As filed with the Securities and Exchange Commission on June 2, 1999.
REGISTRATION NO. 333-_________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION Washington,ON JANUARY 31, 2003
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-----------------------------
KEY ENERGY SERVICES, INC.
Co-registrants are listed on the following pages.
(Exact name of registrant as specified in its charter)
MARYLAND 1381 04-2648081
(State or other jurisdiction of(Primary Standard (I.R.S. Employer
of incorporation or Industrial Classification Identification No.)
incorporation or organization) TWO TOWER CENTER, 20TH FLOOR
EAST BRUNSWICK, NEW JERSEY 08816
(732) 247-4822Code Number)
6 DESTA DRIVE
MIDLAND, TEXAS 79705
(915) 620-0300
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
FRANCIS D. JOHN
TWO TOWER CENTER, 20TH FLOOR
EAST BRUNSWICK,400 SOUTH RIVER ROAD
NEW JERSEY 08816
(732) 247-4822HOPE, PENNSYLVANIA 18938
(215) 862-7900
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
-----------------------------
WITH----------
COPIES TOTO:
JACK D. LOFTIS, JR. SAMUEL N. ALLEN
KEY ENERGY SERVICES, INC. PORTER & HEDGES, L.L.P.
TWO TOWER CENTER, 20TH FLOOR400 SOUTH RIVER ROAD 700 LOUISIANA, 35TH FLOOR
EAST BRUNSWICK, NEW JERSEY 08816HOPE, PENNSYLVANIA 18938 HOUSTON, TEXAS 77002
(732) 247-4822(215) 862-7900 (713) 226-0600
----------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
timeAs soon as
practicable after the Registration Statementthis registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / ____________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ____________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
-----------------------------
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERINGPROPOSED MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNITAGGREGATE OFFERING PRICEPRICE(1) REGISTRATION FEEFEE(3)
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- ------------------------------ ---------------------
Warrants.................................... 150,000 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------Debt Securities(2)......................
Common Stock, par value $.10 per share...... 2,173,433(1) 4.88125(2) $10,609,070 3,215(3)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------share..
Preferred Stock(2)......................
Warrants(2).............................
Guarantees of Debt Securities(4)........
======================================== ============================== =====================
Total.............................. $ 500,000,000 $ 46,000
======================================== ============================== =====================
- ----------
(1) The number of shares of common stock indicated is based on an exercise rate
of 14.4896 shares of common stock per warrant. Pursuant to Rule 416 under
the Securities Act of 1933, there are also registered an indeterminate
number of shares of common stock that may be issued upon exercise of the
warrants because of the antidilution provisions of the warrants.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(g) under457(o). The aggregate initial offering price of all
securities issued from time to time pursuant to this Registration Statement
will not exceed $500,000,000 or the equivalent thereof in foreign
currencies, foreign currency units or composite currencies.
(2) There are being registered hereunder an indeterminate principal amount of
Debt Securities, Act basedan indeterminate number of shares of Common Stock and
Preferred Stock and an indeterminate number of Warrants, including Debt
Securities, Common Stock, Preferred Stock and Warrants issuable on
conversion, redemption, repurchase, exchange or exercise of the Debt
Securities, Preferred Stock or Warrants registered hereunder or pursuant to
any applicable antidilution provisions. If any Debt Securities are issued
at an original issue discount, then the principal amount of such Debt
Securities being registered hereunder shall be such principal amount as
shall result in an aggregate initial offering price at
which the Warrants may be exercised.of up to $500,000,000.
(3) Pursuant to Rule 457(g)429, this Registration Statement contains a combined
prospectus that relates to the Registrant's Common Stock, Debt Securities,
Preferred Stock and Warrants registered on Registration Statement No.
333-67665 on Form S-3 previously filed by the Registrant on November 20,
1998 (the "Earlier Registration Statement") pursuant to which $75,522,467
remains to be issued. Fees totaling $20,439 covering the previously
registered securities were paid by the Registrant upon filing the Earlier
Registration Statement and, pursuant to Rule 457(p), will be used to offset
the registration fees for this registration statement.
(4) Pursuant to Rule 457(n), no registrationseparate fee is required for the warrants
since the shares of common stock underlying the warrants are being
registered hereby.guarantees is payable.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------================================================================================
TABLE OF ADDITIONAL REGISTRANTS
UNDER REGISTRATION STATEMENT ON FORM S-3
The following subsidiaries of Key Energy Services, Inc. are co-registrants
under this Registration Statement for the purpose of providing guarantees, if
any, of payments on debt securities registered hereunder:
JURISDICTION OF I.R.S.
NAME INCORPORATION IDENTIFICATION
---- --------------- --------------
AES Acquisition, L.P. Texas 76-0684876
Brooks Well Servicing Beneficial, L.P. Texas 46-0473384
Brooks Well Servicing, Inc. Delaware 75-2739749
Brooks Well Servicing, LLC Delaware 48-1253652
Dawson Production Acquisition Corp. Delaware 52-2022906
Dawson Production Management, Inc. Delaware 76-0525388
Dawson Production Partners, L.P. Delaware 76-0525389
Dawson Production Taylor, Inc. Delaware 52-2045563
Kalkaska Oilfield Services, Inc. Michigan 38-3083604
Key Energy Drilling Beneficial, L.P. Texas 46-0473380
Key Energy Drilling, Inc. Delaware 22-3363468
Key Energy Drilling, LLC Delaware 43-1955835
Key Energy Services - California, Inc. Delaware 22-3617958
Key Energy Services - South Texas, Inc. Delaware 22-3594553
Key Four Corners, Inc. Delaware 22-3530274
Key Rocky Mountain, Inc. Delaware 22-3530272
Misr Key Energy Services, LLC Delaware 42-1537527
Odessa Exploration Incorporated Delaware 06-1377021
Q Energy Services, L.L.C. Delaware 51-0414081
Q Oil & Gas Services, LLC Texas 76-0693508
Q Production Services, L.P. Texas 76-0678192
Q Services, Inc. Texas 76-0550630
Q.V. Services, Inc. Texas 76-0472475
Q.V. Services, LLC Delaware 33-1039536
Q.V. Services Beneficial, L.P. Texas 14-1866909
Q.V. Services of Texas, L.P. Texas 76-0516897
Quality Oil Field Services, L.P. Texas 75-2562835
Quality Tubular Services, L.P. Texas 76-0399390
Unitrak Services Holding, Inc. Texas 01-0728555
Unitrak Services, L.P. Texas 01-0728561
Unitrak Services, LLC Delaware 30-0092733
Watson Oilfield Service & Supply, Inc. Delaware 22-3582713
Well-Co Oil Service, Inc. Nevada 75-2513771
WellTech Eastern, Inc. Delaware 38-3283245
WellTech Mid-Continent Beneficial, LP Texas 46-0473376
WellTech Mid-Continent, Inc. Delaware 73-1532154
WellTech Mid-Continent, LLC Delaware 71-0874911
Yale E. Key Beneficial, LP Texas 46-0473368
Yale E. Key, Inc. Texas 75-1074929
Yale E. Key, LLC Delaware 71-0874913
SUBJECT TO COMPLETION, DATED JUNE 2, 1999.
THE INFORMATION IN THISJANUARY 31, 2003
The information in this prospectus is not complete and may be changed. We may
not offer these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and we are not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
PROSPECTUS
IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT OFFER THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SEC
IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND WE
ARE NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER
OR SALE IS NOT PERMITTED.
PROSPECTUS
[LOGO][ KEY LOGO ]
$500,000,000
KEY ENERGY SERVICES, INC.
150,000 WARRANTS
2,173,433 OF COMMON STOCK
This prospectus relates to:Common Stock
Debt Securities
Preferred Stock
Warrants
----------
We may offer and sell from time to time:
- The resale of 150,000 warrants that we previously issued;common stock;
- The issuance of common stock upon exercise of the warrants;debt securities;
- preferred stock; and
- If required by applicable law, the resale of the common stock issued
upon exercise of the warrants.
We will not receive anyprovide specific terms of the proceeds from the resale of the warrantssecurities and each offering in a
supplement to this prospectus. The prospectus supplement also may add, update or
the resale of the common stock issuable upon exercise of the warrants. We will,
however, receive proceeds from any exercise of the warrants. Each warrant, when
exercised, will entitle the holder to receive 14.4896 shares of our common stock
at an exercise price of $4.88125 per share. Therefore, if all of the warrants
are exercised, we will issue an aggregate of 2,173,433 shares of common stock
and we will receive aggregate proceeds of $10,609,070.
You should readchange information in this prospectus carefully before you invest.prospectus.
Our common stock is listed and traded on the New York Stock Exchange under
the symbol "KEG."
The warrants are not listed for trading on any exchange.
On June 1, 1999, the last reported sale price of our common stock was $3.00
per share.PLEASE READ AND CONSIDER CAREFULLY THE RISK FACTORS"RISK FACTORS" BEGINNING ON PAGE 53 IN
THIS PROSPECTUS.
Neither the SEC nor any state securities commission has approved these
securities or determined that this prospectus is accurate or complete. Any
representation to the contrary is illegal.a criminal offense.
This prospectus is dated June , 1999.____________, 2003.
YOU SHOULD RELY ONLY ON THE INFORMATION INCORPORATED BY REFERENCE OR
PROVIDED IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT. WE HAVE NOT AUTHORIZED
ANYONE ELSE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT MAKING AN
OFFER TO SELL THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
TABLE OF CONTENTS
SECTION PAGE
- ------- ----
About This Prospectus..................................................1
Key Energy Services, Inc...............................................1
Risk Factors...........................................................3
Forward-Looking Statements.............................................7
Where You Can Find More Information...........................................3
Key Energy Services, Inc......................................................4
The Offering..................................................................4
Forward-Looking Statements....................................................5
Risk Factors..................................................................5Information....................................8
Use of Proceeds...............................................................9
Selling Securityholders......................................................10
PlanProceeds.......................................................10
Ratio of Distribution.........................................................11Earnings to Fixed Charges....................................10
Description of Debt Securities........................................11
Description of Capital Stock.................................................12Stock..........................................17
Description of Warrants......................................................13Warrants...............................................18
Plan of Distribution..................................................19
Legal Matters................................................................15
Experts......................................................................15Matters.........................................................20
Experts...............................................................21
2i
WHERE YOU CAN FIND MORE INFORMATION
WeABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we have filed with
the SECSecurities and Exchange Commission under a "shelf" registration statement on Form S-3 (Reg.
No. _________)process.
Using this process, we may offer the securities this prospectus describes in one
or more offerings with respecta total initial offering price of up to this offering.$500,000,000.
This prospectus which isprovides you with a partgeneral description of the registration statement, does not contain allsecurities we may
offer. Each time we use this prospectus to offer securities, we will provide a
prospectus supplement and, if applicable, a pricing supplement. The prospectus
supplement and any pricing supplement will describe the specific terms of that
offering. The prospectus supplement and any pricing supplement may also add to,
update or change the information in this prospectus. Please carefully read this
prospectus, the prospectus supplement and any pricing supplement, in addition to
the information contained in the registration statement, including its exhibits and
schedules. For further information about us, you shoulddocuments we refer to under the registration statement, including the exhibits and schedules. Statements we
make in this prospectus about certain contracts or other documents are not
necessarily complete. When we make such statements, we refer you to the
copies of the contracts or documents that are filed as exhibits to the
registration statement, because those statements are qualified in all
respects by reference to those exhibits. The registration statement,
including exhibits and schedules, is on file at the offices of the SEC and
may be inspected without charge.
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings, including the registration
statement, are available to the public over the Internet at the SEC's web site
at http://www.sec.gov.heading "Where
You also may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C.; New York, New York; and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information about the public reference rooms.
SEC rules allow us to include some of the information required to be in the
registration statement by incorporating that information by reference to
documents we file with the SEC. That means we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is an important part of this prospectus, and
information that we file later with the SEC will automatically update and
supersede this information.
We incorporate by reference the documents listed below and any future
filings made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the
Exchange Act:
- Annual Report on Form 10-K for the year ended June 30, 1998, as
amended on October 28, 1998 and as further amended on March 31, 1999;
- Quarterly Report on Form 10-Q for the quarter ended September 30,
1998, as amended on March 31, 1999;
- Quarterly Report on Form 10-Q for the quarter ended December 31, 1998,
as amended on March 31, 1999, and as further amended April 30, 1999;
- Quarterly Report on Form 10-Q for the quarter ended March 31, 1999;
- Current Reports on Form 8-K, filed on September 28, 1998, May 6, 1999,
April 20, 1999, February 3, 1999, December 21, 1998 and Form 8-K/A
filed on October 28, 1998 and March 31, 1999;
- Our prospectus dated April 16, 1999, as filed with the SEC under
Rule 424(b) on April 16, 1999, as supplemented by the prospectus
supplement dated May 4, 1999, filed with the SEC pursuant to
Rule 424(b) on May 4, 1999;
- Proxy Statement on Schedule 14A, dated November 17, 1998; and
- The description of the our common stock contained in Form 8-A dated
March 27, 1998, including any amendments or reports that have been
filed to update the description.
You may request a copy of these filings, which we will provide to you at no
cost, by writing or telephoning us at the following address:
Key Energy Services, Inc.
Two Tower Center, 20th Floor
East Brunswick, New Jersey 08816
(732) 247-4822
3
Can Find More Information."
KEY ENERGY SERVICES, INC.
BUSINESS
WeBased on available industry data, we are the world's largest onshore, oil and gasrig-based
well service and workover
company based onservicing contractor in the number of rigs we own and available industry data.world. We provide a complete range of well
services to major oil companies and independent oil and natural gas production
companies, including:
- rig-based well maintenance, workover, completion, and recompletion
contract drilling and non-rig ancillary well services to major and
independent oil and gas companies. We believe that we have the most
comprehensive array of services of any participant in the market and have
differentiated ourselves from our competitors by our position as a single-source
provider of multiple well-head based services and products across multiple
geographic regions. In addition to maintenance and workover services, we
provide services that include:
- The completion of newly drilled wells
- the recompletion of existing wells (including horizontal recompletions)
- plugging and abandonment of wells at the end of their useful
lives;
- oilfield fluid and equipment transportation
- oilfield fluid storage and disposal servicestrucking services;
- fishing and rental toolstool services;
- wireline servicespressure pumping services; and
- air drilling
- hot oiling
- production testing services
AREAS OF OPERATION. Our principal operating regionsancillary oilfield services.
We conduct well servicing operations onshore internationally in Argentina,
Egypt and in Ontario, Canada and in the following regions of the continental
United States
includeStates:
- Gulf Coast (including South Texas, Central Gulf Coast of Texas and
South Louisiana);
- Permian Basin of West Texas and Eastern New Mexico;
- Mid-Continent (including the Gulf Coast, Oklahoma, Michigan,Anadarko, Hugoton, Arkoma and Fort Worth
Basins and the ArkLaTex region);
- Four Corners (including the San Juan, Piceance, Uinta and Paradox
Basins);
- Eastern (including the Appalachian, Basin,
theMichigan and Illinois Basins);
- Rocky Mountains (including the Ark La Tex region, the Four Corners areaDenver-Julesberg, Powder River, Wind
River, Green River and California.Williston Basins); and
- California (the San Joaquin Basin).
We are also operatea leading onshore drilling contractor and we conduct land
drilling operations in a number of major domestic producing basins, as well as
in Argentina, Egypt and have limited operations in Ontario, Canada. OPERATING ASSETS. We estimate thatIn addition to our share ofother businesses,
we also produce and develop oil and natural gas reserves in the domestic onshore well
service rig fleet is approximately 37% based on the number of rigs we ownPermian Basin
region and available industry data. Our operating assets consist of approximately 1,420
well service and workover rigs, 75 drilling rigs and 1,130 oil field trucks.
ACQUISITIONS.Texas Panhandle.
We have pursued anbuilt our leadership position in part through the acquisition strategy designed to
consolidate a highly fragmented industry that is primarily comprised of
small, regional well service companies. OverWe have also implemented a strategy,
which has also contributed to our position within the last three years, we have completed
over 50 acquisitions, forindustry, to:
1
- improve our balance sheet and reduce our level of debt;
- build strong customer relationships by offering a broad range of
equipment and services that will meet most of our customer's needs at
the wellsite;
- maximize utilization of our rig fleet by actively refurbishing our
rigs and related equipment; and
- train and professionally develop our employees, with an aggregate consideration of approximately $807
million.
____________________________emphasis on
safety.
Our principal executive offices are located at Two Tower Center, 20th
Floor, East Brunswick, New Jersey 088166 Desta Drive, Midland,
Texas 79705, and our phone number is (732) 247-4822.
THE OFFERING
This prospectus relates to:
- The resale of 150,000 warrants we previously issued in an offering of
150,000 units, consisting of $150,000,000 principal amount of our 14%
Senior Subordinated Notes due 2009 and the warrants;
- The issuance of common stock upon exercise of the warrants; and
- If required by applicable law, the resale of the common stock issued
upon exercise of the warrants.
USE OF PROCEEDS. If all of the warrants are exercised in full, we will
receive aggregate proceeds of $10,609,070. These proceeds will be used for
general corporate purposes or as otherwise described herein.
4(915) 620-0300.
2
FORWARD-LOOKING STATEMENTS
The statements made in this prospectus or in the documents we have
incorporated by reference that are not statements of historical fact, are
"forward looking statements" within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements generally can be identified by the use of
forward-looking terminology such as "may," "will," "expect," "intend,"
"estimate," "anticipate" or "believe," or similar terminology.
The forward-looking statements include discussions about business strategy
and expectations concerning market position, future operations, margins,
profitability, liquidity and capital resources, and statements concerning the
integration into our business of the operations we have acquired. Although we
believe that the expectations in such statements are reasonable, we can not give
any assurance that those expectations will be correct.
We caution you not to place undue reliance on these forward-looking
statements, which speak only as of the date of this prospectus.
Our operations are subject to several uncertainties, risks and other
influences, many of which are outside our control and any of which could
materially affect our results of operations and ultimately prove the statements
we make to be inaccurate.
Important factors that could cause actual results to differ materially from
our expectations are discussed under the heading "Risk Factors" and elsewhere in
this prospectus.
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORSRISKS DESCRIBED BELOW AND OTHER
INFORMATION IN THIS PROSPECTUS BEFORE DECIDING TO BUY THE WARRANTS.
RECENT OPERATING LOSSES
We have experienced a significant decrease in the demand for our services
during the last three quarters that has resulted in operating losses. The
proceeds of our May 1999 public offering permitted us to reduce indebtedness and
has provided us with a cash reserve which, together with cash from operations,
should permit us to maintain operations for the balance of calendar 1999 and
through 2000. However, there must be a significant improvement in the demand
for our services for us to be able to generate cash from operations sufficient
to service our indebtedness or to return to profitability. No assurance can be
given when or if there will be any such improvement in demand for our services.INVEST IN OUR SECURITIES.
OTHER RISKS ASSOCIATED WITH OILFACING OUR COMPANY OR RELATED TO EACH OFFERING MAY ALSO BE INCLUDED
IN ANY ACCOMPANYING PROSPECTUS SUPPLEMENT AND GAS INDUSTRY --WE URGE YOU TO READ CAREFULLY ANY
ACCOMPANYING PROSPECTUS SUPPLEMENT BEFORE YOU MAKE YOUR DECISION TO INVEST IN
OUR SECURITIES.
OUR BUSINESS IS DEPENDENT ON CONDITIONS IN THE OIL AND NATURAL GAS INDUSTRY,
ESPECIALLY THE PRODUCTIONCAPITAL EXPENDITURES OF OIL AND NATURAL GAS COMPANIES.
The demand for our services is directlyprimarily influenced by current and
anticipated oil and natural gas prices. Prices for oil and natural gas
historically have been extremely volatile and have reacted to changes in the
supply of and demand for oil and natural gas (including changes resulting from
the ability of the Organization of Petroleum Exporting Countries to establish
and maintain production quotas for oil prices), domestic and worldwide economic
conditions and political instability in oil producing countries. Weakness in oil
and natural gas prices (or the perception by our customers that oil and natural
gas production costs,prices will decrease) may cause lower rates and government
regulation and conditions in the worldwidelower utilization of
available well service equipment. In addition, when oil and natural gas industry,prices
are weak, or when our customers expect oil and particularly onnatural gas prices to decrease,
fewer wells are drilled, resulting in less drilling and less maintenance work
for us. Additional factors that affect demand for our services include:
- the level of development, exploration and production activity of, and
corresponding spending by, oil and natural gas companies. Most of our
operations arecompanies;
- oil and natural gas production costs;
- government regulation; and
- conditions in the United States whereworldwide oil and natural gas industry.
In addition, we anticipate that prices for oil and natural gas will
continue to be volatile and affect the demand for well servicing and related services currently is depressed in many markets becausepricing of weak oil
prices, which recently were at a twelve-year low. Continued weaknessour services.
Decreases in oil and natural gas prices may cause lower day ratescan result in a reduction in the trading
prices and lower utilization of available well
service equipment, which may influence the recoverability and carrying value of our long-term assetssecurities, even if the decreases in oil and related goodwill balances, pursuant tonatural gas
prices do not affect our business generally. However, a material decline in oil
or natural gas prices or activities over a sustained period of time could
materially adversely affect the provisionsdemand for our services and, therefore, our
results of SFAS 121 "Accounting for Impairment of Long-Lived Assetsoperations and for Long-Lived
Assets to be Disposed Of." In addition, when oil prices are weak, fewer wells
are drilled, resulting in less drilling and less maintenance work for us.financial condition.
Periods of diminished or weakened demand mayfor our services have occurred in
the past. We have experienced a decrease in the demand for our services
beginning in August 2001, and continuing through September 2002. We believe this
trend is due to an overall weakening of demand for onshore well services, which
is attributable to general uncertainty about future oil and nature gas prices
and the U.S. economy. If these conditions continue, to occur.or worsen, they could have a
material adverse effect on our financial condition and results of operations. In
light of these and other factors relating to the oil and natural gas industry,
our historical operating results may not be indicative of future performance.
AN ECONOMIC DOWNTURN MAY ADVERSELY AFFECT OUR BUSINESS.
The United States economy is currently believed to be in a recession. An
economic downturn may cause reduced demand for petroleum-based products and
natural gas. In addition, reductionsmany oil and natural gas production companies often
reduce or delay expenditures to reduce costs, which in oil prices can result inturn may cause a
reduction in the trading prices ofdemand for our securities, even if the reductionservices during these periods. According to
industry data, in oil prices does not affect our business
generally.
5
SUBSTANTIAL LEVERAGE -- OUR SUBSTANTIAL INDEBTEDNESS COULD ADVERSELY AFFECT OUR
FINANCIAL HEALTH AND PREVENT US FROM FULFILLING OUR OBLIGATIONS UNDER OUR
CURRENT INDEBTEDNESS.
We have a significant amount of indebtedness. Our substantial indebtedness
could:
- increase our vulnerability to general adverse economic and industry
conditions;
- limit our ability to fund future working capital, capital expenditures
and other general corporate requirements;
- require us to dedicate a substantial portion of our cash flow from
operations to payments on our indebtedness, thereby reducing the
availability of our cash flow to fund working capital, capital
expenditures and other general corporate purposes;
- limit our flexibility in planning for, or reacting to, changes in our
business and the industry in which we operate;
- place us at a competitive disadvantage compared to our competitors
that have less debt; and
- limit, along with the financial and other restrictive covenants in our
credit facility, among other things, our ability to borrow additional
funds. Our failure to comply with these covenants could result in an
event of default which, if not cured or waived, could have a material
adverse effect on us.
ADDITIONAL BORROWINGS AVAILABLE -- DESPITE CURRENT INDEBTEDNESS LEVELS, WE AND
OUR SUBSIDIARIES STILL MAY BE ABLE TO INCUR SUBSTANTIALLY MORE DEBT. THIS COULD
FURTHER INCREASE THE RISKS DESCRIBED ABOVE.
We and our subsidiaries may be able to incur substantial additional
indebtednessJuly 2001, there were approximately 1,293 active drilling rigs
in the future. Our credit facility currently permits additional
borrowingsUnited States. As of up to approximately $9.0 million. If new debt is added to our and
our subsidiaries' current debt levels, the related risks that we and they now
face could intensify.
ABILITY TO SERVICE DEBT -- TO SERVICE OUR INDEBTEDNESS, WE WILL REQUIRE A
SIGNIFICANT AMOUNT OF CASH. OUR ABILITY TO GENERATE CASH DEPENDS ON MANY
FACTORS BEYOND OUR CONTROL.
Our ability to make payments on and to refinance our indebtedness, and to
fund planned capital expenditures will depend on our ability to generate cash in
the future. This, to a certain extent, is subject to general economic,
financial, competitive, legislative, regulatory and other factors that are
beyond our control.
We cannot assure you that our business will generate sufficient cash flow
form operations to service our outstanding debt, that currently anticipated cost
savings and operating improvements will be realized or that future borrowings
will be available to us under our credit facility in an amount sufficient to
enable us to pay our indebtedness or to fund our other liquidity needs. We may
need to refinance all or a portion of our indebtedness on or before maturity.
We cannot assure you that we will be able to refinance any of our indebtedness,
including our credit facility, on commercially reasonable terms or at all.
RISKS ASSOCIATED WITH INTEGRATION OF ACQUISITIONS -- WE HAVE PURSUED, AND INTEND
TO CONTINUE TO PURSUE, ACQUISITIONS. OUR BUSINESS MAY BE ADVERSELY AFFECTED IF
WE CANNOT EFFECTIVELY INTEGRATE ACQUIRED OPERATIONS.
One of our business strategies has been to acquire operations and assets
that are complementary to our existing businesses. In the last 18 months,
our acquisitions have doubledSeptember 27, 2002, the number of well serviceactive drilling
rigs had been reduced to 875. The number of active drilling rigs may be
indicative of demands for services such as those we own. Our
revenues have grown from $44.7 million in fiscal 1995 to $645.6 million on a
pro forma basis in fiscal 1998, largely as a result of acquisitions.
Acquiring operations and assets involves financial, operational and legal
risks. These risks includeprovide. If the difficulty of assimilating operations,
systems and personnel of the acquired businesses and maintaining uniform
standards, controls, procedures and policies. We currently do not have an
active acquisition program, but weeconomic
environment worsens, our business may make strategic acquisitions in the
future under certain circumstances. Any future acquisitions would likely
result in an increase in expenses. In addition, competition from other
potential buyers could cause us to pay a higher price than we otherwise might
have to pay and reduce our acquisition
6be further adversely impacted.
3
opportunities. Moreover, our past success in making acquisitions and in
integrating acquired businesses does not necessarily mean we will be
successful in making acquisitions and integrating businesses in the future.
OPERATING RISKS; INSURANCE --
OUR BUSINESS COULD BE ADVERSELY AFFECTED BYINVOLVES CERTAIN OPERATING RISKS, WHICH ARE PRIMARILY SELF-INSURED,
AND OUR INSURANCE MAY NOT BE ADEQUATE TO COVER ALL LOSSES OR LIABILITIES WE
MIGHT INCUR IN OUR OPERATIONS.
Our operations are subject to many hazards. These hazards include
explosions, blow-outs,and risks, including the
following:
- blow-outs;
- reservoir damage,damage;
- loss of well control, cratering, firescontrol;
- cratering;
- fires;
- accidents resulting in serious bodily injury and the loss of life or
property;
- pollution and other damage to the environment. In addition, we are subject to seasonal risks
causedenvironment; and
- liabilities from accident or damage by adverse weather conditions such as rain and flooding, high winds and
severe winter storms. Operationsour fleet of trucks.
If these hazards occur they could result in northern regions are subject to limitations
on transporting equipment during the spring thaw. These hazards and risks could
cause the suspension of operations,
damage to or destruction of our equipment and the property of others and injury
or death to field personnel.
Like most
companies in our industry, we have experienced someWe self insure a significant portion of these incidentsliabilities. For losses in
excess of our operations. The frequency and severity of these incidents affectself-insurance limits, we maintain insurance from unrelated
commercial carriers. However, our operating
costs and our relationships with customers, employees and regulators. Any
significant increase in the frequency or severity of such incidents, or the
general level of compensation awards, could affect our ability to obtain
insurance and could have a material adverse effect on our business. We have
insurance, customary in the industry, to protect against these liabilities.
However, this insurance is capped at $50 million per incident and does not
provide coverage for all liabilities. Our insurance may not be adequate to cover all
losses or liabilities that we might incur in our operations. ToThere can be no
assurance that our insurance will adequately protect us against liability from
all of the extenthazards of our liability for any particular loss or liability exceedsbusiness. Moreover, we also are subject to the $50
million cap, we would incur costs for the excess. Moreover,risk
that we may not be able to maintain or obtain insurance of the type and amount
we desire at adequate levels or ata reasonable cost. If we were to incur a significant liability for
which we were not fully insured it could have a material adverse effect on our
financial position and results of operations.
WE ARE SUBJECT TO THE ECONOMIC, POLITICAL AND SOCIAL INSTABILITY RISKS OF DOING
BUSINESS IN CERTAIN FOREIGN COUNTRIES.
We have operations in Argentina, Egypt and Canada, and may expand our
operations into other foreign countries. As a result, we are exposed to risks of
international operations, including:
- increased governmental ownership and regulation of the economy in the
markets where we operate;
- inflation and adverse economic conditions stemming from governmental
attempts to reduce inflation, such as imposition of higher interest
rates and particular
typeswage and price controls;
- increased trade barriers, such as higher tariffs and taxes on imports
of coverage may not be availablecommodity products;
- exchange controls or other currency restrictions;
- war, civil unrest or significant political instability;
- expropriation, confiscatory taxation and nationalization of our assets
located in the future.
COMPETITION
We experience intense competition inmarkets where we operate; and
- governmental policies limiting returns to foreign investors.
The occurrence of one or more of these risks may:
4
- negatively impact our markets. Certainresults of operations;
- restrict the movement of funds;
- inhibit our competitors have greater financialability to collect receivables; and
other resources than we do.
POTENTIAL LABOR SHORTAGE --- lead to U.S. government or international sanctions.
WE HISTORICALLY HAVE EXPERIENCED A HIGH EMPLOYEE TURNOVER RATE. ANY DIFFICULTY
WE EXPERIENCE REPLACING OR ADDING WORKERS COULD ADVERSELY AFFECT OUR BUSINESS.
We historically have experienced an annual employee turnover rate of over
50%. The high turnover rate is caused by the nature of the work, which is
physically demanding and performed outdoors. As a result, workers may choose to
pursue employment in fields that offer a more desirable work environment at wage
rates that are competitive with ours. Although we currently are downsizing our
workforce, weWe cannot assure that at times of high
demand we will be able to retain, recruit and train an adequate number of
workers. Potential inability or lack of desire by workers to commute to our
facilities and job sites and competition for workers from other industries are
factors that could affect our ability to attract and retain workers. We believe
that our wage rates are competitive with the wage rates of our competitors and
other potential employers. A significant increase in the wages other employers
pay could result in a reduction in our workforce, increases in our wage rates,
or both. Either of these events could diminish our profitability and growth
potential.
GOVERNMENTAL REGULATIONWE ARE SUBJECT TO ENVIRONMENTAL, HEALTH AND ENVIRONMENTAL MATTERS -- WE MAY BECOME LIABLE FOR
PENALTIES UNDER A VARIETY OF ENVIRONMENTALSAFETY LAWS AND GOVERNMENT REGULATIONS EVEN
IF WE DO NOT CAUSE ANY ENVIRONMENTAL PROBLEMS. CERTAIN CHANGES IN ENVIRONMENTAL
LAWS AND GOVERNMENT REGULATIONS COULD ADVERSELY AFFECT OUR BUSINESS.THAT
EXPOSE US TO POTENTIAL LIABILITY.
Our operations are subject toregulated under a number of foreign, federal, state and
local laws that govern, among other things, the handling, storage and disposal
of waste materials, some of which are classified as hazardous substances, and
the discharge of hazardous materials into the environment. Our operations are
subject to stringent regulations relating to protection of the environment natural resources, health
and
safety, waste management and transportation of waste and other materials
including hydrocarbons and chemicals. Our fluid services include injection
operations that pose certain risks of environmental liability. Althoughhandling. In addition to potential liability if we monitor the injection process, the possibility exists of leakageshould fail to surface or
subsurface soils or groundwater, which could result in cancellation of well
operations, fines and penalties, expenditures for remediation, andcomply,
these regulations may expose us to liability for property damages and personal injuries.noncompliance of other parties,
without regard to whether we were negligent. Sanctions for noncompliance with
applicable environmental laws and regulations also may include administrative, civil
and criminal penalties, revocation of permits and corrective action orders.
In addition, our operationsFurthermore, we may be subject to potential liabilityliable for costs for environmental clean upclean-up at currently
or previously owned or operated properties or off-site locations where we sent,
disposed of, or arranged for disposal of hazardous materials. A party can be liable for environmental
7
damage without regard to its negligence or fault. Therefore, we could incur
liability based on the conduct of others, or for acts that were lawful at the
time we performed them. Environmental laws have become more stringent over
the years. The modification or interpretation ofCompliance with
existing laws or regulations, the adoption of new laws or regulations or the
more vigorous enforcement of environmental laws or regulations could curtail exploratoryhave a
material adverse effect on our operations by increasing our expenses and
limiting our future business opportunities.
WE HAVE A SIGNIFICANT AMOUNT OF INDEBTEDNESS AND COULD INCUR ADDITIONAL
INDEBTEDNESS, WHICH COULD MATERIALLY ADVERSELY AFFECT OUR FINANCIAL CONDITION,
RESULTS OF OPERATIONS AND BUSINESS PROSPECTS AND PREVENT US FROM FULFILLING OUR
OBLIGATIONS UNDER OUR OUTSTANDING INDEBTEDNESS.
We had approximately $504.5 million of long-term indebtedness and capital
lease obligations outstanding at September 30, 2002. We are permitted under our
senior credit facility and the indentures governing our public debt securities
to incur additional debt, subject to certain limitations. If we incur additional
debt, our increased leverage could, for example:
- make it more difficult for us to satisfy our obligations under our
public debt securities or development drillingother indebtedness and, if we fail to comply
with the requirements of the other indebtedness, that failure could
result in an event of default on our public debt securities or such
other indebtedness;
- require us to dedicate a substantial portion of our cash flow from
operations to required payments on indebtedness, thereby reducing the
availability of cash flow for oilworking capital, capital expenditures
and gasother general business activities;
- limit our ability to obtain additional financing in the future for
working capital, capital expenditures and other general corporate
activities;
5
- limit our flexibility in planning for, or reacting to, changes in our
business and the industry in which we operate;
- detract from our ability to successfully withstand a downturn in our
business or the economy generally; and
- place us at a competitive disadvantage against less leveraged
competitors.
If new debt is added to our and our subsidiaries' current debt levels, the
related risks that we and they now face could increase.
WE MAY NOT BE ABLE TO GENERATE SIGNIFICANT CASH FLOW TO MEET OUR DEBT SERVICE
OBLIGATIONS.
Our ability to make payments on and to refinance our indebtedness, and to
fund planned capital expenditures, will depend on our ability to generate cash
in the future. This, to a certain extent, is subject to general economic,
financial, competitive, legislative, regulatory and other factors that are
beyond our control.
We cannot assure you that our business will generate sufficient cash flow
from operations to service our outstanding indebtedness, that future borrowings
will be available to us under our senior credit facility in an amount sufficient
to enable us to pay our indebtedness or to fund our other liquidity needs. We
may need to refinance all or a portion of our existing indebtedness on or before
maturity. We cannot assure you that we will be able to refinance any of our
indebtedness, including our senior credit facility, on commercially reasonable
terms or at all.
OUR DEBT INSTRUMENTS IMPOSE RESTRICTIONS ON US THAT MAY AFFECT OUR ABILITY TO
SUCCESSFULLY OPERATE OUR BUSINESS.
Our senior credit facility and the terms of the indentures for our public
debt securities limit our ability to take various actions, such as:
- incurring additional indebtedness;
- paying dividends;
- repurchasing junior indebtedness;
- making investments;
- entering into transactions with affiliates;
- merging or consolidating with other entities; and
- selling all or substantially all of our assets.
In addition, our senior CREDIT FACILITY requires us to maintain certain
financial covenant ratios and satisfy certain financial condition tests, several
of which become more restrictive over time and may require us to take action to
reduce our debt or take some other action in order to comply with them. These
restrictions also could limit well servicing
opportunities.
FOREIGN INVESTMENTS -- OUR FOREIGN BUSINESS EXPOSES USour ability to obtain future financings, make
needed capital expenditures, withstand a downturn in our business or the economy
in general, or otherwise conduct necessary corporate activities. We also may be
prevented from taking advantage of business opportunities that arise because of
the limitations imposed on us by the restrictive covenants under our senior
credit facility and the indentures.
WE HAVE PURSUED AND CONTINUE TO RISKS RELATING TO
INCREASED REGULATION AND POLITICAL OR ECONOMIC INSTABILITY WITHIN CERTAIN
FOREIGN COUNTRIES.
We have investments and may make additional investments in Argentina and
Canada. We may make other investments outside the United States. Foreign
investments are subject to risks relating to the political, social and economic
structures of those countries. Risks may include fluctuations in currency
valuation, expropriation, confiscatory taxation and nationalization, currency
conversion restrictions, increased regulation and approval requirements and
governmental policies limiting returns to foreign investors. In fiscal 1998,
our foreign operations accounted for less than 10% of our revenues.
DEPENDENCE ON KEY PERSONNEL --PURSUE STRATEGIC ACQUISITIONS. OUR BUSINESS MAY
BE ADVERSELY AFFECTED IF WE LOSE
OUR EXECUTIVE OFFICERS.
We depend upon the performanceCANNOT EFFECTIVELY INTEGRATE ACQUIRED OPERATIONS.
A component of our executive officers. We have entered
into employment agreements withstrategy includes acquiring complementary businesses.
Acquisitions involve a number of risks and challenges including:
6
- our ability to integrate acquired operations;
- potential loss of key employees and customers of the acquired
companies; and
- an increase in our expenses and working capital requirements.
Any of these executive officers that contain
non-compete provisions. Notwithstanding these agreements, we may not be able to
retain our executive officers and may not be able to enforce the non-compete
provisions in the employment agreements. We maintain key person life insurance
on the lives of certain of our offices, including our chief executive officer.
This insurance does not mean that the death or disability of one or more of them
would notfactors could adversely affect our operations.
YEAR 2000 ISSUE -- THE YEAR 2000 PROBLEM MAY ADVERSELY AFFECT OUR BUSINESS IF
OUR SUPPLIERS AND CUSTOMERS DO NOT ADEQUATELY ADDRESS THEIR YEAR 2000 CONCERNS.
We currently are implementingability to achieve
anticipated levels of earnings and cash flow from acquisitions or realize other
anticipated benefits. Furthermore, competition from other potential buyers could
reduce our acquisition opportunities or cause us to pay a new integrated management information
system along with updated hardware that will replace most of our current
systems. The new management information system will be year 2000 compliant for
our systems as well as for those of our past and future acquisitions.
Implementation began in July 1998 and is scheduled to be substantially completed
by June 1999. Our new management information systems do not cover our Argentine
operations, buthigher price than we
have established a separate system, which is year 2000
compliant, that will be implemented in late 1999.
We have not yet developed a plan to formally communicate with our
significant suppliers and customers to determine if those parties have
appropriate plans to remedy year 2000 issues when their systems interface with
our systems or otherwise have an impact on our operations. We do not anticipate
that this will have a material impact on our operations. However, there can be
no assurance that the systems of other companies on which we rely will be timely
converted, or that failure to successfully convert by another company, or
conversion that is incompatible with our systems, would not have an impact on
our operations. We currently do not have a contingency plan to cover any
unforeseen problems encountered that relate to the year 2000, but we intend to
produce one before the end of the current fiscal year.
The cost of the new management information system is not anticipated to
have a material impact on our business. Although we are not aware of any
material operational issues or costs associated with preparing our internal
systems for the year 2000, there can be no assurance that there will not be a
delay in, or increased costs associated with, the implementation of the
necessary systems and changes to address the year 2000 issues.
If we are unable to adequately address the year 2000 issue in a timely
manner, the worst case scenario would be that we could suffer significant
computer downtime, and billings, payments and collections would revert to manual
accounting records. In addition, the inability of our principal suppliers and
major customers to be year 2000 compliant could result in delays in product
deliveries from those suppliers and collection of accounts receivable.
8
SHARES ELIGIBLE FOR FUTURE SALE -- THE MARKET PRICE OF OUR COMMON STOCK COULD BE
ADVERSELY AFFECTED BY SALES OF SUBSTANTIAL AMOUNTS OF COMMON STOCK IN THE PUBLIC
MARKET OR THE PERCEPTION THAT SUCH SALES COULD OCCUR.
As of May 12, 1999, we had 77,302,401 shares of common stock outstanding.
Approximately 16.2 million additional shares of common stock were issuable upon
the exercise of outstanding options, warrants and convertible securities. All
of these shares will be registered under the Securities Act or are subject to
registration rights agreements. The market price of our common stock could be
adversely affected by sales of substantial amounts of common stock in the public
market or the perception that such sales could occur.
VOLATILITY --might pay.
THE TRADING PRICE OF OUR SECURITIES COULD BE SUBJECT TO SIGNIFICANT
FLUCTUATIONS.
The trading price of our common stock has been volatile. Factors such as
announcements of fluctuations in our or our competitors' operating results and
market conditions for oil and gas related stocks in general could have a
significant impact on the future trading prices of our securities. In
particular, the trading price of the common stock of many oil and gas companies
has experienced extreme price and volume fluctuations, which have at times been
unrelated to the operating performance of suchthe companies whose stocks were
affected. TheIn addition, the trading prices of our securities could be subject to
significant fluctuations in response to variations in our prospects and
operating results, which may in turn be affected by weakness in oil prices,
changes in interest rates and other factors. In addition, our May 1999 public offering of
58,508,772 shares of our common stock resulted in an approximate 317% increase
in the number of shares of our common stock issued and outstanding. The
historical volume of trading and historical trading price of our common stock
has been based on a substantially lower number of outstanding shares of our
common stock than were outstanding after the offering. Therefore, our prior
trading volume and prior market price may not be indicative of our future
trading volume and market price. There can be no assurance that
these factors will not have an adverse effect on the trading prices of our
securities.
SINCE ARTHUR ANDERSEN LLP ACTED AS THE INDEPENDENT AUDITOR FOR Q SERVICES, INC.,
YOUR ABILITY TO SEEK REMEDIES AGAINST, OR RECOVER FROM, THEM RELATED TO THEIR
WORK WILL BE LIMITED.
On July 19, 2002, we acquired Q Services. The aggregate value, including
assumed debt, for Q Services was approximately $221.0 million. The consolidated
financial statements of Q Services as of December 31, 2001 and for each of the
three years in the period ended December 31, 2001 incorporated by reference
herein were audited by Arthur Andersen LLP. After reasonable efforts, we have
not been able to obtain Arthur Andersen's consent to the incorporation by
reference of its audit report dated April 17, 2002 into this prospectus.
Under Rule 437a of the Securities Act, we can incorporate by reference Q
Services' financial statements into the registration statement, which includes
this prospectus, without Arthur Andersen's written consent. Accordingly, Arthur
Andersen, or its successors, is not subject to the liability provisions of
Section 11 of the Securities Act for its reports on Q Services' consolidated
financial statements because Arthur Andersen did not consent to being named as
having prepared or certified those financial statements within the meanings of
Section 7 and 11 of the Securities Act. Furthermore, your ability, if any, to
recover damages from Arthur Andersen is further limited as a result of Arthur
Andersen's discontinuation of operations.
FORWARD-LOOKING STATEMENTS
The statements made in this prospectus or in the documents we have
incorporated by reference that are not statements of historical fact are
"forward-looking statements" within the meaning of Section 27A of the Securities
Act and Section 21E of the Securities Exchange Act. Forward-looking statements
generally can be identified by the use of words such as "may," "will," "expect,"
"intend," "estimate," "anticipate," "believe," or similar expressions.
Although we believe that the expectations in our forward-looking statements
are reasonable, we cannot give any assurance that those expectations will be
correct. Our operations are subject to numerous uncertainties, risks and other
influences, many of which are outside our control and any of which could
materially affect our results of operations and ultimately prove the statements
we make to be inaccurate. We caution you not to place undue reliance on these
forward-looking statements, which speak only as of the date of this prospectus.
Future events and actual results may differ materially from the results set
forth in or implied in the forward-looking statements. Factors that might cause
such a difference include:
- fluctuations in world-wide prices and demand for oil and natural gas;
7
- fluctuations in level of oil and natural gas exploration and
development activities;
- fluctuations in the demand for well servicing, contract drilling and
ancillary oilfield services;
- the existence of competitors, technological changes and developments
in the industry;
- the existence of operating risks inherent in the well servicing,
contract drilling and ancillary oilfield services industries; and
- general economic conditions, the existence of regulatory
uncertainties, and the possibility of political instability in any of
the countries in which we do business, in addition to other matters
discussed herein.
Other factors that could cause actual results to differ materially from our
expectations are discussed under the heading "Risk Factors."
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form S-3 (registration no.
333-_____) with the SEC with respect to the securities we are offering. This
prospectus is a part of that registration statement, however, it does not
contain all the information contained in the registration statement, including
its exhibits and schedules. You should refer to the registration statement,
including the exhibits and schedules, for further information about us and the
securities we are offering. Statements we make in this prospectus about certain
contracts or other documents are not necessarily complete. When we make those
statements, we refer you to the copies of the contracts or documents that are
filed as exhibits to the registration statement, because those statements are
qualified in all respects by reference to those exhibits. The registration
statement, including exhibits and schedules, is on file at the offices of the
SEC and may be inspected without charge.
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. Our filings, including the registration statement, are
available to the public over the Internet at the SEC's web site at
http://www.sec.gov. You also may read and copy any document we file at the SEC's
public reference rooms in Washington, D. C. and Chicago, Illinois. Please call
the SEC at 1-800-SEC-0330 for further information about the public reference
rooms.
SEC rules allow us to "incorporate by reference" in this prospectus the
information we file with the SEC, which means we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered part of this prospectus from the date we
file that document. Any reports filed by us with the SEC after the date of this
prospectus and before we sell all of the securities offered through this
prospectus will automatically update and, where applicable, supersede any
information contained in this prospectus or incorporated by reference in this
prospectus. We incorporate by reference the documents listed below and any
future filings made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of
the Securities Exchange Act until we sell all of the securities covered by this
prospectus:
- Annual Report on Form 10-K for the year ended June 30, 2002, as
amended;
- Quarterly Report on Form 10-Q for the quarter ended September 30,
2002;
- Current Reports on Form 8-K filed on July 16, 2002, August 2, 2002,
December 31, 2002 and January 31, 2003, and Form 8-K/A filed on
October 2, 2002; and
- The description of our common stock contained in the registration
statement on Form 8-A dated March 27, 1998 and 8-A/A dated December 9,
2002, including any future amendments or reports that have been filed
to update the description.
8
You may request a copy of these filings, which we will provide to you at no
cost, by writing or telephoning us at the following address and telephone
number:
Key Energy Services, Inc.
400 South River Road
New Hope, Pennsylvania 18938
Attn: General Counsel
(215) 862-7900
9
USE OF PROCEEDS
WeUnless we inform you otherwise in the prospectus supplement, we will not receive any ofuse
the net proceeds from the resalesale of the warrants or
the resale of the common stock issued upon exercise of the warrants. We will,
however, receive the proceeds from the exercise of the warrants. If all of the
warrants are exercised, we would receive aggregate proceeds of approximately
$10.61 million. The proceeds from the exercise of warrants will be usedoffered securities for general corporate
purposes. These purposes which may include refinancings of indebtedness,acquisitions, working capital, capital
expenditures, acquisitionsrepayment and refinancing of indebtedness and repurchases and
redemptions of securities. 9Pending any specific application, we may initially
invest those funds in short-term marketable securities or apply them to the
reduction of short-term indebtedness.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of our earnings to our fixed charges for each of the periods
indicated is as follows:
FISCAL YEAR ENDED JUNE 30, THREE MONTHS
- ------------------------------------------------------------------------------- ENDED
1998 1999 2000 2001 2002 SEPTEMBER 30, 2002
---- ---- ---- ---- ---- ------------------
2.61 -- -- 2.67 2.35 --
For these ratios, earnings consist of income from continuing operations
before income taxes and fixed charges. Fixed charges consist of interest
expenses, amortization of debt issuance expenses and the portions of rentals and
lease obligations representative of the interest factor. For the years ending
June 30, 1999 and 2000, and the three months ended September 30, 2002, earnings
were insufficient to cover fixed charges by $78.9 million, $28.0 million, and
$4.8 million, respectively. There was no preferred stock outstanding for any of
the periods shown above.
10
SELLING SECURITYHOLDERSDESCRIPTION OF DEBT SECURITIES
The debt securities will be:
- our direct unsecured or secured general obligations;
- either senior debt securities or subordinated debt securities; and
- issued under one or more separate indentures.
Senior debt securities will be issued under a senior indenture and
subordinated debt securities will be issued under a subordinated indenture.
Senior debt securities and subordinated debt securities may be guaranteed by
certain of our subsidiaries. The debt securities issued may be convertible into
shares of our common stock, preferred stock or warrants.
We have summarized selected provisions of the Indentures below. The summary
is not complete. The forms of the Indentures have been filed as exhibits to the
registration statement, and you should read the Indentures for provisions that
may be important to you. In the summary, we have included references to section
numbers of the Indentures so that you can easily locate those provisions.
Capitalized terms used in this summary have the meanings used in the Indentures.
GENERAL
We are a holding company that conducts substantially all operations through
our subsidiaries. Holders of debt securities generally will have a junior
position to claims of creditors of our subsidiaries including trade creditors,
debt holders, secured creditors, taxing authorities, guaranty holders and any
preferred stockholders. At September 30, 2002, we did not have any outstanding
preferred stock and we and our subsidiaries had approximately $504.5 million of
outstanding long-term debt and capital lease obligations.
- The Indentures do not limit the aggregate principal amount of debt
securities that can be issued thereunder. (Section 301)
- Debt securities may be issued in one or more series, each in an
aggregate principal amount we authorize before issuance, and may be in
any currency or currency unit that we may designate. (Section 301)
- Debt securities of a series may be issued in registered or global
form. (Sections 201 and 203)
- The Indentures do not limit the amount of other unsecured debt or
securities that we can issue.
- The senior debt securities will rank equally with all of our other
senior debt.
- The subordinated debt securities will have a junior position to all of
our senior debt. (Section 1301)
A prospectus supplement and a supplemental indenture relating to any series
of debt securities being offered will include specific terms relating to the
offering. These terms will include some or all of the following:
- the title and type of debt securities being offered;
- the total principal amount of debt securities being offered;
- the dates on which the principal of, and premium, if any, on the
offered debt securities is payable;
- the interest rate;
- the date from which interest will accrue;
11
- the interest payment dates;
- any optional redemption periods;
- any sinking fund or other provisions that would obligate us to
repurchase or otherwise redeem the debt securities;
- whether the debt securities will be convertible into shares of common
stock or exchangeable for other of our securities, and if so, the
terms of conversion or exchange;
- events causing acceleration of maturity;
- any provisions granting special rights to holders when specified
events occur;
- any changes to or additional events of default or covenants;
- any special tax implications of the debt securities; and
- any other terms of the debt securities. (Section 301)
GUARANTEES
- Debt securities may be guaranteed by some, but not all, of our
subsidiaries, including subsidiaries that we may acquire in the
future. In the event of a bankruptcy, liquidation or reorganization of
any of the non-guarantor subsidiaries, the non-guarantor subsidiaries
will pay the holders of their debt and their trade creditors before
they will be able to distribute any of their assets to us.
- The guarantees will be general obligations of each guarantor.
- The guarantors will jointly and severally guarantee any of our
guaranteed debt securities.
- The obligations of each guarantor under any guarantee will be limited
as necessary to prevent that guarantee from constituting a fraudulent
conveyance under applicable law.
- A guarantor may not consolidate with or merge into another company
unless the surviving company assumes all of the obligations of that
guarantor pursuant to a supplemental indenture satisfactory to the
trustee, and only if immediately after giving effect to the
transaction, no default or event of default would exist.
DENOMINATIONS
The debt securities will be issued in denominations of $1,000 or multiples
thereof. (Section 302)
SUBORDINATION
Under the subordinated indenture, payment of the principal, interest and
any premium on the subordinated debt securities generally will be subordinated
and junior in right of payment to the prior payment in full of all senior debt.
The subordinated indenture provides that no payment of principal, interest and
or premium on the subordinated debt securities may be made in the event:
- of any insolvency, bankruptcy or similar proceeding involving us or
our property (Section 1303); or
- we fail to pay the principal, interest, any premium or any other
amounts on any senior debt when due. (Sections 1301 and 1302)
12
The subordinated indenture will not limit the amount of senior debt that we
may incur.
Senior Indebtedness is defined to include all our secured and unsecured
direct or contingent liabilities and obligations, including our guarantees for
money we borrow, which is not expressed to be subordinate to or junior in right
of, payment to any of our other indebtedness, but does not include our
intercompany indebtedness, our trade payables and our tax liabilities.
EVENTS OF DEFAULT
The following table sets forthare Events of Default under each Indenture:
- failure to pay principal or any premium on any debt security when due;
- failure to pay any interest on any debt security when due, continued
for 30 days;
- failure to deposit any mandatory sinking fund payment when due,
continued for 30 days;
- failure to perform or breach of any covenant or warranty in the
Indenture that continues for 90 days after written notice;
- certain informationevents of bankruptcy, insolvency or reorganization; and
- any other event of default as may be specified in the supplemental
indenture with respect to each
selling securityholderdebt securities of such series.
(Section 501)
An Event of Default for whom we are registering warrants and common stock
issuable upon exercisea particular series of debt securities does not
necessarily constitute an Event of Default for any other series of debt
securities. The Trustee may withhold notice to the holders of debt securities of
any default (except in the payment of principal or interest) if the Trustee in
good faith determines the withholding of notice to be in the best interest of
the warrants for resale. Beneficial ownershipholders. (Section 602)
ACCELERATION OF DEBT UPON AN EVENT OF DEFAULT
If an Event of Default occurs either the Trustee or the holders of at least
25% in principal amount of the warrantsoutstanding debt securities may declare the
principal amount of all the debt securities of the applicable series to be due
and payable immediately. (Section 502) If this happens, subject to certain
conditions, the holders of a majority of the outstanding principal amount of a
series of debt securities can void the declaration. These conditions include the
requirement that we have paid or deposited with the Trustee a sum sufficient to
pay all overdue principal and interest payments on the series of debt securities
subject to the default. (Section 502)
If an Event of Default occurs due to certain events of bankruptcy,
insolvency or reorganization, the principal amount of the outstanding debt
securities of all series will become immediately due and payable without any
declaration or other act on the part of either Trustee or any holder. (Section
502)
Depending on the terms of our indebtedness, an Event of Default under an
Indenture may cause a cross default on our other indebtedness.
DUTIES OF TRUSTEE
Other than its duties in the case of default, the Trustee is not obligated
to exercise any of its rights or powers under either Indenture at the request,
order or direction of any holders unless the holders offer the Trustee
reasonable indemnity. (Section 603)
If the holders provide reasonable indemnification, the holders of a
majority of principal amount of any series of debt securities may direct the
time, method and place of conducting any proceeding or any remedy available to
the Trustee, or exercising any power conferred upon the Trustee for any series
of debt securities. (Section 512)
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COVENANTS
Under the Indentures, we will:
- pay the principal, interest and premium, if any, on the debt
securities when due;
- maintain a place of payment;
- deliver a report to the Trustee at the end of each fiscal year
reviewing our obligations under the Indentures; and
- deposit sufficient funds with any payment agent on or before the due
date for the payment of any principal, interest or premium, if any.
(Sections 1001, 1002, 1003 and 1005)
MODIFICATION OF INDENTURES
Each Indenture provides that we and the Trustee may, without the consent of
any holders of debt securities, enter into supplemental debt indentures for the
purposes, among other things, of:
- adding to our covenants;
- adding additional events of default;
- changing or eliminating any provisions of the indentures so long as
there are no holders entitled to the benefit of the provisions;
- establishing the form or terms of any series of debt securities; or
- curing ambiguities, defects or inconsistencies in the Indentures or
making any other provisions with respect to matters or questions
arising under the Indentures.
With specific exceptions, the Indentures or the rights of the holders of
the debt securities may be modified by us and the Trustee with the consent of
the holders of a majority of the outstanding principal amount of the debt
securities of each series affected by the selling securityholders aftermodification, but no modification may
be made without the consent of the holders of each outstanding debt security
affected which would:
- change the maturity of any payment of principal of, or any premium on,
or any installment of interest on any debt security;
- change the terms of any sinking fund with respect to any debt
security;
- reduce the principal amount of, or the interest or any premium on, any
debt security upon redemption or repayment at the option of the
holder;
- change any place of payment where, or the currency in which, any debt
security or any premium or interest is payable;
- impair the right to sue for the enforcement of any payment on or with
respect to any debt security; or
- reduce the percentage in principal amount of outstanding debt
securities of any series required to consent to any supplemental debt
indenture, any waiver of compliance with provisions the Indenture or
specific defaults and their consequences provided for in the
Indentures, or otherwise modify the sections in the Indentures
relating to these consents.
14
CONSOLIDATION, MERGER AND SALE OF ASSETS
Each Indenture generally permits a consolidation or merger between us and
another company. They also permit us to sell all or substantially all of our
property and assets. If this offeringhappens, the remaining or acquiring company will
dependassume all of our responsibilities and liabilities under the Indentures,
including the payment of all amounts due on the numberdebt securities and performance
of warrants soldthe covenants in the Indentures. (Sections 801 and 802)
We will only consolidate or merge with or into another company or sell all
or substantially all of our assets according to the terms and conditions of the
Indentures. The remaining or acquiring company will assume our obligations under
the Indentures with the same effect as if it had been an original party to the
Indentures and we shall be released from all our liabilities and obligations
under either Indenture and any debt securities. (Sections 801 and 802)
Thereafter, the successor company may exercise our rights and powers under
either Indenture, in our name or in its own name. Any act or proceeding required
or permitted to be done by each selling securityholder; however,our board of directors or any of our officers may be
done by the table
assumesboard or officers of the successor company.
DISCHARGE AND DEFEASANCE
We will be discharged from all obligations under the applicable indenture
with respect to any series of debt securities, except for surviving obligations
to register the transfer or exchange of the debt securities, if:
- all debt securities of the series previously authenticated and
delivered under the relevant indenture have been delivered to the
indenture trustee for cancellation; or
- all debt securities of that all warrants ownedseries have become due and payable or will
become due and payable, at maturity or by redemption, and we deposit
with the applicable trustee funds or government securities sufficient
to make payments on the debt securities of that series on the dates
those payments are due.
To exercise our right to be discharged, we must deliver the following to
the applicable trustee:
- an opinion of counsel to the effect that the holders will not
recognize income, gain or loss for federal income tax purposes as a
beneficial owner are offered and resold
pursuant to this prospectus. This prospectus also covers the resaleresult of common
stock issued upon the exercise of such option and will be subject to U.S.
federal income tax on the warrants. However, sincesame; and
- an officers' certificate stating that all conditions precedent to the
distribution
of common stock upon exercisesatisfaction and discharge of the warrants also is covered by this
prospectus,applicable indenture have been
complied with.
In addition to our right of discharge described above, we do not anticipate that this prospectusmay deposit with
the applicable trustee funds or government securities sufficient to make
payments on the debt securities of a series on the dates those payments are due
and payable, then, at our option, either of the following will occur:
- we will be required for
resales of the common stock. Therefore, the table set forth below does not
include information concerning potential resales of the common stock issuable
upon exercise of the warrants. Other than the selling securityholders'
ownership ofdischarged from our securities, no material relationship exists between any of the
selling securityholders and us, nor have any such relationships existed within
the past three years.
BENEFICIAL OWNERSHIP OF
WARRANTS BEFORE OFFERING
--------------------------
NUMBER OF
WARRANTS % OF
NAME OWNED CLASS
- --------- ---------- -----------
The Bank of New York............................................. 35,000 23.33%
Bear, Stearns Securities Corp.................................... 6,000 4.00%
Brown Brothers Harriman & Co..................................... 2,750 1.83%
Chase Manhattan Bank............................................. 7,000 4.67%
Firstar Trust Company............................................ 4,000 2.67%
Investors Bank & Trust/M.F. Custody.............................. 30,250 20.17%
The Northern Trust Company....................................... 1,600 1.07%
State Street Bank and Trust Company.............................. 33,025 22.02%
UMB Bank, National Association................................... 6,500 4.33%
Bankers Trust Company............................................ 3,175 2.12%
Boston Safe Deposit and Trust Company............................ 3,900 2.60%
Bankers Trust Company/First Union Safekeeping.................... 5,000 3.33%
Citibank, N.A.................................................... 3,900 2.60%
FUNB-Philadelphia Main........................................... 1,150 *
Lehman Brothers, Inc............................................. 4,500 3.00%
FNC Bank, National Association................................... 2,000 1.33%
Swiss American Securities Inc.................................... 250 *
---------- -----------
Total..................................................... 150,000 100%
---------- -----------
---------- -----------
- ---------------------
The information in the tableobligations with respect to selling securityholders who
arethe debt
securities of that series ("legal defeasance"); or
- we will no longer have any obligation to comply with the restrictive
covenants under the applicable indenture, and the related events of
default will no longer apply to us, but some of our other obligations
under the indenture and the debt securities of that series, including
our obligation to make payments on those debt securities, will survive
("covenant defeasance").
If we defease a series of debt securities, the holders of warrants has been prepared based upon information furnishedthe debt
securities of the series affected will not be entitled to the company by or on behalfbenefits of the
selling securityholders.
10
PLAN OF DISTRIBUTION
This prospectus relatesapplicable indenture, except for our obligations to:
- The resaleregister the transfer or exchange of 150,000 warrants held bydebt securities;
- replace stolen, lost or mutilated debt securities; and
15
- maintain paying agencies and hold moneys for payment in trust.
Unless we inform you otherwise in the selling securityholders;
- Our issuance of common stock upon exercise of the warrants; and
- If required by applicable law, the resale of the common stock issued
upon exercise of the warrants.
Although this prospectus relates to resales of common stock issued upon
exercise of warrants,supplement, we do not anticipate that a prospectus will be
required to be delivered with respectdeliver to those sales because the distributionapplicable trustee an opinion of our common
stock uponcounsel that the
exercisedeposit and related defeasance would not cause the holders of the warrants also is covereddebt
securities to recognize income, gain or loss for U.S. federal income tax
purposes. If we elect legal defeasance, that opinion of counsel must be based on
a ruling from the U.S. Internal Revenue Service or a change in law to that
effect.
PAYMENT AND PAYING AGENTS
Principal, interest and premium, if any, on fully registered securities
will be paid at designated places. Payment will be made by this prospectus.
Wecheck mailed to the
person in whose name the debt securities are registered on the day specified in
the Indentures or any prospectus supplement. Payments in other forms will bear all costs, expensesbe
paid at a place designated by us and feesspecified in connection with registrationa prospectus supplement.
(Section 307)
Fully registered securities may be transferred or exchanged at the
corporate trust office of the Trustee or at any other office or agency
maintained by us for such purposes without the payment of any service charge
except for any tax or governmental charge. (Section 1002)
GLOBAL SECURITIES
The debt securities covered by this prospectus. Brokerage commissions and similar
selling expenses, if any, attributable to the resale of warrants or common stock
issued upon the exercise of warrants will be borne by the selling
securityholders.
Sales of warrants or common stock issued upon exercise of the warrantsa series may be effected by selling securityholders from time to time in one or more types of
transactions (which may include block transactions) in the over-the-counter
market, in negotiated transactions, through put or call options transactions
relating to the securityholders, or a combination of such methods of sale, at
market prices prevailing at the time of sale, or at negotiated prices. Such
transactions may or may not involve brokers or dealers. The selling
securityholders have advised us that they have not entered into any agreements,
understandings or arrangements with any underwriters or broker-dealers regarding
the sale of their warrants or common stock issued upon exercise of the warrants,
nor is there an underwriter or coordinating broker acting in connection with the
proposed sale of warrants or common stock issued upon exercise of the warrants
by the selling securityholders.
The selling securityholders may effect such transactions by selling
warrants or common stock issued upon exercise of the warrants directly to
purchasers or to or through broker-dealers, which may act as agents or
principals. Such broker-dealers may receive compensation in the form of discounts, concessions,one or commissions from the selling securityholders and/more
global certificates that will be deposited with a depositary or the purchasers of warrants for whom such broker-dealersits nominee
identified in a prospectus supplement. We may act as agentsissue global debt securities in
either temporary or to
whom they sell as principal, or both which compensation as to a particular
broker-dealer might bepermanent form. We will describe in excess of customary commissions.
The selling securityholders and any broker-dealers that act in connection
with the sale of warrants might be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act, and any commissions received by
such broker-dealers and any profit on the resale of the warrants or common
stock issued upon exercise of the warrants sold by them while acting as
principals might be deemed to be underwriting discounts or commissions under the
Securities Act. The selling securityholders may agree to indemnify any agent
dealer or broker-dealer that participates in transactions involving sales of the
warrants or common stock issued upon exercise of the warrants against certain
liabilities, including liabilities arising under the Securities Act.
Because selling securityholders may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act, the selling securityholders
may be subject to the prospectus
delivery requirementssupplement the terms of any depositary arrangement and the Securities Act.
Selling securityholders also may resell all or a portionrights and
limitations of the warrants or
common stock issued upon exerciseowners of the warrantsbeneficial interests in open market transactions in
reliance upon Rule 144 under the Securities Act, provided they meet the criteria
and conform to the requirements of such rule.
After we are notified by a selling securityholder that any material
arrangement has been entered into with a broker-dealer for the sale of warrants
or common stock issued upon the exercise of warrants through a block trade,
special offering, exchange distribution or secondary distribution or a purchase
by a broker or dealer, a supplement to this prospectus will be filed, if
required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the
name of each such selling securityholder and of the participating
broker-dealer(s), (ii) the type and number of securities involved, (iii) the
price at which such securities were sold, (iv) the commissions paid or discounts
or concessions allowed to such broker-dealer(s), where applicable, (v) that such
broker-
11global debt security.
16
dealer(s) did not conduct any investigations to verify the information set out
or incorporated by reference in this prospectus and (vi) other facts material
to the transaction.
DESCRIPTION OF CAPITAL STOCK
As of May 12, 1999,September 30, 2002, our authorized capital stock was 100,000,000200,000,000
shares, all of which may be issued as eithershares of common stock and up to
15,169,320 of which may be issued as shares of preferred stock or common stock. As of that
date, we had 77,302,401128,108,584 shares of common stock outstanding and no shares of
preferred stock outstanding.
COMMON STOCK
LISTING. Our common stock is listed on the New York Stock Exchange under
the symbol "KEG." Any additional common stock we issue will also be listed on
the NYSE.
DIVIDENDS. Common stockholders may receive dividends when declared by the
board of directors. Dividends may be paid in cash, stock or another form.
However, certain of our existing debt agreements contain covenants that
currently restrict us from paying dividends. Additionally, in certain cases,
common stockholders may not receive dividends until we have satisfied our
obligations to any preferred stockholders.
FULLY PAID. All outstanding shares of common stock are fully paid and
non-assessable. Any additional common stock we issue will also be fully paid and
non-assessable.
VOTING RIGHTS. Each share of common stock isCommon stockholders are entitled to one vote in the election
of directors and other matters.matters for each share of common stock owned. Common
stockholders are not entitled to preemptive or cumulative voting rights.
OTHER RIGHTS. We will notify common stockholders of any stockholders'
meetings according to applicable law. If we liquidate, dissolve or wind-up our
business, either voluntarily or not, common stockholders will share equally in
the assets remaining after we pay our creditors and preferred stockholders.
TRANSFER AGENT AND REGISTRAR. Our transfer agent and registrar is American
Stock Transfer & Trust Company, New York, New York.
PREFERRED STOCK
Our board of directors can, without approval of our stockholders, issue one
or more series of preferred stock. The board can also determine the number of
shares of each series and the rights, preferences and limitations of each series
including the dividend rights, voting rights, conversion rights, redemption
rights and any liquidation preferences of any series of preferred stock, the
number of shares constituting each series and the terms and conditions of issue.
In some cases,If we offer preferred stock, the issuancespecific terms will be described in a
prospectus supplement, including:
- the specific designation, number of shares, seniority and purchase
price;
- any liquidation preference per share;
- any date of maturity;
- any redemption, repayment or sinking fund provisions;
- any dividend rate or rates and the dates on which any such dividends
will be payable (or the method by which such rates or dates will be
determined);
- any voting rights;
- if other than the currency of the United States, the currency or
currencies including composite currencies in which such preferred
stock is denominated and/or in which payments will or may be payable;
- the method by which amounts in respect of such preferred stock may be
calculated and any commodities, currencies or indices, or value, rate
or price, relevant to such calculation;
17
- whether such preferred stock is convertible or exchangeable and, if
so, the securities or rights into which such preferred stock is
convertible or exchangeable, and the terms and conditions upon which
such conversions or exchanges will be effected including conversion or
exchange prices or rates, the conversion or exchange period and any
other related provisions;
- the place or places where dividends and other payments on the
preferred stock will be payable; and
- any additional voting, dividend, liquidation, redemption and other
rights, preferences, privileges, limitations and restrictions.
All shares of preferred stock could delayoffered will, when issued, be fully paid and
non-assessable.
The transfer agent, registrar, and dividend disbursement agent for a change in controlseries
of the Company and make it harder to remove present management. Under certain
circumstances, preferred stock could also restrict dividend payments to holders
of our common stock.will be named in a prospectus supplement. The registrar for
shares of preferred stock will send notices to stockholders of any meetings at
which holders of the preferred stock have the right to elect directors or to
vote on any other matter.
12
In some cases, the issuance of preferred stock could delay a change in
control of us and make it harder to remove present management. Under certain
circumstances, preferred stock could also restrict dividend payments to common
stockholders.
DESCRIPTION OF WARRANTS
TheWe may issue warrants, were issued pursuant to a warrant agreement with The Bank of
New York, as Warrant Agent. The following summary of certain provisions of the
warrant agreement is not complete and is qualified in its entirety by reference
to the warrant agreement. A copy of the warrant agreement may be obtained by
contacting Key Energy Services, Inc. at Two Tower Center, 20th Floor, East
Brunswick, New Jersey 08816, Attention: General Counsel.
GENERAL
SHARES ISSUABLE UPON EXERCISE. Each warrant, when exercised, entitles a
holder to receive 14.4896 fully paid and non-assessable shares of our common
stock. The exercise price is $4.88125 per share of common stock. The exercise
price and the number of shares of common stock issuable upon exercise of a
warrant are both subject to adjustment in certain circumstances described below.
The warrants currently trade as a unit with our 14% senior subordinated notes
due 2009, and will continue to trade as a unit until the earlier of:
- The commencement of an exchange offer or the effectiveness of a
shelf-registration statement with respect to the registration of the
14% notes under the Securities Act;
- July 15, 1999;
- Or such date as the underwriter for the unit offering may determine.
EXERCISE PERIOD. Warrants are exercisable at any time on or after January
25, 2000. Unless earlier exercised, the warrants will expire on January 15,
2009. We will give notice of expiration not less than 90 nor more than 120 days
before the expiration date to the registered holders of the then outstanding
warrants. If we fail to give the notice when required, the warrants will not
expire until 90 days after notice is given.
The warrants are not listed for trading on any stock exchange, but the
common stock issuable upon exercise of the warrants has been listed on the New
York Stock Exchange.
EXERCISE PROCEDURES. In order to exercise all or any of the warrants,
holders are required, in the case of a warrant in certificated form, to
surrender to the warrant agent the certificate representing theincluding warrants to be
exercised, and in the case of a warrant held in book-entry form, to comply with
the applicable procedures set forth in the warrant agreement, in each case with
the accompanying form of election to purchase properly completed and executed,
and to pay in full the exercise price for each share ofdebt securities,
preferred stock, common stock or other securities. We may issue warrants
independently or together with other securities issuablethat may be attached to or
separate from the warrants.
If we issue warrants, we will do so under one or more warrant agreements
between us and a warrant agent that we will name in the prospectus supplement.
The prospectus supplement relating to any warrants being offered will
include specific terms relating to the offering. These terms will include some
or all of the following:
- the title of the warrants;
- the securities into which the warrants are exercisable;
- the exercise price;
- the aggregate number of warrants to be issued;
- the principal amount of securities purchasable upon exercise of each
warrant;
- the warrants. The exercise price mayor prices at which each warrant will be paid:
(i) in cash or by certified or official bank check or by wire
transfer to an account that we have designatedissued;
- the procedures for that purpose; or
(ii) withoutexercising the payment of cash, by reducingwarrants;
- the number of shares
of common stock that would be obtainabledate upon which the exercise of a warrantwarrants will commence; and
payment- the expiration date, and any other material terms of the exercise pricewarrants.
18
PLAN OF DISTRIBUTION
We may sell the securities in cash so asand outside the United States (1) through
underwriters or dealers, (2) directly to yield a number of shares of
common stock uponpurchasers or (3) through agents. The
prospectus supplement will set forth the exercisefollowing information:
- the terms of the warrant equaloffering;
- the names of any underwriters or agents;
- the name or names of any managing underwriter or underwriters;
- the purchase price of the securities from us;
- the net proceeds we will receive from the sale of the securities;
- any delayed delivery arrangements;
- any underwriting discounts, commissions and other items constituting
underwriters' compensation;
- the initial public offering price;
- any discounts or concessions allowed or reallowed or paid to dealers;
and
- any commissions paid to agents.
SALE THROUGH UNDERWRITERS OR DEALERS
If we use underwriters in the sale of the offered securities, the
underwriters will acquire the securities for their own account. The underwriters
may resell the securities from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale. Underwriters may offer securities
to the product of (a)public either through underwriting syndicates represented by one or more
managing underwriters or directly by one or more firms acting as underwriters.
Unless we inform you otherwise in the number of shares of common stock for whichprospectus supplement, the warrant is exercisable
asobligations of
the date of exercise (ifunderwriters to purchase the exercise price were being paid in cash)
and (b) the "cashless exercise ratio," as defined in the warrant agreement.
VOTING RIGHTS; DIVIDENDS. If warrants are not exercised, warrant holders
will not be entitled to receive dividends, to vote, to consent, to exercise any
preemptive rights or to receive notice as a stockholder in respect of any
stockholders meeting for the election of our directors or any other purpose, or
to exercise any other rights whatsoever as a stockholder.
13
ADJUSTMENTS. The number of shares of common stock issuable upon the
exercise of the warrants and the exercise pricesecurities will be subject to adjustment in
certain circumstances, including:
(i) payment of dividendsseveral
conditions, and other distributions on our common
stock payable in our common stock or our other equity interests;
(ii) subdivisions, combinations and certain reclassifications of
our common stock;
(iii) the issuanceunderwriters will be obligated to purchase all holders of common stock of rights, options
or warrants entitling them to subscribe for additional shares of common
stock, or ofthe offered
securities convertible into or exercisable or exchangeable for
additional shares of common stock at an offering price (or with an initial
conversion, exercise or exchange price plus such offering price) that is
less than the then current market value per share of common stock;
(iv) the distribution to all holders of common stock ofif they purchase any of our
assets (including cash), our debt securities or any rights or warrants to
purchase any securities (excluding those rights, options and warrants
referred to in clause (iii) above and cash dividends and other cash
distributions from current or retained earnings);
(v) the issuance of shares of common stock for a consideration per
share that is less than the then current market value per share of common
stock; and
(vi) the issuance of securities convertible into or exercisable or
exchangeable for common stock for a conversion, exercise or exchange price
per share that is less, than the then current market value per share of
common stock.them. The events described in clauses (v) and (vi) above are subject to certain
exceptions described in the warrant agreement, including, without limitation,
certain BONA FIDE public offerings and private placements, issuances of common
stock under any option, warrant, right or convertible security exercisable upon
issuance of the warrants and certain issuances of common stock pursuant to
employee stock incentive plans.
No adjustment in the exercise price will be required unless the adjustment
would result in an increase or decrease of at least 1% in the exercise price;
PROVIDED, HOWEVER, that any adjustment that is not made as a result of this
paragraph will be carried forward and taken into account in any subsequent
adjustment. In addition, weunderwriters may at any time reduce the exercise price (but not
to an amount that is less than the par value of the common stock) for any period
of time (but not less than 20 business days) as deemed appropriate by our board
of directors.
If we consolidate or merge, or sell all or substantially all of our assets
to another person, each warrant will thereafter be exercisable for the right to
receive the kind and amount of shares of stock or other securities or property
to which you would have been entitled as a result of such consolidation, merger
or sale had the warrants been exercised immediately prior thereto. However, if
(i) we consolidate, merge or sell all or substantially all of our assets to
another person and, in connection therewith, the consideration payable to the
holders of common stock in exchange for their shares is payable solely in cash
or (ii) we dissolve, liquidate or wind-up, then warrant holders will be entitled
to receive distributions on an equal basis with the holders of common stock or
other securities issuable upon exercise of the warrants, as if the warrants had
been exercised immediately before such event, less the exercise price.
AMENDMENT. Any amendment or supplement to the warrant agreement that has
an adverse effect on the interests of warrant holders will require the written
consent of the holders of a majority of the then outstanding warrants (excluding
any warrants held by us or any of our affiliates). Notwithstanding the
foregoing,change from time
to time any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers.
If we use underwriters in the sale of the offered securities, rules of the
SEC may limit the ability of the underwriters and certain selling group members
to bid for and purchase our securities until the distribution of the offered
securities is completed. As an exception to these rules, the underwriters are
permitted to engage in certain transactions that stabilize, maintain or
otherwise affect the price of the offered securities.
In connection with an underwritten offering, the underwriters may make
short sales of the offered securities and may purchase our securities on the
open market to cover positions created by short sales. Short sales involve the
sale by the underwriters of a greater number of securities than they are
required to purchase in the offering. "Covered" short sales are made in an
amount not greater than the over-allotment option we may grant to the
underwriters in connection with the offering. The underwriters may close out any
covered short position by either exercising the over-allotment option or
purchasing our securities in the open market. In determining the source of
securities to close out the covered short position, the underwriters will
consider, among other things, the price of securities available for purchase in
the open market as compared to the price at which they may purchase securities
through the over-allotment option. "Naked" short sales are sales in excess of
the over-allotment option. The underwriters must close out any naked short
position by purchasing our securities in the open market. A naked short position
is more likely to be created if the underwriters are concerned that there may be
downward pressure on the price of the securities in the open market after
pricing that could adversely affect investors who purchase in the offering.
19
The underwriters may also impose a penalty bid on certain selling group
members. This means that if the underwriters purchase our securities in the open
market to reduce the selling group members' short position or to stabilize the
price of the securities, they may reclaim the amount of the selling concession
from the selling group members who sold those securities as part of the
offering.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of those purchases or those purchases could prevent
or retard a decline in the price of the security. The imposition of a penalty
bid might also have an effect on the price of a security to the extent that it
were to discourage resales of the security.
Neither we nor the underwriters will make any representation or prediction
as to the direction or magnitude of any effect that the transactions we describe
above may have on the price of the offered securities. In addition, neither we
nor the underwriters will make any representation that the underwriters will
engage in these transactions or that these transactions, once commenced, will
not be discontinued without notice.
If we use dealers in the sale of securities, we will sell the securities to
them as principals. They may then resell those securities to the public at
varying prices determined by the dealers at the time of resale. We will include
in the prospectus supplement the names of the dealers and the warrantterms of the
transactions.
DIRECT SALES AND SALES THROUGH AGENTS
We may sell the securities directly. In that event, no underwriters or
agents would be involved. We may also sell the securities through agents we
designate from time to time. In the prospectus supplement, we will name any
agent withoutinvolved in the consentoffer or sale of warrant holders,the offered securities, and we will
describe any commissions payable by us to the agent. Unless we inform you
otherwise in the prospectus supplement, any agent will agree to use its
reasonable best efforts to solicit purchases for the period of its appointment.
We may amendsell the securities directly to institutional investors or others
who may be deemed to be underwriters within the meaning of the Securities Act
with respect to any sale of those securities. We will describe the terms of any
such sales in the prospectus supplement.
DELAYED DELIVERY CONTRACTS
If we so indicate in the prospectus supplement, we may authorize agents,
underwriters or dealers to solicit offers from selected types of institutions to
purchase securities from us at the warrant agreementpublic offering price under delayed delivery
contracts. These contracts would provide for certain
purposes,payment and delivery on a specified
date in the future. The contracts would be subject only to those conditions
described in the prospectus supplement. The prospectus supplement will describe
the commission payable for solicitation of those contracts.
GENERAL INFORMATION
We may have agreements with the agents, dealers and underwriters to
indemnity them against civil liabilities, including to cure any ambiguities, defects or inconsistenciesliabilities under the
Securities Act, or to make any changecontribute with respect to payments that does not adversely affect your rights.
14
the agents,
dealers or underwriters may be required to make. Agents, dealers and
underwriters may be customers of, engage in transactions with or perform
services for us in the ordinary course of their businesses.
LEGAL MATTERS
Certain legal matters relating to the validity of the common stock, and the
debt
securities, preferred stock and warrants will be passed upon by Porter & Hedges,
L.L.P., Houston, Texas.
20
EXPERTS
The consolidated financial statements and schedule of the Company and subsidiariesKey Energy Services,
Inc. as of June 30, 19982002 and 1997,2001, and for each of the years in the three-year
period ended June 30, 1998,2002, have been incorporated by reference in this prospectusherein in
reliance upon the report of KPMG LLP, independent certified public accountants, incorporated by
reference herein, and upon the authority of said firm as experts in accounting
and auditing. The audit report covering the June 30, 2002, financial statements
refers to a change in accounting for derivative instruments and hedging
activities in fiscal year 2001 and to a change in accounting for goodwill and
other intangible assets in fiscal year 2002.
The consolidated financial statements of Dawson ProductionQ Services, Inc. and subsidiaries as of Marchat December 31,
1998 and 1997,2001, and for each of the three years in the three-year period ended MarchDecember 31, 1998, have been2001,
which are incorporated by reference ininto this registration statement on Form S-3
of which this prospectus in reliance upon the report of KPMGforms a part, have been audited by Arthur Andersen LLP,
independent certified
public accountants, incorporated by reference herein, upon the authority of said
firmauditors, as expertsset forth in accounting and auditing.
15their report thereon.
21
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. SetThe following table sets
forth below is an estimate of the amount of fees and expenses to be
incurredpayable by Key Energy Services, Inc. (the "Company") in
connection with the issuance and distribution of the securities registered hereby, other than underwriting discounts and commissions.being
registered. All the amounts shown are estimates, except the SEC registration
fee.
Registration Fee Under Securities Act.................SEC registration fee.......................................... $ 3,21546,000
Printing expenses............................................. 25,000
Legal Fees............................................ 12,500fees and expenses....................................... 15,000
Accounting Fees....................................... 5,000
Printingfees and Engraving................................expenses.................................. 5,000
Miscellaneous Fees.................................... 4,285
-------
Total.......................................... $30,000
-------
-------expenses........................................ 16,000
---------
Total.................................................. $ 107,000
=========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 2-418 of the
Maryland General Corporation Law (the "MGCL") provides that a corporation may indemnify any
director made a party to any proceeding against judgments, penalties, fines,
settlements and reasonable expenses, unless it is established that -(i) the act
or omission of the director was material to the matter giving rise to the
proceeding and was committed in bad faith or was a result of deliberate
dishonesty;
-dishonesty, (ii) the director actually received an improper personal benefit;benefit or
-(iii) in a criminal proceeding, the director had reasonable cause to believe the
act or omission was unlawful. A director may not be indemnified in any
proceeding charging improper
personal benefit if the director was adjudged to be liable on the basis that personal benefit was improperly received and, in a
derivative action, there shall not be indemnification if a director has been
adjudged liable to the corporation. A director or officer of a corporation who
has been successful in the defense of any proceeding shall be indemnified
against reasonable costs incurred in such defense. Indemnification may not be
made unless authorized for a specific proceeding after determination by the
board of directors, special legal counsel or the stockholders that
indemnification is permissible because the director has met the requisite
standard of conduct.
Article Seventh of the Company's Amended and Restated Articles of
Incorporation, as amended (the "Charter"), provides that the Company shall
indemnify:
-indemnify (i) its directors and officers, whether serving the Company or at its
request any other entity, to the full extent required or permitted by the
Maryland law, including the advance of expenses under the procedures and to the
full extent permitted by law;law and -(ii) other employees and agents to such extent as shall be authorized by
the Board of Directors or the Company's Bylaws and be
permitted by law. The foregoing rights of indemnification are not exclusive of
any other rights to which those seeking indemnification may be entitled. The
Board of Directors may take such action as is necessary to carry out these
indemnification provisions and is II-1
expressly empowered to adopt, approve and
amend from time to time such Bylaws,By-laws, resolutions or contracts implementing such
provisions or such further indemnification arrangements as may be permitted by
the Maryland law. Furthermore, no director or officer of the Company shall be
personally liable to the Company or its stockholders for monetary damages for
breach of fiduciary duty as a director or an officer, except to the extent that
exculpation from liability is not permitted under the Maryland law as in effect
when such breach occurred. No amendment of the Charter or repeal of any of its
provisions shall limit or eliminate the limitations on liability provided to
directors and officers with respect to acts or omissions occurring prior to such
amendment or repeal.
II-1
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
EXHIBIT NO. DESCRIPTION
----------- -----------
4.1 -- Warrant Agreement, datedEXHIBITS.
EXHIBIT NO. DESCRIPTION
- ----------- ----------------------------------------------------------------
+1.1 -- Form of Underwriting Agreement
*4.1 -- Form of Senior Indenture
*4.2 -- Form of Subordinated Indenture
*5.1 -- Opinion of Porter & Hedges, L.L.P.
*12.1 -- Statement Regarding Computation of Ratio of Earnings to Fixed
Charges
23.1 -- Consent of Porter & Hedges, L.L.P. (included in Exhibit 5.1)
*23.2 -- Consent of KPMG LLP
24.1 -- Power of Attorney (included on signature page)
24.2 -- Power of Attorney for Guarantors (included on signature page)
+25.1 -- Statement of Eligibility of Trustee on Form T-1
- ----------
* Filed herewith.
+ The Company will file as January 22, 1999
between the Registrant and the Bank of New York,an exhibit to a New York banking corporation as Warrant Agent
(incorporated by reference to Exhibit 99(c) to
the Registrant's Current Reportcurrent report on Form 8-K dated February 3, 1999.
4.2 -- Form of Warrant (attached as Exhibit A(i) any
underwriting agreement relating to the Warrant Agreement filedsecurities offered hereby or (ii) any
Statement of Eligibility and Qualification under the Trust Indenture Act of
1939, as Exhibit 4.1 to this
R e gistration Statement, and incorporated by
reference to Exhibit 99(c) toamended, of the Registrant's
Current Report on Form 8-K, dated February 3,
1999).
*5.1 -- Opinion of Porter & Hedges, L.L.P.
*23.1 -- Consent of Porter & Hedges, L.L.P. (included in
Exhibit 5.1)
*23.2 -- Consent of KPMG LLP
*23.3 -- Consent of KPMG LLP
*24.1 -- Power of Attorney (included on signature page)
- -----------------
* Filed herewith
(b) Financial Statement Schedules
Schedules are omitted since the information required to be submitted has
been included in the Consolidated Financial Statements of Key Energy Services,
Inc., or the notes thereto, or the required information is not applicable.applicable trustee.
ITEM 17. UNDERTAKINGS.
The undersigned Registrantregistrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made of the securities registered hereby, a post-effective
amendment to this Registration Statement:registration statement:
(i) Toto include any prospectus required by sectionSection 10(a)(3) of
the Securities Act of 1933;
II-2
(ii) Toto reflect in the prospectus any facts or events arising
after the effective date of thethis registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in thisthe registration
statement; provided, however, that notwithstanding the
foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered
would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus
filed with the Securities and Exchange Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
(iii) Toto include any material information with respect to the
plan of distribution not previously disclosed in thisthe
registration statement or any material change to such
information in thisthe registration statement;
provided, however, that subparagraphsthe undertakings set forth in clauses (i)
and (ii) above do not apply if the information required to be
included in a post-effective amendment by those paragraphsclauses is
contained in the periodic reports filed by the Registrantregistrant pursuant to
Section 13 or Section 15(d) of the Securities and Exchange Act of 1934
that are incorporated by reference in this registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
II-2
securities offered herein,therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(4) The undersigned Registrant hereby undertakes as follows: that prior
to any public offering ofThat, for the securities registered hereunder through
use of a prospectus which is a part of this registration statement, by
any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the issuer undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be
deemed underwriters, in addition to the information called for by the
other items of the applicable form.
(5) The registrant undertakes that every prospectus: (I) that is filed
pursuant to paragraph (1) immediately preceding, or (ii) that purports
to meet the requirements of Section 10(a)(3) of the Act and is used in
connection with an offering of securities subject to Rule 415, will be
filed as a part of an amendment to the registration statement and will
not be used until such amendment is effective, and that, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendmentfiling of the registrant's annual
report pursuant to Section 13(a) or 15(d) of the Securities and
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(a)
of the Securities Exchange Act of 1934) that is incorporated by
reference in this registration statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby further undertakes that,(5) To file an application for the purpose of determining the
eligibility of the trustee to act under subsection (a) of Section
310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2)
of the Trust Indenture Act.
(6) That for purposes of determining any liability under the
Securities Act, the information omitted from the form of
1933, each filingprospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of prospectus
filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of
this registration statement as of the Registrant's annual report pursuant to Section 13(a) or Section 15(d)time it was declared
effective.
(7) That for the purpose of determining any liability under the
Securities ExchangeAct, each post-effective amendment that contains a
form of 1934 that is incorporated by reference in this
registration statementprospectus shall be deemed to be a new registration
statement relating to the securities offered herein,therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to our directors, officers and controlling persons
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by us of expenses incurred or paid by our director, officer or
controlling person in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection with
the securities being registered, we will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by them is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act, of 1933, as amended, Key Energy Services,
Inc. certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this Registration Statementregistration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of East Brunswick,New Hope, State of New JerseyPennsylvania on
June 2,
1999.January 30, 2003.
KEY ENERGY SERVICES, INC.
By: /s/ FRANCISFrancis D. JOHN
------------------------------------
FRANCISJohn
-----------------------------------
Francis D. JOHN, PRESIDENT AND
CHIEF EXECUTIVE OFFICERJohn,
Chairman of the Board, President
and Chief Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as amended (the
"Securities Act"), this Registration Statementregistration statement on Form S-3 has been signed below
by the following persons in the capacities and on the dates indicated; and each
of the undersigned officers and directors of Key Energy Services, Inc. hereby
severally constitutes and appoints Francis D. John and Jack D. Loftis, Jr., and
each of them, as true and lawful attorneys-in-fact and agents for the
undersigned, with full power of substitution, to do any and all acts and things
in our name and on our behalf in our capacities as directors and officers, and
to execute any and all instruments for us and in our names in the capacities
indicated below, which said attorneys-in-fact and agents, or either of them, may
deem necessary or advisable to enable said corporation to comply with the
Securities Act, and any rules, regulations and requirements of the Commission,
in connection with the filing of this registration statement, including
specifically without limitation, power and authority to sign for him, andany of us, in
his nameour names in the capacitycapacities indicated below, such
Registration Statement on Form S-3 and for the purpose of registering such
securities under the Securities Act of 1933, as amended, and any and all amendments thereto,
including without limitation any registration statements or post-effective
amendment thereof filed under and meeting the requirements of Rule 462(b) under
the Securities Act, hereby ratifying and confirming our signatures as they may
be signed by our attorneys to such Registration Statement and any and all
amendments thereto.
Signatures Title Date
---------- ----- ----SIGNATURES TITLE DATE
- --------------------- --------------------------------------- -----------------------------
Chairman of the Board, President January 30, 2003
/s/ FRANCIS D. JOHN
- --------------------- and Chief Executive Officer
Francis D. John (Principal Executive Officer)
Director January 30, 2003
/s/ DAVID J. BREAZZANO
- ----------------------
David J. Breazzano
Director January 30, 2003
/s/ KEVIN P. COLLINS
- ----------------------
Kevin P. Collins
Director January 29, 2003
/s/ WILLIAM D. FERTIG
- ----------------------
William D. Fertig
Director January 30, 2003
/s/ W. PHILLIP MARCUM
- ----------------------
W. Phillip Marcum
Director January 30, 2003
/s/ J. ROBINSON WEST
- ----------------------
J. Robinson West
Director January 30, 2003
/s/ MORTON WOLKOWITZ
- ----------------------
Morton Wolkowitz
Executive Vice President, January 30, 2003
/s/ ROYCE W. MITCHELL
- ---------------------- Chief Financial Officer and
Royce W. Mitchell Chief Accounting Officer
SIGNATURES
Pursuant to the requirements of the Securities Act, each Guarantor
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New Hope, State of Pennsylvania on January 30, 2003.
BROOKS WELL SERVICING, INC., DAWSON
PRODUCTION ACQUISITION CORP., DAWSON
PRODUCTION MANAGEMENT, INC., DAWSON
PRODUCTION TAYLOR, INC., KALKASKA
OILFIELD SERVICES, INC., KEY ENERGY
DRILLING, INC., KEY ENERGY SERVICES --
CALIFORNIA, INC., KEY ENERGY SERVICES --
SOUTH TEXAS, INC., KEY FOUR CORNERS,
INC., KEY ROCKY MOUNTAIN, INC., ODESSA
EXPLORATION INCORPORATED, WATSON
OILFIELD SERVICE & SUPPLY, INC., WELL-CO
OIL SERVICE, INC., WELLTECH EASTERN,
INC., WELLTECH MID-CONTINENT, INC., YALE
E. KEY, INC., MISR KEY ENERGY SERVICES,
LLC, Q SERVICES, INC., Q.V. SERVICES,
INC., AND UNITRAK SERVICES HOLDING, INC.
By: /s/ JACK D. LOFTIS, JR.
------------------------------------
Jack D. Loftis, Jr., Vice President
DAWSON PRODUCTION PARTNERS, L.P.
By: DAWSON PRODUCTION MANAGEMENT, INC.,
AS SOLE GENERAL PARTNER
BROOKS WELL SERVICING BENEFICIAL, L.P.
By: BROOKS WELL SERVICING, INC.,
AS SOLE GENERAL PARTNER
KEY ENERGY DRILLING BENEFICIAL, L.P.
By: KEY ENERGY DRILLING, INC.,
AS SOLE GENERAL PARTNER
Q.V. SERVICES BENEFICIAL, L.P.
By: Q.V. SERVICES, INC.,
AS SOLE GENERAL PARTNER
UNITRAK SERVICES, L.P.
By: UNITRAK SERVICES HOLDING, INC.,
AS SOLE GENERAL PARTNER
WELLTECH MID-CONTINENT BENEFICIAL, LP
By: WELLTECH MID-CONTINENT, INC.,
AS SOLE GENERAL PARTNER
YALE E. KEY BENEFICIAL, LP
By: YALE E. KEY, INC.,
AS SOLE GENERAL PARTNER
By: /s/ JACK D. LOFTIS, JR.
---------------------------------------
Jack D. Loftis, Jr., Vice President
of each corporate general partner
listed above
Q ENERGY SERVICES, L.L.C.
Q.V. SERVICES, LLC
Q OIL & GAS SERVICES, LLC
BROOKS WELL SERVICING, LLC
KEY ENERGY DRILLING, LLC
UNITRAK SERVICES, LLC
YALE E. KEY, LLC
WELLTECH MID-CONTINENT, LLC
By: /s/ JACK D. LOFTIS, JR.
---------------------------------------
Jack D. Loftis, Jr., Manager of each
limited liability company listed above
AES ACQUISITION, L.P.
QUALITY TUBULAR SERVICES, L.P.
QUALITY OIL FIELD SERVICES, L.P.
Q PRODUCTION SERVICES, L.P.
Q.V. SERVICES OF TEXAS, L.P.
By: Q OIL & GAS SERVICES, LLC, the sole
general partner of each limited
partnership listed above
By: /s/ JACK D. LOFTIS, JR.
---------------------------------------
Jack D. Loftis, Jr., Manager
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as amended (the
"Securities Act"), this registration statement on Form S-3 has been signed below
by the following persons in the capacities and on the dates indicated; and each
of the undersigned officers and directors of the Guarantors hereby severally
constitutes and appoints Francis D. John and Jack D. Loftis, Jr., and each of
them, as true and lawful attorneys-in-fact and agents for the undersigned, with
full power of substitution, to do any and all acts and things in our name and on
our behalf in our capacities as directors and officers, and to execute any and
all instruments for us and in our names in the capacities indicated below, which
said attorneys-in-fact and agents, or either of them, may deem necessary or
advisable to enable said corporation to comply with the Securities Act, and any
rules, regulations and requirements of the Commission, in connection with the
filing of this registration statement, including specifically without
limitation, power and authority to sign for any of us, in our names in the
capacities indicated below, and any and all amendments thereto, including
without limitation any registration statements or post-effective amendment
thereof filed under and meeting the requirements of Rule 462(b) under the
Securities Act, hereby ratifying and confirming our signatures as they may be
signed by our attorneys to such Registration Statement and any and all
amendments thereto.
AES ACQUISITION, L.P.
BY: Q OIL & GAS SERVICES, LLC, AS SOLE GENERAL MANAGER
Manager
/s/ FRANCIS D. JOHN
- ------------------------------ (Principal Executive Officer) January 30, 2003
Francis D. John
Manager January 30, 2003
/s/ JACK D. LOFTIS, JR.
- ------------------------------
Jack D. Loftis, Jr.
Manager January 30, 2003
/s/ JAMES J. BYERLOTZER
- ------------------------------
James J. Byerlotzer
Manager January 30, 2003
/s/ ROYCE W. MITCHELL
- ------------------------------ (Principal Financial Officer and
Royce W. Mitchell Principal Accounting Officer)
Manager January 30, 2003
/s/ PHILLIP M. BURCH
- ------------------------------
Phillip M. Burch
BROOKS WELL SERVICING, INC.
President (Principal Executive January 30, 2003
/s/ JOE EUSTACE
- ------------------------------ Officer)
Joe Eustace
[here]
Vice President and Director January 30, 2003
/s/ FRANCIS D. JOHN
- ------------------------------
Francis D. John
Vice President (Principal January 30, 2003
/s/ ROYCE W. MITCHELL
- ------------------------------ Financial Officer and Principal
Royce W. Mitchell Accounting Officer)
Vice President and Treasurer January 30, 2003
/s/ PHILLIP M. BURCH
- ------------------------------
Phillip M. Burch
DAWSON PRODUCTION ACQUISITION CORP.
President and Director (Principal January 27, 2003
/s/ JOAN L. DOBRZYNSKI
- ------------------------------ Executive Officer)
Joan L. Dobrzynski
Director January 27, 2003
/s/ LISA OAKES
- ------------------------------
Lisa Oakes
Vice President, Treasurer and January 27, 2003
/s/ FRANCIS B. JACOBS, II
- ------------------------------ Director (Principal Accounting
Francis B. Jacobs, II Officer)
Vice President (Principal January 30, 2003
/s/ ROYCE W. MITCHELL
- ------------------------------ Financial Officer)
Royce W. Mitchell
DAWSON PRODUCTION MANAGEMENT, INC.
President, Chief Executive Officer June 2, 1999January 30, 2003
/s/ FRANCIS D. JOHN
- ------------------------------ and Director (Principal Executive
Francis D. John Officer)
Vice President and Treasurer January 30, 2003
/s/ ROYCE W. MITCHELL
- ------------------------------ (Principal Financial Officer and
Royce W. Mitchell Principal Accounting Officer)
DAWSON PRODUCTION PARTNERS, L.P.
BY: DAWSON PRODUCTION MANAGEMENT, INC. AS SOLE GENERAL PARTNER
President, Chief Executive Officer January 30, 2003
/s/ FRANCIS D. JOHN
- ------------------------------ and Director (Principal Executive
Francis D. John Officer)
Vice President and Treasurer January 30, 2003
/s/ ROYCE W. MITCHELL
- ------------------------------ (Principal Financial Officer and
Royce W. Mitchell Principal Accounting Officer)
DAWSON PRODUCTION TAYLOR, INC.
President and Director (Principal January 27, 2003
Executive Officer)
/s/ JOAN L. DOBRZYNSKI
- ------------------------------
Joan L. Dobrzynski
Director January 27, 2003
/s/ LISA OAKES
- ------------------------------
Lisa Oakes
Vice President, Treasurer and January 27, 2003
/s/ FRANCIS B. JACOBS, II
- ------------------------------ Director (Principal Accounting
Francis B. Jacobs, II Officer)
Vice President (Principal January 30, 2003
/s/ ROYCE W. MITCHELL
- ------------------------------ Financial Officer)
Royce W. Mitchell
KALKASKA OILFIELD SERVICES, INC.
President (Principal Executive January 30, 2003
/s/ PHIL ALTMAN
- ------------------------------ Officer)
Phil Altman
Vice President and Director January 30, 2003
/s/ FRANCIS D. JOHN
- ------------------------------
Francis D. John
Vice President (Principal January 30, 2003
/s/ ROYCE W. MITCHELL
- ------------------------------ Financial Officer and Principal
Royce W. Mitchell Accounting Officer)
Vice President and Treasurer January 30, 2003
/s/ PHILLIP M. BURCH
- ------------------------------
Phillip M. Burch
KEY ENERGY DRILLING, INC.
President (Principal Executive January 30, 2003
/s/ STEVEN A. RICHARDS
- ------------------------------ Officer)
Steven A. Richards
Vice President and Director January 30, 2003
/s/ FRANCIS D. JOHN
- ------------------------------
Francis D. John
Vice President (Principal January 30, 2003
/s/ ROYCE W. MITCHELL
- ------------------------------ Financial Officer and Principal
Royce W. Mitchell Accounting Officer)
Vice President and Treasurer January 30, 2003
/s/ PHILLIP M. BURCH
- ------------------------------
Phillip M. Burch
KEY ENERGY SERVICES -- CALIFORNIA, INC.
President (Principal January 30, 2003
/s/ JAMES D. FLYNT
- ------------------------------ Executive Officer)
James D. Flynt
Vice President and Director January 30, 2003
/s/ FRANCIS D. JOHN
- ------------------------------
Francis D. John
Vice President (Principal January 30, 2003
/s/ ROYCE W. MITCHELL
- ------------------------------ Financial Officer and Principal
Royce W. Mitchell Accounting Officer)
Vice President and Treasurer January 30, 2003
/s/ PHILLIP M. BURCH
- ------------------------------
Phillip M. Burch
KEY ENERGY SERVICES -- SOUTH TEXAS, INC.
President (Principal Executive January 30, 2003
/s/ JOE EUSTACE
- ------------------------------ Officer)
Joe Eustace
Vice President and Director January 30, 2003
/s/ FRANCIS D. JOHN
- ------------------------------
Francis D. John
Vice President (Principal January 30, 2003
/s/ ROYCE W. MITCHELL
- ------------------------------ Financial Officer and Principal
Royce W. Mitchell Accounting Officer)
Vice President and Treasurer January 30, 2003
/s/ PHILLIP M. BURCH
- ------------------------------
Phillip M. Burch
KEY FOUR CORNERS, INC.
President (Principal January 30, 2003
/s/ RON FELLABAUM
- ------------------------------ Executive Officer
Ron Fellabaum
Vice President and Director January 30, 2003
/s/ FRANCIS D. JOHN
- ------------------------------
Francis D. John
Vice President (Principal January 30, 2003
/s/ ROYCE W. MITCHELL
- ------------------------------ Financial Officer and Principal
Royce W. Mitchell Accounting Officer)
Vice President and Treasurer January 30, 2003
/s/ PHILLIP M. BURCH
- ------------------------------
Phillip M. Burch
KEY ROCKY MOUNTAIN, INC.
President (Principal Executive January 30, 2003
/s/ JAMES D. FLYNT
- ------------------------------ Officer)
James D. Flynt
Vice President and Director January 30, 2003
/s/ FRANCIS D. JOHN
- ------------------------------
Francis D. John
Vice President (Principal January 30, 2003
/s/ ROYCE W. MITCHELL
- ------------------------------ Financial Officer and Principal
Royce W. Mitchell Accounting Officer)
Vice President and Treasurer January 30, 2003
/s/ PHILLIP M. BURCH
- ------------------------------
Phillip M. Burch
ODESSA EXPLORATION INCORPORATED
President January 30, 2003
/s/ W. BRUCE LOWE
- ------------------------------ and Treasurer (Principal
W. Bruce Lowe Executive Officer and Principal
Accounting Officer)
Vice President and Director January 30, 2003
/s/ FRANCIS D. JOHN
- ------------------------------
Francis D. John
Vice President (Principal January 30, 2003
/s/ ROYCE W. MITCHELL
- ------------------------------ Financial Officer)
Royce W. Mitchell
WATSON OILFIELD SERVICE & SUPPLY, INC.
President (Principal Executive January 30, 2003
/s/ JAMES D. FLYNT
- ------------------------------ Officer)
James D. Flynt
Vice President and Director January 30, 2003
/s/ FRANCIS D. JOHN
- ------------------------------
Francis D. John
Vice President (Principal January 30, 2003
/s/ ROYCE W. MITCHELL
- ------------------------------ Financial Officer and Principal
Royce W. Mitchell Accounting Officer)
Vice President and Treasurer January 30, 2003
/s/ PHILLIP M. BURCH
- ------------------------------
Phillip M. Burch
WELL-CO OIL SERVICE, INC.
President (Principal Executive January 30, 2003
/s/ JAMES J. BYERLOTZER
- ------------------------------ Officer)
James J. Byerlotzer
Vice President and Director January 30, 2003
/s/ FRANCIS D. JOHN
- ------------------------------
Francis D. John
Vice President (Principal January 30, 2003
/s/ ROYCE W. MITCHELL
- ------------------------------ Financial Officer)
Royce W. Mitchell
Treasurer and Asst. Secretary January 30, 2003
/s/ MATT SIMMONS
- ------------------------------ (Principal Accounting Officer)
Matt Simmons
WELLTECH EASTERN, INC.
President (Principal Executive January 30, 2003
/s/ MICHAEL R. FURROW
- ------------------------------ Officer)
Michael R. Furrow
Vice President and Director January 30, 2003
/s/ FRANCIS D. JOHN
- ------------------------------
Francis D. John
Vice President (Principal January 30, 2003
/s/ ROYCE W. MITCHELL
- ------------------------------ Financial Officer and Principal
Royce W. Mitchell Accounting Officer)
Vice President and Treasurer January 30, 2003
/s/ PHILLIP M. BURCH
- ------------------------------
Phillip M. Burch
WELLTECH MID-CONTINENT, INC.
President (Principal Executive January 30, 2003
/s/ MICHAEL R. FURROW
- ------------------------------ Officer)
Michael R. Furrow
Vice President and Director January 30, 2003
/s/ FRANCIS D. JOHN
- ------------------------------
Francis D. John
Vice President (Principal January 30, 2003
/s/ ROYCE W. MITCHELL
- ------------------------------ Financial Officer and Principal
Royce W. Mitchell Accounting Officer)
Vice President and Treasurer January 30, 2003
/s/ PHILLIP M. BURCH
- ------------------------------
Phillip M. Burch
BROOKS WELL SERVICING BENEFICIAL, L.P.
BY: BROOKS WELL SERVICING, INC., AS SOLE GENERAL PARTNER
President
/s/ JOE EUSTACE
- ------------------------------ (Principal Executive Officer) January 30, 2003
Joe Eustace
Vice President and Director January 30, 2003
/s/ FRANCIS D. JOHN
- ------------------------------
Francis D. John
Vice President January 30, 2003
/s/ JACK D. LOFTIS, JR.
- ------------------------------
Jack D. Loftis, Jr.
Vice President (Principal January 30, 2003
/s/ ROYCE W. MITCHELL
- ------------------------------ Financial Officer and Principal
Royce W. Mitchell Accounting Officer)
Vice President and Treasurer January 30, 2003
/s/ PHILLIP M. BURCH
- ------------------------------
Phillip M. Burch
BROOKS WELL SERVICING, LLC
Manager (Principal Executive Officer,
Principal Accounting Officer and January 30, 2003
/s/ FRANCIS D. JOHN
- ------------------------------ Principal Financial Officer)
Francis D. John
Manager January 30, 2003
/s/ WILLIAM S. MANLY Director June 2, 1999JACK D. LOFTIS, JR.
- ------------------------------
William S. ManlyJack D. Loftis, Jr.
Manager January 30, 2003
/s/ MORTON WOLKOWITZ Director June 2, 1999MICHAEL G. MORGAN
- ------------------------------
Morton WolkowitzMichael G. Morgan
KEY ENERGY DRILLING BENEFICIAL, L.P.
BY: KEY ENERGY DRILLING, INC., AS SOLE GENERAL PARTNER
President
/s/ DAVID J. BREAZZANO Director June 2, 1999STEVEN A. RICHARDS
- ------------------------------ David J. Breazzano(Principal Executive Officer) January 30, 2003
Steven A. Richards
Vice President and Director January 30, 2003
/s/ KEVIN P. COLLINS Director June 2, 1999FRANCIS D. JOHN
- ------------------------------
Kevin P. Collins
Francis D. John
Vice President January 30, 2003
/s/ JACK D. LOFTIS, JR.
- ------------------------------
Jack D. Loftis, Jr.
Vice President (Principal January 30, 2003
/s/ ROYCE W. MITCHELL
- ------------------------------ Financial Officer and Principal
Royce W. Mitchell Accounting Officer)
Vice President and Treasurer January 30, 2003
/s/ PHILLIP W. MARCUM Director June 2, 1999M. BURCH
- ------------------------------
Phillip W. MarcumM. Burch
KEY ENERGY DRILLING, LLC
Manager (Principal Executive Officer,
Principal Accounting Officer and January 30, 2003
/s/ FRANCIS D. JOHN
- ------------------------------ Principal Financial Officer)
Francis D. John
Manager January 30, 2003
/s/ JACK D. LOFTIS, JR.
- ------------------------------
Jack D. Loftis, Jr.
Manager January 30, 2003
/s/ MICHAEL G. MORGAN
- ------------------------------
Michael G. Morgan
MISR KEY ENERGY SERVICES, LLC
President and Chief Executive Officer January 30, 2003
/s/ THOMAS B. MURPHY
- ------------------------------
Thomas B. Murphy
Vice President (Principal Financial January 30, 2003
/s/ STEPHEN E. MCGREGOR ChiefROYCE W. MITCHELL
- ------------------------------ Officer and Principal
Royce W. Mitchell Accounting Officer)
BY: KEY ENERGY SERVICES, INC.,
AS SOLE MEMBER
Senior Vice President January 30, 2003
/s/ JACK D. LOFTIS, JR.
- ------------------------------
Jack D. Loftis, Jr.
Q ENERGY SERVICES, L.L.C.
Manager (Principal Executive Officer,
/s/ FRANCIS D. JOHN
- ------------------------------ Principal Accounting Officer and
Francis D. John Principal Financial Officer) January 30, 2003
Manager January 30, 2003
/s/ JACK D. LOFTIS, JR.
- ------------------------------
Jack D. Loftis, Jr.
Manager January 27, 2003
/s/ JOAN L. DOBRZYNSKI
- ------------------------------
Joan L. Dobrzynski
Q OIL & GAS SERVICES, LLC
Manager
/s/ FRANCIS D. JOHN
- ------------------------------ (Principal Executive Officer) January 30, 2003
Francis D. John
Manager January 30, 2003
/s/ JACK D. LOFTIS, JR.
- ------------------------------
Jack D. Loftis, Jr.
Manager January 30, 2003
/s/ JAMES J. BYERLOTZER
- ------------------------------
James J. Byerlotzer
Manager
/s/ ROYCE W. MITCHELL
- ------------------------------ (Principal Financial Officer and January 30, 2003
Royce W. Mitchell Principal Accounting Officer)
Manager January 30, 2003
/s/ PHILLIP M. BURCH
- ------------------------------
TreasurerPhillip M. Burch
Q PRODUCTION SERVICES, L.P.
BY: Q OIL & GAS SERVICES, LLC, AS SOLE GENERAL PARTNER
Manager
/s/ FRANCIS D. JOHN
- ------------------------------ (Principal Executive Officer) January 30, 2003
Francis D. John
Manager January 30, 2003
/s/ JACK D. LOFTIS, JR.
- ------------------------------
Jack D. Loftis, Jr.
Manager January 30, 2003
/s/ JAMES J. BYERLOTZER
- ------------------------------
James J. Byerlotzer
Manager
/s/ ROYCE W. MITCHELL
- ------------------------------ (Principal Financial Officer and January 30, 2003
Royce W. Mitchell Principal Accounting Officer)
June 2, 1999
Stephen E. McGregorManager January 30, 2003
/s/ DANNY R. EVATTPHILLIP M. BURCH
- ------------------------------
Phillip M. Burch
Q SERVICES, INC.
President and Director
/s/ FRANCIS D. JOHN
- ------------------------------ (Principal Executive Officer) January 30, 2003
Francis D. John
Vice President of Financial June 2, 1999and Treasurer
/s/ ROYCE W. MITCHELL
- ------------------------------ Operations (Principal Financial Officer and January 30, 2003
Royce W. Mitchell Principal Accounting Officer)
QUALITY OIL FIELD SERVICES, L.P.
BY: Q OIL & GAS SERVICES, LLC, AS SOLE GENERAL PARTNER
Manager
/s/ FRANCIS D. JOHN
- ------------------------------ (Principal Executive Officer) January 30, 2003
Francis D. John
Manager January 30, 2003
/s/ JACK D. LOFTIS, JR.
- ------------------------------
Jack D. Loftis, Jr.
Manager January 30, 2003
/s/ JAMES J. BYERLOTZER
- ------------------------------
James J. Byerlotzer
Manager
/s/ ROYCE W. MITCHELL
- ------------------------------ (Principal Financial Officer and January 30, 2003
Royce W. Mitchell Principal Accounting Officer)
DannyManager January 30, 2003
/s/ PHILLIP M. BURCH
- ------------------------------
Phillip M. Burch
QUALITY TUBULAR SERVICES, L.P.
BY: Q OIL & GAS SERVICES, LLC, AS SOLE GENERAL PARTNER
Manager
/s/ FRANCIS D. JOHN
- ------------------------------ (Principal Executive Officer) January 30, 2003
Francis D. John
Manager January 30, 2003
/s/ JACK D. LOFTIS, JR.
- ------------------------------
Jack D. Loftis, Jr.
Manager January 30, 2003
/s/ JAMES J. BYERLOTZER
- ------------------------------
James J. Byerlotzer
Manager
/s/ ROYCE W. MITCHELL
- ------------------------------ (Principal Financial Officer and January 30, 2003
Royce W. Mitchell Principal Accounting Officer)
Manager January 30, 2003
/s/ PHILLIP M. BURCH
- ------------------------------
Phillip M. Burch
Q.V. SERVICES, INC.
President
/s/ SCOTT JONES
- ------------------------------ (Principal Executive Officer) January 30, 2003
Scott Jones
Vice President and Director January 30, 2003
/s/ FRANCIS D. JOHN
- ------------------------------
Francis D. John
Vice President January 30, 2003
/s/ JACK D. LOFTIS, JR.
- ------------------------------
Jack D. Loftis, Jr.
Vice President (Principal
/s/ ROYCE W. MITCHELL
- ------------------------------ Financial Officer and Principal January 30, 2003
Royce W. Mitchell Accounting Officer)
Vice President and Treasurer January 30, 2003
/s/ PHILLIP M. BURCH
- ------------------------------
Phillip M. Burch
Q.V. SERVICES, LLC
Manager (Principal Executive Officer,
Principal Accounting Officer and
/s/ FRANCIS D. JOHN
- ------------------------------ Principal Financial Officer) January 30, 2003
Francis D. John
Manager January 30, 2003
/s/ JACK D. LOFTIS, JR.
- ------------------------------
Jack D. Loftis, Jr.
Manager January 30, 2003
/s/ MICHAEL G. MORGAN
- ------------------------------
Michael G. Morgan
Q.V. SERVICES BENEFICIAL, L.P.
BY: Q.V. SERVICES, INC., AS SOLE GENERAL PARTNER
President
/s/ SCOTT JONES
- ------------------------------ (Principal Executive Officer) January 30, 2003
Scott Jones
Vice President and Director January 30, 2003
/s/ FRANCIS D. JOHN
- ------------------------------
Francis D. John
Vice President January 30, 2003
/s/ JACK D. LOFTIS, JR.
- ------------------------------
Jack D. Loftis, Jr.
Vice President (Principal
/s/ ROYCE W. MITCHELL
- ------------------------------ Financial Officer and Principal January 30, 2003
Royce W. Mitchell Accounting Officer)
Vice President and Treasurer January 30, 2003
/s/ PHILLIP M. BURCH
- ------------------------------
Phillip M. Burch
Q.V. SERVICES OF TEXAS, L.P.
BY: Q OIL & GAS SERVICES, LLC, AS SOLE GENERAL PARTNER
Manager
/s/ FRANCIS D. JOHN
- ------------------------------ (Principal Executive Officer) January 30, 2003
Francis D. John
Manager January 30, 2003
/s/ JACK D. LOFTIS, JR.
- ------------------------------
Jack D. Loftis, Jr.
Manager January 30, 2003
/s/ JAMES J. BYERLOTZER
- ------------------------------
James J. Byerlotzer
Manager
/s/ ROYCE W. MITCHELL
- ------------------------------ (Principal Financial Officer and January 30, 2003
Royce W. Mitchell Principal Accounting Officer)
Manager January 30, 2003
/s/ PHILLIP M. BURCH
- ------------------------------
Phillip M. Burch
UNITRAK SERVICES HOLDING, INC.
President
/s/ W. BRUCE LOWE
- ------------------------------ (Principal Executive Officer) January 30, 2003
W. Bruce Lowe
Vice President and Director January 30, 2003
/s/ FRANCIS D. JOHN
- ------------------------------
Francis D. John
Vice President (Principal
/s/ ROYCE W. MITCHELL
- ------------------------------ Financial Officer and Principal January 30, 2003
Royce W. Mitchell Accounting Officer)
Vice President and Treasurer January 30, 2003
/s/ PHILLIP M. BURCH
- ------------------------------
Phillip M. Burch
UNITRAK SERVICES, LLC
Manager (Principal Executive Officer,
Principal Accounting Officer and
/s/ FRANCIS D. JOHN
- ------------------------------ Principal Financial Officer) January 30, 2003
Francis D. John
Manager January 30, 2003
/s/ JACK D. LOFTIS, JR.
- ------------------------------
Jack D. Loftis, Jr.
Manager January 30, 2003
/s/ MICHAEL G. MORGAN
- ------------------------------
Michael G. Morgan
UNITRAK SERVICES, L.P.
BY: UNITRAK SERVICES HOLDING, INC., AS SOLE GENERAL PARTNER
President
/s/ W. BRUCE LOWE
- ------------------------------ (Principal Executive Officer) January 30, 2003
W. Bruce Lowe
Vice President and Director January 30, 2003
/s/ FRANCIS D. JOHN
- ------------------------------
Francis D. John
Vice President January 30, 2003
/s/ JACK D. LOFTIS, JR.
- ------------------------------
Jack D. Loftis, Jr.
Vice President (Principal
/s/ ROYCE W. MITCHELL
- ------------------------------ Financial Officer and Principal January 30, 2003
Royce W. Mitchell Accounting Officer)
Vice President and Treasurer January 30, 2003
/s/ PHILLIP M. BURCH
- ------------------------------
Phillip M. Burch
WELLTECH MID-CONTINENT BENEFICIAL, L.P.
BY: WELLTECH MID-CONTINENT, INC., AS SOLE GENERAL PARTNER
President
/s/ MICHAEL R. EvattFURROW
- ------------------------------ (Principal Executive Officer) January 30, 2003
Michael R. Furrow
Vice President and Director January 30, 2003
/s/ FRANCIS D. JOHN
- ------------------------------
Francis D. John
Vice President January 30, 2003
/s/ JACK D. LOFTIS, JR.
- ------------------------------
Jack D. Loftis, Jr.
Vice President (Principal
/s/ ROYCE W. MITCHELL
- ------------------------------ Financial Officer and Principal January 30, 2003
Royce W. Mitchell Accounting Officer)
Vice President and Treasurer January 30, 2003
/s/ PHILLIP M. BURCH
- ------------------------------
Phillip M. Burch
WELLTECH MID-CONTINENT, LLC
Manager (Principal Executive Officer,
Principal Accounting Officer and
/s/ FRANCIS D. JOHN
- ------------------------------ Principal Financial Officer) January 30, 2003
Francis D. John
Manager January 30, 2003
/s/ JACK D. LOFTIS, JR.
- ------------------------------
Jack D. Loftis, Jr.
Manager January 30, 2003
/s/ MICHAEL G. MORGAN
- ------------------------------
Michael G. Morgan
YALE E. KEY BENEFICIAL, L.P.
BY: YALE E. KEY, INC., AS SOLE GENERAL PARTNER
President
/s/ TOMMY PIPES
- ------------------------------ (Principal Executive Officer) January 30, 2003
Tommy Pipes
Vice President and Director January 30, 2003
/s/ FRANCIS D. JOHN
- ------------------------------
Francis D. John
Vice President (Principal
/s/ ROYCE W. MITCHELL
- ------------------------------ Financial Officer and Principal January 30, 2003
Royce W. Mitchell Accounting Officer)
Vice President and Treasurer January 30, 2003
/s/ PHILLIP M. BURCH
- ------------------------------
Phillip M. Burch
YALE E. KEY INC.
President
/s/ TOMMY PIPES
- ------------------------------ (Principal Executive Officer) January 30, 2003
Tommy Pipes
Vice President and Director January 30, 2003
/s/ FRANCIS D. JOHN
- ------------------------------
Francis D. John
Vice President (Principal
/s/ ROYCE W. MITCHELL
- ------------------------------ Financial Officer and Principal January 30, 2003
Royce W. Mitchell Accounting Officer)
Vice President and Treasurer January 30, 2003
/s/ PHILLIP M. BURCH
- ------------------------------
Phillip M. Burch
YALE E. KEY, LLC
Manager (Principal Executive Officer,
Principal Accounting Officer and
/s/ FRANCIS D. JOHN
- ------------------------------ Principal Financial Officer) January 30, 2003
Francis D. John
Manager January 30, 2003
/s/ JACK D. LOFTIS, JR.
- ------------------------------
Jack D. Loftis, Jr.
Manager January 30, 2003
/s/ MICHAEL G. MORGAN
- ------------------------------
Michael G. Morgan
EXHIBITS
EXHIBIT NO. DESCRIPTION
----------- -----------
4.1 -- Warrant Agreement dated
EXHIBIT NO. DESCRIPTION
- ----------- ----------------------------------------------------------------
+1.1 -- Form of Underwriting Agreement
*4.1 -- Form of Senior Indenture
*4.2 -- Form of Subordinated Indenture
*5.1 -- Opinion of Porter & Hedges, L.L.P.
*12.1 -- Statement Regarding Computation of Ratio of Earnings to Fixed
Charges
23.1 -- Consent of Porter & Hedges, L.L.P. (included in Exhibit 5.1)
*23.2 -- Consent of KPMG LLP
24.1 Power of Attorney (included on signature page)
24.2 -- Power of Attorney for Guarantors (included on signature page)
+25.1 -- Statement of Eligibility of Trustee on Form T-1
- ----------
* Filed herewith.
+ The Company will file as January 22, 1999
between the Registrant and the Bank of New York,an exhibit to a New York banking corporation as Warrant Agent
(incorporated by reference to Exhibit 99(c) to
the Registrant's Current Reportcurrent report on Form 8-K dated February 3, 1999.
4.2 -- Form of Warrant (attached as Exhibit A(i) any
underwriting agreement relating to the Warrant Agreement filedsecurities offered hereby or (ii) any
Statement of Eligibility and Qualification under the Trust Indenture Act of
1939, as Exhibit 4.1 to this
Registration Statement, and incorporated by
reference to Exhibit 99(c) toamended, of the Registrant's
Current Report on Form 8-K, dated February 3,
1999).
*5.1 -- Opinion of Porter & Hedges, L.L.P.
*23.1 -- Consent of Porter & Hedges, L.L.P. (included in
Exhibit 5.1)
*23.2 -- Consent of KPMG LLP
*23.3 -- Consent of KPMG LLP
*24.1 -- Power of Attorney (included on signature page)
- -----------------
* Filed herewith.applicable trustee.