<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 6, 1997.
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------
GREY WOLF, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
TEXAS 74-2144774
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
10370 RICHMOND AVENUE, SUITE 600
HOUSTON, TEXAS 77042
(713) 435-6100
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Copies To:
<TABLE>
<C> <C>
T. SCOTT O'KEEFE NICK D. NICHOLAS
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER PORTER & HEDGES, L.L.P.
10370 RICHMOND AVENUE, SUITE 600 700 LOUISIANA, 35TH FLOOR
HOUSTON, TEXAS 77042 HOUSTON, TEXAS 77002
(713) 435-6100 (713) 226-0600
</TABLE>
Name, address, including zip code, and telephone number,
including area code, of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after the effective date of this Registration Statement.
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, check the following box. [ ]
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
<TABLE>
<CAPTION>
==========================================================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM
AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED REGISTERED PER SHARE PRICE
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock, par value $0.10 per share........... 15,786,605 $8.0625(1) $127,279,503(1)
==========================================================================================================================
<CAPTION>
================================================ ===============================
AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTER REGISTRATION FEE
- ------------------------------------------------ -------------------------------
<S> <C>
Common Stock, par value $0.10 per share......... $38,570(1)(2)
- -----------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 457(c), the registration fee is calculated on the basis of
the average of the high and low sale prices for the Common Stock on the
American Stock Exchange on October 30, 1997, $8.0625 per share.
(2) Does not include 92,819,030 shares covered by previous registration
statements and included in the Prospectus filed herewith pursuant to Rule
429. Aggregate registration fees of $33,125.16 were previously paid
regarding the shares covered by such previous registration statements.
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 SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
PURSUANT TO THE PROVISIONS OF RULE 429 OF THE SECURITIES ACT OF 1933, AS
AMENDED, THE PROSPECTUS CONTAINED IN THIS REGISTRATION STATEMENT ALSO RELATES TO
7,500,000, 71,194,038 AND 14,176,000 SHARES OF COMMON STOCK COVERED BY THE
REGISTRANT'S REGISTRATION STATEMENTS ON FORM S-3 (REG. NOS. 333-20423, 333-14783
AND 333-6077, RESPECTIVELY). THE PREVIOUSLY FILED FORM S-3 (REG. NO. 333-20423)
REGISTERED 14,176,000 SHARES OF COMMON STOCK FOR WHICH THE REGISTRATION FEES
WERE PREVIOUSLY PAID. THE PREVIOUSLY FILED FORM S-3 (REG. NO. 333-14783)
REGISTERED 7,500,000 SHARES OF COMMON STOCK FOR WHICH THE REGISTRATION FEES WERE
PREVIOUSLY PAID. THE PREVIOUSLY FILED FORM S-3 (REG. NO. 333-6077) AMENDED A
REGISTRATION STATEMENT ON FORM S-4 AND REGISTERED 82,337,956 SHARES OF COMMON
STOCK, 9,194,918 OF WHICH HAVE BEEN SOLD AND 2,000,000 OF WHICH RELATED TO
SHARES UNDERLYING WARRANTS THAT HAVE TERMINATED. THE REGISTRATION FEES WITH
RESPECT THERETO WERE PREVIOUSLY PAID.
================================================================================
<PAGE> 2
PROSPECTUS
84,664,760 SHARES
GREY WOLF, INC.
COMMON STOCK
------------------------
The 84,664,760 shares (the "Shares") of common stock, par value $0.10 per
share (the "Common Stock"), of Grey Wolf, Inc., a Texas corporation ("Grey Wolf"
or the "Company"), offered hereby are held by, or subject to certain warrants or
options held by, certain shareholders of the Company (the "Selling
Shareholders"). The Company will not receive any part of the proceeds of the
sale of the Shares offered hereby. In September 1997, the Company changed its
corporate name from DI Industries, Inc. to Grey Wolf, Inc.
Sales of the Shares by the Selling Shareholders may be made from time to
time in one or more transactions, including block transactions, on the American
Stock Exchange ("AMEX"), or any other exchange or quotation system on which the
Common Stock may be listed or quoted (collectively, the "Exchanges"), pursuant
to and in accordance with the applicable rules of the Exchanges, in the
over-the-counter market, in privately negotiated transactions not crossing an
Exchange or other public securities market or in a combination of any such
methods of sale, at fixed prices that may be changed, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. The Shares may be offered directly, to or
through agents designated from time to time, or to or through brokers or
dealers, or through any combination of such methods of sale. Such agents,
brokers or dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Shareholders and/or the purchasers
of the Shares for whom such broker-dealers may act as agents or to whom they
sell as principals, or both (which compensation as to a particular broker-dealer
might be in excess of customary commissions). A member firm of an Exchange may
be engaged to act as an agent in the sale of Shares by the Selling Shareholders.
See "Plan of Distribution."
The Selling Shareholders and any brokers, dealers, agents or others that
participate with the Selling Shareholders in the distribution of the Shares may
be deemed to be "underwriters" within the meaning of the Securities Act of 1933,
as amended (the "Securities Act"), and any commissions or fees received by such
persons and any profit on the resale of the Shares purchased by such persons may
be deemed to be underwriting commissions or discounts under the Securities Act.
The Company has agreed to indemnify certain of the Selling Shareholders against
certain liabilities, including liabilities under the Securities Act. See "Plan
of Distribution."
The total costs, fees and expenses incurred in connection with the
registration of the Shares are estimated to be approximately $80,000.
The Common Stock is traded on the AMEX under the symbol "GW." On November
5, 1997, the closing sales price of the Common Stock as reported on the AMEX was
$9.03125 per share.
INVESTORS SHOULD CONSIDER CAREFULLY THE MATTERS SET FORTH UNDER THE CAPTION
"RISK FACTORS" BEGINNING ON PAGE 4.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is November 6, 1997.
<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act (as defined herein), and, in accordance therewith, files reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). The Registration Statement (as defined herein), as well as
such reports, proxy statements and other information filed by the Company with
the Commission can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, and at its regional offices located at Seven World Trade Center,
13th Floor, New York, New York 10048 and at 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Copies of such material can also be obtained at
prescribed rates from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549. The Commission maintains a site on
the World Wide Web that contains certain documents filed with the Commission
electronically. The address of such site is http://www.sec.gov and the
Registration Statement may be inspected at such site. The Common Stock is listed
and traded on the AMEX and certain of the Company's reports, proxy statements
and other information can be inspected at the offices of the AMEX, 86 Trinity
Place, New York, New York 10006.
The Company has filed with the Commission a Registration Statement on Form
S-3 (together with any amendments or supplements thereto, the "Registration
Statement") under the Securities Act with respect to the Common Stock offered
hereby. This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits thereto, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. For
further information with respect to the Company and the Common Stock, reference
is made to the Registration Statement and the exhibits thereto. Statements
contained in this Prospectus (or in any document incorporated into this
Prospectus by reference) as to the contents of any contract or other document
referred to herein (or therein) are not necessarily complete, and in each
instance reference is made to the copy of such contract or other document filed
as an exhibit to the Registration Statement. Each such statement is qualified in
its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents or portions of documents, which have been filed by
the Company with the Commission pursuant to the Exchange Act (Commission File
No. 1-8226) or the Securities Act, are incorporated herein by reference and made
a part of this Prospectus:
1. Annual Report on Form 10-K for the fiscal year ended December 31,
1996.
2. Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997
and June 30, 1997.
3. Definitive Proxy Statement for the 1997 Annual Meeting of
Shareholders held May 14, 1997.
4. The description of Common Stock contained in the Current Report on
Form 8-K filed October 6, 1997.
5. Definitive Information Statement pursuant to Section 14(c) of the
Exchange Act filed August 22, 1997.
6. Current Reports on Form 8-K filed: January 13, 1997, February 3, 1997
(as amended by Form 8-K/A filed April 15, 1997); March 10, 1997; May
16, 1997; August 22, 1997; and September 19, 1997; September 30,
1997; October 6, 1997 and October 22, 1997.
7. The historical financial statements of Grey Wolf Drilling Company
contained in the prospectus dated June 23, 1997 relating to the
Company's registration statement on Form S-3 (Registration
Statement No. 333-26519).
8. The pro forma financial statements of the Company contained in the
prospectus dated October 29, 1997 relating to the Company's
registration statement on Form S-3 (Registration Statement No.
333-36593).
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<PAGE> 4
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering made hereby shall be deemed to be incorporated
by reference into this Prospectus and to be a part hereof from the respective
dates of filing of such documents.
Any statement contained in a document or information incorporated or deemed
to be incorporated herein by reference shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any subsequently filed document that also is, or is
deemed to be, incorporated herein by reference, modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company undertakes to provide, without charge, to each person,
including any beneficial owner, to whom a copy of this Prospectus is delivered,
upon the written or oral request of such person, a copy of any and all of the
documents or information referred to above that have been or may be incorporated
by reference in this Prospectus (excluding exhibits to such documents unless
such exhibits are specifically incorporated by reference). Requests should be
directed to the corporate secretary, Grey Wolf, Inc., 10370 Richmond Avenue,
Suite 600, Houston, Texas 77042-4136, telephone (713) 435-6100.
THE COMPANY
Grey Wolf, Inc., a Texas corporation formed in 1980, is engaged primarily
in the business of providing onshore contract drilling services to the oil and
gas industry. The Company conducts domestic operations in Texas, Louisiana,
Arkansas, Mississippi and several other states. In addition, the Company
currently conducts international operations in Venezuela. The principal office
of the Company is located at 10370 Richmond Avenue, Suite 600, Houston, Texas
77042, and its telephone number is (713) 435-6100.
RECENT DEVELOPMENTS
In November 1997, the Company closed a public offering (the "1997
Offering") of 25 million shares of Common Stock, of which 12.5 million shares
were sold on behalf of selling shareholders. Certain proceeds of the 1997
Offering were used to pay down indebtedness under the Bank Credit Facility (as
defined herein) which had been incurred in October 1997 to finance certain
acquisitions. The remaining proceeds of the 1997 Offering will be used to
finance rig refurbishments, future acquisitions or for other general corporate
purposes.
In connection with the GWDC Acquisition (as defined herein), a $5.0 million
escrow fund was established to provide a source of payment for the net costs to
the Company, if any, for any eventual settlement by, or the payment of a
monetary court judgment against, the Company arising out of a case pending
against GWDC (as defined herein) at the time of the GWDC Acquisition. The source
of the escrow fund was the cash consideration that would have otherwise been
payable by the Company to GWDC's shareholders. The litigation which was styled
TEPCO, Inc. v. Grey Wolf Drilling (Cause No. 96-49194) in the 164th Judicial
District Court of Harris County, Texas, was settled in August 1997 for $2.5
million which was paid from the escrow fund.
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<PAGE> 5
RISK FACTORS
In addition to the other information contained in this Prospectus, the
following should be carefully considered in evaluating the Company and its
business before purchasing the shares offered hereby.
DEPENDENCE ON OIL AND GAS INDUSTRY; INDUSTRY CONDITIONS
The Company's current business and operations are substantially dependent
upon conditions in the oil and gas industry and, specifically, the exploration
and production expenditures of oil and gas companies. The demand for contract
land drilling and related services is directly influenced by oil and gas prices,
expectations about future prices, the cost of producing and delivering oil and
gas, government regulations, local and international political and economic
conditions, including the ability of the Organization of Petroleum Exporting
Countries ("OPEC") to set and maintain production levels and prices, the level
of production by non-OPEC countries and the policies of the various governments
regarding exploration and development of their oil and gas reserves. There can
be no assurance that current levels of oil and gas exploration expenditures will
be maintained or that demand for the Company's services will reflect the level
of such expenditures.
HISTORY OF LOSSES FROM OPERATIONS
The Company has a history of losses and has not had a profitable full year
since 1991. The Company incurred net losses of $11.7 million and $13.4 million
for the years ended December 31, 1996 and 1995, respectively, and $2.2 million
for the nine months ended December 31, 1994. The calendar year 1996 loss
includes non-recurring charges of $6.1 million while the 1995 loss includes a
provision for asset impairment of $5.3 million. Profitability in the future will
depend upon many factors, but largely upon utilization rates and day rates for
the Company's drilling rigs. There can be no assurance that current utilization
rates and day rates will not decline or that the Company will not experience
losses.
DEPENDENCE ON KEY PERSONNEL; NEW BUSINESS STRATEGY
Since April 1996, the Company has hired a majority of its current senior
management team. In addition, in August 1996, the shareholders of the Company
elected a Board of Directors comprised of five members, all but one of whom were
elected for the first time. In connection with the acquisition (the "Flournoy
Acquisition") of the operating assets of Flournoy Drilling Company ("Flournoy"),
another new member was added to the Company's Board of Directors effective
January 31, 1997 and two additional new members were added to the Company's
Board of Directors in connection with the acquisition (the "GWDC Acquisition")
of Grey Wolf Drilling Company ("GWDC") in June 1997. The Company believes that
its operations are dependent upon a small group of relatively new management
personnel, the loss of any one of whom could have a material adverse effect on
the Company's financial condition and results of operations. Material changes in
the Company's management and business strategy have only recently occurred. The
Company is therefore unable to predict the effect of these changes on the
Company's financial condition and results of operations. The Company's ability
to meet its substantially increased debt service requirements and principal
payments will depend, in part, on the success of the Company's new business
strategy. There can be no assurance these material changes in the Company's
management and business strategy will result in the improvement of the Company's
financial condition and results of operations.
COMPETITION
The land drilling industry is a highly competitive and cyclical business
characterized by high capital and maintenance costs. Drilling contracts are
usually awarded on a competitive bid basis and, while an operator may consider
factors such as quality of service and type and location of equipment as well as
the ability to provide ancillary services, price and rig availability are the
primary factors in determining which contractor is awarded a job. An
increasingly important competitive factor in the land drilling industry is the
ability to provide drilling equipment adaptable to, and personnel familiar with,
new technologies and drilling techniques as they become available. The land
drilling business is also highly fragmented. As a result, even though the
Company has the largest or second largest rig fleet in its three core domestic
markets, the Company estimates
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<PAGE> 6
that its market share represents only 10% to 30% of the overall market share in
each of these three core markets. Certain of the Company's competitors have
greater financial and human resources than the Company, which may enable them to
better withstand periods of low rig utilization, to compete more effectively on
the basis of price and technology, to build new rigs or acquire existing rigs
and to provide rigs more quickly than the Company in periods of high rig
utilization. A number of the Company's competitors have also announced plans to
refurbish and reactivate rigs from their inventory of stacked rigs. The
deployment of these additional rigs to the Company's core markets could further
intensify competition based on pricing and rig availability. There can be no
assurance that the Company will be able to compete successfully against its
competitors in the future or that the level of competition will allow the
Company to obtain adequate margins from its drilling services.
RISKS ASSOCIATED WITH TURNKEY DRILLING
Contract drilling services performed under turnkey drilling contracts have
historically represented, and are expected to continue to represent, a
significant component of the Company's revenues. Under a turnkey drilling
contract, the Company contracts to drill a well to a contract depth under
specified conditions for a fixed price. In addition, the Company provides
technical expertise and engineering services, as well as most of the equipment
required for the well, and is compensated when the contract terms have been
satisfied. On a turnkey well, the Company often subcontracts for related
services and manages the drilling process. The risks to the Company on a turnkey
drilling contract are substantially greater than on a well drilled on a daywork
basis because the Company assumes most of the risks associated with drilling
operations generally assumed by the operator in a daywork contract, including
risk of blowout, loss of hole, stuck drill string, machinery breakdowns,
abnormal drilling conditions and risks associated with subcontractors' services,
supplies and personnel. Although the Company has obtained insurance coverage in
the past to reduce certain of the risks inherent in turnkey drilling operations,
there can be no assurance that such coverage will be obtained or available in
the future. The occurrence of an uninsured or under-insured loss could have a
material adverse effect on the Company's financial position and results of
operations.
OPERATING HAZARDS AND INSURANCE
The Company's operations are subject to the many hazards inherent in the
land drilling business, including blowouts, cratering, fires, explosions, loss
of hole, lost or stuck drill strings and damage or loss from adverse weather.
These hazards could also cause personal injury and loss of life, substantial
damage to the environment, suspension of drilling operations or serious damage
to or destruction of the property and equipment involved and damage to producing
formations and surrounding areas. The Company maintains insurance coverage
against some but not all operating hazards. However, such insurance may not be
sufficient to protect the Company against liability for all consequences of well
disasters such as personal injury, damage to the Company's rigs, damage to the
property of others or damage to the environment. The insurance maintained by the
Company is subject to substantial deductibles and provides for premium
adjustments based on claims. In view of difficulties that may be encountered in
renewing such insurance at reasonable rates, no assurance can be given that the
Company will be able to maintain the type and amount of coverage that it
considers adequate. The occurrence of a significant event for which the Company
is not fully insured could have a material adverse effect on the Company's
financial position and results of operations.
RISKS OF ACQUISITION STRATEGY
As a key component of its new business strategy, the Company has pursued
and intends to continue to pursue acquisitions of complementary assets and
businesses. Certain risks are inherent in an acquisition strategy, such as
increasing leverage and debt service requirements and combining disparate
company cultures and facilities, which could adversely affect the Company's
operating results. The success of any completed acquisition will depend in part
on the Company's ability to integrate effectively the acquired business into the
Company. The process of integrating such acquired businesses may involve
unforeseen difficulties and may require a disproportionate amount of
management's attention and the Company's financial and other resources. Possible
future acquisitions may be for purchase prices significantly higher than those
paid for
5
<PAGE> 7
recent and pending acquisitions. No assurance can be given that the Company will
be able to continue to identify additional suitable acquisition opportunities,
negotiate acceptable terms, obtain financing for acquisitions on satisfactory
terms or successfully acquire identified targets. The Company's failure to
achieve consolidation savings, to incorporate the acquired businesses and assets
into its existing operations successfully or to minimize any unforeseen
operational difficulties could have a material adverse effect on the Company's
financial condition and results of operations.
SHORTAGES OF EQUIPMENT, SUPPLIES AND PERSONNEL
There is a general shortage of drilling equipment and supplies which the
Company believes may intensify. The costs and delivery times of equipment and
supplies are substantially greater than in prior periods and are currently
escalating. Accordingly, in 1996 the Company formed an alliance with a drill
pipe manufacturer that enables the Company to take delivery through 1998 of
29,300 joints of drill pipe in commonly used diameters at fixed prices plus
possible escalations for increases in the manufacturer's cost of raw materials.
As is common in the industry, the drill pipe supply alliance is not a formal
contractual agreement but represents an informal arrangement in which both
parties undertake to satisfy the supply objectives of the alliance. Due in part
to its alliance arrangement, the Company is not currently experiencing any
material shortages of, or material price increases in, drill pipe. The Company
believes that the alliance may reduce, but not eliminate, its exposure to price
increases and supply shortages of drill pipe. The Company and its supplier under
the drill pipe supply alliance have entered into a formal contractual
arrangement for the purchase and supply of an average quarterly quantity of
3,750 joints of drill pipe (a total of 15,000 joints) during 1999 at prices
based on the supplier's price list as of February 1997 less 5% (the "Drill Pipe
Agreement"). If the Company's source of supply through the alliance and the
Drill Pipe Agreement becomes unavailable or insufficient for any reason
(including by reason of additional rig acquisitions), the Company will likely
experience substantial delays in, and material price increases for, obtaining
substitute or additional supplies for drill pipe. Additionally, the Company may
be subject to shortages and price increases with respect to quantities in excess
of, and varieties of drill pipe not covered by, the alliance and the Drill Pipe
Agreement. Although the Company has formed similar informal supply alliances
with manufacturers and suppliers of other equipment and supplies, and is
attempting to establish arrangements to assure adequate availability of certain
other necessary equipment and supplies on satisfactory terms, there can be no
assurance that it will be able to do so. Shortages by the Company of drilling
equipment or supplies could delay and adversely affect its ability to refurbish
its inventory rigs and obtain contracts for its marketable rigs, which could
have a material adverse effect on its financial condition and results of
operations.
The demand for, and wage rates of, qualified rig crews have begun to rise
in the land drilling industry in response to the increasing number of active
rigs in service. Although the Company has not encountered material difficulty in
hiring and retaining qualified rig crews, such shortages have in the past
occurred in the industry and are again arising as demand for land drilling
services increases. The Company may experience shortages of qualified personnel
to operate its rigs, which could have a material adverse effect on the Company's
financial condition and results of operations.
GOVERNMENTAL REGULATIONS
Many aspects of the Company's operations are affected by domestic and
foreign political developments and are subject to numerous laws and regulations
that may relate directly or indirectly to the contract drilling industry. For
example, drilling operations are subject to extensive and evolving laws and
regulations governing environmental quality, pollution control, remediation of
contamination and preservation of natural resources. Such laws and regulations
pertain, among other things, to air emissions, waste management, spills and
other discharges, wetlands and endangered species protection and cleanup of
contamination. The Company's operations are often conducted in or near
ecologically sensitive areas, such as wetlands which, are subject to protective
measures. The handling of waste materials, some of which are classified as
hazardous substances, is a routine part of the Company's operations.
Consequently, the regulations applicable to the Company's operations include
those with respect to containment, disposal and controlling the discharge of
hazardous oilfield waste and other nonhazardous waste material into the
environment, requiring removal and cleanup
6
<PAGE> 8
under certain circumstances, or otherwise relating to the protection of the
environment. Laws and regulations protecting the environment have become more
stringent in recent years and may in certain circumstances impose strict
liability, rendering a party liable for environmental damage without regard to
negligence or fault on the part of such party. Such laws and regulations may
expose the Company to liability for the conduct of, or conditions caused by,
others or for acts of the Company which were in compliance with all applicable
laws at the time such acts were performed. The Company may also be exposed to
environmental or other liabilities originating from businesses and assets
subsequently acquired by the Company. Compliance with such laws and regulations
may require significant capital expenditures. Although such compliance costs to
date have not had a material effect on the Company, application of these
requirements or the adoption of new requirements could have a material adverse
effect on the Company. In addition, the modification or judicial interpretations
of existing laws or regulations or the adoption of new laws or regulations
curtailing exploratory or development drilling for oil and gas for economic,
environmental or other reasons could have a material adverse effect on the
Company's operations by limiting future contract drilling opportunities.
RISKS OF INTERNATIONAL OPERATIONS
The Company derives revenues from international operations. The Company's
current international operations are conducted only in Venezuela. Risks
associated with operating in international markets include foreign exchange
restrictions and currency fluctuations, foreign taxation, political instability,
foreign and domestic monetary and tax policies, expropriation, nationalization,
nullification, modification or renegotiation of contracts, war and civil
disturbances or other risks that may limit or disrupt markets. Additionally, the
ability of the Company to compete in the international drilling markets may be
adversely affected by foreign government regulations that favor or require the
awarding of such contracts to local contractors, or by regulations requiring
foreign contractors to employ citizens of, or purchase supplies from, a
particular jurisdiction. Furthermore, the Company's foreign subsidiaries may
face governmentally imposed restrictions from time to time on their ability to
transfer funds to the Company. No predictions can be made as to what foreign
governmental regulations may be applicable to the Company's operations in the
future. The Company is currently marketing six rigs in Venezuela, two of which
are under contract. In addition, the Company has expended $3.3 million for
capital improvements to these rigs in 1997. There can be no assurance that
marketing efforts and scheduled capital improvements will improve the Company's
operating performance or generate contracts for the Company's rigs in Venezuela.
SIGNIFICANT LEVERAGE AND DEBT SERVICE REQUIREMENTS
On June 27, 1997, the Company issued $175.0 million of 8 7/8% Senior Notes
due 2007 in an underwritten public offering (the "Senior Notes"). Additionally,
the Company has a $50.0 million amended and restated senior secured revolving
credit facility with a syndicate of commercial banks (the "Bank Credit
Facility") under which no amount was outstanding at September 30, 1997. The
Company expects, however, to continue to borrow under the Bank Credit Facility
and possible future credit arrangements in order to finance possible future
acquisitions and for general corporate purposes.
The level of the Company's indebtedness could have several important
effects on its future operations, including, among others, (i) its ability to
obtain additional financing for working capital, acquisitions, capital
expenditures, general corporate and other purposes may be limited, (ii) a
substantial portion of the Company's cash flow from operations will be dedicated
to the payment of principal and interest on its indebtedness, thereby reducing
funds available for other purposes and (iii) the Company's significant leverage
could make it more vulnerable to economic downturns in the industry. The
Company's ability to meet its debt service obligations and reduce its total
indebtedness will be dependent upon the Company's future performance, which will
be subject to the success of its business strategy, general economic conditions,
industry cycles, levels of interest rates, and financial, business and other
factors affecting the operations of the Company, many of which are beyond its
control. There can be no assurance that the Company's business will generate
sufficient cash flow from operations to meet debt service requirements and
payments of principal, and if the Company is unable to do so, it may be required
to sell assets, to refinance all or a portion of its indebtedness,
7
<PAGE> 9
including the Senior Notes, or to obtain additional financing. There can be no
assurance that any such refinancing would be possible or that any additional
financing could be obtained.
RESTRICTIONS IMPOSED BY TERMS OF INDEBTEDNESS
The indenture under which the Senior Notes were issued (the "Indenture")
contains covenants restricting or limiting the ability of the Company and
certain of its subsidiaries to, among other things: (i) incur additional
indebtedness; (ii) pay dividends or make other restricted payments; (iii) make
asset dispositions; (iv) permit liens; (v) enter into sale and leaseback
transactions; (vi) enter into certain mergers, acquisitions and consolidations;
(vii) make certain investments; (viii) enter into transactions with related
persons and (ix) engage in unrelated lines of business.
In addition, the loan agreement setting forth the terms of the Bank Credit
Facility (the "Bank Credit Agreement") contains certain other and more
restrictive covenants than those contained in the Indenture. These covenants may
adversely affect the Company's ability to pursue its acquisition and rig
refurbishment strategies and limit its flexibility in responding to changing
market conditions. The Bank Credit Agreement also requires the Company to
maintain specific financial ratios and satisfy certain financial condition
tests. The Company's ability to meet those financial ratios and financial
condition tests can be affected by events beyond its control, and there can be
no assurance that the Company will meet those tests. The Bank Credit Agreement
contains default terms that effectively cross default with the Indenture.
Accordingly, the breach by the Company or its subsidiaries of the covenants
contained in the Indenture likely will result in a default under not only the
Indenture but also the Bank Credit Facility, and possibly certain other then
outstanding debt obligations of the Company or its subsidiaries. If the
indebtedness under the Bank Credit Facility or other indebtedness of the Company
or its subsidiaries is in excess of $10.0 million and is not paid when due or is
accelerated by the holders thereof, an event of default under the Indenture
would occur. In any such case there can be no assurance that the Company's
assets would be sufficient to repay in full all of the Company's and its
subsidiaries' indebtedness, including the Senior Notes.
QUALIFICATION OF THE GWDC ACQUISITION AS A REORGANIZATION FOR U.S. FEDERAL
INCOME TAX PURPOSES
The GWDC Acquisition is intended to qualify as a tax free reorganization
under Sections 368(a)(1)(A) and 368(a)(2)(D) of the Internal Revenue Code of
1986, as amended (the "Code"), with respect to Common Stock received by GWDC
shareholders. A principal condition for such qualification is that the former
shareholders of GWDC will satisfy the continuity of proprietary interest
standard with respect to Common Stock received in the GWDC Acquisition. Thus,
under present Internal Revenue Service ("IRS") guidelines, dispositions of
Common Stock by GWDC shareholders during the five years following the GWDC
Acquisition could cause the IRS to assert that the GWDC Acquisition does not
qualify as a tax free reorganization. The Company has no contractual agreements
with GWDC shareholders preventing the disposition of their shares. If the GWDC
Acquisition fails to qualify as a tax free reorganization for failure to meet
the continuity of interest standard or for any other reason, the receipt of
Common Stock will be taxable to the GWDC shareholders at the time of the GWDC
Acquisition, and GWDC will be deemed to have sold all of its assets in a taxable
exchange triggering a corporate tax liability to GWDC estimated to be in excess
of $30.0 million. The Company's wholly-owned subsidiary, Grey Wolf Drilling
Company Inc. (formerly Drillers, Inc.), as the surviving corporation of the GWDC
Acquisition, would be liable for any such corporate tax which, if imposed, would
have a material adverse effect on the financial condition of the Company.
SHARES ELIGIBLE FOR FUTURE SALE
There are approximately 84.7 million shares of Common Stock which are
available for sale under this Prospectus, including approximately 2.8 million
shares issuable upon exercise of options. On a fully diluted basis, such shares
represent approximately 51% of the Company's outstanding Common Stock.
Approximately 8% of the outstanding Common Stock is not covered by this
Prospectus, but is available for resale under Rules 144 and 145 under the
Securities Act and is covered, to a substantial extent, by currently unexercised
registration rights. An additional 5,557,400 shares are issuable upon exercise
of options and 489,600 shares are issuable upon the exercise of warrants. Future
sales of substantial amounts of Common Stock in the public
8
<PAGE> 10
market, or the perception that such sales may occur, could adversely affect
prevailing market prices of the Common Stock.
SIGNIFICANT CUSTOMER
During the six months ended June 30, 1997, the largest customer for the
Company's contract drilling services accounted for approximately 17% of total
revenues. While the Company does not currently expect any material reduction in
the number of its rigs operating for such customer, and believes that it could
successfully remarket any rigs engaged in drilling operations on behalf of such
customer that might be discontinued, there can be no assurance that such
customer or any of the Company's other principal customers will continue to
employ the Company's services or that the loss of any of such customers or
adverse developments affecting any of such customers would not have a material
adverse effect on the Company's financial condition and results of operations.
FORWARD-LOOKING STATEMENTS
This Prospectus contains, or incorporates by reference, certain statements
that may be deemed "forward-looking statements" within the meaning of Section
27A of the Securities Act and Section 21E of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). All statements, other than statements of
historical facts, that address activities, events or developments that the
Company intends, expects, projects, believes or anticipates will or may occur in
the future are forward-looking statements. Such statements are based on certain
assumptions and analyses made by management of the Company in light of its
experience and its perception of historical trends, current conditions, expected
future developments and other factors it believes to be appropriate. The
forward-looking statements included in this Prospectus are also subject to a
number of material risks and uncertainties. Important factors that could cause
actual results to differ materially from the Company's expectations are
discussed herein under the caption "Risk Factors." Prospective investors are
cautioned that such forward-looking statements are not guarantees of future
performance and that actual results, developments and business decisions may
differ from those envisaged by such forward-looking statements.
9
<PAGE> 11
SELLING SHAREHOLDERS
The following table sets forth certain information, as of the date hereof,
with respect to the number of Shares beneficially owned and being offered hereby
by the Selling Shareholders.
<TABLE>
<CAPTION>
SHARES
SHARES BENEFICIALLY
BENEFICIALLY SHARES OFFERED OWNED AFTER THE
NAME OF BENEFICIAL OWNER OWNED(1) HEREBY(1) OFFERING
------------------------ ------------ -------------- ---------------
<S> <C> <C> <C>
Norex Drilling Ltd.................................. 14,926,605 14,926,605 --
Gulf Coast Council Inc., Boy Scouts of America ..... 83,000 83,000 --
Flournoy Family Properties, Ltd.(2)................. 3,699,000 3,699,000 --
Lucien Flournoy(2)(3)............................... 4,331,055 4,331,055 --
Maxine E. Flournoy(2)(4)............................ 4,331,055 4,331,055 --
Fields Family Investment, Ltd.(2)(5)................ 394,701 394,701 --
Flournoy First Fields Grandchild Trust(2)........... 1,567 1,567 --
Flournoy Second Fields Grandchild Trust(2).......... 1,567 1,567 --
Flournoy Third Fields Grandchild Trust(2)........... 1,567 1,567 --
Helen Ruth Flournoy Pope(2)(6)...................... 410,733 400,733 10,000
Flournoy First Pope Grandchild Trust(2)............. 44,734 44,734 --
Flournoy Second Pope Grandchild Trust(2)............ 44,734 44,734 --
Flournoy Third Pope Grandchild Trust(2)............. 44,734 44,734 --
Mary Anne Flournoy Guthrie(2)(7).................... 459,046 459,046 --
Gregory M. Guthrie(2)(8)............................ 459,046 459,046 --
Flournoy First Guthrie Grandchild Trust(2).......... 44,734 44,734 --
Flournoy Second Guthrie Grandchild Trust(2)......... 44,734 44,734 --
Flournoy Third Guthrie Grandchild Trust(2).......... 44,734 44,734 --
Flournoy Fourth Guthrie Grandchild Trust(2)......... 44,734 44,734 --
Flournoy Fifth Guthrie Grandchild Trust(2).......... 44,734 44,734 --
F.C. West(2)(9)..................................... 1,100,000 1,100,000 --
Somerset Capital Partners(10)(11)................... 29,896,978 29,896,978 --
Somerset Drilling Associates, L.L.C.(10) ........... 24,435,223 24,435,223 --
John Winfield(10)................................... 500,000 500,000 --
Intergroup Corporation(10).......................... 500,000 500,000 --
Winston Partners, L.P.(10).......................... 1,605,000 1,605,000 --
Roy T. Oliver, Jr.(12)(13).......................... 11,440,614 11,440,614 --
University of Oklahoma Foundation................... 34,000 34,000 --
The Education & Employment Ministry................. 3,000 3,000 --
U.S. Rig & Equipment, Inc.(12)...................... 2,027,002 2,027,002 --
Michael D. Oliver(14)............................... 1,000,000 1,000,000 --
Thomas R. Soli(14).................................. 25,000 25,000 --
Wender O. Wells(14)................................. 25,000 25,000 --
Don Bodard 1995 Revocable Trust(12)................. 1,714,602 1,714,602 --
Roberds Johnson Industries, Inc.(12)................ 399,282 399,282 --
Craig Cannon(12).................................... 277,053 277,053 --
Mike Mullen Energy Equipment Resource, Inc.(12)..... 6,235,500 6,235,500 --
GCT Investments, Inc.(12)........................... 1,187,100 1,187,100 --
Empire Holdings, Ltd.,(12).......................... 100,657 100,657 --
Layton Humphrey,(12)................................ 705,222 705,222 --
NRY #1 Family Ltd. Partnership(12).................. 31,023 31,023 --
PAN #1 Family Ltd. Partnership(12).................. 62,123 62,123 --
R.E. Ferrell(12).................................... 83,039 83,039 --
Lloyd Haggard(12)................................... 35,020 35,020 --
John Day(12)........................................ 162,953 162,953 --
Lee Revocable Trust(12)............................. 17,520 17,520 --
</TABLE>
10
<PAGE> 12
<TABLE>
<CAPTION>
SHARES
SHARES BENEFICIALLY
BENEFICIALLY SHARES OFFERED OWNED AFTER THE
NAME OF BENEFICIAL OWNER OWNED(1) HEREBY(1) OFFERING
------------------------ ------------ -------------- ---------------
<S> <C> <C> <C>
John Mullen III(12)................................. 508,605 508,605 --
Jack Witkin Family LLC(12).......................... 41,520 41,520 --
Alan Munoz(12)...................................... 35,020 35,020 --
Lee Financial Corporation(12)....................... 6,607 6,607 --
Brady Allen(12)..................................... 4,762 4,762 --
BMRN Family Partners, Ltd.(12)...................... 3,431 3,431 --
Francisco Cardenas(12).............................. 26,351 26,351 --
Bobbie A. Chrest(12)................................ 4,762 4,762 --
David Franklin(12).................................. 37,401 37,401 --
Gonzalez Partners L.P.(12).......................... 31,256 31,256 --
Marilyn L. Hanna Trust(12).......................... 8,577 8,577 --
Polly Pierson Living Trust(12)...................... 8,577 8,577 --
RRG #1 Family Limited Partnership(12)............... 4,289 4,289 --
Ronald L. Skaggs(12)................................ 9,625 9,625 --
David C. Vaughn(12)................................. 9,625 9,625 --
Ronald D. Watson(12)................................ 26,351 26,351 --
Jack A. Witkin(12).................................. 68,618 68,618 --
Spencer Finance Corp.(15)........................... 3,297,436 3,297,436 --
B.F. Interests, Inc.(15)............................ 618,540 618,540 --
Gilbo Invest A/S(15)................................ 422,581 422,581 --
Thomas P. Richards(16).............................. 1,900,000 1,900,000 --
Richards Brothers Interests, L.P.(17) .............. 1,000,000 1,000,000 --
T. Scott O'Keefe(18)................................ 20,000 20,000 --
Ivar Siem(19)....................................... 16,058,605 16,052,605 6,000
William R. Ziegler(20).............................. 29,976,978 29,971,978 5,000
Peter M. Holt(21)................................... 175,000 75,000 100,000
Steven A. Webster(22)............................... 29,972,978 29,971,978 1,000
</TABLE>
- ---------------
* Less than one percent.
(1) Unless otherwise noted, all Shares are beneficially owned. These amounts do
not include 1,440,000 shares which may be issued, subject to certain
conditions not under the holder's control, upon the exercise of certain
warrants.
(2) Share data represents shares acquired in connection with the Flournoy
Acquisition from the Company as consideration for the Flournoy Acquisition
and subsequently transferred to the holder by Flournoy.
(3) Share data includes 74,294 shares owned by Maxine E. Flournoy, an affiliate
of the holder and 3,699,000 shares owned by Flournoy Family Properties,
Ltd., an affiliate of the holder.
(4) Share data includes 557,761 shares owned by Lucien Flournoy, an affiliate
of the holder and 3,699,000 shares owned by Flournoy Family Properties,
Ltd., an affiliate of the holder.
(5) Share data includes 4,701 shares owned by Flournoy First Fields Grandchild
Trust, Flournoy Second Fields Grandchild Trust and Flournoy Third Fields
Grandchild Trust, affiliates of the holder.
(6) Share data includes 134,202 shares owned by Flournoy First Pope Grandchild
Trust, Flournoy Second Pope Grandchild Trust and Flournoy Third Pope
Grandchild Trust, affiliates of the holder.
(7) Share data includes 239,315 shares owned by Gregory M. Guthrie, Flournoy
First Guthrie Grandchild Trust, Flournoy Second Guthrie Grandchild Trust,
Flournoy Third Guthrie Grandchild Trust, Flournoy Fourth Guthrie Grandchild
and Flournoy Fifth Guthrie Grandchild Trust, affiliates of the holder.
(8) Share data includes 443,401 shares owned by Mary Anne Flournoy Guthrie,
Flournoy First Guthrie Grandchild Trust, Flournoy Second Guthrie Grandchild
Trust, Flournoy Third Guthrie Grandchild Trust, Flournoy Fourth Guthrie
Grandchild Trust and Flournoy Fifth Guthrie Grandchild Trust, affiliates of
the holder.
11
<PAGE> 13
(9) F.C. West was formerly employed by Flournoy as Vice President and
Operations Manager and, as of the date of this Prospectus, serves as Vice
President of Operations for the South Texas division of Grey Wolf Drilling
Company, Inc., a wholly-owned subsidiary of the Company.
(10) Share data represents shares acquired by the holder pursuant to the
Company's issuance of 39.4 million shares of Common Stock for $25.0 million
in cash in August 1996.
(11) Share data includes 24,435,223 shares owned by Somerset Drilling
Associates, L.L.C., an affiliate of the holder.
(12) Share data represents shares acquired by the holder, directly or as a
result of distributions by entities with which the holder was affiliated,
pursuant to the Company's merger with Roy T. Oliver, Inc. and Land Rig
Acquisition Corp. in August 1996.
(13) Share data includes 2,068,051 shares owned by the minor children of the
holder and U.S. Rig and Equipment, Inc., an affiliate of the holder, and
75,000 shares issuable on the exercise of options.
(14) Share data represents shares to be acquired from U.S. Rig and Equipment,
Inc. by the exercise of an option.
(15) Share data represents shares acquired by the holder as a result of
distributions by entities with which the holder was affiliated pursuant to
the Company's acquisition of certain assets of Mesa Drilling, Inc. in
October 1996.
(16) Share data represents shares issuable upon the exercise of options.
Includes 1,000,000 shares issuable upon the exercise of options held by
Richard Brothers Interests, L.P., an affiliate of Mr. Richards, regarding
which Mr. Richards disclaims beneficial ownership.
(17) Share data represents shares of Common Stock issuable upon the exercise of
options.
(18) Share data represents shares of Common Stock acquired by Mr. O'Keefe
through the exercise of options.
(19) Share data includes (i) 15,492,605 shares beneficially owned by Norex
Drilling Ltd. ("Norex Drilling"), an affiliate of Mr. Siem, and (ii)
566,000 shares issuable on the exercise of options, of which 560,000 are
offered hereby.
(20) Share data includes: (i) 29,896,978 shares beneficially owned by Somerset
Capital Partners, an affiliate of Mr. Ziegler, and (ii) 75,000 shares
issuable on the exercise of options.
(21) Share data includes 75,000 shares issuable on the exercise of options, all
of which are offered hereby.
(22) Share data includes: (i) 29,896,978 shares beneficially owned by Somerset
Capital Partners, an affiliate of Mr. Webster, and (ii) 75,000 shares
issuable on the exercise of options.
Thomas P. Richards is the President and Chief Executive Officer of the
Company. T. Scott O'Keefe provided consulting services to the Company from April
1996 until September 1996 when he was appointed Senior Vice President and Chief
Financial Officer. William R. Ziegler and Steven A. Webster, both general
partners of Somerset Capital Partners, are also directors. The Company has
entered into an investment monitoring agreement providing for a one-time $75,000
payment by the Company to Somerset Capital Partners to monitor the investment of
Somerset Drilling Associates, L.L.C. in the Company. Lucien Flournoy has been a
director of the Company since the Flournoy Acquisition in January 1997. In 1994,
Grey Wolf Drilling Company, Inc., drilled a well for Flournoy for total payment
of $495,110. Roy T. Oliver, Jr. is a director of the Company. In 1997, the
Company purchased four rigs for addition to its inventory of rigs for
refurbishment and reactivation from R.T. Oliver, Inc., a company controlled by
director Roy T. Oliver, Jr. The aggregate purchase price for such rigs purchased
from R.T. Oliver, Inc. was $10.6 million. Iver Siem is the Chairman of the Board
of Directors of the Company and a member of the board of directors of Norex
Industries Inc., the parent of Norex Drilling. In August 1996, the 1995
subscription by Norex Drilling for 4,000 shares of Series B preferred Stock and
related Series B Warrants was rescinded. The $4,000,000 subscription plus
accrued dividends was repaid to Norex Drilling by the Company with the proceeds
from a term loan that was made by Norex Drilling to the Company. Interest
accrued at 12% per annum and was payable on the last business day of each
calendar quarter. The note payable was paid in full on December 31, 1996 using
the proceeds from a private placement of the Company's common stock. On June 10,
1996, Norex Drilling advanced $1,000,000 to the Company pursuant to a Promissory
Note (the "Norex Note") and Commercial Security Agreement. The Norex Note
provided for interest at 12% per annum, and matured in
12
<PAGE> 14
August 1996. The Company repaid this loan, plus accrued interest, in July 1996.
Peter M. Holt is a director of the Company.
Except as otherwise noted, none of the other Selling Shareholders have held
any position or office or had any other material relationship with the Company.
PLAN OF DISTRIBUTION
Sales of the Shares by the Selling Shareholders may be made from time to
time in one or more transactions, including block transactions, on the AMEX or
any other exchange or quotation system on which the Common Stock may be listed
or quoted pursuant to and in accordance with the applicable rules of the
Exchanges, in the over-the-counter market, in privately negotiated transactions
not involving an Exchange or other public securities market or in a combination
of any such methods of sale, at fixed prices that may be changed, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. The Shares may be offered directly, to or
through agents designated from time to time, or to or through brokers or
dealers, or through any combination of these methods of sale. Such agents,
brokers or dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Shareholders and/or the purchasers
of the Shares for whom such broker-dealers may act as agents or to whom they
sell as principals, or both (which compensation as to a particular broker-dealer
might be in excess of customary commissions). A member firm of an Exchange may
be engaged to act as an agent in the sale of Shares by the Selling Shareholders.
The Selling Shareholders and any brokers, dealers, agents or others that
participate with the Selling Shareholders in the distribution of the Shares may
be deemed to be "underwriters" within the meaning of the Securities Act, and any
commissions or fees received by such persons and any profit on the resale of the
Shares purchased by such persons may be deemed to be underwriting commissions or
discounts under the Securities Act.
Agents, brokers and dealers may be entitled under agreements entered into
by the Selling Shareholders or the Company to indemnification against certain
civil liabilities, including liabilities under the Securities Act.
There is no assurance that the Selling Shareholders will sell any or all of
the Shares offered hereby.
EXPERTS
The consolidated financial statements of the Company as of December 31,
1996, and for the year then ended have been incorporated by reference herein and
in the Registration Statement in reliance on the report of KPMG Peat Marwick
LLP, independent certified public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
The financial statements of DI Industries, Inc. incorporated in this
Prospectus by reference as of and for the year ended December 31, 1995, and the
nine month period ended December 31, 1994, have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their reports, which are
incorporated herein by reference, and have been so incorporated in reliance upon
the reports of such firm given upon their authority as experts in accounting and
auditing.
The audited financial statements of Grey Wolf Drilling Company incorporated
by reference in this Prospectus and elsewhere in the Registration Statement to
the extent and for the periods indicated in their report have been audited by
Arthur Andersen LLP, independent public accountants, and are incorporated by
reference herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said report.
LEGAL MATTERS
Certain legal matters in connection with the Shares have been passed upon
for the Company by Cokinos, Bosien & Young or by Porter & Hedges, L.L.P., both
of Houston, Texas.
13
<PAGE> 15
============================================================
NO PERSONS HAVE BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH
THE OFFERING OF SECURITIES MADE HEREBY AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR ANY OTHER PERSON. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, NOR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES IN ANY JURISDICTION
TO OR FROM ANY PERSON TO OR FROM WHOM IT IS NOT LAWFUL TO MAKE ANY SUCH OFFER OR
SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY DISTRIBUTION OF SECURITIES MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES
CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION HEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO ITS DATE.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information....................... 2
Incorporation of Certain Documents by
Reference................................. 2
The Company................................. 3
Recent Developments......................... 3
Risk Factors................................ 4
Forward-Looking Statements.................. 9
Selling Shareholders........................ 10
Plan of Distribution........................ 13
Experts..................................... 13
Legal Matters............................... 13
</TABLE>
============================================================
============================================================
84,664,760 SHARES
GREY WOLF, INC.
COMMON STOCK
(PAR VALUE $0.10 PER SHARE)
------------------------------------
PROSPECTUS
------------------------------------
NOVEMBER 6, 1997
============================================================
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
SEC registration fee........................................ $ 38,570
Blue Sky fees and expenses.................................. 1,000
Legal fees and expenses..................................... 10,000
Printing expenses........................................... 15,000
Accounting fees and expenses................................ 10,000
Miscellaneous............................................... 5,430
-----------
Total Expenses.................................... $ 80,000
===========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Article 1302-7.06 of the Texas Miscellaneous Corporation Laws Act,
the articles of incorporation of a Texas corporation may provide that a director
of that corporation shall not be liable, or shall be liable only to the extent
provided in the articles of incorporation, to the corporation or its
shareholders for monetary damages for acts or omissions in the director's
capacity as a director, except that the articles of incorporation cannot provide
for the elimination or limitation of liability of a director to the extent that
the director is found liable for (i) a breach of the director's duty of loyalty
to the corporation or its shareholders, (ii) acts or omissions not in good faith
that constitutes a breach of duty of the director to the corporation or an act
or omission that involves intentional misconduct or a knowing violation of the
law, (iii) any transaction from which the director received an improper personal
benefit, or (iv) an act or omission for which the liability of a director is
expressly provided by an applicable statute. Article XII of the Company's
Articles of Incorporation, as amended, states that a director of the Company
shall not be liable to the Company or its shareholders for monetary damages
except to the extent otherwise expressly provided by the statutes of the State
of Texas.
In addition, Article 2.02-1 of the Texas Business Corporations Act (the
"TBCA") authorizes a Texas corporation to indemnify a person who was, is, or is
threatened to be made a named defendant or respondent in a proceeding, including
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, arbitrative, or investigative because the person is or
was a director. The TBCA provides that unless a court of competent jurisdiction
determines otherwise, the indemnification is permitted only if it is determined
that the person (1) conducted himself in good faith; (2) reasonably believed (a)
in the case of conduct in his official capacity as a director of the
corporation, that his conduct was in the corporation's best interests, and (b)
in all other cases, that his conduct was at least not opposed to the
corporation's best interests; and (3) in the case of any criminal proceeding,
had no reasonable cause to believe his conduct was unlawful. A person may be
indemnified under Article 2.02-1 against judgments, penalties (including excise
and similar taxes), fines, settlements, and reasonable expenses actually
incurred by the person (including court costs and attorneys' fees), but if the
person is found liable to the corporation or is found liable on the basis that
personal benefit was improperly received by him, the indemnification is limited
to reasonable expenses actually incurred and shall not be made in respect of any
proceeding in which the person has been found liable for willful or intentional
misconduct in the performance of his duty to the corporation. A corporation is
obligated under Article 2.02-1 to indemnify a director or officer against
reasonable expenses incurred by him in connection with a proceeding in which he
is named defendant or respondent because he is or was a director or officer if
he has been wholly successful, on the merits or otherwise, in the defense of the
proceeding. Under Article 2.02-1 a corporation may (i) indemnify and advance
expenses to an officer, employee, agent or other persons who are or were serving
at the request of the corporation as a director, officer, partner venturer,
proprietor, trustee, employee, agent or similar functionary of another entity to
the same extent that it may indemnify and advance expenses to its directors,
(ii) indemnify and advance expenses to directors and such other persons
identified in (i) to such further extent, consistent with law, as may be
provided in the corporation's articles of incorporation, bylaws, action of its
board of directors, or contract or as
II-1
<PAGE> 17
permitted by common law and (iii) purchase and maintain insurance or another
arrangement on behalf of directors and such other persons identified in (i)
against any liability asserted against him and incurred by him in such a
capacity or arising out of his status as such a person. The Bylaws of the
Company set forth specific provisions for indemnification of directors,
officers, agents and other persons which are substantially identical to the
provisions of Article 2.02-1 described above. The Company maintains directors
and officers insurance.
ITEM 16. EXHIBITS
(a) Exhibits
The exhibits listed in the Exhibit Index below are filed as part of the
Registration Statement:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
2.1 -- Agreement and Plan of Merger dated May 7, 1996, among DI
Industries, Inc., DI Merger Sub, Inc., Roy T. Oliver,
Jr., Mike L. Mullen, R.T. Oliver, Inc. and Land Rig
Acquisition Corp. (incorporated herein by reference to
Exhibit 2.1 to Registration Statement No. 333-6077).
2.1.1 -- Amendment to Agreement and Plan of Merger dated May 7,
1996, among DI Industries, Inc., DI Merger Sub, Inc., Roy
T. Oliver, Jr., Mike L. Mullen, R.T. Oliver, Inc. and
Land Rig Acquisition Corp. (incorporated herein by
reference to Exhibit 2.1.1 to Registration Statement No.
333-6077).
2.1.2 -- Second Amendment to Agreement and Plan of Merger dated
July 26, 1996, among DI Industries, Inc., DI Merger Sub,
Inc., Roy T. Oliver, Jr., Mike L. Mullen, R.T. Oliver,
Inc. and Land Rig Acquisition Corp. (incorporated herein
by reference to Exhibit 2.1.2 to Amendment No. 1 to
Registration Statement No. 333-6077).
2.2 -- Agreement and Plan of Merger dated May 7, 1996, among DI
Industries, Inc. and Somerset Investment Corp.
(incorporated herein by reference to Exhibit 2.2 to
Registration Statement No. 333-6077).
2.2.1 -- Amendment to Agreement and Plan of Merger dated May 7,
1996, among DI Industries, Inc. and Somerset Investment
Corp. (incorporated herein by reference to Exhibit 2.2.1
to Registration Statement No. 333-6077).
2.2.2 -- Second Amendment to Agreement and Plan of Merger dated
July 26, 1996, among DI Industries, Inc. and Somerset
Investment Corp. (incorporated herein by reference to
Exhibit 2.2.2 to Amendment No. 1 to Registration
Statement No. 333-6077).
2.3 -- Asset Purchase Agreement dated October 3, 1996, by and
between DI Industries, Inc. and Meritus, Inc., a Texas
corporation, Mesa Rig 4 L.L.C., a Texas limited liability
company, Mesa Venture, a Texas general partnership, and
Mesa Drilling, Inc., a Texas corporation (incorporated
herein by reference to Exhibit 2.1 to Registration
Statement No. 333-14783).
2.4 -- Asset Purchase Agreement dated November 12, 1996, between
Diamond M Onshore, Inc. and Drillers, Inc. (incorporated
herein by reference to Exhibit 2.1 to Form 8-K dated
December 30, 1996).
2.4.1 -- Letter Agreement dated December 31, 1996, between Diamond
M Onshore, Inc. and Drillers, Inc. amending the Asset
Purchase Agreement (incorporated herein by reference to
Exhibit 2.2 to Form 8-K dated December 30, 1996).
2.5 -- Asset Purchase Agreement dated December 31, 1996, by and
between Flournoy Drilling Company and Drillers, Inc.
(incorporated herein by reference to Exhibit 2.1 to Form
8-K dated January 31, 1996).
</TABLE>
II-2
<PAGE> 18
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
2.6 -- Agreement and Plan of Merger dated March 7, 1997, by and
among DI Industries, Inc., Drillers, Inc., and Grey Wolf
Drilling Company including form of Escrow Agreement, form
of Trust Under Grey Wolf Drilling Company Deferred
Corporation Plan, and form of Grey Wolf Drilling Company
Deferred Compensation Plan (incorporated herein by
reference to Exhibit 10.1 to Form 8-K dated March 10,
1997).
2.6.1 -- Amendment No. 1 to Agreement and Plan of Merger by and
among DI Industries, Inc., Drillers Inc. and Grey Wolf
Drilling Company (incorporated by reference from Appendix
A to the Prospectus included in Form S-4 Registration
Statement of DI Industries, Inc., Registration No.
333-26519).
2.7 -- Asset Purchase Agreement dated September 15, 1997 by and
between Justiss Oil Company, Inc. and Grey Wolf Drilling
Company (incorporated by reference from Exhibit 99.1 to
Form 8-K filed September 19, 1997).
5* -- Opinion of Porter & Hedges, L.L.P.
23.1* -- Consent of KPMG Peat Marwick LLP.
23.2* -- Consent or Arthur Andersen LLP.
23.3* -- Consent of Deloitte & Touche LLP.
23.4 -- Consent of Cokinos, Bosien & Young (Incorporated by
reference to Exhibits 23.2 to each Amendment No. 1 to
Registration Statement No. 333-6077 and Registration
Statement No. 333-14783).
23.5* -- Consent of Porter & Hedges, L.L.P. (included in their
opinion filed as Exhibit 5 hereto.)
24* -- Power of Attorney (included in the signature page
hereto).
</TABLE>
- ---------------
* Filed herewith.
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by section 10(a)(3) of the
Securities Act of 1933 (the "Securities Act");
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the 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 the registration statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
Provided, however, that clauses (a)(1)(i) and (a)(1)(ii) of this
paragraph do not apply if the information required to be included in a
post-effective amendment by those clauses is contained in periodic reports
filed with or furnished to the Securities and Exchange Commission by the
registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
II-3
<PAGE> 19
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment 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; and
(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;
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
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.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
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, the registrant 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 it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE> 20
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
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 HOUSTON, STATE OF TEXAS, ON NOVEMBER 5, 1997.
GREY WOLF, INC.
By: /s/ T. SCOTT O'KEEFE
----------------------------------
T. Scott O'Keefe,
Senior Vice President and
Chief Financial Officer
Each person whose signature appears below hereby appoints Thomas P.
Richards, T. Scott O'Keefe and David W. Wehlmann any of whom may act without the
joinder of the other, as his true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement and any registration
statement for the same offering filed pursuant to Rule 462 under the Securities
Act of 1933, and to file the same, with all exhibits thereto and all other
documents in connection therewith, with the Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing appropriate or necessary to be done, as fully and for all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or their substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ THOMAS P. RICHARDS President and Chief November 5, 1997
- ----------------------------------------------------- Executive Officer
Thomas P. Richards
/s/ T. SCOTT O'KEEFE Senior Vice President and November 5, 1997
- ----------------------------------------------------- Chief Financial Officer
T. Scott O'Keefe
/s/ DAVID W. WEHLMANN Vice President and November 5, 1997
- ----------------------------------------------------- Controller
David W. Wehlmann
/s/ PETER M. HOLT Director November 5, 1997
- -----------------------------------------------------
Peter M. Holt
/s/ ROY T. OLIVER, JR. Director November 5, 1997
- -----------------------------------------------------
Roy T. Oliver, Jr.
/s/ IVAR SIEM Director November 5, 1997
- -----------------------------------------------------
Ivar Siem
/s/ STEVEN A. WEBSTER Director November 5, 1997
- -----------------------------------------------------
Steven A. Webster
/s/ WILLIAM R. ZIEGLER Director November 5, 1997
- -----------------------------------------------------
William R. Ziegler
/s/ LUCIEN FLOURNOY Director November 5, 1997
- -----------------------------------------------------
Lucien Flournoy
/s/ JAMES K. B. NELSON Director November 5, 1997
- -----------------------------------------------------
James K. B. Nelson
/s/ WILLIAM T. DONOVAN Director November 5, 1997
- -----------------------------------------------------
William T. Donovan
</TABLE>
II-5
<PAGE> 21
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
2.1 -- Agreement and Plan of Merger dated May 7, 1996, among DI
Industries, Inc., DI Merger Sub, Inc., Roy T. Oliver,
Jr., Mike L. Mullen, R.T. Oliver, Inc. and Land Rig
Acquisition Corp. (incorporated herein by reference to
Exhibit 2.1 to Registration Statement No. 333-6077).
2.1.1 -- Amendment to Agreement and Plan of Merger dated May 7,
1996, among DI Industries, Inc., DI Merger Sub, Inc., Roy
T. Oliver, Jr., Mike L. Mullen, R.T. Oliver, Inc. and
Land Rig Acquisition Corp. (incorporated herein by
reference to Exhibit 2.1.1 to Registration Statement No.
333-6077).
2.1.2 -- Second Amendment to Agreement and Plan of Merger dated
July 26, 1996, among DI Industries, Inc., DI Merger Sub,
Inc., Roy T. Oliver, Jr., Mike L. Mullen, R.T. Oliver,
Inc. and Land Rig Acquisition Corp. (incorporated herein
by reference to Exhibit 2.1.2 to Amendment No. 1 to
Registration Statement No. 333-6077).
2.2 -- Agreement and Plan of Merger dated May 7, 1996, among DI
Industries, Inc. and Somerset Investment Corp.
(incorporated herein by reference to Exhibit 2.2 to
Registration Statement No. 333-6077).
2.2.1 -- Amendment to Agreement and Plan of Merger dated May 7,
1996, among DI Industries, Inc. and Somerset Investment
Corp. (incorporated herein by reference to Exhibit 2.2.1
to Registration Statement No. 333-6077).
2.2.2 -- Second Amendment to Agreement and Plan of Merger dated
July 26, 1996, among DI Industries, Inc. and Somerset
Investment Corp. (incorporated herein by reference to
Exhibit 2.2.2 to Amendment No. 1 to Registration
Statement No. 333-6077).
2.3 -- Asset Purchase Agreement dated October 3, 1996, by and
between DI Industries, Inc. and Meritus, Inc., a Texas
corporation, Mesa Rig 4 L.L.C., a Texas limited liability
company, Mesa Venture, a Texas general partnership, and
Mesa Drilling, Inc., a Texas corporation (incorporated
herein by reference to Exhibit 2.1 to Registration
Statement No. 333-14783).
2.4 -- Asset Purchase Agreement dated November 12, 1996, between
Diamond M Onshore, Inc. and Drillers, Inc. (incorporated
herein by reference to Exhibit 2.1 to Form 8-K dated
December 30, 1996).
2.4.1 -- Letter Agreement dated December 31, 1996, between Diamond
M Onshore Inc. and Drillers, Inc. amending the Asset
Purchase Agreement (incorporated herein by reference to
Exhibit 2.2 to Form 8-K dated December 30, 1996).
2.5 -- Asset Purchase Agreement dated December 31, 1996, by and
between Flournoy Drilling Company and Drillers, Inc.
(incorporated herein by reference to Exhibit 2.1 to Form
8-K dated January 31, 1996).
2.6 -- Agreement and Plan of Merger dated March 7, 1997, by and
among DI Industries, Inc., Drillers Inc., and Grey Wolf
Drilling Company including form of Escrow Agreement, form
of Trust Under Grey Wolf Drilling Company Deferred
Corporation Plan, and form of Grey Wolf Drilling Company
Deferred Compensation Plan (incorporated herein by
reference to Exhibit 10.1 to Form 8-K dated March 10,
1997).
</TABLE>
<PAGE> 22
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
2.6.1 -- Amendment No. 1 to Agreement and Plan of Merger by and
among DI Industries, Inc., Drillers, Inc. and Grey Wolf
Drilling Company (incorporated by reference from Appendix
A to the Prospectus included in Form S-4 Registration
Statement of DI Industries, Inc., Registration No.
333-26519).
2.7 -- Asset Purchase Agreement dated September 15, 1997 by and
between Justiss Oil Company, Inc. and Grey Wolf Drilling
Company (incorporated by reference from Exhibit 99.1 to
Form 8-K filed September 19, 1997).
5* -- Opinion of Porter & Hedges, L.L.P.
23.1* -- Consent of KPMG Peat Marwick LLP.
23.2* -- Consent or Arthur Andersen LLP.
23.3* -- Consent of Deloitte & Touche LLP.
23.4 -- Consent of Cokinos, Bosien & Young (Incorporated by
reference to Exhibits 23.2 to each Amendment No. 1 to
Registration Statement No. 333-6077 and Registration
Statement No. 333-14783).
23.5* -- Consent of Porter & Hedges, L.L.P. (included in their
opinion filed as Exhibit 5 hereto.)
24* -- Power of Attorney (included in the signature page
hereto).
</TABLE>
- ---------------
* Filed herewith.
<PAGE> 1
EXHIBIT 5
Porter & Hedges, L.L.P.
700 Louisiana, 35th Floor
Houston, Texas 77002
Telephone (713) 226-0600
Telecopy (713) 228-1331
November 5, 1997
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Grey Wolf, Inc. -- Registration Statement on Form S-3 (the
"Registration Statement")
Ladies and Gentlemen:
We have acted as counsel to Grey Wolf, Inc., a Texas corporation (the
"Company"), in connection with the registration on Form S-3 under the Securities
Act of 1933, as amended, of 15,786,605 shares of the Company's common stock, par
value $.10 per share (the "Common Stock"). In such capacity we have examined the
articles of incorporation, bylaws and corporate proceedings of the Company, and
based upon such examination and having regard for applicable legal principles,
it is our opinion that such 15,786,605 shares will, when sold as contemplated in
the Registration Statement, be validly issued, fully paid and non-assessable,
outstanding shares of Common Stock.
We consent to the use of this opinion as an exhibit to the Registration
Statement and in the reference to our firm under the heading "Legal Matters" in
the Prospectus included as part of the Registration Statement.
Very truly yours,
/s/ Porter & Hedges, L.L.P.
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Grey Wolf, Inc. (formerly DI Industries, Inc.), on Form S-3 of our report
dated March 14, 1997, relating to the consolidated balance sheet of DI
Industries, Inc. and Subsidiaries as of December 31, 1996 and the related
consolidated statements of operations, changes in shareholders' equity and cash
flows for the year then ended, and the related financial statement schedule,
which report appears in the December 31, 1996 Annual Report on Form 10-K of DI
Industries, Inc. and to the reference to our firm under the heading "Experts" in
the Prospectus.
/s/ KPMG PEAT MARWICK LLP
KPMG PEAT MARWICK LLP
Houston, Texas
November 5, 1997
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement of our report on the financial
statements of Grey Wolf Drilling Company dated January 13, 1997, included in DI
Industries, Inc.'s Registration Statement File No. 333-26519 on Form S-3 and to
all references to our Firm included in this Registration Statement.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Houston, Texas
November 4, 1997
<PAGE> 1
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Grey Wolf, Inc. (formerly DI Industries, Inc.) on Form S-3 of our report
dated March 28, 1996, appearing in the Annual Report on Form 10-K of DI
Industries, Inc. for the year ended December 31, 1996 and to the reference to us
under the heading "Experts" in the Prospectus, which is part of this
Registration Statement.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Houston, Texas
November 5, 1997
