SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (section) 240.14a-11(c) or
(section) 240.14a-12
POOL ENERGY SERVICES CO.
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(Name of Registrant as Specified in Its Charter)
POOL ENERGY SERVICES CO.
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No filing fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11.
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
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POOL ENERGY SERVICES CO.
[GRAPHICS OMITTED]
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DATE OF RELEASE: DECEMBER 14, 1998
<PAGE>
SUMMARY
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o Pool has a Strategic Plan that it is successfully implementing
o Strong financials and capitalization
o The Board and management are committed to maximizing shareholder value
o Nabors' proposal represents a substantial discount, not premium
o This is the worst point in the cycle to consider selling
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-1-
<PAGE>
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POOL HAS A STRATEGIC PLAN WHICH IT IS SUCCESSFULLY IMPLEMENTING
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<PAGE>
POOL'S STRATEGIC PLAN: WELL BALANCED AND AGGRESSIVE
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Expand in Core Markets
Pursue expansion opportunities in existing core
market areas through selective acquisitions that
result in expanded market presence and in
consolidation cost savings
[GRAPHIC OMITTED]
Upgrade/Enhance Existing Assets Enter New Foreign Markets
Upgrade and enhance the capabilities of Pool's Enter new foreign markets that
existing rig fleet and construct specialized offer significant development
rigs and equipment to operate in markets and production activity
with high levels of activity and strong
pricing fundamentals
Offer Complementary Services and Equipment
Offer a broad and integrated array of additional
services and equipment that complement Pool's
businesses in its existing locations
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<PAGE>
IMPLEMENTATION OF POOL'S STRATEGIC PLAN
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ACQUISITIONS AND CAPITAL EXPANSION PROGRAM -- MAY 1994 TO PRESENT
<TABLE>
<CAPTION>
COMPANY/ASSETS AMOUNT
DATE ACQUIRED ($MM)
- ------------ ------------------------ ----------
<S> <C> <C>
Sept. 1994 Pool Arctic Alaska $ 12.1
June 1995 Golden Pacific Corp. $ 18.8
Mar. 1996 Refurbishment of Rig $ 8.4
18
June 1996 Western Oil $ 4.0
Aug. 1996 Pool International $ 8.7
Argentina S.A.
Oct. 1996 Antah Drilling Sdn. $ 24.0
Bhd. ($9+15/net debt)
June 1997 DA&S Oil Well $ 10.5
Servicing
Aug. 1997 Dean's Well Servicing, $ 1.0
Inc.
Aug. 1997 Oceandril Ranger Rig $ 8.2
Oct. 1997 Anchor Cementing $ 2.5
Service
Oct. 1997 Saudi land $ 16.8
drilling/workover rigs
<CAPTION>
STRATEGIC PLAN OBJECTIVE
-----------------------------------------------
EXPAND IN UPGRADE COMPLEMENTARY NEW
DESCRIPTION OF ACQUIRED CORE EXISTING SERVICES AND FOREIGN
DATE COMPANY/ASSETS MARKETS ASSETS EQUIPMENT MARKETS
- ------------ --------------------------------------- ----------- ---------- --------------- --------
<S> <C> <C> <C> <C> <C>
Sept. 1994 Acquired 60.7% partnership X
interest it did not previously
own; operations include 3 special
operation land drilling rigs
June 1995 California well servicing operation X
with 155 land well servicing rigs
and related equipment fleet
Mar. 1996 Refurbished Rig 18, a previously X
idle platform drilling rig for a term
contract in the Gulf of Mexico
June 1996 Well servicing operation in the X
Williston Basin with fleet of 23
land well servicing rigs
Aug. 1996 Acquired 51% controlling interest X
in Argentine well servicing operations
with 9 land drilling rigs and 11 land
workover rigs
Oct. 1996 Acquired remaining 51% interest X X
it did not previously own; includes
2,000 H.P. offshore platform
drilling rig and offshore platform
workover rig
June 1997 Well servicing company with a X
fleet of 37 land well servicing rigs
in Permian Basin of New Mexico
Aug. 1997 Well servicing company with a X
fleet of 7 land well servicing rigs in
Oklahoma
Aug. 1997 Offshore jackup workover rig in X X
the Gulf of Mexico
Oct. 1997 Fleet of 3 coiled tubing units, 6 X X
pump trucks and a bulk cementing
plant in California
Oct. 1997 Acquired 3,000 H.P. land drilling X X X
rig and 2 land workover rigs from a
competitor in Saudi Arabia; land
drilling rig then significantly
upgraded and under 3-yr. term
contract
</TABLE>
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<PAGE>
IMPLEMENTATION OF POOL'S STRATEGIC PLAN (continued)
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ACQUISITIONS AND CAPITAL EXPANSION PROGRAM -- MAY 1994 TO PRESENT
<TABLE>
<CAPTION>
COMPANY/ASSETS AMOUNT
DATE ACQUIRED ($MM)
- ------------ ------------------------ ----------
<S> <C> <C>
Oct. 1997 Trey Services, Inc. $ 31.3
Nov. 1997 A.A. Oilfield Services, $ 4.1
Inc.
Feb. 1998 Rig 16 (newbuild) $ 12.0
Mar. 1998 Saudi land drilling rig $ 9.4
upgrade
Mar. 1998 Alaskan land drilling $ 6.8
rig upgrade
Mar. 1998 Sea Mar, Inc. $ 126.0
(includes debt assumed)
Pending Rig 6 (upgrade) $ 18.6
Pending Rig 9 (newbuild) $ 13.8
Sep. 1998 Oman land drilling rig $ 6.1
-------
$ 343.1
<CAPTION>
STRATEGIC PLAN OBJECTIVE
-----------------------------------------------
EXPAND IN UPGRADE COMPLEMENTARY NEW
DESCRIPTION OF ACQUIRED CORE EXISTING SERVICES AND FOREIGN
DATE COMPANY/ASSETS MARKETS ASSETS EQUIPMENT MARKETS
- ------------- -------------------------------------- ----------- ---------- --------------- --------
<S> <C> <C> <C> <C> <C>
Oct. 1997 Well servicing company with fleet X X
of 67 well servicing rigs, 104
oilfield trucks, 430 fluid storage
tanks and 5 brine and disposal
wells in the Permian Basin of
West Texas
Nov. 1997 Well servicing company with fleet X X
18 oilfield trucks and 1 salt water
disposal wells and related
equipment in the Permian Basin
of New Mexico
Feb. 1998 Constructed a new 1,500 H.P. X X
offshore platform drilling rig;
operating under 2-yr. term
contract in Gulf of Mexico
Mar. 1998 Upgraded 1,000 H.P. and 1,500 X X
H.P. land drilling rigs; moved to
Saudi Arabia to operate under
3-yr. term contracts (leased to
Pool Arabia)
Mar. 1998 Upgraded 1,000 H.P. Arctic land X
drilling rig to operate on the
North Slope under 5-yr. term
contract for BP Exploration
(Alaska)
Mar. 1998 Offshore support vessel company X X
with a fleet of 23 vessels
operating primarily in the Gulf of
Mexico
Pending Upgrading 2,000 H.P. Arctic land X
drilling rig for year-round
operations on the North Slope
under 3-yr. term contract for
ARCO Alaska
Pending Constructing 1,000 H.P. Arctic X X
land drilling rig for year-round
operations on the North Slope
under 3-yr. term contract for
ARCO Alaska
Sep. 1998 Purchase and upgrade 2,000 HP X X
land drilling rig for operations in
Oman under multi-well contract
</TABLE>
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<PAGE>
OVERVIEW OF POOL ENERGY SERVICES
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1997 REVENUE MIX(1)
<TABLE>
<S> <C> <C>
GULF OF MEXICO RIGS
o 15 platform
o 6 jackup
[GRAPHIC OMITTED]
SEA MAR VESSELS
o 13 supply
U.S. LAND - CENTRAL DIVISION o 7 mini-supply
o 489 land well-servicing rigs o 2 research
o 352 fluid hauling trucks o 1 anchor handling/tug supply
INTERNATIONAL RIGS
o 25 land drilling
o 32 land workover
o 3 platform
o 1 jackup
CALIFORNIA DIVISION ALASKA RIGS
o 264 land well-servicing rigs o 4 land drilling
o 12 fluid hauling trucks o 1 land workover
o 1 platform rig o 1 platform
</TABLE>
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Note: (1) 1997 pro forma the acquisition of Sea Mar.
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<PAGE>
KEY CONSIDERATIONS
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o High quality rig and equipment fleet, offering an integrated array of
services
o Worldwide presence and geographic diversity coupled with strong share in
major markets
o Well-positioned to capitalize on long-term industry trends
o Track record of growth through successful execution of its strategic plan
o Strong balance sheet providing financial flexibility
o Significant upside potential in the stock
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<PAGE>
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STRONG FINANCIALS AND CAPITALIZATION
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<PAGE>
REVIEW OF POOL'S HISTORICAL FINANCIAL RESULTS(1)
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1994 THROUGH LTM(2)
[GRAPHIC OMITTED]
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Notes: (1) Adjusted for non-recurring items.
(2) LTM through September 30, 1998.
(3) Defined as net income plus DD&A and deferred taxes less undistributed
equity in earnings of unconsolidated subsidiaries.
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<PAGE>
CAPITALIZATION AS OF SEPTEMBER 30, 1998
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(DOLLARS IN MILLIONS)
Cash $ 24.7
Short-Term Debt $ 0.6
8 5/8% Senior Subordinated Notes Due 2008 150.0
Other Long-Term Debt 27.9
-------
Total Debt $ 178.5
Shareholders' Equity $ 289.8
Total Debt/Total Capitalization 38.1%
LTM EBITDA/LTM Interest(1) 7.9 x
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Note: (1) LTM through September 30, 1998.
-8-
<PAGE>
POOL'S ESTIMATED BUSINESS SEGMENT POSITIONS(1)
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<TABLE>
<CAPTION>
U.S. LAND WELL GULF OF MEXICO
SERVICING SAUDI ARABIA ALASKA OFFSHORE SUPPLY VESSELS
- ----------------------- ------------------------ --------------------------- --------------------------
COMPANY % COMPANY % COMPANY % COMPANY %
- --------------- ----- ---------------- ----- ------------------- ----- ---------------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Key Energy 33% 1. Pool 46% 1. Nabors 45% 1. Tidewater 40%
2. Pool 18% 2. Sedco Forex 25% 2. Pool 26% 2. Trico 15%
3. Other 49% 3. Nabors 18% 3. Doyon Drilling 16% 3. Seacor Smit 11%
4. Other 11% 4. Other 13% 4. ENSCO 10%
5. Hvide 10%
6. Pool 5%
7. Others 9%
</TABLE>
OFFSHORE GULF OF MEXICO
<TABLE>
<CAPTION>
PLATFORM DRILLING/WORKOVER RIGS(2) JACKUP WORKOVER RIGS
- --------------------------------------- ------------------------------
COMPANY % COMPANY %
- ------------------------------- ----- -------------------- -------
<S> <C> <C> <C>
1. Pride International 41% 1. Pool 50%
2. Nabors 26% 2. Nabors 42%
3. Pool 19% 3. Parker Drilling 8%
4. Parker Drilling 14%
</TABLE>
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Notes: (1) Source: Offshore Data Services, Company data and MSDW equity
research.
(2) 350 to 1,000 horsepower rating.
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<PAGE>
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THE BOARD AND MANAGEMENT ARE COMMITTED
TO MAXIMIZING SHAREHOLDER VALUE
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<PAGE>
MANAGEMENT ORGANIZATION(1)
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[GRAPHIC OMITTED]
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Note: (1) * Indicates number of years with Pool or predecessors.
** Indicates number of years of industry experience.
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<PAGE>
POOL'S DIRECTORS
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<TABLE>
<CAPTION>
APPOINTED
NAME AGE (CLASS) EXECUTIVE OFFICE OR COMMITTEE
- --------------------- ----- ------------------ -------------------------------
<S> <C> <C> <C>
INSIDE DIRECTORS
James T. Jongebloed 57 1989 (Class III) Chairman, President & CEO
OUTSIDE DIRECTORS
Dennis R. Hendrix 58 1998 (Class II) N/A
John F. Lauletta 53 1998 (Class II) N/A
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Note: Class I, II and III directors' terms expire in 2001, 1999 and 2000
respectively.
<CAPTION>
NAME OTHER POSITIONS AND AFFILIATIONS
- --------------------- ---------------------------------------------------------
<S> <C>
INSIDE DIRECTORS
James T. Jongebloed Chairman since 1994. CEO since 1990. President since
1989. Has served in various executive positions with the
Company since 1978.
OUTSIDE DIRECTORS
Dennis R. Hendrix CEO of PanEnergy from 1990-1995; chairman from
1990-1997 (until merger with Duke). Formerly held
positions with Texas Eastern Corporation, Halliburton
Company, CSX Corporation, and Texas Gas Corporation.
Director for Allied Waste Industries, Duke Energy,
Newfield Exploration, Chase Bank of Texas, National
Power, Baylor College of Medicine, Texas Medical Center
Corp., the Greater Houston Partnership and the Houston
Museum of Fine Arts.
John F. Lauletta President & CEO of Tuboscope Inc. since 1996. Former
president & CEO of Drexel Oilfield Services. Formerly
held positions with Baker Hughes and Schlumberger Well
Services. Also a director of the Petroleum Equipment
Suppliers Association and a member of the American
Association of Petroleum Geologists and the Society of
Petroleum Engineers.
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Note: Class I, II and III directors' terms expire in 2001, 1999 and 2000
respectively.
</TABLE>
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<PAGE>
POOL'S DIRECTORS (continued)
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<TABLE>
<CAPTION>
APPOINTED
NAME AGE (CLASS)
- ------------------------------------------------------ ----- ------------------
<S> <C> <C>
OUTSIDE DIRECTORS (continued)
- -----------------------------
William H. Mobley 56 1990 (Class I)
James L. Payne 61 1992 (Class III)
Joseph R. Musolino 61 1994 (Class I)
- ----------------------------------------------------
Note: Class I, II and III directors' terms expire in 2001, 1999 and 2000
respectively.
<CAPTION>
NAME EXECUTIVE OFFICE OR COMMITTEE
- ---------------------------------------------------- -------------------------------
<S> <C>
OUTSIDE DIRECTORS (continued)
- -----------------------------
William H. Mobley Audit/Finance Committee
James L. Payne Compensation Committee
Joseph R. Musolino Audit/Finance Committee
- ----------------------------------------------------
Note: Class I, II and III directors' terms expire in 2001, 1999 and 2000
respectively.
<CAPTION>
NAME OTHER POSITIONS AND AFFILIATIONS
- --------------------- ---------------------------------------------------------
<S> <C>
OUTSIDE DIRECTORS (continued)
- -----------------------------
William H. Mobley President and Managing Director of PDI Global Research
Consortia, and international management research and
consulting firm. Previously a professor in the Graduate
School of Business at Texas A&M from 1980-1996. From 1993-
1994, a Chancellor of the Texas A&M University System, and
from 1988-1993, President of Texas A&M. He is also a
director of Medici Medical Group.
James L. Payne Chairman & CEO of Santa Fe Energy Resources since 1990.
President of Santa Fe Energy Resources from 1990-1998.
Joseph R. Musolino Vice Chairman of NationsBank, N.A. for the last five
years. Also a director of Justin Industries, Inc.
</TABLE>
Note: Class I, II and III directors' terms expire in 2001, 1999 and 2000
respectively.
<PAGE>
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NABORS' PROPOSAL REPRESENTS A SUBSTANTIAL DISCOUNT,
NOT A PREMIUM
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<PAGE>
CHRONOLOGY OF THE CURRENT SITUATION
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o In late 1993, Nabors began acquiring shares of Pool and soon thereafter
representatives of both organizations met. No specific proposals were
discussed or any mention of Nabors' shareholding in Pool
o On May 5, 1994, Pool adopted a strategic plan designed to strengthen its
competitive position and expedite growth in revenues and EBITDA
o On May 26, 1994, Nabors announced that it had acquired 6.4% of Pool's stock
o In the summer of 1998, after declining oil prices had led to a substantial
deterioration in the share price of Pool and its peers, Nabors approached a
financial advisor of the Company regarding a possible combination of the two
organizations. Nabors was informed that the management of the Company did not
believe that the weak stock price environment was suitable for such a
combination
o On October 12, 1998, Nabors formalized its intent with a letter to the Board
of Directors of Pool
o On October 26, 1998, after a review by the Board of Directors of Pool, the
Company sent a letter to Nabors indicating it was not interested in pursuing
a transaction with Nabors
o Further clarity was given to Nabors' offer on October 28, 1998 when Nabors
outlined a proposal to purchase Pool for 0.481 Nabors shares and $6.125 in
cash for each Pool share
o On October 30, 1998, Nabors issued a press release detailing, among other
things, the text of all prior correspondence and announcing the merger
proposal
o On November 16, 1998, the Company engaged Morgan Stanley as its financial
advisor
o On November 17, 1998, Morgan Stanley advised Nabors' advisor that Morgan
Stanley and the Company's new counsel needed time to familiarize themselves
with the Company before considering scheduling any meeting between Nabors and
Pool
o On November 23, 1998, Pool received and acknowledged receipt of notice by
Nabors calling for a special meeting of shareholders to be scheduled in
January of 1999. On that date, Pool also publicly announced the retention of
Morgan Stanley as its financial advisor
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<PAGE>
SHARE PRICE ANALYSIS
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JANUARY 3, 1997 TO DECEMBER 11, 1998
[GRAPHIC OMITTED]
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<PAGE>
OVERVIEW OF RECENT TRADING PERFORMANCE
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<TABLE>
<CAPTION>
CHANGE FROM 10/9/98 TO 10/29/98
- -----------------------------------------------------
THIRD QUARTER EPS Implied
PRICE % ESTIMATED/ACTUAL % Value
--------------- ------------------- of Proposal
<S> <C> <C>
Pool 67.3%(1) 38.9%
SELECTED COMPARABLE COMPARABLE
- --------------------------------- [GRAPHIC OMITTED]
COMPANIES
- ------------------
Atwood Oceanics 56.4% 10.8%
BJ Services 40.3% -22.4%
ENSCO 33.8% 18.6%
Global Marine 32.6% -6.9%
Grey Wolf 37.5% -25.0%
Halliburton 31.8% 4.8%
Hvide 25.8% -2.0%
Key 27.6% -56.5%
Noble 30.7% 0.0%
Nabors 31.6% -10.0%
Patterson 31.0% 100.0%
Parker 13.0% N/A
Pride 71.4% -5.1%
Rowan 46.1% 16.9%
Smith 51.3% -7.4%
Tidewater 57.3% 28.9%
Trico 51.4% -21.2%
Tuboscope 39.3% -13.0%
Varco 71.9% 0.0%
UTI 35.9% 30.0%
</TABLE>
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Notes: (1) Share price of $7.06 and $11.81 as of October 9 and October 29,
respectively.
(2) Unaffected share price of $11.81 as of October 29, 1998.
-15-
<PAGE>
VALUATION TRADING STATISTICS (1)(2)
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SELECTED OILFIELD SERVICE COMPANIES
PUBLIC MARKET MULTIPLES PRECEDENT TRANSACTION
ADJ. MARKET CAP./1998E EBITDA ADJ. MARKET CAP./LTM EBITDA
----------------------------- -------------------------------
[GRAPHIC OMITTED] [GRAPHIC OMITTED]
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Notes: (1) As of December 11, 1998.
(2) Based on First Call estimates and available equity research.
(3) Based on an unaffected price of $11.81 on October 29, 1998.
-16-
<PAGE>
NAV AND RVA TRADING COMPARISON (1)
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NET ASSET VALUE REPLACEMENT VALUE ANALYSIS
- --------------------------- ----------------------------
[GRAPHIC OMITTED] [GRAPHIC OMITTED]
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Notes: (1) Based on MSDW equity research. Prices as of December 11, 1998.
(2) Based on unaffected price of $11.81 on October 29, 1998.
(3) Pro forma for the acquisition of Bayard Drilling Technologies.
-17-
<PAGE>
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THIS IS THE WORST POINT IN THE CYCLE TO CONSIDER SELLING
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<PAGE>
HISTORICAL OIL PRICES
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JANUARY 2, 1985 TO DECEMBER 11, 1998
ANNUAL AVERAGES CUMULATIVE AVERAGES
----------------- ---------------------
Current $10.79 5 Year $18.60
YTD $14.55 10 Year $19.76
1997 $20.60 15 Year $19.70
1996 $22.03 Since 1/1/91 $19.26
1995 $18.39
1994 $17.20
1993 $18.46
1992 $20.59
1991 $21.50
__ WTI
__ S&P Oil Well Equipment &
Services Index(1)
[GRAPHIC OMITTED]
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Note: (1) Baker Hughes, Halliburton, Helmerich & Payne, Rowan and Schlumberger
-18-
<PAGE>
OIL PRICE VS. WORKOVER RIG COUNT
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JANUARY 1992 TO OCTOBER 1998
WTI Price
U.S. Workover Rig Count
[GRAPHIC OMITTED]
- --------------------------------------------------------------------------------
Source: Baker Hughes
-19-
<PAGE>
DOMESTIC ONSHORE WELL-SERVICING
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1980 TO 1998 YTD (1)
Average Total Rigs
Full Utilization
Average Active Rigs
[GRAPHIC OMITTED]
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Source: Guiberson Division, Dresser Industries
Note: (1) 1998 data is average through October.
-20-
<PAGE>
WELL SERVICING HOURLY RATES VS. WTI
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Hourly Rate (1) WTI WTI LTM EBITDA per Share $ 4.65
($) Hourly Rate ($) LTM EPS per Share $ 1.41
IMPACT OF $10 HOURLY RATE
INCREASE(2)
EBITDA per Share $ 0.58
Earnings per Share $ 0.36
[GRAPHIC OMITTED] HISTORICAL AVERAGE HOURLY RATES
CENTRAL CALIFORNIA
------------- --------------
RATE %GROWTH RATE %GROWTH
---- ------ ---- -------
1995 $135 -- -- --
1996 $145 7.3% $138 --
1997 $154 6.2% $146 5.8%
1998 YTD $156 1.2% $151 3.2%
- --------------------------------------------------------------------------------
Notes: (1) For well servicing rigs in the Central Division.
(2) Based on 1998 YTD through September utilization for well servicing
rigs in the Central and California Divisions.
-21-
<PAGE>
WELL SERVICING UTILIZATION VS. WTI
- --------------------------------------------------------------------------------
Utilization(1) WTI WTI LTM EBITDA per Share $ 4.65
Utilization ($) LTM EPS per Share $ 1.41
IMPACT OF 10% INCREASE
----------------------
IN UTILIZATION(2)
-----------------
EBITDA per Share $ 0.39
Earnings per Share $ 0.25
[GRAPHIC OMITTED]
HISTORICAL AVERAGE UTILIZATION
------------------------------
CENTRAL CALIFORNIA
------- ----------
1995 63.5% --
1996 61.3% 63.6%
1997 64.4% 63.9%
1998 YTD 54.8% 57.7%
- --------------------------------------------------------------------------------
Notes: (1) For well servicing rigs in the Central Division.
(2) Based on YTD through September hourly rates and operating margins for
well servicing rigs the Central and California Divisions.
-22-
<PAGE>
SUMMARY
- --------------------------------------------------------------------------------
o Pool has a Strategic Plan that it is successfully implementing. Since the
creation of the Strategic Plan in 1994, Pool has
--Grown revenues and EBITDA at a compounded average growth rate of 22% and
60%, respectively
--Completed $343 million in acquisitions and expansion capital
--Increased its share price by 460% to $40.63, its all time high prior to
the decline in oil prices
o The Board and management are committed to maximizing shareholder value
--Board of Directors is strong and independent
--Pool has retained Morgan Stanley to assist in reviewing, evaluating and
implementing the Strategic Plan
o Nabors' proposal represents
--A 70.1% discount to Pool's all time high of $40.63, a 60.0% discount to its
LTM high of $30.38 and a 56.3% discount to its 1998 high of $27.75 in April
1998
--A 4.6x LTM EBITDA multiple compared to the 7.4x multiple in the Key/Dawson
transaction, the most recent and comparable transaction and Nabors' 1998E
EBITDA multiple of 4.8x
--A 2.8% premium to Pool's unaffected share price on October 29, 1998
o This is the worst point in the cycle to consider selling
--Oil prices at a low not seen in over 10 years
--Significant industry sector consolidation has occurred and available rig
counts have declined from the overbuilding in the mid-1980s, thereby
limiting downside on rigs rates
--There is tremendous operating leverage on which Pool is poised to capitalize
once the cycle reverses and stabilizes
--Overall, significant upside potential in the stock
- --------------------------------------------------------------------------------
-23-
<PAGE>
CERTAIN FORWARD LOOKING INFORMATION
- --------------------------------------------------------------------------------
Portions of this presentation include statements regarding future financial
performance and results of operations and other statements that are not
historical facts but are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Statements to the effect that the
Company, the Board or management "anticipates," "believes," "estimates,"
"expects," "predicts," or "projects" a particular result or course of events,
or that such result or course of events "should" occur, and similar
expressions, are also intended to identify forward-looking statements. Such
statements are subject to numerous risks, uncertainties and assumptions,
including but not limited to uncertainties relating to industry and market
conditions, prices of crude oil and natural gas, foreign exchange and currency
fluctuations, political instability in foreign jurisdictions, the ability of
the Company to integrate newly acquired operations and other factors discussed
in this presentation and in the Company's other filings with the Commission.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those stated.
- --------------------------------------------------------------------------------
-24-
