BASIC ENERGY SERVICES INC (Form: 8-K, Received: 10/25/2016 09:09:53)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 25, 2016

Basic Energy Services, Inc.

(Exact name of registrant as specified in its charter)




Delaware	1-32693		54-2091194
(State or other jurisdiction of incorporation)	(Commission File Number)		(I.R.S. Employer Identification No.)

801 Cherry Street, Suite 2100
Fort Worth, Texas		76102
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (817) 334-4100

Not Applicable

(Former name or former address, if changed since last report.)

________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.03 Bankruptcy or Receivership.

On October 25, 2016, Basic Energy Services, Inc. (“Basic” or the “Company”) and certain of its subsidiaries (collectively with Basic, the “Debtors”) filed voluntary petitions (the “Bankruptcy Petitions,” and the cases commenced thereby, the “Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Court”) to pursue a Joint Prepackaged Chapter 11 Plan of the Debtors (as proposed, the “Prepackaged Plan”). The Company’s Chapter 11 Case is being administered under the caption In re Basic Energy Services, Inc. (Case No. 16-12320 ). The Debtors have filed a motion with the Court seeking to administer all of the Debtors’ Chapter 11 Cases jointly under the caption In re Basic Energy Services, Inc., et al. No trustee has been appointed, and the Debtors will continue to operate their businesses as “debtors in possession” under the jurisdiction of the Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Court. Basic expects to continue its operations without interruption during the pendency of the Chapter 11 Cases. To assure ordinary course operations, the Company is seeking approval from the Court for a variety of “first day” motions seeking various relief and authorizing the Debtors to maintain their operations in the ordinary course. Court filings and other information related to the Chapter 11 Cases are available at a website administered by the Company’s claims agent, Epiq Corporate Restructuring, at http://dm.epiq11.com/BasicEnergy.

The subsidiary Debtors in the Chapter 11 Cases are Basic Energy Services GP, LLC; Basic Energy Services LP, LLC; Basic Energy Services, L.P.; Basic ESA, Inc.; Chaparral Service, Inc.; SCH Disposal, L.L.C.; Sledge Drilling Corp.; Admiral Well Service, Inc.; Basic Marine Services, Inc.; JS Acquisition LLC; Permian Plaza, LLC; Maverick Coil Tubing Services, LLC; First Energy Services Company; JetStar Holdings, Inc.; Xterra Fishing & Rental Tools Co.; Maverick Solutions, LLC; LeBus Oil Field Service Co.; Acid Services, LLC; Taylor Industries, LLC; Maverick Stimulation Company, LLC; Globe Well Service, Inc.; JetStar Energy Services, Inc.; Platinum Pressure Services, Inc.; Maverick Thru-Tubing Services, LLC; MCM Holdings, LLC; MSM Leasing, LLC; and The Maverick Companies, LLC.

A summary of the key features of the Prepackaged Plan was included in Item 1.01 to our Current Report on Form 8-K filed on October 24, 2016. That description of the Prepackaged Plan does not purport to be complete and is qualified in its entirety by reference to the Prepackaged Plan, a copy of which is filed as Exhibit 2.1 to this Form 8-K.

Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.

The filing of the Bankruptcy Petitions described in Item 1.03 constitutes an event of default that accelerated the Company’s obligations under the following debt instruments (the “Debt Instruments”):


•	Term Loan Credit Agreement dated as of February 17, 2016, as amended, by and among Basic, as borrower, the lenders party thereto and U.S. Bank National Association, as administrative agent;


•	Amended and Restated Credit Agreement dated as of November 26, 2014, as amended, by and among Basic, as borrower, the lenders party thereto and Bank of America, N.A., as administrative agent, swing line lender and l/c issuer;


•	Indenture dated as of October 16, 2012, among the Company, as issuer, the guarantors named therein and Wilmington Trust, National Association, as successor trustee; and


•	Indenture dated as of February 15, 2011, as amended, among the Company, as issuer, the guarantors named therein and Wilmington Trust, National Association, as successor trustee.

The Debt Instruments provide that as a result of the commencement of the Chapter 11 Cases, the principal and accrued interest due thereunder shall be immediately due and payable. Any efforts to enforce such payment obligations under the Debt Instruments are automatically stayed as a result of the filing of the Bankruptcy Petitions, and the holders’ rights of enforcement in respect of the Debt Instruments are subject to the applicable provisions of the Bankruptcy Code.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On October 24, 2016, Basic entered into amendments to employment agreements with certain of its executive officers, including (i) T.M. “Roe” Patterson, President and Chief Executive Officer; (ii) Alan Krenek, Chief Financial Officer, Secretary and Treasurer; (iii) James F. Newman, Senior Vice President, Region Operations; (iv) William T. Dame, Vice President, Pumping Services; and (v) Brett J. Taylor, Vice President, Manufacturing and Equipment (collectively, the “NEOs”). The employment agreements of the NEOs were amended to, among other things, (i) clarify that consummation of the Debtors’ restructuring transaction shall not constitute a “Change in Control” thereunder; (ii) clarify that consummation of the Debtors’ restructuring transaction shall not itself give rise to a “Good Reason” thereunder; (iii) define as a “Good Reason” to terminate such agreements, the failure of the Company’s board of directors to grant the emergence awards allocated to the executives in accordance with the term sheet to the proposed Management Incentive Plan on or within ninety days following the Company’s emergence from the Chapter 11 Cases; and (iv) in the case of T.M. “Roe” Patterson’s employment agreement, amend in the definition of “Retirement” reference to age 60 instead of age 65.

Copies of forms of the employment agreement amendments are filed as Exhibits 10.1 and 10.2 hereto and are incorporated herein by reference. The above description of the employment agreements is qualified in its entirety by the full text of such exhibits.

Item 7.01 Regulation FD Disclosure.

On October 25, 2016, Basic issued a press release announcing the filing of the Chapter 11 Cases, as described in Item 1.03. A copy of the press release is being furnished as Exhibit 99.1 and is incorporated into this Item 7.01 by reference.

The information furnished pursuant to Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is not subject to the liabilities of that

section and is not deemed incorporated by reference in any filing of Basic’s under the Securities Act of 1933, as amended (the “Securities Act”), unless specifically identified therein as being incorporated therein by reference.

Item 8.01 Other Events.

The Company cautions that trading in Basic’s securities during the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks. Trading prices for Basic’s securities may bear little or no relationship to the actual recovery, if any, by holders of Basic’s securities in the Chapter 11 Cases.

Forward-Looking Statements

This Current Report on Form 8-K contains certain statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, among other things, the risk factors discussed in this Current Report and in our most recent Annual Report on Form 10-K as well as in other reports filed from time to time by the Company with the Securities and Exchange Commission, most of which are beyond our control. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “plan,” “expect,” “indicate” and similar expressions are intended to identify forward-looking statements. All statements other than statements of current or historical fact contained in this Current Report are forward-looking statements. Although we believe that the forward-looking statements contained in this Current Report are based upon reasonable assumptions, the forward-looking events and circumstances discussed in this Current Report may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements.

These forward-looking statements relate, in part, to (i) the Company’s ability to obtain approval by the Bankruptcy Court of the Prepackaged Plan or any other plan of reorganization, including the treatment of the claims of the Company’s lenders and trade creditors, among others; (ii) the Company’s ability to obtain approval with respect to motions in the Chapter 11 cases and the Bankruptcy Court’s rulings in the Chapter 11 cases and the outcome of the Chapter 11 cases in general; (iii) the length of time the Debtors will operate under the Chapter 11 cases; (iv) risks associated with third-party motions in the Chapter 11 cases, which may interfere with the Debtors’ ability to develop and consummate the Prepackaged Plan or other plan of reorganization; (v) the potential adverse effects of the Chapter 11 cases on the Debtors’ liquidity, results of operations or business prospects; (vi) the ability to execute the Company’s business and restructuring plan; (viii) increased legal and advisor costs related to the Chapter 11 cases and other litigation and the inherent risks involved in a bankruptcy process; and (viii) other factors disclosed by the Company from time to time in its filings with the SEC, including those described under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We do not intend to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise, except as required by law.

Item 9.01 Financial Statements and Exhibits.




(d)	Exhibits.

	2.1	Joint Prepackaged Chapter 11 Plan of Basic Energy Services, Inc. and its Affiliated Debtors dated October 24, 2016 (Incorporated by reference to Exhibit A of Exhibit T3E.1 of the Form T-3 filed by Basic Energy Services, Inc. with the SEC on October 24, 2016), with respect to the Company’s Senior Notes).
	10.1	Amendment to Amended and Restated Employment Agreement, dated as of October 24, 2016, by and between T.M. “Roe” Patterson and the Company
	10.2	Form of Amendment to Employment Agreement, dated as of October 24, 2016.
	99.1	Press Release dated October 25, 2016.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



	Basic Energy Services, Inc.

Date: October 25, 2016	By:	/s/ Alan Krenek
		Alan Krenek
		Senior Vice President, Chief Financial Officer,
		Treasurer and Secretary

EXHIBIT INDEX



Exhibit No.	Description


2.1	Joint Prepackaged Chapter 11 Plan of Basic Energy Services, Inc. and its Affiliated Debtors dated October 24, 2016 (Incorporated by reference to Exhibit A to Exhibit T3E.1 of the Form T-3 filed by Basic Energy Services, Inc. with the SEC on October 24, 2016), with respect to the Company’s Senior Notes).
10.1	Amendment to Amended and Restated Employment Agreement, dated as of October 24, 2016, by and between T.M. “Roe” Patterson and the Company.
10.2	Form of Amendment to Employment Agreement, dated as of October 24, 2016.
99.1	Press Release dated October 25, 2016.

Exhibit 10.1

AMENDMENT TO AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

THIS AMENDMENT (“Amendment”) to that certain Amended and Restated Employment Agreement, as amended from time to time (the “Employment Agreement”) entered into as of May 1, 2013, by and between Basic Energy Services, Inc. (the “Company”) and Thomas Monroe Patterson (the “Executive”) is entered into as of October 24, 2016 (the “Effective Date”), by and between the Company and the Executive (each, a “Party,” and collectively, the “Parties”).

WHEREAS, the Company will be filing a petition for relief under chapter 11 of title 11 of the United States Code to implement a restructuring of its balance sheet (the “Reorganization”);

WHEREAS, the Parties would like to clarify that the consummation of the restructuring transaction as contemplated by the Plan of Reorganization (attached as Exhibit A to that certain Restructuring Support Agreement, dated October 23, 2016) and as may be amended from time to time in accordance with the terms of such Restructuring Support Agreement, will not itself constitute a Change in Control or give rise to a Good Reason event (both as defined in the Employment Agreement); and

WHEREAS, in connection with the Reorganization, the Company and its creditors have negotiated the material terms of a management incentive plan (the “MIP”) to be effective upon the date of the Company’s emergence from the restructuring transaction contemplated by the Plan of Reorganization and as may be amended from time to time to time in accordance with the terms of the Restructuring Support Agreement (the “Reorganization Date), with such material terms as set forth in the MIP term sheet (the “MIP Term Sheet”) attached as an exhibit to that certain Restructuring Support Agreement;

WHEREAS, in consideration of the Executive’s continuing services to the Company, the Parties desire to amend the Employment Agreement to provide that if the Board of Directors of the reorganized Company fails to grant the emergence awards allocated to the Executive in accordance with MIP Term Sheet on or within ninety (90) days following the Reorganization Date, such failure will constitute a Good Reason event under the Employment Agreement; and

WHEREAS, Section 32 of the Employment Agreement permits amendment of the Employment Agreement by means of a written instrument, signed by both Parties.

NOW, THEREFORE, in consideration of the mutual promises and agreements set forth herein, the Company and Employee agree as follows:

1. Amendment to Employment Agreement . Effective as of the Effective Date:


A.	A new Section 6(d)(7)(G) will be added to the Employment Agreement to read as follows:


(i)	The failure of the Board of Directors of Basic Energy Services, Inc. to grant the emergence awards allocated to the Executive in accordance with the MIP Term Sheet as set forth in Exhibit G to the Restructuring Support Agreement, on or within ninety (90) days following the Reorganization Date, shall constitute a “ Good Reason ” event.


B.	In the last paragraph of Section 6(d)(7), the words “under subparagraphs (A), (B), (C), (D), or (E) (above)” shall be replaced with the words “under subparagraphs (A), (B), (C), (D), (E) or (G) (above).”


C.	The following sentence will be added after the last sentence of the last paragraph in Section 6(d)(7):


(i)	In addition, the consummation of the restructuring transaction as contemplated by the Plan of Reorganization as may be amended from time to time in accordance with the terms of the Restructuring Support Agreement, shall not itself give rise to a “ Good Reason ” event under subparagraphs (C) or (D) (above).”


D.	A new Section 6(d)(3)(D) will be added to the Employment Agreement to read as follows:


(i)	Notwithstanding the foregoing as set forth in this Section 6(d)(3), the consummation of the restructuring transaction as contemplated by the Plan of Reorganization as may be amended from time to time in accordance with the terms of such Restructuring Support Agreement, shall not constitute a “ Change in Control ” herein.


E.	Section 6(d)(8) is hereby amended to replaced in its entirety to read as follows:


(i)	“ Retirement ” means the termination of Executive’s employment for normal retirement at or after attaining age sixty (60) provided that, on the date of his retirement, Executive has accrued at least ten years of active service with the Company.

2. Definitions . Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Employment Agreement.

3. References . All references in the Employment Agreement to “Agreement” and any other references of similar effect shall hereinafter refer to the Employment Agreement as amended by this Amendment.

4. Remaining Provisions . Except as expressly modified by this Amendment, the Employment Agreement shall remain in full force and effect. This Amendment embodies the entire agreement and understanding of the Parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, whether oral or written, relating thereto.

5. Governing Law . This Amendment is to be interpreted, construed and governed according to the laws of the State of Texas without regard to conflicts of laws.

6. Counterparts . The Parties hereto may execute this Amendment in counterparts, each of which shall be deemed to be an original and all of which shall together constitute one and the same instrument.

[signature page follows]

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the Effective Date.

EXECUTIVE

/s/Thomas Monroe Patterson

Thomas Monroe Patterson

Company

By: /s/Eric Lannen

Name: Eric Lannen

Title: V.P. Human Resources

Patterson, Thomas M.

Exhibit 10.2

AMENDMENT TO EMPLOYMENT AGREEMENT

THIS AMENDMENT (“Amendment”) to that certain Employment Agreement, as amended from time to time (the “Employment Agreement”) entered into as of ______________, by and between Basic Energy Services, Inc. (the “Company”) and __________________ (the “Executive”) is entered into as of October 24, 2016 (the “Effective Date”), by and between the Company and the Executive (each, a “Party,” and collectively, the “Parties”).

WHEREAS, the Company will be filing a petition for relief under chapter 11 of title 11 of the United States Code to implement a restructuring of its balance sheet (the “Reorganization”);

WHEREAS, Section 32 of the Employment Agreement permits amendment of the Employment Agreement by means of a written instrument, signed by both Parties.

NOW, THEREFORE, in consideration of the mutual promises and agreements set forth herein, the Company and Employee agree as follows:

1. Amendment to Employment Agreement . Effective as of the Effective Date:


A.	A new Section 6(d)(8)(G) will be added to the Employment Agreement to read as follows:


(i)	The failure of the Board of Directors of Basic Energy Services, Inc. to grant the emergence awards allocated to the Executive in accordance with the MIP Term Sheet as set forth in Exhibit G to the Restructuring Support Agreement, on or within ninety (90) days following the Reorganization Date, shall constitute a “ Good Reason ” event.


B.	In the last paragraph of Section 6(d)(8), the words “under subparagraphs (A), (B), (C), (D), or (E) (above)” shall be replaced with the words “under subparagraphs (A), (B), (C), (D), (E) or (G) (above).”


C.	The following sentence will be added after the last sentence of the last paragraph in Section 6(d)(8):


(i)	In addition, the consummation of the restructuring transaction as contemplated by the Plan of Reorganization as may be amended from time to time in accordance with the terms of the Restructuring Support Agreement, shall not itself give rise to a “ Good Reason ” event under subparagraphs (C) or (D) (above).”


D.	A new Section 6(d)(4)(D) will be added to the Employment Agreement to read as follows:


(i)	Notwithstanding the foregoing as set forth in this Section 6(d)(4), the consummation of the restructuring transaction as contemplated by the Plan of Reorganization as may be amended from time to time in accordance with the terms of such Restructuring Support Agreement, shall not constitute a “ Change in Control ” herein.

2. Definitions . Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Employment Agreement.

5. Governing Law . This Amendment is to be interpreted, construed and governed according to the laws of the State of Texas without regard to conflicts of laws.

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the Effective Date.

EXECUTIVE

______________________________

Company

By: ___________________________

Name: Eric Lannen

Title: VP, Human Resources

Exhibit 99.1

NEWS RELEASE




	Contacts:	Alan Krenek,
		Chief Financial Officer
		Basic Energy Services, Inc.
		817-334-4100

		Jack Lascar
		Dennard ▪ Lascar Associates
		713-529-6600

BASIC ENERGY SERVICES

INITIATES PREPACKAGED CHAPTER 11 PROCEEDINGS PURSUANT TO RESTRUCTURING SUPPORT AGREEMENT

COMPANY SEEKS EXPEDITED CHAPTER 11 EMERGENCE

PLAN SUPPORTED BY SECURED LENDERS AND BONDHOLDERS

WILL REDUCE DEBT BY MORE THAN $650 MILLION

NEW CAPITAL OF $125 MILLION

VENDORS, TRADE CREDITORS AND EMPLOYEES TO BE PAID IN FULL

FORT WORTH, Texas - October 25, 2016 - Basic Energy Services, Inc. (NYSE: BAS) (“Basic” or the “Company”) and certain subsidiaries today announced that they had filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the Bankruptcy Court for the District of Delaware to pursue a prepackaged plan (“Prepackaged Plan”) of reorganization in accordance with its previously announced restructuring support agreement with creditors to effectuate a comprehensive balance sheet restructuring (the “RSA”).

The RSA and Prepackaged Plan provides for a substantial deleveraging transaction pursuant to which Basic will meaningfully improve its balance sheet by equitizing over $800 million of its existing unsecured bond obligations and will substantially bolster its liquidity position through a $125 million rights offering for mandatorily convertible debt, to be backstopped by certain unsecured noteholders. Basic’s prepetition secured term loan lenders and certain of its unsecured bondholders have also agreed, subject to the Court’s approval, to provide a $90 million debtor-in-possession credit facility (the “DIP Financing”) to help fund the costs of the restructuring.

Basic’s creditors throughout its capital structure overwhelmingly support the restructuring. Pursuant to the RSA, 100% of Basic’s prepetition secured term loan lenders and holders of over 80% of its 7.75% senior notes due 2019 and 7.75% senior notes due 2022 have agreed to vote in favor of the Prepackaged Plan.

The Company began the solicitation of votes on the Prepackaged Plan prior to filing its petition and currently estimates that it will emerge from the Chapter 11 reorganization before the end of 2016.

Basic will continue to operate the business as debtors-in-possession under the jurisdiction of the Bankruptcy Court and fully expects to continue existing operations and maintain staffing and equipment as normal throughout the court-supervised financial restructuring process. Basic has filed a series of motions with the Bankruptcy Court requesting authority to continue normal operations, including requesting Bankruptcy Court authority to continue paying employee wages and salaries and providing employee benefits without interruption. The Company continues to work closely with its suppliers and partners to ensure it meets ongoing obligations and business continues uninterrupted.

Roe Patterson, Basic’s President and Chief Executive Officer commented, “After much thought, we decided that Chapter 11 proceedings were necessary to create financial stability which will allow Basic to be a formidable competitor during the cyclical nature of our industry.

“Throughout the Chapter 11 process, we anticipate meeting ongoing obligations to our employees, customers, vendors and suppliers, and others. We will continue to provide our customers with the dependable, high-quality services which Basic is known for.”

To support and effect the restructuring, Basic has retained Weil, Gotshal & Manges LLP as legal counsel and Moelis & Company as financial advisor.

Additionally, the Company engaged David Johnston of AP Services, LLC (and a Managing Director at AlixPartners LLP) as Chief Restructuring Officer. Mr. Johnston is supported by a team including Charles Braley and Brian Huffman as Senior Vice President and Vice President of Restructuring, respectively.

As noted above, the RSA anticipates that the restructuring would be implemented through the Prepackaged Plan, which remains subject to Bankruptcy Court approval and the satisfaction of conditions laid out in the Prepackaged Plan.

Additional information regarding Basic’s restructuring is available at www.basicenergyservices.com/restructuring. Basic has also established a telephone hotline and e-mail address to respond to inquiries from interested parties regarding the restructuring. The telephone hotline is 844-801-5971. The e-mail address is restructuring@basicenergyservices.com.

About Basic Energy Services

Basic Energy Services provides well site services essential to maintaining production from the oil and gas wells within its operating area. The Company employs over 3,500 employees in more than 100 service points throughout the major oil and gas producing regions in Texas, Louisiana, Oklahoma, New Mexico, Arkansas, Kansas, California and the Rocky Mountain and Appalachian regions. Additional information on Basic Energy Services is available on the Company’s website at www.basicenergyservices.com .

Safe Harbor Statement

This release includes forward-looking statements and projections, made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding the status of the negotiations and our liquidity. Basic has made every reasonable effort to ensure that the information and assumptions on which these statements and projections are based are current, reasonable, and complete. However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this release, including (i) changes in demand for our services and any related material impact on our pricing and utilizations rates, (ii) Basic's ability to execute, manage and integrate acquisitions successfully, (iii) changes in our expenses, including labor or fuel costs and financing costs, (iv) continued volatility of oil or natural gas prices, and any related changes in expenditures by our customers, (v) competition within our industry, (vi) Basic’s ability to comply with its financial and other covenants and metrics in its debt agreements, as well as any cross-default provisions, (vii) Basic’s ability to obtain approval by the Bankruptcy Court of the Prepackaged Plan or any other plan of reorganization, including the treatment of the claims of the Basic’s lenders and trade creditors, among others; (viii) Basic’s ability to obtain approval with respect to motions in the Chapter 11 cases and the Bankruptcy Court’s rulings in the Chapter 11 cases and the outcome of the Chapter 11 cases in general; (ix) the length of time the Debtors will operate under the Chapter 11 cases; (x) risks associated with third-party motions in the Chapter 11 cases, which may interfere with the Debtors’ ability to develop and consummate the Prepackaged Plan or other plan of reorganization; (xi) the potential adverse effects of the Chapter 11 cases on the Debtors’ liquidity, results of operations or business prospects; (xii) the ability to execute Basic’s business and restructuring plan; and (xiii) increased legal and advisor costs related to the Chapter 11 cases and other litigation and the inherent risks involved in a bankruptcy process. Additional important risk factors that could cause actual results to differ materially from expectations are disclosed in Item 1A of Basic’s Form 10-K for the year ended December 31, 2015 and subsequent Form 10-Qs filed with the SEC. While Basic makes these statements and projections in good faith, neither Basic nor its management can guarantee that anticipated future results will be achieved. Basic assumes no obligation to publicly update or revise

any forward-looking statements made herein or any other forward-looking statements made by Basic, whether as a result of new information, future events, or otherwise.