SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
SCHEDULE 13D/A
(RULE 13D-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13D-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13D-2(a)
(Amendment No. 1)
DAWSON PRODUCTION SERVICES, INC.
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(Name of Issuer)
Common Stock, Par Value $.01 Per Share
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Title of Class of Securities
239423106
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(CUSIP Number)
Jack D. Loftis, Jr.
Key Energy Group, Inc.,
Two Tower Center, Twentieth Floor
East Brunswick, NJ 08816
(732) 247-4822
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 29, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check
the following box [_].
Note: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Rule 13d-7(b) for
other parties to whom copies are to be sent.
The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 (the "Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions
of the Act (however, see the Notes).
CUSIP NO. 239423106 13D
1 Name of Reporting Person
I.R.S. Identification No. of Above Person (ENTITIES ONLY)
Key Energy Group, Inc. (I.R.S. Identification No.: 04-2648081)
2 Check the Appropriate Box If a Member of a Group
a. [ ]
b. [ ]
3 SEC Use Only
4 Source of Funds
WC
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
Maryland
7 Sole Voting Power
Number of 820,500
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 820,500
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
820,500
12 Check Box If the Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
7.3%
14 Type of Reporting Person
CO
This Amendment No. 1 to Schedule 13D amends and supplements the
Schedule 13D filed by Key Energy Group, Inc. on June 15, 1998 (the "Initial
Statement"). Capitalized terms used but not otherwise defined herein shall
have the meanings ascribed to such terms in the Initial Statement. Except
as amended and supplemented hereby, the Initial Statement remains in effect.
ITEM 4. PURPOSE OF TRANSACTION.
On June 29, 1998, Francis D. John, Chairman, President and Chief
Executive Officer of the Reporting Person, sent a letter (the "Letter") to
the Issuer's President and Board of Directors, in which, among other
things, the Reporting Person proposed to acquire all issued and outstanding
Shares of the Issuer for a cash price of $16.00 per Share (the "Proposal").
The Reporting Person issued a press release on June 29, 1998, publicly
setting forth the text of the Letter. A copy of the Letter is filed
herewith as Exhibit D and a copy of the press release is filed herewith as
Exhibit E, both of which are incorporated herein by reference.
Depending upon such factors as the Reporting Person considers relevant
from time to time, the Reporting Person will seek further contact with the
Issuer, the Issuer's representatives and other persons interested in the
Issuer, for the purpose of discussing the Letter and the Proposal.
Depending upon the Issuer's response to the Letter and the Proposal,
if any, the results of further contact with the Issuer, if any, market
conditions and other factors as the Reporting Person considers relevant
from time to time, the Reporting Person may consider additional courses
of action with respect to the Issuer, including (a) acquiring additional
Shares or other securities of the Issuer in the open market, in privately
negotiated transactions or otherwise, (b) seeking to obtain control of
the Issuer, and (c) disposing of some or all of the Shares held by it in
the open market or in privately negotiated transactions. Although the
foregoing activities represent the range of activities within the current
contemplation of the Reporting Person, it should be noted that the
activities within such contemplated range are subject to change at any
time.
The description of the Letter does not purport to be complete, and is
qualified in its entirety by reference to the Letter, which is filed as
Exhibit D to this Amendment No. 1 to Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) An aggregate of 820,500 Shares, or 7.3% of the total outstanding
Shares, are beneficially owned by the Reporting Person. The calculation of
the percentage of outstanding Shares beneficially owned by the Reporting
Person is based on 11,202,965 Shares outstanding, which is the number of
outstanding Shares reported in the Issuer's Annual Report on Form 10-K for
the fiscal year ended March 31, 1998 (the most recent available filing
with the Commission by the Issuer).
(b) The Reporting Person has the sole power to vote and the sole
power to dispose of the 820,500 Shares reported herein as being
beneficially owned by it.
(c) There have been no transactions with respect to the Shares
effected by the Reporting Person or any other person referred to in Item 2
of the Initial Statement since the filing of the Initial Statement.
(d) Not applicable.
(e) Not applicable.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
A. Amended and Restated Credit Agreement, dated as of June 6, 1997,
as amended and restated through November 6, 1997, among the Reporting
Person, PNC Bank, National Association, as Administrative Agent, and
several other financial institutions (incorporated by reference to Exhibit
10(s) to the Reporting Person's Form 10-Q for the quarterly period ended
December 31,1997, File No. 000-22665).
B. First Amendment to the Amended and Restated Credit Agreement of
June 6, 1997, as amended and restated through November 6, 1997, dated
December 3, 1997 (incorporated by reference to Exhibit 10(t) to the
Reporting Person's Form 10-Q for the quarterly period ended December 31,
1997, File No. 000-22665).
C. Second Amendment to the Amended and Restated Credit Agreement of
June 6, 1997, as amended and restated through November 6, 1997, as amended
December 3, 1997, dated April 28, 1998 (filed with the Initial Statement).
D. Letter dated June 29, 1998 from Francis D. John to Michael E.
Little and the Board of Directors of the Issuer.
E. Press Release dated June 29, 1998 of the Reporting Person
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Date: June 29, 1998
KEY ENERGY GROUP, INC.
By: /s/ Francis D. John
___________________________________
Name: Francis D. John
Title: Chairman, President
and Chief Executive Officer
EXHIBIT INDEX
EXHIBIT
-----------
A. Amended and Restated Credit Agreement, dated as of June 6, 1997, as
amended and restated through November 6, 1997, among the Reporting
Person, PNC Bank, National Association, as Administrative Agent, and
several other financial institutions (incorporated by reference to
Exhibit 10(s) to the Reporting Person's Form 10-Q for the quarterly
period ended December 31,1997, File No. 000-22665).
B. First Amendment to the Amended and Restated Credit Agreement of June
6, 1997, as amended and restated through November 6, 1997, dated
December 3, 1997 (incorporated by reference to Exhibit 10(t) to the
Reporting Person's Form 10-Q for the quarterly period ended December
31, 1997, File No. 000-22665).
C. Second Amendment to the Amended and Restated Credit Agreement of June
6,1997, as amended and restated through November 6, 1997, as amended
December 3, 1997, dated April 28, 1998 (filed with the Initial
Statement).
D. Letter dated June 29, 1998 from Francis D. John to Michael E. Little
and the Board of Directors of the Issuer.
E. Press Release dated June 29, 1998 of the Reporting Person.
EXHIBIT D
[Key Energy Group, Inc. Letterhead]
June 29, 1998
The Board of Directors
of Dawson Production Services, Inc.
112 E. Pecan Street
Suite 1000
San Antonio, Texas 78205
Mr. Michael E. Little and other Board Members:
Mike, over the past three years you and I with our respective Board
members have discussed the significant value that would be created by a
combination of Key Energy Group, Inc. ("Key") and Dawson Production
Services, Inc. ("Dawson"). Since May of last year we have made three
specific proposals to Dawson that we believe would have benefitted both
companies' shareholders. Subsequent to our most recent discussions, in
January and February of this year, Key has continued to analyze the
possible benefits of such a combination. This analysis reconfirms our
belief that the companies would be a superb fit. Key/Dawson would be the
largest well servicing company in the world, positively staged for future
growth, with leading positions in nearly all major domestic producing
regions and with great expansion prospects throughout the world. The
combination would provide substantial benefits to shareholders, employees
and customers of both companies.
Key and Dawson have each shown significant operating improvements as
we have successfully consolidated the well servicing industry. We believe
more than ever that a Key/Dawson combination creates real shareholder
value; therefore, Key is pleased to submit to you its proposal to acquire,
at a cash price of $16.00 per share, all issued and outstanding shares of
common stock of Dawson. This price represents a premium of 62% over the
closing price of Dawson's shares on June 12, 1998, the last trading day
prior to the date on which Key disclosed its present investment in Dawson.
While this is an all-cash proposal, we believe that the combined
company's equity would be highly attractive, and accordingly we would be
willing to consider a stock-for-stock transaction or a mixed stock-and-cash
transaction.
The combination of Key and Dawson would create a stronger, more
competitive entity. In addition, a Key/Dawson combination would provide
significant operational and financial consolidation benefits and, based on
our current analyses and projections, should be accretive within the first
year of combined operations.
Based on extensive conversations with a major commercial bank and a
leading investment bank, Key is highly confident that financing would be
available to pay for all transaction-related financing requirements,
including Dawson's shares and for any necessary refinancing of existing
debt.
This proposal obviously is subject to the negotiation and execution of
definitive documentation on mutually satisfactory terms; however, we
believe that this could be accomplished quite expeditiously.
Our interest in Dawson is strong, and, as stated above, we have made a
substantial investment in Dawson. As disclosed in our Schedule 13D filed
with the SEC on June 15, 1998, Key now owns 820,500 shares of Dawson common
stock, representing approximately 7.3% of the shares outstanding based on
current publicly available information. Simultaneously with the
transmission of this letter, we have issued a public announcement setting
forth the text of this letter.
We believe that Dawson's shareholders will find our proposal extremely
attractive and trust that you will give careful consideration to it. Our
strong preference is to proceed harmoniously and cooperatively within the
framework of a negotiated transaction. To this end, we would welcome the
opportunity to meet with you to discuss our proposal at the earliest
possible date. We look forward to hearing from you in the near future.
Very truly yours,
/s/ Francis D. John
Francis D. John
FDJ/dg
Enclosure
EXHIBIT E
KEY ENERGY GROUP, INC.
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NEWS RELEASE
FOR IMMEDIATE RELEASE
KEY ENERGY GROUP MAKES $16 PER SHARE CASH PROPOSAL
TO DAWSON PRODUCTION SERVICES BOARD
EAST BRUNSWICK, N. J., JUNE 29, 1998 - Key Energy Group, Inc. (NYSE: KEG)
announced today that it has made a proposal to the board of directors of
Dawson Production Services, Inc. (Nasdaq: DPSI) to acquire all of the
issued and outstanding shares of Dawson common stock for $16.00 per share
in cash. This price represents a premium of 62% over the closing price of
Dawson's shares on June 12, 1998, the last trading day prior to the date on
which Key disclosed its present investment of 820,500 shares of Dawson
common stock. The proposed transaction would have a total market equity
value of approximately $180 million and is anticipated to be accretive to
Key's earnings and cash flow per share in the first year after the close of
the transaction.
Francis D. John, Chairman and Chief Executive Officer of Key, said, "We
believe that together, Key and Dawson would be a superb fit. Key / Dawson
would be the largest well servicing company in the world, positively staged
for future growth, with leading positions in nearly all major domestic
producing regions and with great expansion prospects throughout the world.
The combination would provide substantial benefits to shareholders,
employees and customers of both companies. Key Energy has a proven track
record of successfully integrating acquisitions. By leading the
consolidation of the well servicing industry, Key has substantially
increased its revenues, earnings and cash flow each year since 1992."
Following is the full text of the letter from Mr. John that was delivered
today to Mr. Michael E. Little, Chairman, President and Chief Executive
officer of Dawson, and other members of Dawson's Board of Directors:
"June 29, 1998
The Board of Directors of
Dawson Production Services, Inc.
112 E. Pecan Street, Suite 1000
San Antonio, Texas 78205
Mr. Michael E. Little and other Board Members:
Mike, over the past three years you and I with our respective
Board members have discussed the significant value that would be created by
a combination of Key Energy Group, Inc. ("Key") and Dawson Production
Services, Inc. ("Dawson"). Since May of last year we have made three
specific proposals to Dawson that we believe would have benefitted both
companies' shareholders. Subsequent to our most recent discussions, in
January and February of this year, Key has continued to analyze the
possible benefits of such a combination. This analysis reconfirms our
belief that the companies would be a superb fit. Key/Dawson would be the
largest well servicing company in the world, positively staged for future
growth, with leading positions in nearly all major domestic producing
regions and with great expansion prospects throughout the world. The
combination would provide substantial benefits to shareholders, employees
and customers of both companies.
Key and Dawson have each shown significant operating improvements
as we have successfully consolidated the well servicing industry. We
believe more than ever that a Key/Dawson combination creates real
shareholder value; therefore, Key is pleased to submit to you its proposal
to acquire, at a cash price of $16.00 per share, all issued and outstanding
shares of common stock of Dawson. This price represents a premium of 62%
over the closing price of Dawson's shares on June 12, 1998, the last
trading day prior to the date on which Key disclosed its present investment
in Dawson.
While this is an all-cash proposal, we believe that the combined
company's equity would be highly attractive, and accordingly we would be
willing to consider a stock-for-stock transaction or a mixed stock-and-cash
transaction.
The combination of Key and Dawson would create a stronger, more
competitive entity. In addition, a Key/Dawson combination would provide
significant operational and financial consolidation benefits and, based on
our current analyses and projections, should be accretive within the first
year of combined operations.
Based on extensive conversations with a major commercial bank and
a leading investment bank, Key is highly confident that financing would be
available to pay for all transaction-related financing requirements,
including Dawson's shares and for any necessary refinancing of existing
debt.
This proposal obviously is subject to the negotiation and
execution of definitive documentation on mutually satisfactory terms;
however, we believe that this could be accomplished quite expeditiously.
Our interest in Dawson is strong, and, as stated above, we have
made a substantial investment in Dawson. As disclosed in our Schedule 13D
filed with the SEC on June 15, 1998, Key now owns 820,500 shares of Dawson
common stock, representing approximately 7.3% of the shares outstanding
based on current publicly available information. Simultaneously with the
transmission of this letter, we have issued a public announcement setting
forth the text of this letter.
We believe that Dawson's shareholders will find our proposal
extremely attractive and trust that you will give careful consideration to
it. Our strong preference is to proceed harmoniously and cooperatively
within the framework of a negotiated transaction. To this end, we would
welcome the opportunity to meet with you to discuss our proposal at the
earliest possible date. We look forward to hearing from you in the near
future.
Very truly yours,
/ s / Francis D. John
Chairman, President and Chief Executive Officer
Key Energy Group, Inc."
- more -
On June 15, 1998 Key Energy filed a Schedule 13D with the Securities and
Exchange Commission to report its purchase in the open market of 820,500
shares of Dawson common stock, representing approximately 7.3% of Dawson's
outstanding shares based on current publicly available information.
Key Energy Group, Inc. is a holding company with diversified energy
operations, including well servicing, oilfield services, contract drilling
and oil and natural gas production. Key has operations in most major
domestic onshore producing regions and in Argentina.
CONTACT: Key Energy Group, Inc Abernathy MacGregor Frank
Jim Dean Joele Frank / Dan Katcher
(732) 247-4822 (212) 371-5999
# # #
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TWO TOWER CENTER, 20TH FLOOR, EAST BRUNSWICK, NJ 08816
TELEPHONE: (732) 247-4822 FAX: (732) 247-5148
