-day period has elapsed and I have not revoked the Release, it shall then become effective and enforceable. I understand that the Separation Payment will not be made under the Employment Agreement and I will not be entitled to the Severance Benefits made under the Employment Agreement until after the seven-day period has elapsed and I have not revoked the Release. | ||
d. | I acknowledge that I have received payment for all wages due at time of my employment termination, including any reimbursement for any and all business related expenses. I further acknowledge that the Separation Payment and the Separation Benefits are consideration to which I am not otherwise entitled under any Company plan, program, or prior agreement. | ||
e. | I certify that I have returned all property of the Company, including but not |
C-2
limited to, keys, credit and fuel cards, files, lists, and documents of all kinds regardless of the medium in which they are maintained. | |||
f. | I have carefully read the contents of this Release and I understand its contents. I am executing this Release voluntarily, knowingly, and without any duress or coercion. |
5. | I acknowledge that this Release shall not be construed as an admission by any of the Released Parties of any liability whatsoever, or as an admission by any of the Released Parties of any violation of my rights or of any other person, or any violation of any order, law, statute, duty or contract. | |
6. | I agree that the terms and conditions of this Release are confidential and that I will not, directly or indirectly, disclose the existence of or terms of this Release to anyone other than my attorney or tax advisor, except to the extent such disclosure may be required for accounting or tax reporting purposes or otherwise be required by law or direction of a court. Nothing in this provision shall be construed to prohibit me from disclosing this Release to the Equal Employment Opportunity Commission in connection with any complaint or charge submitted to that agency. | |
7. | In the event that any provision of this Release should be held void, voidable, or unenforceable, the remaining portions shall remain in full force and effect. | |
8. | I hereby declare that this Release constitutes the entire and final settlement between me and the Company, superseding any and all prior agreements, and that the Company has not made any promise or offered any other agreement, except those expressed in this Release, to induce or persuade me to enter into this Release. |
|
|
C-3
This Third Amendment to that certain Consulting Agreement entered into on April 12, 2006 (as amended by the First Amendment effective May 1, 2008 and by the Second Amendment effective May 1, 2009), between Robert L. Parker (Parker), an individual who resides in Tulsa, Oklahoma, and Parker Drilling Company, a Delaware corporation (the Company) is effective as of the 1 st day of May 2010 (the Effective Date). |
WHEREAS, Parker is willing to extend the Consulting Agreement for one year in accordance with the terms contained in this Third Amendment; |
1. | Section 3 shall be amended to provide that the Consulting Term shall be extended for one (1) year through April 30, 2011, subject to earlier termination as provided in paragraph 2 below. As compensation for providing consulting services, the Company shall pay Parker the amounts specified in paragraph 2 below from and after the Effective Date of this Third Amendment. | ||
2. | Section 5 shall be amended to provide that the only payments and benefits payable to Parker, from and after the Effective Date of this Third Amendment until the termination of the Consulting Term, shall be a consulting fee of $10,000 per month, payable by the fifth (5 th ) calendar day of each month. | ||
3. | Section 27 shall be amended to reflect that notices to the Company shall be sent to: |
4. | Except as specifically amended by this Third Amendment, all other terms and conditions of the Agreement shall remain in full force and effect. |
PARKER DRILLING COMPANY | ROBERT L. PARKER | |||||||
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By:
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/s/ David Mannon | /s/ Robert L. Parker | ||||||
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David Mannon | Robert L. Parker | |||||||
President and Chief Executive Officer |
Parker Drilling Company of Oklahoma, Incorporated (Oklahoma)
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100 | % | ||
Parker Technology, Inc. (Oklahoma)
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100 | % | ||
Parker Drilling Company Limited LLC (Delaware)
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100 | % | ||
Parker North America Operations, Inc. (Nevada)
(3)
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100 | % | ||
Parker Drilling Company (Bolivia) S.A. (Bolivia)
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100 | % | ||
Universal Rig Service LLC (Delaware)
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100 | % | ||
Parker Drilling Arctic Operating Inc.
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100 | % | ||
Parker Drilling Domestic Holding Company LLC
(2)
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100 | % | ||
Parker Drilling International Holding Company LLC
(1)
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100 | % | ||
Parker Drilling Management Services, Inc.
(4)
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100 | % |
(1) | Parker Drilling International Holding Company owns 64.8% of Parker Drilling Eurasia, Inc. | |
(2) | Parker Drilling Domestic Holding Company owns 100% of Choctaw International Rig Corp. (Nevada); Creek International Rig Corp. (Nevada) and Parker Drilling Company of Argentina, Inc. (Nevada). It also owns 74% of Parker Drilling Pacific Rim, Inc. (Delaware). | |
(3) | Parker North America Operations, Inc. owns 100% of Parker Drilling Company North America, Inc. (Nevada); Parker USA Drilling Company (Nevada) and Parker Drilling Offshore Corporation (Nevada).* |
* | Parker Drilling Offshore Corporation owns 100% of the following entities: |
| Mallard Argentine Holdings, Ltd. (Cayman Islands) | ||
| Mallard Drilling of South America, Inc. (Cayman Islands) | ||
| Mallard Drilling of Venezuela, Inc. (Cayman Islands) | ||
| Parker Drilling Offshore International, Inc. (formerly Mallard Drilling International, Inc.)(Cayman Islands), which owns 100% of Parker Drilling (Nigeria) Limited (Nigeria) and 100% of KDN Drilling Limited (Nigeria). | ||
| Parker Drilling Offshore USA, L.L.C. (Oklahoma), which owns 100% of Parker Drilling Company of Mexico, LLC (Nevada), 98% of Parker Drilling de Mexico, SRL (Mexico), 2% of PD Servicios Integrales, SRL (Mexico) and 100% of Parker Enex, LLC (Delaware). | ||
| Parker Technology, L.L.C. (Louisiana) | ||
| Parker Tools, LLC (Oklahoma), which owns 99% of Quail Tools, L.P. (formerly Quail Tools, L.L.P.) (Oklahoma). | ||
| Quail USA, LLC (Oklahoma), which owns 1% of Quail Tools, L.P. (formerly Quail Tools, L.L.P.) (Oklahoma). |
* | Parker Drilling Offshore Corporation owns 98% of PD Servicios Integrales, SRL (Mexico). | ||
* | Parker Drilling Offshore Corporation owns 2% of Parker Drilling de Mexico, SRL (Mexico). | ||
* | Parker Drilling Offshore Corporation owns 35.2% of Parker Drilling Eurasia, Inc. (Delaware), which owns 100% of Parker Drilling Company International Limited (Nevada), 100% of Parker Drilling Company Eastern Hemisphere, Ltd. Co. (Oklahoma), 100% of Parker Drillserv, LLC (Delaware), 100% of Parker Drilltech, LLC (Delaware) and 99.96% of PD Offshore Holdings C.V. (Netherlands) which owns 100% of Parker 3source, LLC (Delaware) and 99.97% of PD Selective Holdings C.V. (Netherlands) which owns 100% of the following entities: |
| Parker Cyprus Ventures Limited (Cyprus) | ||
| Parker Drillex, LLC (Delaware) | ||
| Parker Drilling AME Limited (Cayman Islands) | ||
| Parker Drilling Company of New Guinea, LLC (Delaware) | ||
| Parker Drilling Company of Sakhalin (Russia) | ||
| Parker Drilling Company of Singapore, LLC (Delaware) | ||
| Parker Drilling Netherlands B.V. (Netherlands) | ||
| Parker Drillsource, LLC (Delaware) | ||
| PD Labor Services, Ltd. (Cayman Islands). | ||
| PD Labor Sourcing, Ltd. (Cayman Islands) | ||
| PD Personnel Services, Ltd. (Cayman Islands) and 99.9% of Parker Drilling Company Kuwait Limited (Bahamas). | ||
| Parker Singapore Rig Holding Pte. Ltd. (Singapore) |
* | Parker Drilling Offshore Corporation owns 26% of Parker Drilling Pacific Rim, Inc. (Delaware), which owns 100% of Parker Rigsource, LLC (Delaware) and 99.88% of PD International Holdings C.V. (Netherlands) which owns 100% of Parker 5272, LLC (Delaware) and 99.96% of PD Dutch Holdings C.V. (Netherlands) which owns 100% of the following entities: |
| Parker Cyprus Leasing Limited (Cyprus) | ||
| Parker Drilling (Kazakstan), LLC (Delaware) | ||
| Parker Drilling Company International, LLC (Delaware) | ||
| Parker Drilling Company of New Zealand Limited (New Zealand) | ||
| Parker Drilling Dutch B.V. (Netherlands) | ||
| Parker Drilling International of New Zealand Limited (New Zealand) |
(4) | Parker Drilling Management Services, Inc. owns 1% of PD Management Resources, L.P., and 100% of Parker USA Resources, LLC, which owns 99% of PD Management Resources, L.P. |
1. | I have reviewed this annual report on Form 10-K for the period ended December 31, 2010, of Parker Drilling Company (the registrant); | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
/s/ David C. Mannon | ||||
David C. Mannon | ||||
President and Chief Executive Officer | ||||
1. | I have reviewed this annual report on Form 10-K for the period ended December 31, 2010, of Parker Drilling Company (the registrant); | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
/s/ W. Kirk Brassfield | ||||
W. Kirk Brassfield | ||||
Senior Vice President and Chief Financial Officer | ||||
1. | The Companys Annual Report on Form 10-K for the year ended December 31, 2010 (the Report) fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and | ||
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
/s/ David C. Mannon
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President and Chief Executive Officer
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1. | The Companys Annual Report on Form 10-K for the year ended December 31, 2010 (the Report) fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and | ||
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
/s/ W. Kirk Brassfield
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Senior Vice President and Chief Financial Officer
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