e424b3
Filed pursuant to Rule 424(b)(3)
Registration No. 333-141921
PROSPECTUS
1,794,759 Shares
Basic Energy Services,
Inc.
Common Stock
This prospectus relates to the resale of 1,794,759 shares
of the common stock of Basic Energy Services, Inc. that may be
offered and sold from time to time by the selling stockholders
named in this prospectus.
The selling stockholders may offer and sell the shares from time
to time at market prices, in negotiated transactions or
otherwise. The timing and amount of any sale are within the sole
discretion of the selling stockholders. The selling stockholders
may sell the shares directly or through underwriters, brokers or
dealers. The selling stockholders will pay commissions or
discounts to underwriters, brokers or dealers in amounts to be
negotiated prior to the sale. We will not receive any of the
proceeds from the sale of the shares by the selling
stockholders. See Plan of Distribution on
page 6 for more information on this topic.
Our common stock is listed on the New York Stock Exchange under
the symbol BAS. On April 4, 2007, the closing
sale price of our common stock on the New York Stock Exchange
was $23.66 per share.
Investing in our common stock involves risks, including those
contained or incorporated by reference herein as described under
Risk Factors on page 2 of this prospectus.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or has determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
The date of this prospectus is April 17, 2007
TABLE OF
CONTENTS
|
|
|
|
|
|
|
Page
|
|
|
|
|
ii
|
|
|
|
|
ii
|
|
|
|
|
ii
|
|
|
|
|
iii
|
|
|
|
|
1
|
|
|
|
|
2
|
|
|
|
|
3
|
|
|
|
|
3
|
|
|
|
|
6
|
|
|
|
|
8
|
|
|
|
|
8
|
|
i
ABOUT
THIS PROSPECTUS
This prospectus is part of a registration statement that we
filed with the Securities and Exchange Commission, or SEC,
utilizing a shelf registration process. Under this
shelf registration process, the selling stockholders may sell
the securities described in this prospectus in one or more
offerings. This prospectus does not contain all of the
information included in the registration statement. The
registration statement filed with the SEC includes exhibits that
provide more details about the matters discussed in this
prospectus. You should carefully read this prospectus, the
related exhibits filed with the SEC, together with the
additional information described below under the headings
Where You Can Find More Information and
Incorporation by Reference.
You should rely only on the information contained or
incorporated by reference in this prospectus. We have not, and
the selling stockholders have not, authorized any other person
to provide you with different information. If anyone provides
you with different or inconsistent information, you should not
rely on it. The selling stockholders are not making to sell or
seeking offers to buy any of the securities covered by this
prospectus in any state where the offer is not permitted. You
should assume that the information appearing in this prospectus
and any other document incorporated by reference is accurate
only as of the date on the front cover of those documents. Our
business, financial condition, results of operations and
prospects may have changed since those dates.
Under no circumstances should the delivery to you of this
prospectus or any offer or sale made pursuant to this prospectus
create any implication that the information contained in this
prospectus is correct as of any time after the date of this
prospectus.
Unless otherwise indicated or unless the context otherwise
requires, all references in this prospectus to
Basic, we, us, and
our mean Basic Energy Services, Inc. and its wholly
owned subsidiaries.
WHERE YOU
CAN FIND MORE INFORMATION
We have filed a registration statement with the SEC under the
Securities Act of 1933, as amended, which we refer to as the
Securities Act, that registers the resale by the selling
stockholders of the securities offered by this prospectus. The
registration statement, including the attached exhibits,
contains additional relevant information about us. The rules and
regulations of the SEC allow us to omit some information
included in the registration statement from this prospectus.
We file annual, quarterly, and other reports, proxy statements
and other information with the SEC under the Securities Exchange
Act of 1934, as amended, which we refer to as the Exchange Act.
You may read and copy any materials we file with the SEC at the
SECs public reference room at 100 F Street, N.E.,
Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330
for further information on the public reference room. Our SEC
filings are also available to the public through the SECs
website at http://www.sec.gov. General information about
us, including our annual reports on
Form 10-K,
quarterly reports on
Form 10-Q
and current reports on
Form 8-K,
as well as any amendments and exhibits to those reports, are
available free of charge through our website at
http://www.basicenergyservices.com as soon as reasonably
practicable after we file them with, or furnish them to, the
SEC. Information on our website is not incorporated into this
prospectus or our other securities filings and is not a part of
this prospectus.
INCORPORATION
BY REFERENCE
The SEC allows us to incorporate by reference
information into this document. This means that we can disclose
important information to you by referring you to another
document filed separately with the SEC. The information
incorporated by reference is considered to be part of this
prospectus. We incorporate by reference the documents listed
below, other than any portions of the respective filings that
were furnished (pursuant to Item 2.02 or Item 7.01 of
current reports on
Form 8-K
or other applicable SEC rules) rather than filed:
|
|
|
|
|
our annual report on
Form 10-K
for the year ended December 31, 2006, as filed with the SEC
on March 16, 2007, which we refer to as our 2006
Form 10-K;
|
|
|
|
our current reports on
Form 8-K,
as filed with the SEC on January 4, 2007, January 12,
2007, January 19, 2007, January 29, 2007,
February 12, 2007 and March 8, 2007; and
|
ii
|
|
|
|
|
the description of our common stock in our Registration
Statement on
Form 8-A
(File
No. 001-32693)
under Section 12(b) of the Exchange Act.
|
All documents that we file pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this
prospectus and until any offerings hereunder are completed, or
after the date of the registration statement of which this
prospectus forms a part and prior to effectiveness of the
registration statement, will be deemed to be incorporated by
reference into this prospectus and will be a part of this
prospectus from the date of the filing of the document. Any
statement contained in a document incorporated or deemed to be
incorporated by reference in this prospectus will be deemed to
be modified or superseded for purposes of this prospectus to the
extent that a statement contained in this prospectus or in any
other subsequently filed document that also is or is deemed to
be incorporated by reference in this prospectus modifies or
supersedes that statement. Any statement that is modified or
superseded will not constitute a part of this prospectus, except
as modified or superseded.
We will provide to each person, including any beneficial owner
to whom a prospectus is delivered, a copy of these filings,
other than an exhibit to these filings unless we have
specifically incorporated that exhibit by reference into the
filing, upon written or oral request and at no cost. Requests
should be made by writing or telephoning us at the following
address:
Basic Energy Services, Inc.
400 W. Illinois, Suite 800
Midland, Texas 79701
(432) 620-5500
Attn: Investor Relations
CAUTIONARY
STATEMENT
REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements within the
meaning of Section 27A of the Securities Act regarding our
business, financial condition, results of operations and
prospects. Words such as expects, anticipates, intends, plans,
believes, seeks, estimates and similar expressions or variations
of such words are intended to identify forward-looking
statements. However, these are not the exclusive means of
identifying forward-looking statements. Although forward-looking
statements contained in this prospectus reflect our good faith
judgment, such statements can only be based on facts and factors
currently known to us. Consequently, forward-looking statements
are inherently subject to risks and uncertainties, and actual
outcomes may differ materially from the results and outcomes
discussed in the forward-looking statements. Further information
about the risks and uncertainties that may impact us are
described or incorporated by reference in Risk
Factors beginning on page 2. You should read that
section carefully. You should not place undue reliance on
forward-looking statements, which speak only as of the date of
this prospectus. We undertake no obligation to update publicly
any forward-looking statements in order to reflect any event or
circumstance occurring after the date of this prospectus or
currently unknown facts or conditions or the occurrence of
unanticipated events.
iii
PROSPECTUS
SUMMARY
This summary highlights selected information contained in
documents incorporated by reference in this prospectus. This
summary does not contain all of the information that you should
consider before investing in our common stock. You should read
carefully the entire prospectus, including Risk
Factors and the other information contained or
incorporated by reference in this prospectus before making an
investment decision.
Our
Business
We provide a wide range of well site services to oil and gas
drilling and producing companies, including well servicing,
fluid services, drilling and completion services and well site
construction services. These services are fundamental to
establishing and maintaining the flow of oil and gas throughout
the productive life of a well. Our broad range of services
enables us to meet multiple needs of our customers at the well
site. Our operations are managed regionally and are concentrated
in the major United States onshore oil and gas producing regions
in Texas, New Mexico, Oklahoma, Arkansas and Louisiana and the
Rocky Mountain states. We provide our services to a diverse
group of over 1,000 oil and gas companies. We operate the
third-largest fleet of well servicing rigs (also commonly
referred to as workover rigs) in the United States, representing
over 11% of the overall available U.S. fleet, with our two
larger competitors controlling approximately 25% and 14%,
respectively, according to the Association of Energy Services
Companies and other publicly available data.
We currently conduct our operations through the following four
business segments:
|
|
|
|
|
Well Servicing. Our well servicing segment
(45% of our revenues in 2006) currently operates our fleet
of over 360 well servicing rigs and related equipment. This
business segment encompasses a full range of services performed
with a mobile well servicing rig, including the installation and
removal of downhole equipment and elimination of obstructions in
the well bore to facilitate the flow of oil and gas. These
services are performed to establish, maintain and improve
production throughout the productive life of an oil and gas well
and to plug and abandon a well at the end of its productive
life. Our well servicing equipment and capabilities are
essential to facilitate most other services performed on a well.
|
|
|
|
Fluid Services. Our fluid services segment
(27% of our revenues in 2006) currently utilizes our fleet
of fluid services trucks and related assets, including
specialized tank trucks, storage tanks, water wells, disposal
facilities and related equipment. These assets provide,
transport, store and dispose of a variety of fluids. These
services are required in most workover, drilling and completion
projects and are routinely used in daily producing well
operations.
|
|
|
|
Drilling and Completion Services. Our drilling
and completion services segment (21% of our revenues in
2006) currently operates our fleet of pressure pumping
units, air compressor packages specially configured for
underbalanced drilling operations, cased-hole wireline units and
an array of specialized rental equipment and fishing tools. We
entered the rental and fishing tool business through an
acquisition in the first quarter of 2006. The largest portion of
this business consists of pressure pumping services focused on
cementing, acidizing and fracturing services in niche markets.
|
|
|
|
Well Site Construction Services. Our well site
construction services segment (7% of our revenues in
2006) currently utilizes our fleet of earth moving
equipment, which includes dozers, trenchers, motor graders,
backhoes and other heavy equipment. We utilize these assets
primarily to provide services for the construction and
maintenance of oil and gas production infrastructure, such as
preparing and maintaining access roads and well locations,
installation of small diameter gathering lines and pipelines and
construction of temporary foundations to support drilling rigs.
|
Our principal executive offices are located at 400 W. Illinois,
Suite 800, Midland, Texas 79701, and our telephone number
at that address is
(432) 620-5500.
Our website address is
http://www.basicenergyservices.com. However, information
contained on our website is not incorporated by reference into
this prospectus, and you should not consider the information
contained on our website to be part of this prospectus.
1
RISK
FACTORS
An investment in our common stock is subject to numerous
risks, including those listed below and the other risks listed
under the caption Risk Factors incorporated by
reference to Item 1A of our
Form 10-K
for the year ended December 31, 2006 and any future filings
on
Form 10-K
or
Form 10-Q.
You should carefully consider these risks, along with the
information provided elsewhere in this prospectus and the
documents we incorporate by reference in this prospectus before
investing in the common stock. You could lose all or part of
your investment in the common stock.
Risks
Associated With an Investment in Our Common Stock
Substantial
sales of our common stock could adversely affect our stock
price.
Sales of a substantial number of shares of common stock after
the date of this prospectus, or the perception that such sales
could occur, could adversely affect the market price of our
common stock by introducing a large number of sellers to the
market. Such sales could cause the market price of our common
stock to decline.
On March 6, 2007, in connection with the closing of our
merger with JetStar Consolidated Holdings, Inc., or JetStar, we
entered into a registration rights agreement with the former
stockholders of JetStar, who collectively hold
1,794,759 shares of our common stock. Pursuant to the
registration rights agreement, we have filed and are obligated
to maintain a shelf registration statement relating
to the resale of the shares of our common stock issued to the
former JetStar stockholders in connection with the merger. We
also expect to enter into other registration rights agreements
in the future in connection with acquisitions, including one
pending acquisition. By causing a large number of shares to be
sold in the public market, these holders could cause the market
price of our common stock to decline.
We cannot predict whether future sales of our common stock, or
the availability of our common stock for sale, will adversely
affect the market price for our common stock or our ability to
raise capital by offering equity securities.
Because
we have no plans to pay dividends on our common stock, investors
must look solely to stock appreciation for a return on their
investment in us.
We do not anticipate paying any cash dividends on our common
stock in the foreseeable future. We currently intend to retain
all future earnings to fund the development and growth of our
business. Any payment of future dividends will be at the
discretion of our board of directors and will depend on, among
other things, our earnings, financial condition, capital
requirements, level of indebtedness, statutory and contractual
restrictions applying to the payment of dividends and other
considerations that the board of directors deems relevant. The
terms of our existing senior credit facility and our senior
notes indenture may limit or prohibit the payment of dividends
without the prior written consent of the lenders. Investors must
rely on sales of their common stock after price appreciation,
which may never occur, as the only way to realize a return on
their investment. Investors seeking cash dividends should not
purchase our common stock.
2
USE OF
PROCEEDS
The shares of common stock to be offered and sold pursuant to
this prospectus will be offered and sold by the selling
stockholders. We will not receive any proceeds from the sale of
the shares by the selling stockholders.
SELLING
STOCKHOLDERS
The following table sets forth information regarding the selling
stockholders and the number of shares of common stock each
selling stockholder is offering. The information included in the
table as to the selling stockholders has been furnished to us by
or on behalf of the selling stockholders for inclusion in this
prospectus. Under the rules of the SEC, beneficial ownership
includes shares over which the indicated beneficial owner
exercises voting or investment power. Unless otherwise indicated
in the footnotes below, we believe the person named in the table
below has sole voting and investment power with respect to all
shares beneficially owned. The information regarding shares
beneficially owned after the offering assumes the sale of all
shares offered by the selling stockholders. The percentage
ownership data is based on 40,416,426 shares of our common
stock issued and outstanding as of March 26, 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Beneficially Owned
|
|
|
|
|
|
Shares Beneficially Owned
|
|
|
|
Before the Offering
|
|
|
Shares That May be
|
|
|
After the Offering
|
|
Name
|
|
Number
|
|
|
Percent
|
|
|
Offered Hereby
|
|
|
Number
|
|
|
Percent
|
|
|
JetStar Investment LLC(1)
|
|
|
768,637
|
|
|
|
1.9
|
%
|
|
|
768,637
|
|
|
|
|
|
|
|
|
|
Elmow Holdings, Inc. (formerly
named Rio Pumping Services, Inc.)(2)
|
|
|
251,325
|
|
|
|
|
*
|
|
|
251,325
|
|
|
|
|
|
|
|
|
|
Pershing, LLC, as Custodian for
Thornton E. Anderson IRA(3)
|
|
|
118,448
|
|
|
|
|
*
|
|
|
118,448
|
|
|
|
|
|
|
|
|
|
David L. Murfin(4)
|
|
|
110,357
|
|
|
|
|
*
|
|
|
110,357
|
|
|
|
|
|
|
|
|
|
Jayhawk Petro-Ventures, LLC(5)
|
|
|
105,713
|
|
|
|
|
*
|
|
|
105,713
|
|
|
|
|
|
|
|
|
|
David Autry(6)
|
|
|
105,713
|
|
|
|
|
*
|
|
|
105,713
|
|
|
|
|
|
|
|
|
|
Whitsunday Enterprises, LLC(7)
|
|
|
68,177
|
|
|
|
|
*
|
|
|
68,177
|
|
|
|
|
|
|
|
|
|
Iuka Carmi Development, LLC(8)
|
|
|
45,386
|
|
|
|
|
*
|
|
|
45,386
|
|
|
|
|
|
|
|
|
|
Jim Collet(9)
|
|
|
43,350
|
|
|
|
|
*
|
|
|
43,350
|
|
|
|
|
|
|
|
|
|
Kathleen S. Anderson(10)
|
|
|
34,088
|
|
|
|
|
*
|
|
|
34,088
|
|
|
|
|
|
|
|
|
|
Anderson Resources, Inc.(11)
|
|
|
34,088
|
|
|
|
|
*
|
|
|
34,088
|
|
|
|
|
|
|
|
|
|
Sunflower Bank, NA, as Custodian
for William L. Anderson IRA(12)
|
|
|
34,088
|
|
|
|
|
*
|
|
|
34,088
|
|
|
|
|
|
|
|
|
|
Xploration Services, Inc.(13)
|
|
|
16,230
|
|
|
|
|
*
|
|
|
16,230
|
|
|
|
|
|
|
|
|
|
Stephens Oil & Cattle,
LLC(14)
|
|
|
16,230
|
|
|
|
|
*
|
|
|
16,230
|
|
|
|
|
|
|
|
|
|
Anderco, LLC(15)
|
|
|
9,718
|
|
|
|
|
*
|
|
|
9,718
|
|
|
|
|
|
|
|
|
|
Jeff Miller(16)
|
|
|
8,576
|
|
|
|
|
*
|
|
|
8,576
|
|
|
|
|
|
|
|
|
|
Durango Enterprises, LLC(17)
|
|
|
6,511
|
|
|
|
|
*
|
|
|
6,511
|
|
|
|
|
|
|
|
|
|
Tim Schniederjan(18)
|
|
|
6,126
|
|
|
|
|
*
|
|
|
6,126
|
|
|
|
|
|
|
|
|
|
Jerry Mower(19)
|
|
|
5,999
|
|
|
|
|
*
|
|
|
5,999
|
|
|
|
|
|
|
|
|
|
Brad Elenburg(20)
|
|
|
5,999
|
|
|
|
|
*
|
|
|
5,999
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,794,759
|
|
|
|
4.4
|
%
|
|
|
1,794,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Represents beneficial ownership of less than one percent of the
outstanding shares of our common stock. |
|
|
|
(1) |
|
The address of JetStar Investment LLC is 2100 McKinney,
Suite 1200, Dallas, Texas 75201. SKM Equity Fund III,
LP is the managing member of JetStar Investment LLC. SKM
Partners, LLC is the general partner of SKM Equity
Fund III, L.P. and Allan W. Karp and John F.
Megrue, Jr. are managers of SKM Partners, LLC. |
3
|
|
|
(2) |
|
The address of Elmow Holdings, Inc. (formerly named Rio Pumping
Services, Inc.) is 271 Lone Tree Road, Jacksboro, Texas 76458.
Jerry Mower and Brad Elenburg are the controlling stockholders
of Elmow Holdings, Inc. |
|
(3) |
|
The address of Pershing, LLC, as Custodian for Thornton E.
Anderson IRA, is One Pershing Plaza, Jersey City, New Jersey
07399. Thornton E. Anderson exercises sole voting and investment
power over these shares. |
|
(4) |
|
The address of David L. Murfin is 250 N. Water,
Suite 300, Wichita, Kansas 67202. |
|
(5) |
|
The address of Jayhawk Petro-Ventures, LLC is
100 S. Main Street, Suite 607, Wichita, Kansas
67202. Daniel J. Klaus and Rosie M. Klaus are the sole members
of Jayhawk Petro-Ventures, LLC. |
|
(6) |
|
The address of David Autry is 1301 Holly, Pratt, Kansas 67124. |
|
(7) |
|
The address of Whitsunday Enterprises, LLC is
9320 E. Central, Wichita, Kansas 67206. John D.
Stephens and Clinton J. Lett, III are the managers of
Whitsunday Enterprises, LLC. |
|
(8) |
|
The address of Iuka Carmi Development, LLC is 920 East First
Street, Pratt, Kansas 67124. Pratt Well Service, Inc. is the
controlling member of, and Kenneth C. Gates is a member-manager
of, Iuka Carmi Development, LLC. The Kenneth C. Gates Trust is
the controlling stockholder of Pratt Well Service, Inc. and
Kenneth C. Gates controls the Kenneth C. Gates Trust. |
|
(9) |
|
The address of Jim Collet is 750 N. St. Paul,
Suite 530, Dallas, Texas 75201. |
|
|
|
(10) |
|
The address of Kathleen S. Anderson is 8805 Bradford Circle,
Wichita, Kansas 67206. |
|
(11) |
|
The address of Anderson Resources, Inc. is
221 S. Broadway, Suite 302, Wichita, Kansas
67202. Thornton E. Anderson and William L. Anderson exercise
voting and investment power over these shares. |
|
(12) |
|
The address of Sunflower Bank, NA, as Custodian for William L.
Anderson IRA, is 2090 S. Ohio, Salina, Kansas 67401.
William L. Anderson exercises sole voting and investment power
over these shares. |
|
(13) |
|
The address of Xploration Services, Inc. is 422 Morningside,
Wichita, Kansas 67218. Dean Pattisson exercises sole voting and
investment power over these shares. |
|
(14) |
|
The address of Stephens Oil & Cattle, LLC is 608
Glendevon Road, Andover, Kansas 67002. John D. Stephens and Lori
A. Stephens are the controlling members of Stephens
Oil & Cattle, LLC. |
|
(15) |
|
The address of Anderco, LLC is 3914 Sweet Bay, Wichita, Kansas
67226. Steven C. Anderson exercises sole voting and investment
power over these shares. |
|
(16) |
|
The address of Jeff Miller is 301 Commerce Street,
Suite 3600, Fort Worth, Texas 76102. |
|
(17) |
|
The address of Durango Enterprises, LLC is
100 S. Main, Suite 607, Wichita, Kansas 67202.
Daniel J. Klaus and David Autry exercise voting and investment
power over these shares. |
|
(18) |
|
The address of Tim Schniederjan is 479 FM 1630,
Gainesville, Texas 76240. |
|
(19) |
|
The address of Jerry Mower is 271 Lone Tree Road, Jacksboro,
Texas 76458. |
|
(20) |
|
The address of Brad Elenburg is 687 Wesley Chapel Road,
Jacksboro, Texas 76458. |
Material
Relationships with the Selling Stockholders
David Autry, Jim Collet, Tim Schniederjan, Jerry Mower and Brad
Elenburg were employees of JetStar or its subsidiaries prior to
the merger and they are current employees of Basic after the
merger.
In addition, David N. Autry, Jim Collet, Brad Elenburg and Jerry
Mower have each entered into a non-competition agreement with
us. Under the non-competition agreements, each of
Messrs. Autry, Collet, Elenburg and Mower has agreed that
until March 6, 2012 he will not, and will not permit any of
his affiliates to, engage in a business similar to ours within a
certain restricted area and has agreed not to solicit our
employees, suppliers and customers.
The selling stockholders obtained their shares of our common
stock in connection with our merger with JetStar, pursuant to
the Agreement and Plan of Merger, which we refer to as the
acquisition agreement, dated as of January 8,
2007, by and among Basic, JS Acquisition LLC, an indirect
wholly-owned subsidiary of Basic, and JetStar. Pursuant to the
merger, Basic issued approximately 1.8 million shares of
common stock (and may issue an additional 95,999 shares),
paid approximately $45 million in cash consideration to
JetStar stockholders and paid approximately $38 million for
the repayment of outstanding indebtedness of JetStar. A total of
$8.25 million from the cash consideration has been
deposited in escrow as security for working capital and net debt
adjustments, and to cover certain potential indemnities and
other claims by the Company under the acquisition agreement.
4
Under the acquisition agreement, we have agreed to indemnify
each selling stockholder and their respective directors,
officers and employees, if any, against certain liabilities,
including liabilities under the Securities Act of 1933. In
addition, we agreed under the acquisition agreement to maintain
all rights to exculpation, indemnification and advancement of
expenses in favor of then current or former directors, officers
and employees of JetStar or its subsidiaries and pay all
reasonable expenses, including reasonable attorneys fees,
that may be incurred in successfully enforcing these rights.
Also in connection with our merger with JetStar, we entered into
a registration rights agreement with the selling stockholders,
dated March 6, 2007. Under the terms of this registration
rights agreement, the selling stockholders have
shelf and piggy-back registration
rights. Also under the terms of this registration rights
agreement, we have agreed to indemnify each selling stockholder,
such selling stockholders directors and officers and any
selling agent selected by such selling stockholder, including
underwriters, against certain liabilities, including certain
liabilities under the Securities Act of 1933. The selling
stockholders have also agreed to indemnify us in certain
circumstances against certain liabilities, including certain
liabilities under the Securities Act of 1933.
Under the terms of the registration rights agreement, we will
bear all expenses in connection with the registration of shares
pursuant to such agreement, excluding underwriters or
brokers fees, discounts and communications, which shall be
borne by the selling stockholder.
The filing of the registration statement of which this
prospectus is a part is intended to satisfy our shelf
registration obligations under the registration rights agreement.
5
PLAN OF
DISTRIBUTION
We are registering shares of common stock on behalf of the
selling stockholders, and we anticipate keeping this
registration statement effective for a period of up to two years
from its effective date. Selling stockholders
include donees, pledgees, transferees or
successors-in-interest
selling securities received from a named selling stockholder as
a gift, pledge, distribution or other non-sale related transfer
after the date of this prospectus. All costs, expenses and fees
in connection with the registration of the shares of common
stock offered by this prospectus and the sale of shares will be
borne by us; provided, however, that the selling
stockholders will pay all discounts, commissions or
brokers fees or fees of similar securities industry
professionals and transfer taxes, if any, attributable to sales
of the shares. Sales of shares may be effected by the selling
stockholders from time to time in one or more types of
transactions, including, without limitation:
|
|
|
|
|
block trades in which the broker or dealer so engaged will
attempt to sell the securities as agent but may position and
resell a portion of the block as principal to facilitate the
transaction;
|
|
|
|
purchases by a broker or dealer as principal and resale by the
broker or dealer for its own account pursuant to this prospectus;
|
|
|
|
on any national securities exchange or quotation service on
which the securities are listed or quoted at the time of sale;
|
|
|
|
otherwise than on such exchanges or services or in the
over-the-counter
market;
|
|
|
|
ordinary brokerage transactions and transactions in which the
broker solicits purchases;
|
|
|
|
privately negotiated transactions;
|
|
|
|
short sales;
|
|
|
|
through the writing of options on the securities, whether or not
the options are listed on an options exchange;
|
|
|
|
through the distribution of the securities by any selling
stockholder to its partners, members or stockholders;
|
|
|
|
one or more underwritten offerings on a firm commitment or best
efforts basis;
|
|
|
|
transactions that may involve crosses or block transactions;
|
|
|
|
to cover hedging transactions (other than short
sales as defined in
Rule 3b-3
under the Exchange Act) made pursuant to this prospectus;
|
|
|
|
by pledge to secure debts or other obligations;
|
|
|
|
any combination of any of these methods of sale; and
|
|
|
|
any other manner permitted pursuant to applicable law.
|
The selling stockholders may also transfer the securities by
gift. We do not know of any arrangements by the selling
stockholders for the sale of any of the securities.
The selling stockholders may sell shares directly to purchasers
or to or through underwriters or broker-dealers, who may act as
agents or principals. The underwriters or broker-dealers may
receive compensation in the form of discounts, concessions or
commissions from the selling stockholders
and/or the
purchasers of shares for whom the underwriters or broker-dealers
may act as agents or to whom they sell as principal, or both.
The amount and form of compensation for these services will be
determined by the selling stockholders and the purchaser or
purchasers, and may be in excess of customary commissions.
The selling stockholders and any underwriters or broker-dealers
that act in connection with the sale of shares might be deemed
to be underwriters within the meaning of
Section 2(a)(11) of the Securities Act, and any commissions
received by these underwriters or broker-dealers and any profit
on the resale of the shares sold by them while acting as
principals might be deemed to be underwriting discounts or
commissions under the Securities Act. The selling stockholders
may agree to indemnify any underwriter, agent, or broker-dealer
that participates in transactions involving sales of the shares
against specified liabilities, including liabilities arising
under the Securities Act.
Because the selling stockholders may be deemed to be
underwriters within the meaning of
Section 2(a)(11) of the Securities Act, the selling
stockholders will be subject to the prospectus delivery
requirements of the Securities Act, which may include delivery
through the facilities of the New York Stock
6
Exchange pursuant to Rule 153 under the Securities Act. We
have informed the selling stockholders that the
anti-manipulative provisions of Regulation M of the
Exchange Act may apply to their sales in the market.
In addition to selling their shares under this prospectus, the
selling stockholders also may resell all or a portion of their
shares in open market transactions in reliance upon
Rule 144 under the Securities Act, provided they meet the
criteria and conform to the requirements of that rule and
regardless of whether the securities are covered by this
prospectus.
If the selling stockholders notify us of any material
arrangement entered into with an underwriter or broker-dealer
for the sale of shares 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, under Rule 424(b) under the Securities
Act, disclosing:
|
|
|
|
|
the name of such selling stockholder and of the participating
underwriter or broker-dealer;
|
|
|
|
the number of shares involved;
|
|
|
|
the price at which the shares were sold;
|
|
|
|
the commissions paid or discounts or concessions allowed to the
underwriter or, broker-dealer; and
|
|
|
|
other facts material to the transaction.
|
From time to time, one or more of the selling stockholders may
pledge, hypothecate or grant a security interest in some or all
of the securities owned by them. The pledgees, secured parties
or persons to whom the securities have been hypothecated will,
upon foreclosure in the event of default, be deemed to be
selling stockholders. As and when a selling stockholder takes
such actions, the number of securities offered under this
prospectus on behalf of such selling stockholder will decrease.
The plan of distribution for that selling stockholders
securities will otherwise remain unchanged. In addition, a
selling stockholder may, from time to time, sell the securities
short, and, in those instances, this prospectus may be delivered
in connection with the short sales and securities offered under
this prospectus may be used to cover short sales.
A selling stockholder may enter into hedging transactions with
broker-dealers and the broker-dealers may engage in short sales
of the securities in the course of hedging the positions they
assume with that selling stockholder, including, without
limitation, in connection with distributions of the securities
by those broker-dealers. A selling stockholder may enter into
option or other transactions with broker-dealers that involve
the delivery of the securities offered hereby to the
broker-dealers who may then resell or otherwise transfer those
securities. A selling stockholder may also loan or pledge the
securities offered hereby to a broker-dealer and the
broker-dealer may sell the securities offered hereby so loaned
or upon a default may sell or otherwise transfer the pledged
securities offered hereby.
We have agreed to indemnify in certain circumstances the selling
stockholders and any agents who may be deemed to be
underwriters, if any, of the securities covered by the
registration statement, against certain liabilities, including
liabilities under the Securities Act of 1933. The selling
stockholders have agreed to indemnify us in certain
circumstances against certain liabilities, including liabilities
under the Securities Act of 1933.
The securities offered hereby have been issued to the selling
stockholders in transactions exempt from the registration
requirements of the Securities Act of 1933. We agreed pursuant
to the registration rights agreement we entered into with the
selling stockholders to register such securities and all other
shares of common stock owned by them under the Securities Act of
1933, and to keep the registration statement of which this
prospectus is a part effective until the earlier of (1) the
date on which the selling stockholders have sold all of the
securities and (2) March 6, 2009; provided, however,
that such date will be extended by adding any time periods
during which we suspend the use of this prospectus. We have
agreed to pay all expenses in connection with this offering,
including the fees and expenses of one counsel to the selling
stockholders, but not including underwriting discounts,
concessions or commissions of the selling stockholders.
We will not receive any proceeds from sales of any securities by
the selling stockholders.
We cannot assure you that the selling stockholders will sell all
or any portion of the securities offered hereby.
7
LEGAL
MATTERS
The validity of the shares of common stock offered in this
prospectus will be passed upon for us by Andrews Kurth LLP,
Houston, Texas.
EXPERTS
The consolidated financial statements and related financial
statement schedule of Basic Energy Services, Inc. (Company) as
of December 31, 2006 and 2005, and for each of the years in
the three-year period ended December 31, 2006, and
managements assessment of the effectiveness of internal
control over financial reporting as of December 31, 2006
have been incorporated by reference herein in reliance upon the
reports of KPMG LLP, independent registered public accounting
firm, incorporated by reference herein, and upon the authority
of said firm as experts in accounting and auditing. Their report
refers to a change in accounting for share-based payments
effective January 1, 2006.
The audit report on managements assessment of the
effectiveness of internal control over financial reporting and
the effectiveness of internal control over financial reporting
as of December 31, 2006, contains an explanatory paragraph
that states that the Company acquired G&L Tool, Ltd, Arkla
Cementing, Inc., Globe Well Services, Inc., Hennessey Rental
Tools Inc., Chaparral Service, Inc., Reddline Services, LLC, and
Rebel Testers, Ltd. (collectively the 2006 Excluded
Acquisitions) during 2006, and management excluded from its
assessment of the effectiveness of the Companys internal
control over financial reporting as of December 31, 2006,
the 2006 Excluded Acquisitions internal control over
financial reporting associated with total assets of
$113.3 million and total revenues of $65.1 million
included in the consolidated financial statements of Basic
Energy Services, Inc. and subsidiaries as of and for the year
ended December 31, 2006. The audit of internal control over
financial reporting of Basic Energy Services, Inc. also excluded
an evaluation of the internal control over financial reporting
of the 2006 Excluded Acquisitions.
8