<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of earliest event reported: December 30, 1997
PARKER DRILLING COMPANY
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(Exact name or registrant as specified in its charter)
Delaware 1-7573 73-0618660
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(State of other jurisdiction Commission File Number (IRS Employer
of incorporation) Identification No.)
Eight East Third Street, Tulsa, Oklahoma 74103
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, include area code: (918) 585-8221
<PAGE> 2
Item 2. Acquisition or Disposition of Assets
On December 30, 1997, Parker Drilling Company completed the previously
announced acquisition of Hercules Offshore Corporation and Hercules Rig Corp.
The acquisition price of $195 million, plus $5 million for certain capital
expenditures incurred subsequent to the definitive agreements' date of May 9,
1997, were financed through existing cash, together with $32 million borrowed
under the revolving credit portion of Parker's Senior Credit Facility. A copy of
the press release announcing the closing of the acquisition is annexed hereto as
Exhibit 99 and incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements - The required historical financial statements
were filed November 3, 1997 with the Company's Form 8-K.
(b) Exhibits
2.1 Stock Purchase Agreement dated May 9, 1997 by and among the
Company, Parker Drilling Offshore Company and Trenergy (Malaysia)
BHD. (incorporated by reference to Exhibit 10(n) to the Company's
Quarterly Report on Form 10-Q for the three months ended May 31,
1997).
2.2 Stock Purchase Agreement dated May 9, 1997 by and among the
Company, Parker Drilling Offshore Company and Reshid & Lee
Nominees SDN, BHD. (incorporated by reference to Exhibit 10(o) to
the Company's Quarterly Report on Form 10-Q for the three months
ended May 31, 1997).
99. Press Release dated December 30, 1997.
<PAGE> 3
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma combined financial information is derived
from the historical financial statements of Parker, Mallard, Quail and Hercules,
incorporated by reference herein, and certain assumptions deemed appropriate by
the Company. The Unaudited Pro Forma Combined Statement of Operations for the
year ended August 31, 1997 reflect: (i) the Mallard Acquisition, (ii) the Quail
Acquisition, (iii) the Hercules Acquisition, (iv) the issuance of $300 million
of 9 3/4% Senior Notes and $100 million of 7.94% term debt in November 1996, (v)
the issuance of $25 million of convertible preferred stock in November 1996 and
the subsequent conversion of such stock into 3,056,600 shares of Common Stock in
December 1996, (vi) the issuance of $175 million of Convertible Notes in July
1997 and (vii) $32 million of additional borrowings under Parker's line of
credit facility at a 7.94% interest rate, in each case as if such transactions
had occurred on September 1, 1996. Such twelve months unaudited pro forma
combined information combines: (i) the audited operating results for the Company
for the fiscal year ended August 31, 1997, (ii) the unaudited operating results
for Mallard and Quail for the period from September 1, 1996 to November 12, 1996
(the date of acquisition by Parker), and (iii) the combined unaudited operating
results of Hercules for the 12 months ended September 30, 1997. The Hercules
financial statements have been derived from the separate financial statements of
HOC and HRC incorporated herein by reference and are presented on a combined
basis with intercompany transactions between the entities eliminated. The
unaudited pro forma combined financial information should be read in conjunction
with the notes thereto and the historical financial statements of Parker,
Mallard, Quail and Hercules, including the notes thereto.
The pro forma adjustments giving effect to the various events described
above are based upon currently available information and upon certain
assumptions that management believes are reasonable. The historical operating
results of Mallard included in the Unaudited Pro Forma Combined Financial
Statements do not reflect any allocation of general corporate, accounting, tax,
legal and other administrative costs incurred by its former parent corporation.
The Company has not incurred any significant amount of additional general and
administrative expense in connection with the incorporation of Mallard's and
Quail's operations, and does not expect to incur any significant amount of such
expenses in connection with the incorporation of Hercules' operations. The
Mallard Acquisition and the Quail Acquisition have been, and the Hercules
Acquisition will be, accounted for by the Company under the purchase method of
accounting and the assets and liabilities of Mallard and Quail were, and the
assets and liabilities of Hercules will be, recorded at their estimated fair
market values at the date of acquisition.
The unaudited pro forma combined financial information does not purport to
be indicative of the results of operations that would actually have occurred if
the transactions described had occurred as presented in such statements or that
may be obtained in the future. In addition, future results may vary
significantly from the results reflected in such statements due to general
economic conditions, oil and gas commodity prices, the demand and prices for
contract drilling services and rental tools, increases in the number of rigs
available for service, the Company's ability to successfully integrate the
operations of Mallard, Quail and Hercules with its current business and several
other factors, many of which are beyond the Company's control.
<PAGE> 4
PARKER DRILLING COMPANY AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
YEAR ENDED AUGUST 31, 1997
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL
--------------------------------------------
SEPT. 1-NOV. 12,
1996
AS REPORTED ---------------- PRO
PARKER(1) MALLARD QUAIL HERCULES(2) ADJUSTMENTS FORMA
----------- ------- ------ ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Drilling........................ $ 283,598 $23,678 $ -- $64,251 $ (967)(1) $ 370,560
Rental.......................... 25,457 -- 5,387 -- -- 30,844
Other........................... 2,589 -- -- -- -- 2,589
---------- ------- ------ ------- -------- ----------
Total revenues.............. 311,644 23,678 5,387 64,251 (967) 403,993
---------- ------- ------ ------- -------- ----------
Operating expense:
Drilling........................ 189,979 14,382 -- 39,090 7,253 (f) 250,615
(89)(1)
Rental.......................... 8,549 -- 439 -- 739 (f) 9,727
Other........................... 4,722 -- -- -- -- 4,722
Depreciation, depletion and
amortization.................. 46,256 2,695 505 5,715 5,360 (d) 61,153
810 (e)
(188)(1)
General and administrative...... 14,414 1,933 739 5,320 (7,992)(f) 14,414
---------- ------- ------ ------- -------- ----------
Total operating expenses.... 263,920 19,010 1,683 50,125 5,893 340,631
---------- ------- ------ ------- -------- ----------
Operating income.................. 47,724 4,668 3,704 14,126 (6,860) 63,362
---------- ------- ------ ------- -------- ----------
Other income (expense):
Interest expense................ (32,851) (102) -- (3,068) (2,541)(a) (52,399)
(15,960)(g)
(945)(j)
3,068 (h)
Interest income................. 5,367 -- 962 -- (949)(i) 5,380
Other........................... 3,316 (78) 5 -- -- 3,243
---------- ------- ------ ------- -------- ----------
Total other income
(expense)................ (24,168) (180) 967 (3,068) (17,327) (43,776)
---------- ------- ------ ------- -------- ----------
Income before income taxes........ 23,556 4,488 4,671 11,058 (24,187) 19,586
---------- ------- ------ ------- -------- ----------
Income tax expense (benefit)...... 7,241 403 -- 4,808 (4,846)(k) 7,371
(235)(l)
---------- ------- ------ ------- -------- ----------
Net income........................ $ 16,315 $ 4,085 $4,671 $ 6,250 $(19,106) $ 12,215
========== ======= ====== ======= ======== ==========
Earnings per share, primary and
fully diluted................... $ .23 $ 0.17
========== ==========
Weighted average shares
outstanding (fully diluted)..... 72,049,124 72,049,124
========== ==========
</TABLE>
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(1) Includes the operations of Malland and Quail from November 12, 1996 through
August 31, 1997.
(2) Reflects combined results of operations of HOC and HRC for the 12 months
ended September 30, 1997. See Note (m) for the summary capsular combining
statement of operations of HOC and HRC for the 12 months ended September 30,
1997.
<PAGE> 5
PARKER DRILLING COMPANY AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
(DOLLARS IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
HISTORICAL
------------------------ PRO
PARKER HERCULES(1) ADJUSTMENTS FORMA
---------- ----------- ----------- ----------
AS OF AS OF
AUGUST 31, SEPT. 30,
1997 1997
---------- -----------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents..................... $209,951 $ 498 $ 32,000 (a) $ 44,999
(200,502)(b)
3,052 (b)
Other short-term investments.................. 2,838 2,838
Accounts and notes receivable................. 103,808 16,681 120,489
Rig materials and supplies.................... 19,130 19,130
Other current assets.......................... 16,227 2,659 (503)(b) 18,383
-------- -------- --------- ----------
Total current assets................... 351,954 19,838 (165,953) 205,839
-------- -------- --------- ----------
Property, plant and equipment:
Drilling equipment............................ 723,878 94,077 51,311 (b,1) 869,266
Rental equipment.............................. 28,264 28,264
Buildings, land and improvements.............. 12,519 12,519
Other......................................... 21,586 203 21,789
Construction in progress...................... 28,640 8,411 37,051
-------- -------- --------- ----------
814,887 102,691 51,311 968,889
Less accumulated depreciation, depletion and
amortization................................ 375,236 8,257 (8,257)(d,l) 375,236
-------- -------- --------- ----------
Net property, plant and equipment............. 439,651 94,434 59,568 593,653
-------- -------- --------- ----------
Goodwill, net of accumulated amortization....... 139,467 16,260 21,355 (b,l) 177,082
-------- -------- --------- ----------
Other noncurrent assets......................... 53,064 885 53,949
-------- -------- --------- ----------
Total assets........................... $984,136 $131,417 $ (85,030) $1,030,523
======== ======== ========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt............. $ 16,084 $ 5,248 $ (5,078)(b) $ 16,254
Accounts payable.............................. 26,178 8,368 34,546
Accrued liabilities........................... 29,539 5,045 34,584
Accrued income taxes.......................... 4,904 804 5,708
-------- -------- --------- ----------
Total current liabilities.............. 76,705 19,465 (5,078) 91,092
-------- -------- --------- ----------
Long-term debt.................................. 551,042 33,413 32,000 (a) 583,042
(33,413)(b)
Deferred income taxes........................... -- 10,133 (10,133)(b)
Other long-term liabilities..................... 7,666 7,666
Preferred stock................................. -- 4,000 (4,000)(b)
Stockholders' equity:
Common stock.................................. 12,780 18,035 (18,035)(b) 12,780
Capital in excess of par value................ 340,243 39,598 (39,598)(b) 340,243
Retained earnings (accumulated deficit)....... (4,023) 6,773 (6,773)(b) (4,023)
Other......................................... (277) (277)
-------- -------- --------- ----------
Total stockholders' equity............. 348,723 64,406 (64,406) 348,723
-------- -------- --------- ----------
Total liabilities and stockholders'
equity............................... $984,136 $131,417 $ (85,030) $1,030,523
======== ======== ========= ==========
</TABLE>
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(1) Represents the combined balances of HOC and HRC as of September 30, 1997.
See note (c) for summary capsular combining balance sheet of HOC and HRC as
of September 30, 1997.
<PAGE> 6
PARKER DRILLING COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(a) To record $32.0 million of additional borrowings under the revolving credit
portion of Parker's Senior Credit Facility at an interest rate of 7.94%.
(b) To reflect the Hercules Acquisition. The purchase price was allocated as
follows:
<TABLE>
<CAPTION>
PURCHASE PRICE HERCULES
-------------- --------
<S> <C>
Cash........................................................ $200,002
Fees and expenses........................................... 500
--------
Total............................................. $200,502
========
Purchase Price Allocation:
Increase in property and equipment........................ 59,568
Working capital adjustment per purchase agreement......... 3,052
Eliminate stockholders' equity............................ 64,406
Reverse assets/liabilities which are not a part of
acquisition:
Debt and capital lease obligations........................ 38,491
Redeemable preferred stock................................ 4,000
Intangible assets......................................... (16,260)
Deferred income taxes..................................... 9,630
Cost in excess of net assets acquired....................... 37,615
--------
$200,502
========
</TABLE>
(c) Following is the summary capsular combining balance sheets of HOC and HRC as
of September 30, 1997.
<TABLE>
<CAPTION>
HOC HRC ELIMINATIONS COMBINED
-------- -------- ------------ --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Current assets........................... $ 19,488 $ 350 $ -- $ 19,838
Noncurrent assets........................ 88,994 24,765 (2,180) 111,579
-------- ------- ------- --------
Total assets................... 108,482 25,115 (2,180) 131,417
======== ======= ======= ========
Current liabilities...................... $ 17,437 $ 2,028 -- $ 19,465
Noncurrent liabilities................... 31,198 14,528 (2,180) 43,546
Preferred stock.......................... 4,000 -- -- 4,000
Stockholders' equity..................... 55,847 8,559 -- 64,406
-------- ------- ------- --------
Total liabilities and
stockholders' equity......... $108,482 $25,115 $(2,180) $131,417
======== ======= ======= ========
</TABLE>
The eliminations represent approximately $2,180,000 of HRC's note payable
to HOC as of September 30, 1997.
(d) To adjust depreciation expense on assets acquired using allocated purchase
price and to eliminate accumulated depreciation on Hercules assets.
Depreciation was calculated over 17 1/2 years for barge drilling rigs, 15
years on jackup rigs and seven years for tool rental equipment, using 5%
salvage on all equipment.
(e) Amortization of excess cost over fair value of net assets acquired over 30
years.
(f) Reclassify the general and administrative expenses of Mallard and Hercules
to drilling expense and of Quail to rental expense.
(g) To record interest expenses related to $300 million of 9 3/4% Senior Notes,
$175 million of Convertible Notes at 5.5%, and $100 million of term debt at
a rate of 7.94%.
<PAGE> 7
(h) Eliminate interest expense on Hercules debt not assumed.
(i) Eliminate interest and investment income on Quail cash and investments not
acquired.
(j) Amortization of original issue discount and debt issuance costs over the
ten-year term of the 9 3/4% Senior Notes and the seven-year term of the
Convertible Notes.
(k) Eliminate U.S. federal income taxes allocated to Mallard by its former
parent and eliminate U.S. federal income taxes recorded by Hercules due to
the existence of the Company's net operating loss tax carryforwards.
(l) Eliminate operating results and balance sheet accounts related to Rig No. 1
which was sold by Hercules subsequent to September 30, 1997.
(m) Following is the summary capsular combining statements of operations of HOC
and HRC, as applicable for the period indicated:
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED SEPTEMBER 30, 1997
-----------------------------------------------
HOC HRC ELIMINATIONS COMBINED
------------ ------ ------------ --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Revenues...................................... $64,251 $1,923 $(1,923) $64,251
Total operating expenses...................... 50,621 1,427 (1,923) 50,125
Other (income) expense........................ 2,013 1,055 -- 3,068
Income (loss) before income taxes............. 11,617 (559) -- 11,058
Income tax expenses........................... 4,808 -- -- 4,808
------- ------ ------- -------
Net income (loss)............................. $ 6,809 $ (559) $ -- $ 6,250
======= ====== ======= =======
</TABLE>
Elimination entries represent the elimination of approximately $1,923,000
of HRC's billings to HOC for the twelve months ended September 30, 1997 for
HOC's bareboat charter of HRC's drilling and workover rigs.
<PAGE> 8
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PARKER DRILLING COMPANY
By: /s/ James J. Davis
-----------------------------------
James J. Davis
Senior Vice President -
Finance and Chief Executive Officer
Date: January 8, 1998
<PAGE> 9
INDEX TO EXHIBITS
Exhibit
Number Description
- ------ -----------
2.1 Stock Purchase Agreement dated May 9, 1997 by and among the
Company, Parker Drilling Offshore Company and Trenergy (Malaysia)
BHD. (incorporated by reference to Exhibit 10(n) to the Company's
Quarterly Report on Form 10-Q for the three months ended May 31,
1997).
2.2 Stock Purchase Agreement dated May 9, 1997 by and among the
Company, Parker Drilling Offshore Company and Reshid & Lee
Nominees SDN, BHD. (incorporated by reference to Exhibit 10(o) to
the Company's Quarterly Report on Form 10-Q for the three months
ended May 31, 1997).
99 Press Release dated December 30, 1997.
<PAGE> 1
EXHIBIT 99
[LOGO]
PARKERNEWS
Parker Drilling Company
Parker Building, Eight East Third Street, Tulsa Oklahoma 74103 (918) 585-8221
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FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION, CONTACT:
Tim Colwell, 918-631-1249
PARKER DRILLING CLOSES ON ACQUISITION OF HERCULES OFFSHORE
(Tulsa, Okla., Dec. 30, 1997) - Parker Drilling Company (NYSE: PKD) today
announced that it has completed its acquisition of Hercules Offshore
Corporation and Hercules Rig Corp.
Hercules Offshore Corporation, a Houston-based offshore drilling
contractor, was owned by Trenergy (Malaysia) BHD, and Hercules Rig Corp. was
owned by private Malaysian interests. The purchase includes seven jackup rigs
and three self-erecting platform rigs operating in the Gulf of Mexico. All the
rigs are under contract except one jackup rig, which is currently being
refurbished.
"Hercules has an excellent reputation in the Gulf of Mexico market," said
Robert L. Parker, Jr., president and chief executive officer. "We are excited
to welcome this company to the Parker family. Our plan is to grow the company,
and expand its operations into international markets where Parker Drilling has
an active presence," he added.
Hercules is the fourth major acquisition by Parker in the past 13 months.
In November 1996, the Tulsa-based company acquired two offshore niche
companies, Mallard Drilling and Quail Tools. In August, Parker purchased the
assets of Bolivia's largest private drilling contractor, Bolifor, S.A.
