<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 0-18437
--------------------
POOL ENERGY SERVICES CO.
(Exact Name Of Registrant As Specified In Its Charter)
TEXAS 76-0263755
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10375 Richmond Avenue
Houston, Texas 77042
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 954-3000
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities and Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES /X/ NO / /
The number of shares outstanding of each of the issuer's classes of common
stock, as of September 30, 1996: Common Stock, no par value - 18,835,938
shares
================================================================================
<PAGE> 2
PART I
ITEM 1. FINANCIAL STATEMENTS
POOL ENERGY SERVICES CO.
CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS
(UNAUDITED)
(IN THOUSANDS EXCEPT NUMBER OF SHARES AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30
-------------------------------
1996 1995
------------- --------------
<S> <C> <C>
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 83,978 $ 75,515
Earnings Attributable to Unconsolidated Affiliates . . . . . . . . . . . . 728 752
------------ ------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84,706 76,267
------------ ------------
Costs and Expenses:
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . 64,796 60,304
Selling, general and administrative expenses . . . . . . . . . . . . 11,779 10,536
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . 4,512 4,010
Acquisition related costs . . . . . . . . . . . . . . . . . . . . . . 21 43
------------- ------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81,108 74,893
------------ ------------
Other Income (Expense) - Net . . . . . . . . . . . . . . . . . . . . . . . 996 354
Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 602 727
------------ ------------
Income Before Income Taxes and Minority Interest . . . . . . . . . . . . 3,992 1,001
Income Tax Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,450 357
Minority Interest in Loss of Consolidated Subsidiary . . . . . . . . . . . (44) -
------------ ------------
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,586 $ 644
============ ============
Earnings Per Share of Common Stock . . . . . . . . . . . . . . . . . . . . $ .14 $ .05
============ ============
Average Common Shares Outstanding . . . . . . . . . . . . . . . . . . . . 18,735,661 14,063,515
============ ============
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
2
<PAGE> 3
POOL ENERGY SERVICES CO.
CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS
(UNAUDITED)
(IN THOUSANDS EXCEPT NUMBER OF SHARES AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30
-------------------------------
1996 1995
------------- --------------
<S> <C> <C>
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 248,648 $ 202,174
Earnings Attributable to Unconsolidated Affiliates . . . . . . . . . . . . 1,910 2,170
------------- -------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250,558 204,344
------------- -------------
Costs and Expenses:
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . 192,898 160,861
Selling, general and administrative expenses . . . . . . . . . . . . 34,056 29,482
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . 13,025 10,834
Acquisition related costs . . . . . . . . . . . . . . . . . . . . . . 24 643
------------- -------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240,003 201,820
------------- -------------
Other Income (Expense) - Net . . . . . . . . . . . . . . . . . . . . . . . 1,527 988
Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,986 1,145
------------- -------------
Income Before Income Taxes and Minority Interest . . . . . . . . . . . . . 10,096 2,367
Income Tax Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,298 953
Minority Interest in Loss of Consolidated Subsidiary . . . . . . . . . . . (44) -
------------- -------------
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,842 $ 1,414
============= =============
Earnings Per Share of Common Stock . . . . . . . . . . . . . . . . . . . . $ .37 $ .10
============= =============
Average Common Shares Outstanding . . . . . . . . . . . . . . . . . . . . 15,668,601 13,764,681
============= =============
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
3
<PAGE> 4
POOL ENERGY SERVICES CO.
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30
------------------------------
1996 1995
---------- -----------
<S> <C> <C>
Operating Activities:
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,842 $ 1,414
Noncash items included above:
Depreciation and amortization . . . . . . . . . . . . . . . . . . 13,025 10,834
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . 1,383 505
Undistributed earnings of unconsolidated affiliates . . . . . . . (1,872) (2,061)
Other - net . . . . . . . . . . . . . . . . . . . . . . . . . . . (277) 215
Payment for lease of manufacturing facility . . . . . . . . . . . . . (1,611) (1,611)
Cash dividends received from unconsolidated affiliates . . . . . . . 101 329
Other - net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (276) (501)
Changes in operating working capital net of effects of acquisitions . (8,189) (2,423)
---------- ----------
Net Cash Flows Provided by Operating Activities . . . . . . . 8,126 6,701
---------- ----------
Investing Activities:
Property additions . . . . . . . . . . . . . . . . . . . . . . . . . (24,275) (18,323)
Expenditures for the acquisition of a 51% controlling interest in PIASA (8,712) -
Expenditures for the purchase of the operating assets of Western Oil (3,950) -
Expenditures for the acquisition of GPC, including acquisition costs,
less cash acquired . . . . . . . . . . . . . . . . . . . . . . . (155) (2,980)
Expenditures for the acquisition of Pool Santana, including acquisition
costs, less cash acquired . . . . . . . . . . . . . . . . . . . . (620) -
Proceeds from disposition of property, plant and equipment . . . . . 1,792 1,558
Other - net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 507 335
---------- ----------
Net Cash Flows Used in Investing Activities . . . . . . . . . (35,413) (19,410)
---------- ----------
Financing Activities:
Proceeds and repayments of short-term borrowings - net . . . . . . . - 7,700
Proceeds from exercise of stock options . . . . . . . . . . . . . . . 1,570 61
Proceeds from issuance of common stock, net . . . . . . . . . . . . . 47,469 -
Retirement of debt assumed in GPC acquisition . . . . . . . . . . . . - (1,962)
Payments for debt financing costs . . . . . . . . . . . . . . . . . . (199) (100)
Proceeds from long-term debt . . . . . . . . . . . . . . . . . . . . 6,500 10,000
Principal payments on long-term debt . . . . . . . . . . . . . . . . (5,412) (1,943)
---------- ----------
Net Cash Flows Provided by Financing Activities . . . . . . . 49,928 13,756
---------- ----------
Net Increase in Cash and Cash Equivalents . . . . . . . . . . . . . . . . 22,641 1,047
Cash and Cash Equivalents at January 1, . . . . . . . . . . . . . . . . . 5,492 2,560
---------- ----------
Cash and Cash Equivalents at September 30, . . . . . . . . . . . . . . . . $ 28,133 $ 3,607
========== ==========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
4
<PAGE> 5
POOL ENERGY SERVICES CO.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT NUMBER OF SHARES)
<TABLE>
<CAPTION>
SEPTEMBER 30 DECEMBER 31
1996 1995
---------- -----------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . $ 28,133 $ 5,492
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . 170 163
Accounts and notes receivable (net of allowance for doubtful accounts
of $1,487 and $1,059) . . . . . . . . . . . . . . . . . . . . 62,964 54,984
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,465 10,516
Deferred income tax asset (net of $226 and $407 allowance) . . . . 3,650 3,469
Other current assets . . . . . . . . . . . . . . . . . . . . . . . 7,276 3,525
---------- -----------
Total current assets . . . . . . . . . . . . . . . . . . . . 114,658 78,149
Property, Plant and Equipment - Net . . . . . . . . . . . . . . . . . 149,074 124,024
Investment in and Noncurrent Receivables from Unconsolidated Affiliates 26,300 26,001
Goodwill, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,992 11,174
Noncurrent Deferred Income Tax Asset (net of $5,871 and $6,314
allowance) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,173 5,528
Noncurrent Receivables (net of allowance for doubtful accounts of
$1,740 and $2,824) and Other Assets . . . . . . . . . . . . . . . . 2,756 2,594
Noncurrent Restricted Cash . . . . . . . . . . . . . . . . . . . . . . 845 973
---------- -----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 309,798 $ 248,443
========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt . . . . . . . . . . . . . . . . . $ 5,952 $ 4,785
Trade accounts payable . . . . . . . . . . . . . . . . . . . . . . 19,457 24,123
Other current liabilities . . . . . . . . . . . . . . . . . . . . . 30,660 22,262
---------- -----------
Total current liabilities . . . . . . . . . . . . . . . . . . . . 56,069 51,170
Long-Term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,705 15,784
Deferred Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . 1,435 2,323
Other Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 41,546 43,139
Minority Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 4,106 -
Shareholders' Equity :
Common stock, no par value:
40,000,000 and 25,000,000 shares authorized; 18,835,938 and
14,063,983 shares issued and outstanding . . . . . . . . . . . 183,546 134,438
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . 7,753 1,911
Unearned compensation related to outstanding restricted stock . . . (40) -
Cumulative foreign currency translation adjustments . . . . . . . . (322) (322)
---------- -----------
Total shareholders' equity . . . . . . . . . . . . . . . . . 190,937 136,027
---------- -----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 309,798 $ 248,443
========== ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
5
<PAGE> 6
POOL ENERGY SERVICES CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated financial statements included in this report are
unaudited but in the opinion of management include all adjustments, consisting
only of normal recurring adjustments, necessary for a fair presentation of the
financial information for the periods indicated. All dollar amounts in the
tabulations in the notes to the financial statements are stated in thousands
unless otherwise indicated. Certain reclassifications have been made in the
1995 financial statements to conform with the 1996 presentation. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted.
2. UNCONSOLIDATED AFFILIATES
The following table sets forth certain summarized financial information of
the Company's unconsolidated affiliates as shown by the financial statements of
the affiliates.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30
----------------------
1996 1995
-------- --------
<S> <C> <C>
Revenues:
Pool Arabia, Ltd. . . . . . . . . . $ 21,086 $ 21,600
Antah Drilling Sdn. Bhd. . . . . . . 4,363 3,146
Pool Santana, Limited . . . . . . . 960 (b) 3,887
Intairdril Oman L.L.C. . . . . . . . 285 308
-------- --------
Total . . . . . . . . . . . . . $ 26,694 $ 28,941
======== ========
Gross Profit (a):
Pool Arabia, Ltd. . . . . . . . . . $ 6,969 $ 7,906
Antah Drilling Sdn. Bhd. . . . . . . 2,442 1,712
Pool Santana, Limited . . . . . . . 333 (b) 1,508
Intairdril Oman L.L.C. . . . . . . . 113 178
-------- --------
Total . . . . . . . . . . . . . $ 9,857 $ 11,304
======== ========
Net Income (Loss):
Pool Arabia, Ltd. . . . . . . . . . $ (962) $ (135)
Antah Drilling Sdn. Bhd. . . . . . . (50) (411)
Pool Santana, Limited . . . . . . . 89 (b) 494
Intairdril Oman L.L.C. . . . . . . . (92) (348)
-------- --------
Total . . . . . . . . . . . . . $ (1,015) $ (400)
======== ========
</TABLE>
(a) Gross profit is computed as revenues less operating expenses (which
excludes depreciation and amortization and selling, general and
administrative expenses).
(b) In April 1996, the Company acquired the 51% interest not already owned by
the Company in Pool Santana, Limited ("Pool Santana"), a Trinidad
corporation, for $1.2 million in cash. Pool Santana's results have been
included in the accompanying consolidated financial statements since the
date of such acquisition.
6
<PAGE> 7
POOL ENERGY SERVICES CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
Earnings attributable to unconsolidated affiliates is summarized below:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30
-----------------------
1996 1995
-------- --------
<S> <C> <C>
The Company's portion of net loss . . . . . . . . . . . . . . . . . . . $ (516) $ (199)
Adjustment to reconcile differences between affiliates' bases and
Company's carrying value . . . . . . . . . . . . . . . . . . . . . 2,388 2,260
-------- --------
Equity in income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,872 2,061
Management fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 7
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 29
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 73
-------- --------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,910 $ 2,170
======== ========
</TABLE>
In October 1996, the Company acquired the 51% interest not already owned by
the Company in Antah Drilling Sdn. Bhd. ("Antah Drilling"), a Malaysia
corporation (see Note 4).
3. PUBLIC OFFERING
On July 9, 1996, the Company completed the sale to the public of 4,600,000
shares of its common stock, no par value, from which it received cash proceeds
of approximately $47.5 million, net of expenses. The Company has used or
intends to use the net proceeds as follows: (i) $10.9 million in connection
with the August 1996 acquisition of a 51% controlling interest in Pool
International Argentina S. A. ("PIASA"), a newly formed Argentina corporation
which provides well-servicing, workover and drilling services in Argentina (see
Note 4), (ii) $9.1 million in connection with the October 1996 acquisition of
the 51% interest not already owned by the Company in Antah Drilling, (iii) $4.5
million in connection with the June 1996 purchase of the operating assets of
Western Oil Well Service Co. ("Western Oil"), (iv) $8.5 million in connection
with the refurbishment of Rig 18, a previously idle platform drilling rig in
the Gulf of Mexico, (v) $1.2 million to replenish working capital reserves
previously used for the Pool Santana acquisition which occurred in April 1996,
and (vi) for repayment of debt under the Company's syndicated bank revolving
line of credit and general corporate purposes. The amounts described above
include both acquisition expenditures and related working capital advances.
4. ACQUISITIONS
On August 28, 1996, the Company acquired for cash of approximately $8.7
million a 51% controlling interest in PIASA. PIASA owns nine land drilling
rigs and 11 land workover rigs, all of which are located in Argentina.
Additionally, the Company advanced $0.4 million to PIASA in September 1996 for
working capital purposes and plans to advance an additional $1.8 million in the
near future. For financial reporting purposes, 100% of the assets,
liabilities, results of operations and cash flows of PIASA are consolidated
with those of the Company. The minority shareholder's interest in PIASA and
the earnings or losses therefrom have been reflected as "minority interest" in
the Company's consolidated financial statements.
7
<PAGE> 8
POOL ENERGY SERVICES CO.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
Effective October 1, 1996, the Company acquired the 51% interest that it
did not already own in Antah Drilling and repaid indebtedness of Antah Drilling
owed to the Company's partner in that venture. A cash payment of $8.4 million
was made by the Company in October in connection with such acquisition, and an
additional amount, estimated at $0.7 million, is expected to be paid in the
fourth quarter of 1996 upon satisfaction of certain conditions specified in the
purchase agreement. Antah Drilling's assets include a new state-of-the-art
2,000 horsepower offshore platform drilling rig which recently commenced a
three-year contract in Australia and an offshore platform workover rig
currently operating in Malaysia.
In connection with the Antah Drilling acquisition, the Company agreed to
assume liability under Antah Drilling's term loans, which loans aggregated
$14.6 million as of October 1, 1996. Required principal payments on such
loans are: $1.4 million in the fourth quarter of 1996; $4.8 million in 1997,
$3.6 million in 1998, and $4.8 million in 1999. Such loans bear interest at
the Singapore Interbank Offered Rate (SIBOR) plus 1%; the applicable interest
rate was 6.44% on October 1, 1996. Such loans are collateralized by Antah
Drilling's offshore platform rigs (approximate net book value of $40 million at
October 1, 1996) and all payments under, and proceeds of, the contracts under
which such rigs are operating.
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
On July 9, 1996, the Company completed the sale to the public of
4,600,000 shares of its common stock, no par value, from which it received cash
proceeds of approximately $47.5 million, net of expenses. The Company has used
or intends to use the net proceeds as follows: (i) $10.9 million in connection
with the August 1996 acquisition of a 51% controlling interest in PIASA, (ii)
$9.1 million in connection with the October 1996 acquisition of the 51%
interest not already owned by the Company in Antah Drilling, (iii) $4.5 million
in connection with the June 1996 purchase of the operating assets of Western
Oil, (iv) $8.5 million in connection with the refurbishment of Rig 18, (v) $1.2
million to replenish working capital reserves previously used for the Pool
Santana acquisition which occurred in April 1996, and (vi) for repayment of
debt under the Company's syndicated bank revolving line of credit and general
corporate purposes. The amounts described above include both acquisition
expenditures and related working capital advances.
On August 28, 1996, the Company acquired for cash of approximately $8.7
million a 51% controlling interest in PIASA. The Company advanced $0.4 million
to PIASA in September 1996 for working capital purposes and plans to advance in
the near future an additional $1.8 million. PIASA's nine land drilling rigs
and 11 land workover rigs operate in the Mendoza and Neuquen basins of
Argentina. For financial reporting purposes, 100% of the assets, liabilities,
results of operations and cash flows of PIASA are consolidated with those of
the Company. The minority shareholder's interest in PIASA and the earnings or
losses therefrom have been reflected as "minority interest" in the Company's
consolidated financial statements.
In June 1996, the Company purchased the operating assets (including
approximately 23 land well-servicing rigs) of Western Oil for approximately
$4.0 million in cash.
In April 1996, the Company acquired the 51% interest not already owned by
the Company in Pool Santana for $1.2 million in cash. The assets acquired
consisted primarily of a platform workover rig and its related equipment.
Effective October 1, 1996, the Company acquired the 51% interest that it
did not already own in Antah Drilling and repaid indebtedness of Antah Drilling
owed to the Company's partner in that venture. A cash payment of $8.4 million
was made by the Company in October in connection with such acquisition, and an
additional amount, estimated at $0.7 million, is expected to be paid in the
fourth quarter of 1996 upon satisfaction of certain conditions specified in the
purchase agreement. Antah Drilling's assets include a new state-of-the-art
2,000 horsepower offshore platform drilling rig which recently commenced a
three-year contract in Australia and an offshore platform workover rig
currently operating in Malaysia.
RESULTS OF OPERATIONS - QUARTERS ENDED SEPTEMBER 30, 1996 AND 1995
For the third quarter of 1996 the Company recorded the highest quarterly
revenues, net income and earnings per share since the Company became public in
April 1990. For the quarter ended September 30, 1996, the Company had
consolidated net income of $2.6 million, reflecting stronger overall market
conditions than those prevailing in the third quarter of 1995 for which the
Company reported net income of $0.6 million. The improvement in market
conditions has been due largely to the strength of oil and natural gas prices.
The average price of crude oil was higher by approximately 25% in the third
quarter of 1996 than in the third quarter of 1995, and average natural gas
prices increased approximately 45% comparing the same periods. Results from
the Company's domestic operations improved primarily due to higher activity and
increased rates for the Company's jackup rigs in the Gulf of Mexico. The
Company's domestic onshore operation reported third quarter well-servicing rig
hours 4% lower than in the corresponding quarter of 1995, primarily due to a
decrease in alliance work in West Texas and Northern California. This decrease
was partially offset by the hours worked by the rigs purchased in June 1996
from Western Oil. The Company's offshore operation in the Gulf of Mexico
experienced rig utilization of 73% in the third quarter of 1996, compared to
62% during the comparable period of 1995; also, average rig rates were 30%
higher in the 1996 period.
9
<PAGE> 10
Revenues. Revenues were $84.0 million in the third quarter of 1996, an
11% increase compared with revenues of $75.5 million in the third quarter of
1995. This increase was attributable to (i) higher activity and increased
rates for the jackup rigs and increased labor contract activity in the Gulf of
Mexico, (ii) increased land drilling activity in Ecuador, (iii) revenues for
the new offshore platform workover rig in Australia and (iv) one month of
revenues from the newly formed Argentina corporation. Domestic onshore
well-servicing and related services revenues increased $0.5 million or 1% in
the third quarter of 1996 from the corresponding quarter of 1995. Domestic
onshore rig utilization was 50% in the third quarter of 1996, compared to 54%
in the third quarter of 1995. Gulf of Mexico offshore workover and drilling
revenues increased $5.5 million or 61%, international operations revenues
increased $3.0 million or 43%, and Alaska operations revenues decreased $0.4
million or 9% from the third quarter of 1995.
Earnings Attributable to Unconsolidated Affiliates. Earnings
attributable to unconsolidated affiliates were $0.7 million in the third
quarter of 1996 compared to $0.8 million in the third quarter of 1995.
Earnings from Pool Santana were $0.1 million in the third quarter of 1995.
Earnings from Pool Santana ceased to be included in earnings attributable to
unconsolidated affiliates immediately following the Company's purchase of its
venture partner's interest in Pool Santana in April 1996.
Costs and Expenses. The Company's costs and expenses were $81.1 million
in the third quarter of 1996, an 8% increase compared to costs and expenses of
$74.9 million in the corresponding period of 1995. This increase was
attributable to the costs associated with higher jackup rig and labor contract
activity in the Gulf of Mexico, expenses related to higher activity for the
land drilling rigs in Ecuador, costs associated with the operation of the new
offshore platform workover rig in Australia and one month of expenses for
PIASA.
Other Income - Net. Other income - net was $0.6 million higher in the
third quarter of 1996 than in the corresponding quarter of 1995 primarily due
to interest income earned on temporary cash investments.
Income Taxes. The Company recorded income tax expense of $1.5 million in
the third quarter of 1996 on income before income taxes of $4.0 million,
compared to income tax expense of $0.4 million on income before income taxes of
$1.0 million in the third quarter of 1995. This increase in income tax expense
was primarily due to stronger operating results in the third quarter of 1996
compared to the third quarter of 1995. The Company's interim period tax
expense is determined by utilizing the aggregate of estimated annual effective
tax rates for each of the Company's domestic and foreign locations.
RESULTS OF OPERATIONS - NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
The Company had consolidated net income of $5.8 million for the first
nine months of 1996, compared to net income of $1.4 million for the first nine
months of 1995, which included a $0.4 million after-tax charge for costs
related to the Golden Pacific Corp. ("GPC") acquisition. Results from the
Company's domestic operations improved primarily due to the higher activity and
increased rates for the Company's jackup rigs in the Gulf of Mexico, the
inclusion of results from rigs and equipment acquired in the June 1995 GPC
acquisition and increased land drilling activity and higher rates in Alaska.
The Company's domestic onshore operation reported rig hours 15% higher for the
first nine months of 1996 than for the corresponding period of 1995, primarily
due to the inclusion of rigs acquired in the GPC acquisition. The Company's
offshore operation in the Gulf of Mexico experienced rig utilization of 69% in
the first nine months of 1996, compared to 63% during the comparable period of
1995; also, average rig rates were 26% higher in the 1996 period.
Revenues. Revenues were $248.6 million in the first nine months of 1996,
a 23% increase compared with revenues of $202.2 million in the first nine
months of 1995. This increase was attributable to (i) the inclusion of
revenues from rigs and equipment acquired in the June 1995 GPC acquisition,
(ii) higher activity and increased rates for the jackup rigs, increased rates
for the platform rigs and increased labor contract activity in the Gulf of
Mexico, (iii) revenues for the new offshore platform workover rig in Australia,
(iv) higher land drilling activity and increased rig rates in Alaska and (v)
higher land drilling activity in Ecuador. Domestic onshore well-servicing and
related service revenues increased $21.6 million or 15% in the first nine
months of 1996 from the
10
<PAGE> 11
corresponding period of 1995, chiefly as a result of the June 1995 GPC
acquisition. Gulf of Mexico offshore workover and drilling revenues increased
$14.3 million or 56%, international operations revenues increased $7.3 million
or 37%, and Alaska operations revenues increased $3.2 million or 20%, from the
first nine months of 1995.
Earnings Attributable to Unconsolidated Affiliates. Earnings
attributable to unconsolidated affiliates were $1.9 million in the first nine
months of 1996 compared to $2.2 million in the first nine months of 1995.
Earnings attributable to Pool Arabia, Ltd. decreased $0.6 million from the
first nine months of 1995 primarily as a result of the completion in March 1995
of a land drilling contract in Saudi Arabia. The decrease in the earnings of
Pool Arabia, Ltd. was partially offset by better operating results from Antah
Drilling.
Costs and Expenses. The Company's costs and expenses were $240.0 million
in the first nine months of 1996, a 19% increase compared to costs and expenses
of $201.8 million in the corresponding period of 1995. This increase was
chiefly attributable to costs and expenses related to the rigs and equipment
obtained in the June 1995 acquisition of GPC. In addition, costs and expenses
increased due to the higher jackup rig and labor contract activity in the Gulf
of Mexico, the higher land drilling activity in Alaska, the new offshore
platform workover rig operating in Australia and higher land drilling activity
in Ecuador. Costs and expenses in 1995 included $0.6 million of expenses
related to the GPC acquisition, primarily for yard closings.
Other Income - Net. Other income - net was $0.5 million higher in the
first nine months of 1996 than in the corresponding period of 1995 primarily
due to interest income earned on temporary cash investments.
Interest Expense. Interest expense was $0.8 million higher in the first
nine months of 1996 than in the corresponding period of 1995 primarily due to
the notes payable related to the GPC acquisition and the term loan used to
refinance the construction costs of Rig 453, the Company's new offshore
platform workover rig in Australia, offset partly by lower average borrowings
in 1996 under the Company's syndicated bank revolving line of credit.
Income Taxes. The Company recorded income tax expense of $4.3 million in
the first nine months of 1996 on income before income taxes of $10.1 million,
compared to income tax expense of $1.0 million on income before income taxes of
$2.4 million in the first nine months of 1995. The increase in income tax
expense was primarily due to stronger operating results in the first nine
months of 1996 compared to the first nine months of 1995. The Company's
interim period tax expense is determined by utilizing the aggregate of
estimated annual effective tax rates for each of the Company's domestic and
foreign locations.
FINANCIAL CONDITION AND LIQUIDITY
Cash Flows. The Company had cash and cash equivalents of $28.1 million
at September 30, 1996 compared to $5.5 million at December 31, 1995. Working
capital was $58.6 million and $27.0 million at September 30, 1996 and December
31, 1995, respectively. The Company used a net $35.4 million for investing
activities in the first nine months of 1996, primarily for capital expenditures
of $24.3 million. Cash used for investing activities during this period also
included $8.7 million for the acquisition of a 51% controlling interest in
PIASA, $4.0 million for the purchase of the operating assets of Western Oil and
$0.6 million, net of cash acquired, for the purchase of 51% of Pool Santana,
offset partly by $1.8 million of proceeds from dispositions of equipment. The
Company used a net $19.4 million for investing activities in the first nine
months of 1995, primarily for capital expenditures of $18.3 million, including
$6.7 million for the construction of the new offshore platform workover rig
located in Australia which began contributing in the second half of 1995. Cash
used for investing activities for this period also included $3.0 million, net
of cash acquired, as partial consideration for the acquisition of GPC and the
related direct acquisition costs, offset partly by $1.6 million of proceeds
from dispositions of equipment.
The Company anticipates that 1996 capital expenditures other than the
matters described in "General" will consist of (i) approximately $18 million
for capital additions and improvements to its existing rig fleet and (ii)
approximately $4.3 million for the construction of a new offshore platform rig
for a four-year contract offshore
11
<PAGE> 12
California. It is anticipated that these expenditures will be financed chiefly
through the net proceeds of the July 1996 stock offering (see "General" for a
description of such offering) and internally generated funds, although the
Company may avail itself of borrowings as needed.
Public Offering. In July 1996, the Company completed the sale of
4,600,000 shares of common stock in a public offering and received cash
proceeds of $47.5 million, net of expenses. See "General" for a discussion of
the use of such net proceeds.
Credit Facilities and Long-Term Debt. The Company has available a
syndicated bank line of credit ("Line of Credit") to finance temporary working
capital requirements and to support the issuance of letters of credit. The
maximum availability is the lesser of (i) $35 million, or (ii) a calculated
amount based on a percentage of domestic receivables meeting certain criteria.
At September 30, 1996, the maximum availability was $33.8 million, of which
none was drawn in cash and $13.0 million was being utilized to support the
issuance of letters of credit.
In January 1996, the Company borrowed $6.5 million under a four-year term
loan agreement in order to refinance the construction costs incurred during
1995 to build Rig 453. The rig construction costs were initially funded from
the Company's cash resources and borrowings under its Line of Credit. During
the first nine months of 1996 the Company made scheduled principal payments of
$1.4 million on this debt.
During the first nine months of 1996, the Company made scheduled
principal payments of $4.0 million on other long-term debt.
In connection with the Antah Drilling acquisition, the Company agreed to
assume liability under Antah Drilling's term loans, which loans aggregated
$14.6 million as of October 1, 1996. See Note 4 of Notes to Condensed
Consolidated Financial Statements for further discussion.
12
<PAGE> 13
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT NO. DOCUMENT
- ----------- --------
<S> <C> <C>
10.1(*) - First Amendment to ISDL Term Loan Agreement, Second Amendment to Pool Company Restated Revolving Credit
Agreement, and Restated Term Loan Agreement
27(*) - Financial Data Schedule
</TABLE>
_________
(*) Filed herewith
(b) Reports on Form 8-K - The Company filed a Current Report on Form 8-K dated
July 10, 1996 (Date of event: July 9, 1996), in respect of the sale to
the public of 4,600,000 shares of the Company's common stock. The item
reported in such Current Report was Item 5, Other Events.
13
<PAGE> 14
SIGNATURES
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, thereunto duly authorized.
POOL ENERGY SERVICES CO.
(Registrant)
<TABLE>
<S> <C>
NOVEMBER 13, 1996 /s/ E. J.SPILLARD
- ---------------------------------- --------------------------------------------
(Date) E. J. Spillard
Senior Vice President, Finance
(principal financial officer)
NOVEMBER 13, 1996 /s/ B. G. GORDON
- ---------------------------------- --------------------------------------------
(Date) B. G. Gordon
Controller
(principal accounting officer)
</TABLE>
14
<PAGE> 15
POOL ENERGY SERVICES CO.
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DOCUMENT
- ----------- --------
<S> <C> <C>
10.1(*) - First Amendment to ISDL Term Loan Agreement, Second Amendment to Pool Company Restated Revolving Credit
Agreement, and Restated Term Loan Agreement
27(*) - Financial Data Schedule
</TABLE>
_________
(*) Filed herewith
15
<PAGE> 1
EXHIBIT 10.1
As of July 31, 1996
International Sea Drilling Ltd. and Pool Company
c/o Pool Company
10375 Richmond Avenue
Houston, Texas 77042
Attention: R. A. Johannsen, Treasurer
Re: (a) First Amendment to ISDL Term Loan Agreement, (b) Second
Amendment to Pool Company Restated Revolving Credit Agreement,
and (c) Restated Term Loan Agreement
Gentlemen:
Reference is made to (a) the Term Loan Agreement dated as of November
30, 1995 (the "ISDL AGREEMENT"), among International Sea Drilling Ltd.
("ISDL"), NationsBank of Texas, N.A., National Bank of Canada and National Bank
of Alaska (collectively, "LENDERS"), and NationsBank of Texas, N.A., as agent
("AGENT"), (b) the Restated Credit Agreement dated as of November 30, 1995, as
modified by the First Amendment and Waiver dated as of April 3, 1996 (the
"REVOLVING CREDIT AGREEMENT"), among Pool Company, Lenders and Agent, and (c)
the Restated Term Loan Agreement dated as of November 30, 1995, as modified by
the First Amendment and Waiver dated as of April 3, 1996 (the "TERM LOAN
AGREEMENT"), among Pool Company, Lenders, and Agent. Unless otherwise
indicated, all capitalized terms herein are used as defined in the ISDL
Agreement, the Revolving Credit Agreement and the Term Loan Agreement.
ISDL has advised Agent that it needs to guarantee payroll transfers of
up to $400,000, to allow for Rig 489 employees to be paid by ISDL. In
addition, Pool Company has advised Agent and Lenders that it wishes to purchase
the remaining 51% of Antah Drilling Sdn. Bhd., a Malaysia company ("ADSB") with
proceeds from PESCO's recent offering of 4.6 million shares of its common stock
which was completed on July 9, 1996 (the "PUBLIC OFFERING"). Pool Company has
also advised Agent and Lenders that it intends to use the remaining proceeds
from such offering to, among other things, acquire 51% of a new joint venture
company in Argentina (the "ARGENTINA COMPANY"), replenish funds used to acquire
certain assets of Western Oil Well Service Co., and upgrade Rig No. 455 (which
will then be redesignated as Rig No. 18) in connection with a new contract in
the Gulf of Mexico. Therefore, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, ISDL, Pool Company,
Agent and Lenders agree as follows:
1. ISDL Debt. SECTION 7.11 of the ISDL Agreement is hereby
amended by deleting the word "and" before CLAUSE (e) and adding the following
at the end of such section:
, and (f) payroll transfer guarantees of up to $400,000 to
allow for Rig 489 employees to be paid by Borrower.
2. Financial Statements for Unconsolidated Affiliates. SECTION
7.3(i)(ii) of the Revolving Credit Agreement and SECTION 7.3(b)(ii) of the Term
Loan Agreement are hereby amended to read in its entirety as follows:
<PAGE> 2
International Sea Drilling Ltd.
and Pool Company
July 31, 1996
Page 2
(ii) Unaudited or audited (to the extent prepared)
Financial Statements showing the financial conditions and
results of operations of the Borrower's unconsolidated
affiliates, including, but not limited to, Pool Arabia, Ltd.,
ADSB (until the Borrower's acquisition of the remaining 51% of
ADSB), and Intairdril Oman L.L.C.
3. Pool Company Debt. SECTION 7.11 of the Revolving Credit
Agreement and SECTION 7.11 of the Term Loan Agreement are hereby amended by
deleting the word "and" before CLAUSE (p) and adding the following at the end
of each such section:
, (q) term Debt of ADSB in a principal amount of up to
$23,902,000 prior to October 1, 1996, and up to $14,600,000
from October 1, 1996, through January 31, 1997, and a guaranty
by Borrower of such Debt, (r) ADSB letters of credit and
guarantees of up to RM500,000 (approximately $197,000) and
A$80,000 (approximately $64,000) existing on July 31, 1996,
and future ADSB letters of credit and guarantees of up to
$1,000,000 (or its equivalent in other currencies) in the
aggregate, in each case through January 31, 1997, (s) Debt of
ADSB under a foreign exchange line of credit of RM2,000,000
(approximately $778,000) through January 31, 1997, and (t)
payroll transfer guarantees of up to $400,000 by ISDL to allow
for Rig 489 employees to be paid by ISDL.
4. Capital Expenditures. SECTION 7.13 of the Revolving Credit
Agreement and SECTION 7.13 of the Term Loan Agreement are hereby amended by
deleting the word "and" before CLAUSE (e), inserting the word "and" after
CLAUSE (e) and adding the following at the end of each such section:
(f) Capital Expenditures made from the net proceeds of the
Public Offering, including, but not limited to, the following:
(i) the acquisition of the remaining 51% of ADSB,
(ii) the acquisition of 51% of the Argentina
Company,
(iii) the acquisition of certain assets of Western
Oil Well Service Co., and
(iv) approximately $7,600,000 to upgrade Rig 455
(which will then be redesignated as Rig 18) for a new contract
in the Gulf of Mexico.
5. Acquisitions, Mergers, and Dissolutions. SECTION 7.15 of the
Revolving Credit Agreement and SECTION 7.15 of the Term Loan Agreement are
hereby amended by deleting the word "and" before CLAUSE (i) and adding the
following at the end of each such section:
and (j) acquisitions made from the net proceeds of the Public
Offering, including, but not limited to, the acquisition of
the remaining 51% of ADSB, and the acquisition of 51% of the
Argentina Company.
6. Loans, Advances, and Investments. SECTION 7.16 of the
Revolving Credit Agreement and SECTION 7.16 of the Term Loan Agreement are
hereby amended by deleting the word "and" before CLAUSE (r) and adding the
following at the end of each such section:
<PAGE> 3
International Sea Drilling Ltd.
and Pool Company
July 31, 1996
Page 3
and (s) investments of the net proceeds of the Public
Offering, including, but not limited to, the acquisition of
the remaining 51% of ADSB for approximately $9,100,000, and
the acquisition of 51% of the Argentina Company for
approximately $10,900,000.
7. Other Definitions. SECTION 10.3 of the Revolving Credit
Agreement and SECTION 10.3 of the Term Loan Agreement are hereby amended by
adding the following definitions:
ADSB means Antah Drilling Sdn. Bhd., a Malaysia company.
ARGENTINA COMPANY means a joint venture company to be formed
under the Laws of Argentina, of which Borrower intends to acquire 51%
with proceeds from the Public Offering.
ISDL means International Sea Drilling Ltd., a Cayman Islands
corporation.
PUBLIC OFFERING means PESCO's offering of 4.6 million shares
of its common stock, which was completed on July 9, 1996.
8. Joint Venture. SECTION 10.3 of the Revolving Credit Agreement
and SECTION 10.3 of the Term Loan Agreement are hereby further amended by
adding the following at the end of the definition of "JOINT VENTURE" in each
such section:
, but shall include, however, the Argentina Company.
9. Subsidiary. SECTION 10.3 of the Revolving Credit Agreement
and SECTION 10.3 of the Term Loan Agreement are hereby further amended by
adding the following at the end of the definition of "SUBSIDIARY" in each such
section:
, and also excluding the Argentina Company.
10. Liens. The definitions of "PERMITTED LIENS" in SECTION 10.3
of the Revolving Credit Agreement and SECTION 10.3 of the Term Loan Agreement
are hereby amended by deleting the word "and" before CLAUSE (s) and adding the
following at the end of each such definition:
, and (t) Liens on Rigs 488 and 489 owned by ADSB and Liens on
ADSB's contracts with ESSO Malaysia and ESSO Australia Ltd.,
all of which Liens secure the term Debt described in SECTION
7.11(q).
11. Pool Santana. It is contemplated that the name of Pool
Santana, Limited, a Trinidad and Tobago corporation, will be changed to Pool
International (Trinidad) Limited. When that occurs, all references in any of
the Loan Papers described in the Revolving Credit Agreement, the Term Loan
Agreement or the ISDL Agreement to "Pool Santana, Limited," shall be amended to
refer to "Pool International (Trinidad) Limited."
12. Conditions. This instrument shall not be effective until it
has been duly executed and delivered by all parties named below.
13. Covenants. ISDL and Pool Company covenant to deliver to Agent
as soon as such items are available after the date of this instrument such
additional documentation as Agent may reasonably request related hereto,
including, without limitation, the following:
<PAGE> 4
International Sea Drilling Ltd.
and Pool Company
July 31, 1996
Page 4
(a) subject to such transactions being consummated, true
and complete copies of the purchase agreements relating to the
purchase of the ADSB stock and the stock of the Argentina Company, and
any other related documents and agreements (which Pool Company hereby
designates as "Material Agreements" for purposes of the Revolving
Credit Agreement and the Term Loan Agreement); and
(b) subject to the acquisition of the remaining 51% of
ADSB being consummated, stock certificates and stock powers from Pool
Company covering 66% of the stock of ADSB in accordance with SECTION
7.29(a) of the Revolving Credit Agreement and SECTION 7.28(a) of the
Term Loan Agreement.
14. Representations and Warranties. ISDL and Pool Company each
represents and warrants that it possesses all requisite power and authority to
execute, deliver and comply with the terms of this instrument, which has been
duly authorized and approved by all necessary corporate action and for which no
consent of any person is required, and agrees to furnish Agent with evidence of
such authorization and approval upon request.
15. Fees and Expenses. Pool Company agrees to pay the reasonable
fees and expenses of counsel to Agent for services rendered in connection with
the preparation, negotiation and execution of this instrument.
16. Loan Paper; Effect. This instrument is a Loan Paper and,
therefore, is subject to the applicable provisions of SECTION 12 of the ISDL
Agreement, SECTION 12 of the Revolving Credit Agreement and SECTION 12 of the
Term Loan Agreement, all of which are incorporated herein by reference the same
as if set forth herein verbatim. Except as amended in this instrument, the
Loan Papers are and shall be unchanged and shall remain in full force and
effect. In the event of any inconsistency between the terms of the ISDL
Agreement, the Revolving Credit Agreement and the Term Loan Agreement as hereby
modified (the "AMENDED AGREEMENTS") and any other Loan Papers, the terms of the
Amended Agreements shall control and such other document shall be deemed to be
amended hereby to conform to the terms of the Amended Agreements. ISDL and
Pool Company each hereby releases Agent and Lenders from any liability for
actions or failures to act in connection with the Loan Papers prior to the date
hereof.
17. No Waiver of Defaults. This instrument does not constitute a
waiver of Lenders' right to insist upon future compliance with each term,
covenant, condition and provision of the Loan Papers, and the Loan Papers shall
continue to be binding upon, and inure to the benefit of, ISDL, Pool Company,
Guarantors, Lenders, Agent, and their respective successors and assigns.
18. Multiple Counterparts. This instrument may be executed in
more than one counterpart, each of which shall be deemed an original, but all
of which when taken together shall constitute one instrument.
19. Final Agreement. THE LOAN PAPERS, AS AMENDED HEREBY,
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.
If the foregoing terms and conditions are acceptable, please indicate
your acceptance by signing in the space provided below, whereupon this letter
shall become an agreement binding upon and inuring to the benefit of Agent,
Lenders, ISDL and Pool Company and their respective successors and assigns.
<PAGE> 5
International Sea Drilling Ltd.
and Pool Company
July 31, 1996
Page 5
Very truly yours,
NATIONSBANK OF TEXAS, N.A., NATIONAL BANK OF CANADA,
as Agent and a Lender as a Lender
By: /s/ JAMES R. ALLRED By: /s/ LARRY L. SEARS
-------------------------------- -----------------------------------
James R. Allred Larry L. Sears
Senior Vice President Group Vice President
NATIONAL BANK OF ALASKA
as a Lender By: /s/ DOUG CLARK
-----------------------------------
Name: Doug Clark
----------------------------------
Title: Vice President
---------------------------------
By: /s/ PATRICIA JELLEY BENZ
--------------------------------
Patricia Jelley Benz
Vice President
Accepted and agreed to as of the day and year first set forth in the
foregoing letter.
INTERNATIONAL SEA DRILLING LTD.
POOL COMPANY
By: /s/ E. J. SPILLARD
-----------------------------------
E. J. Spillard
Senior Vice President-Finance of
each of the above Borrowers
By: /s/ R. A. JOHANNSEN
-----------------------------------
R. A. Johannsen
Treasurer of each of the
above Borrowers
<PAGE> 6
International Sea Drilling Ltd.
and Pool Company
July 31, 1996
Page 6
GUARANTORS' CONSENT AND AGREEMENT
As an inducement to Agent and Lenders to execute, and in consideration
of Agent's and Lenders' execution of the foregoing, the undersigned hereby
consent thereto and agree that the same shall in no way release, diminish,
impair, reduce or otherwise adversely affect the respective obligations and
liabilities of each of the undersigned under the Guaranty described in the
Revolving Credit Agreement (and, in the case of Pool Energy Services Co., Pool
Energy Holding, Inc., and Pool Company, the Guaranty described in the ISDL
Agreement) executed by the undersigned, or any agreements, documents or
instruments executed by any of the undersigned to create liens, security
interests or charges to secure any of the indebtedness under the Loan Papers
(as described in the Revolving Credit Agreement, the Term Loan Agreement or the
ISDL Agreement), all of which obligations and liabilities are, and shall
continue to be, in full force and effect. This consent and agreement shall be
binding upon the undersigned, and the respective successors and assigns of
each, and shall inure to the benefit of Agent and Lenders, and respective
successors and assigns of each.
POOL ENERGY SERVICES CO.
POOL ENERGY HOLDING, INC.
POOL COMPANY
POOL COMPANY (HOUSTON) INC.
POOL COMPANY (TEXAS) INC.
ASSOCIATED PETROLEUM SERVICES, INC.
POOL PRODUCTION SERVICES, INC.
POOL ALASKA, INC.
POOL AMERICAS, INC.
POOL INTERNATIONAL, INC.
POOL-AUSTRALIA, INC.
THE INTERNATIONAL AIR DRILLING
COMPANY
POOL HORIZONTAL DRILLING SERVICES CO.
POOL CALIFORNIA ENERGY SERVICES, INC.
BIG 10 FISHING TOOL COMPANY, INC.
WESTEX PRODUCTION SERVICE, INC.
By: /s/ E. J. SPILLARD
-----------------------------------------
E. J. Spillard
Senior Vice President-Finance of each
of the above Obligors
By: /s/ R. A. JOHANNSEN
-----------------------------------------
R. A. Johannsen
Treasurer of each of the above Obligors
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 28,133
<SECURITIES> 0
<RECEIVABLES> 54,670
<ALLOWANCES> 1,487
<INVENTORY> 12,465
<CURRENT-ASSETS> 114,658
<PP&E> 236,508
<DEPRECIATION> 87,434
<TOTAL-ASSETS> 309,798
<CURRENT-LIABILITIES> 56,069
<BONDS> 15,705
0
0
<COMMON> 183,546
<OTHER-SE> 7,391
<TOTAL-LIABILITY-AND-EQUITY> 309,798
<SALES> 0
<TOTAL-REVENUES> 248,648
<CGS> 0
<TOTAL-COSTS> 192,898
<OTHER-EXPENSES> 24
<LOSS-PROVISION> 94
<INTEREST-EXPENSE> 1,986
<INCOME-PRETAX> 10,096
<INCOME-TAX> 4,298
<INCOME-CONTINUING> 5,842
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,842
<EPS-PRIMARY> .37
<EPS-DILUTED> .37
</TABLE>
