<PAGE> 1
As filed with the Securities and Exchange Commission on March 27, 1998
REGISTRATION NO. 333-41971
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
AMENDMENT NO. 2
TO
FORM S-3
--------------------
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
PONDER INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-2268672
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5005 RIVERWAY DRIVE, SUITE 550
HOUSTON, TEXAS 77056
(713) 965-0653
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
--------------------
EUGENE L. BUTLER
PRESIDENT AND CHIEF EXECUTIVE OFFICER
PONDER INDUSTRIES, INC.
5005 RIVERWAY DRIVE, SUITE 550
HOUSTON, TEXAS 77056
(713) 965-0653
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------------
Copies of all communications, including all communications sent to the
agent for service, should be sent to:
PHILLIP M. RENFRO, ESQ.
FULBRIGHT & JAWORSKI L.L.P.
300 CONVENT STREET, SUITE 2200
SAN ANTONIO, TEXAS 78205
(210) 270-7172
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
--------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box:
[ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box: [x]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ] _________
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] __________________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box: [ ]
<TABLE>
<CAPTION>
=======================================================================================================================
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------------
Proposed
Proposed Maximum Maximum
Offering Aggregate Amount of
Title of Each Class of Amount of Shares Price Per Offering Registration
Securities to be Registered to be Registered Share(1) Price(1) Fee
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value per share. . . 1,346,952 $1.125 $1,515,321 $447.02
- -----------------------------------------------------------------------------------------------------------------------
Total . . . . . . . . . . . . . . . . . . . 1,346,952 - $1,515,321 $447.02
=======================================================================================================================
</TABLE>
(1) Pursuant to Rule 457(c), the proposed maximum offering price
per share and proposed maximum aggregate offering price have
been calculated on the basis of the average of the bid and ask
prices of the Common Stock as reported on the NASDAQ SmallCap
Market on March 23, 1998.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
================================================================================
<PAGE> 2
P R O S P E C T U S
1,346,952 SHARES
PONDER INDUSTRIES, INC.
COMMON STOCK
---------------
This Prospectus has been prepared for use in connection with the
proposed sale or distribution by certain stockholders (the "Selling
Stockholders") of an aggregate of 1,346,952 shares (the "Shares") of common
stock, par value $.01 per share ("Common Stock"), of Ponder Industries, Inc.
("Ponder" or the "Company"). The Shares may be sold from time to time by or
for the account of the Selling Stockholders in the over-the-counter market, on
the National Association of Securities Dealers Automated Quotation System, Inc.
("NASDAQ") or otherwise at prices and on terms then prevailing or at prices
related to the then current market price, or in negotiated transactions. The
Shares may be sold by any one or more of the following methods: (a) a block
trade in which the broker or dealer so engaged will attempt to sell the
securities as agent but may position and resell a portion of the block as
principal to facilitate the transaction; (b) purchases by a broker or dealer as
principal and resale by such broker or dealer for its account pursuant to this
Prospectus; (c) ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and (d) privately negotiated transactions.
The Common Stock is traded on the SmallCap Market System of NASDAQ
(the "NASDAQ SmallCap Market") under the symbol "PNDR." On March 23, 1998, the
last reported sale price for the Common Stock on the NASDAQ SmallCap Market was
$1.125 per share.
The Company will receive no portion of the proceeds of the sale of the
Shares offered hereby and will bear all costs and expenses incident to their
registration. See "Plan of Distribution."
The Shares have not been registered for sale under the securities laws
of any state or jurisdiction as of the date of this Prospectus. Brokers or
dealers effecting transactions in the Shares should confirm the registration
thereof under the securities laws of the states in which such transactions
occur, or the existence of any exemption from registration.
---------------
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE MATTERS SET
FORTH UNDER THE CAPTION "RISK FACTORS" ON PAGE 3 HEREOF.
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this Prospectus is March 27, 1998
<PAGE> 3
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"SEC") in Washington, D.C., a Registration Statement on Form S-3 (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the securities offered by this Prospectus.
Certain of the information contained in the Registration Statement is omitted
from this Prospectus, and reference is hereby made to the Registration
Statement and exhibits and schedules relating thereto for further information
with respect to the Company and the securities offered by this Prospectus. The
Company is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith,
files reports, proxy statements and other information with the SEC. Such
reports, proxy statements and other information are available for inspection
and copies of such materials may be obtained upon payment of the fees
prescribed therefor by the rules and regulations of the SEC from the SEC, at
its principal offices located at Judiciary Plaza, 450 Fifth Street, Room 1024,
Washington, D.C., 20549 and at the following regional offices of the SEC:
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511 and at Seven World Trade Center, Suite 1300, New York, New York
10048, and copies of all or any part of the Registration Statement may be
obtained from the Public Reference Section of the SEC, at 450 Fifth Street,
N.W., Judiciary Plaza, Washington, D.C. 20549 upon the payment of the fees
prescribed by the SEC. The SEC maintains a WorldWide Web site on the Internet
at http://www.sec.gov that contains reports, proxy statements and other
information regarding registrants that file electronically with the SEC.
INCORPORATION OF CERTAIN DOCUMENTS
The Company's Annual Report on Form 10-K for the fiscal year ended
August 31, 1997, the Quarterly Report on Form 10-Q for the quarter ended
November 30, 1997, and the Current Report on Form 8-K dated January 27, 1998,
are hereby incorporated herein by reference.
The description of the Company's capital stock on the Registration
Statement on Form S-1 (SEC File No. 33- 33190) is hereby incorporated by
reference.
All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act, after the date of this Prospectus and prior to
the termination of the Registration Statement of which this Prospectus is a
part with respect to registration of the Shares, shall be deemed to be
incorporated by reference in this Prospectus and be a part hereof from the date
of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference in this Prospectus shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained in this Prospectus, or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference, modifies or replaces such statement.
The Company undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, upon written or oral request
of any such person, a copy of any or all of the documents incorporated by
reference herein, other than exhibits to such documents, unless such exhibits
are specifically incorporated by reference into the information that this
Prospectus incorporates. Written or oral requests for such copies should be
directed to: Ponder Industries, Inc., 5005 Riverway Drive, Suite 550, Houston,
Texas 77056, Attention: Eugene L. Butler, telephone (713) 965-0653.
RECENT DEVELOPMENTS
TRANSACTIONS. A $2,500,000 bridge loan was obtained from White Owl
Capital Partners ("White Owl") and certain others in October 1997 with the
intention of providing additional capital for acquisitions and expansion of the
Company's business. The promissory notes evidencing such loan (the "Promissory
Notes") were convertible into an aggregate of 4,000,000 shares of Common Stock.
In January 1998, the Company completed an $11,000,000 private placement of its
Common Stock to affiliates of White Owl at a purchase price of $1.00 per share.
As part of the private placement, the Promissory Notes were converted into
Common Stock. Also in January 1998, the Company purchased Fishing Tools, Inc.
("FTI") for $6,500,000 in cash and approximately 645,000 shares of Common
Stock, valued at $1,000,000. FTI is a full service fishing and rental tool
company, with three locations in Louisiana and one in Texas, and has a
significant offshore presence.
STOCK OPTIONS. The Company granted stock options (the "Employee Stock
Options") in the aggregate amount of 2,050,000 shares, with an exercise price
of $0.50 per share, to eleven key employees on September 30, 1997. Eugene
Butler, President, Chief Executive Officer and Chairman of the Board
-2-
<PAGE> 4
of the Company, received a stock option to purchase 500,000 shares of Common
Stock, which was fully vested on the date of grant. All of the other Employee
Stock Options vest at a rate of 20 percent per year, with 20 percent vesting
immediately. Mr. Butler received an additional stock option to purchase
500,000 shares; Frank Wall, Senior Vice President of Operations and a Director
of the Company, received a stock option to purchase 200,000 shares; Gerald
Slaughter, Senior Vice President and Chief Financial Officer of the Company,
received a stock option to purchase 250,000 shares of Common Stock; Shirley
Meyer, Secretary and Vice President of Personnel of the Company, received a
stock option to purchase 50,000 shares; and Barry Cromeans, Controller of the
Company, received a stock option to purchase 50,000 shares of Common Stock.
RISK FACTORS
Other than historical and factual statements, the matters and items
discussed in this Prospectus are forward- looking statements that involve risks
and uncertainties. The Company's actual results may differ materially from the
results discussed in the forward-looking statements. In addition to other
information contained in this Prospectus, the following factors could
contribute to such differences. Prospective investors should carefully
consider the following factors and cautionary statements in determining whether
to purchase shares of Common Stock in the offering made hereby. All factors
should be considered in conjunction with the other information and financial
data appearing elsewhere in this Prospectus and in the documents incorporated
herein by reference. See "Disclosure Regarding Forward-Looking Statements."
Each investor should carefully examine this entire Prospectus and
should give particular attention to the risk factors set forth below, in
addition to other information contained in or incorporated by reference in this
Prospectus.
EFFECTS OF DELISTING FROM NASDAQ SMALLCAP MARKET; LACK OF LIQUIDITY OF
LOW PRICED STOCKS. If the Company fails to maintain the qualification for its
Common Stock to trade on the Nasdaq SmallCap Market, its securities could be
subject to delisting. The Nasdaq Stock Market recently announced increases in
the quantitative standards for maintenance of listings on The Nasdaq SmallCap
Market. The revised standards for continued listing, which will be applied
beginning in February 1998, include maintenance of any of (x) $2,000,000 of net
tangible assets, (y) $35,000,000 of market capitalization or (z) $500,000 of
net income for two of the last three years and a minimum bid price per share of
$1.00. Although the Company is currently in compliance with the new Nasdaq
SmallCap Market continued listing requirements, no assurances can be given that
the Company will be able to maintain such compliance in the future. In the
event the Company is unable to satisfy the continued listing requirements,
trading, if any, in the Common Stock would thereafter be conducted in the
over-the-counter markets in the so-called "pink sheets" or the National
Association of Securities Dealer's "Electronic Bulletin Board." Consequently,
the liquidity of the Company's Common Stock would likely be impaired, not only
in the number of shares which could be bought and sold, but also through delays
in the timing of the transactions, reduction in security analysts' and the news
media's coverage, if any, of the Company and lower prices for the Company's
securities than might otherwise prevail.
In addition, if the Common Stock were to become delisted from trading
on The Nasdaq SmallCap Market and the trading price of the Common Stock were
below $5.00 per share, trading in the Common Stock would also be subject to the
requirements of certain rules promulgated under the Exchange Act, which require
additional disclosures by broker-dealers in connection with any trades
involving a stock defined as a penny stock (generally, any non-Nasdaq equity
security that has a market price of less than $5.00 per share, subject to
certain exceptions). Such rules require the delivery, prior to any penny stock
transaction, of a disclosure schedule explaining the penny stock market and the
risks associated therewith, and impose various sales practice requirements on
broker-dealers who sell penny stock to persons other than established customers
and accredited investors (which are generally institutions). For these types
of transactions, the broker-dealer must make a special suitability
determination for the purchase and have received the purchaser's written
consent to the transaction prior to the sale. The additional burdens imposed
upon broker-dealers by such requirements may discourage broker-dealers from
effecting transactions in the Common Stock which could severely limit the
market liquidity of Common Stock and the ability of purchasers in this offering
to sell their shares of Common Stock in the secondary market.
-3-
<PAGE> 5
POSSIBLE VOLATILITY OF SECURITIES PRICES. The market price of the
Common Stock has in the past been, and may in the future continue to be,
volatile. A variety of events, including quarter to quarter variations in
operating results, news announcements or the introduction of new products by
the Company or its competitors, as well as market conditions in the oil and gas
industry, or changes in earnings estimates by securities analysts may cause the
market price of the Common Stock to fluctuate significantly. In addition, the
stock market in recent years has experienced significant price and volume
fluctuations which have particularly affected the market prices of equity
securities of many companies that service the oil and gas industry and which
often have been unrelated to the operating performance of such companies.
These market fluctuations may adversely affect the price of the Common Stock.
HISTORY OF LOSSES; ACCUMULATED DEFICIT. The Company has experienced
significant losses from continuing operations since 1992. As of November 30,
1997, the Company had an accumulated deficit of approximately $24,120,000. For
the three months ended November 30, 1997, and the years ended August 31, 1997
and 1996, respectively, the Company had losses of approximately $424,000,
$9,921,000 and $3,892,000, respectively. The Report of Independent Public
Accountants on the Company's 1997 financial statements indicates that such
continued losses and the possible need for additional financing for future
operating expenses raise substantial doubt about the Company's ability to
continue as a going concern. Although the Company believes it will be able to
achieve and maintain profitable operations in the future, there can be no
assurance that the Company will ever operate profitably.
ACQUISITION INTEGRATION. A major portion of Ponder's growth in recent
years has resulted from acquisitions, which involve certain operational and
financial risks. Operational risks include the possibility that an acquisition
does not ultimately provide the benefits originally anticipated by Ponder's
management, while Ponder continues to incur operating expenses to provide the
services formerly provided by the acquired company. Financial risks involve
the incurrence of indebtedness as a result of the acquisition and the
consequent need to service that indebtedness. In addition, the issuance of
stock in connection with acquisitions dilutes the voting power and may dilute
the economic interests of existing stockholders. In carrying out its
acquisition strategy, Ponder attempts to minimize the risk of unexpected
liabilities and contingencies associated with acquired businesses through
planning, investigation and negotiation, but there is no assurance that it will
be successful in doing so. There can be no assurance that recent or future
acquisitions can be readily assimilated into the Company's operating structure.
Inability to efficiently integrate acquired companies could have a material
adverse effect on the Company's financial condition and results of operations.
DEPENDENCE UPON KEY PERSONNEL; MANAGEMENT OF GROWTH. The Company's
future success depends to a significant degree upon the continued services of
its Chairman of the Board, President and Chief Executive Officer, Eugene L.
Butler, and other key senior management personnel. The Company does not
currently have an employment agreement with Mr. Butler, nor does it have "key
man" life insurance on Mr. Butler. Ponder's future success also depends on its
continuing ability to attract and retain highly qualified managerial personnel.
Competition for such personnel is intense, and there can be no assurance that
Ponder will be able to retain its key managerial employees or attract,
assimilate or retain other highly qualified managerial personnel in the future.
The Company's ability to manage growth successfully will require that it
continue to improve its operational, management and financial systems and
controls. Failure to do so could have a material adverse effect upon the
Company's business and results of operations.
INDUSTRY VOLATILITY. The oil and gas industry in which Ponder
participates historically has experienced significant volatility. Demand for
Ponder's services and products depends primarily upon the number of oil and gas
wells being drilled, the depth and drilling conditions of such wells, the
volume of production, the number of well completions and the level of workover
activity. Drilling and workover activity can fluctuate significantly in a
short period of time, particularly in the United States.
These factors are influenced by the willingness of oil and gas
operators to make capital expenditures for the exploration, development and
production of oil and natural gas. The levels of such capital expenditures and
the ability of oil and gas companies to raise capital will continue to be
influenced by numerous factors over which Ponder has no control, including the
prevailing and expected market prices for oil and natural gas. Such prices are
impacted by, among other factors, the ability of the members of the
Organization of Petroleum Exporting Countries ("OPEC") to maintain price
stability through voluntary production limits, the level of production by
non-OPEC countries, worldwide demand for oil and natural gas, local, national
and international economic and political conditions, costs of exploration and
production of oil and natural gas, availability of new leases and concessions,
and governmental regulations regarding, among other things, environmental
protection, taxation, price
-4-
<PAGE> 6
controls and product allocations. No assurance can be given as to the future
price of oil or natural gas or the level of future oil and gas industry
activity or demand for Ponder's services and products.
COMPETITION. The Company competes in highly competitive areas of the
oilfield business. The volatility of oil and gas prices has led to a
consolidation of the number of companies providing services similar to the
Company. This reduced number of companies competes intensely for available
projects. Many of the competitors of the Company are larger and have greater
financial and other resources than the Company. Ponder encounters substantial
competition from numerous small, single-site operators, larger concerns
operating at multiple locations and various well servicing companies. Although
the Company believes that it competes on the basis of technical expertise and
reputation of service, there can be no assurance that the Company will be able
to maintain its competitive position. Ponder expects that the substantial
competition currently encountered by it will not be reduced or eliminated.
NONPAYMENT OF DIVIDENDS. Ponder has never declared or paid dividends
on Common Stock and does not anticipate paying dividends on Common Stock at any
time in the foreseeable future. The terms of certain of the Company's loan
agreements restrict the payment of dividends.
SEASONALITY. Demand for the Company's services and products is tied
closely to the seasonality of drilling activity. Higher activity is generally
experienced in the spring, summer and fall. In the United States and Europe,
the lowest drilling activity generally occurs during the early months of the
year due to inclement weather. Purchases of the Company's products and
services are also to a substantial extent deferrable in the event oil and gas
companies reduce capital expenditures as a result of conditions existing in the
oil and gas industry or general economic downturns. Fluctuations in the
Company's revenues and costs may have a material adverse effect on the
Company's business and operations. Accordingly, the Company's operating
results may vary from quarter to quarter, depending upon factors outside of its
control.
POSSIBLE PRODUCT LIABILITY CLAIMS. Certain products sold or leased by
Ponder are used in potentially hazardous drilling, completion, production and
workover applications that can cause personal injury or loss of life as well as
damage to property, equipment or the environment and suspension of operations.
Litigation arising from a catastrophic occurrence at a location where Ponder's
equipment and services are used may in the future result in Ponder being named
as a defendant in product liability or other lawsuits asserting potentially
large claims. Ponder maintains insurance coverage that its management believes
to be customary in the industry for a company of its size against these
hazards. However, insurance may not provide complete protection against
casualty losses and a successful claim could have a material adverse effect on
Ponder. Further, no assurance can be given that Ponder will be able to
maintain adequate insurance in the future at rates considered reasonable.
GOVERNMENTAL REGULATION AND ENVIRONMENTAL MATTERS. Ponder's business
is affected both directly and indirectly by governmental regulations relating
to the oilfield service industry and the oil and gas exploration and production
industry in general, as well as by environmental and safety regulations that
specifically apply to such businesses. It is likely that the trend of more
expansive and stricter environmental laws and regulations will continue, and
that the costs of compliance with such laws and regulations will continue to
increase in the foreseeable future, for Ponder and its customers. There can be
no assurance that the cost of compliance with current environmental and safety
regulations or future changes in such laws and regulations will not have a
material adverse effect on Ponder's operations.
CERTAIN ANTI-TAKEOVER FEATURES. Certain provisions of Delaware
statutory law, could discourage potential acquisition proposals and could delay
or prevent a change in control of the Company. Such provisions could diminish
the opportunities for a stockholder to participate in tender offers, including
tender offers at a price above the then- current market value of Ponder's
Common Stock. Such provisions also may inhibit fluctuations in the market
price of Ponder's Common Stock that could result from takeover attempts.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus contains certain "forward-looking statements" within
the meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act. Specifically, all statements other than statements of historical
facts included in this report regarding the Company's financial position,
business strategy and plans and objectives of management of the Company for
future operations are forward-
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<PAGE> 7
looking statements. These forward-looking statements are based on the beliefs
of the Company's management, as well as assumptions made by and information
currently available to the Company's management. When used in this report, the
words "anticipate," "believe," "estimate," "expect" and "intend" and words or
phrases of similar import, as they relate to the Company or Company management
are intended to identify forward-looking statements. Such statements reflect
the current view of the Company with respect to future events and are subject
to certain risks, uncertainties and assumptions related to certain factors
including, without limitation, competitive factors, general economic
conditions, customer relations, relationships, relationships with vendors, the
interest rate environment, governmental regulation and supervision,
seasonality, the operation of the Company's networks, transmission costs,
product introductions and acceptance, technological change, changes in industry
practices, one-time events and other factors described herein ("cautionary
statements"). Although the Company believes that its expectations are
reasonable, it can give no assurance that such expectations will prove to be
correct. Based upon changing conditions, should any one or more of these risks
or uncertainties materialize, or should any underlying assumptions prove
incorrect, actual results may vary materially from those described herein as
anticipated, believed, estimated, expected or intended. All subsequent written
and oral forward-looking statements attributable to the Company or persons
acting on its behalf are expressly qualified in their entirety by the
applicable cautionary statements.
THE COMPANY
Ponder Industries is engaged in the business of providing specialized
oilfield services and rental equipment to the oil and gas industry. The
Company's principal executive offices are located in Houston, Texas, at 5005
Riverway Drive, Suite 550, Houston, Texas 77056 and its telephone number at
that address is (713) 965-0653. The Company currently has operating facilities
in Texas, Louisiana, Oklahoma, Arkansas, Illinois, Mississippi and the United
Kingdom.
Ponder was founded as a Texas corporation in 1981. In 1990, Ponder
became a Delaware corporation through a share exchange between Ponder
Industries, Inc., a Texas corporation, and Ponder Industries, Inc., a Delaware
corporation.
Ponder rents a full line of specialized equipment and tools utilized
in fishing operations. Fishing services are required by the oil and gas
industry whenever there is an obstruction in the borehole of a well. At times
during the life of a well, cable, tubulars, casing, wellbore tools or debris
may become detached and stuck in the well. Likewise, equipment can be
accidentally dropped in a well. Events such as these can create major
obstructions that impede work and raise drilling and completion costs. Ponder
provides expert "fishing" and cutting services to remove such obstructions and
return the wellsite to normal operation.
Fishing services require a variety of equipment designed to catch or
snag "fish" or "junk" in a well or to grind, cut or otherwise eliminate the
obstruction. The equipment is generally rented but may also be designed and
built by the Company. Specialized fishing tool equipment is often not owned by
drilling contractors and operators because of the high cost of owning and
maintaining the full range of equipment required for the various types of
situations encountered in the oil and gas industry throughout many geographic
areas. The items of equipment available for rental from the Company include a
full line of fishing tools, such as milling tools, casing cutters, jars,
spears, overshots and whipstocks. Ponder also provides supervisory services
relating to the operation of their fishing tool equipment and the proper
selection and assembly of the fishing string. The fishing string consists of
jars, subs, overshots (external), spears (internal) and other tools for
removing the item or the "fish" from the well.
The Company solicits orders for its services, products and incidental
equipment rentals primarily through its employee sales force. Traditionally,
most U.S. orders have been received on a well-by-well basis, while
internationally, the Company generally obtains business through contracts with
customers who commit to use the Company's services, products and equipment for
a specified period of time or for a certain number of wells in a certain
geographic area.
Upon the completion of operations by the customer, the tools are
returned to the Company where the tools are inspected and repaired as needed.
Repairs are at the cost of the customer and if the tools cannot be restored to
first class condition, the cost of the tool is charged to the customer.
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<PAGE> 8
The Company has followed a policy of seeking patents and licenses for
products and equipment that appear to have commercial applications. The
Company believes its patents and licenses to be adequate for the conduct of its
products and services business and, while it considers them to be valuable in
the aggregate, the Company does not believe that its business is materially
dependent upon its patents or licenses. None of the Company's patents or
licenses expire in the near future. In management's opinion, engineering,
operation skills and application experience are more responsible for the
Company's market position than are patents or licenses.
The Company obtains orders through its direct sales force, supervisors
and fishermen. Due to the short-term nature of the equipment rental and
service business, backlog is not meaningful. The Company's backlog for
equipment rentals is not a significant percentage of the Company's consolidated
revenues.
The Company's principal customers are major and independent national
and international oil and gas companies.
USE OF PROCEEDS
The Shares to be sold pursuant to the Prospectus are owned by several
stockholders of the Company. The Company will not receive any of the proceeds
from the sale of the Shares. See "Selling Stockholders."
SELLING STOCKHOLDERS
In April 1996, the Company completed a $10,950,000 placement of
convertible debentures. In August 1996, a case was filed in the United States
District court for the Western District of New York alleging that the Company
breached an obligation to convert certain debentures held by the plaintiff into
Common Stock. The Company contested the plaintiff's claims and responded to
the plaintiff's complaint by filing counterclaims and third-party claims
against the plaintiff, the Company's other convertible debenture holders and
the placement agent on the convertible debenture offering alleging various
violations of the Exchange Act, common law fraud, civil conspiracy, negligent
misrepresentation, breach of contract, breach of fiduciary duty, negligence,
indemnification and seeking a declaration that the Company had no obligation to
convert the debentures and no liability for failure to so convert. Also, in
August 1996, an action was filed in the United States District Court for the
Northern District of Illinois, Eastern Division, by two other convertible
debenture holders of the Company who alleged that the Company breached an
obligation to convert certain debentures held by such plaintiffs into Common
Stock. The plaintiffs in this action sought a declaratory judgment setting
forth the rights and liabilities of the parties and an award of Common Stock or
an undisclosed amount of money allegedly due them. The Company contested the
plaintiffs' claims and removed the action to federal court and transferred it
to the Western District of New York. In September 1997, the Company and the
holders of the then outstanding convertible debentures (the "Settling Holders")
entered into a settlement agreement (the "Settlement Agreement") whereby all of
the then outstanding convertible debentures were converted into shares of
Common Stock and the Company issued to the Settling Holders warrants to
purchase an aggregate of 957,000 shares of Common Stock. Pursuant to the terms
of the Settlement Agreement, the Company granted the Settling Holders
registration rights to the shares of Common Stock underlying the warrants.
With the exception of the shares of Common Stock offered hereby by Orez Ltd.,
all of the shares of Common Stock being offered hereby are issuable upon the
exercise of the warrants granted to the Settling Holders pursuant to the
Settlement Agreement.
The following table sets forth the name of each of the Selling
Stockholders and, as of December 8, 1997, the beneficial ownership of Common
Stock held by each of the Selling Stockholders, immediately prior to and upon
completion of this offering. All information as to beneficial ownership has
been furnished by each of the Selling Stockholders. The number of Shares that
may be actually sold by each of the Selling Stockholders will be determined by
each such Selling Stockholder, and may depend upon a number of factors,
including, among other things, the market price of the Common Stock. Because
each Selling Stockholder may offer all, some or none of the Shares that each
holds, and because the offering contemplated by this Prospectus is currently
not being underwritten, no estimate can be given as to the number of Shares
that will be held by any Selling Stockholder upon or prior to the termination
-7-
<PAGE> 9
of this offering. See "Plan of Distribution." Each Selling Stockholder has
sole voting and investment power over the shares listed. Except as set forth
below, no Selling Stockholder has had a material relationship with the Company
or any of its predecessors or affiliates within the past three years.
<TABLE>
<CAPTION>
Beneficial Ownership Beneficial Ownership
Before the Offering After the Offering(1)
----------------------------- -----------------------------
Percentage
Number of Shares to Number Percentage
Name of Shares Class(2) be Sold of Shares of Class
---- ---------------- ----------- ----------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
AG Superfund International
Partners, L.P. 22,500(3) * 22,500 0 0%
The Gifford Fund 112,500(3) * 112,500 0 0%
Cameron Capital Ltd. 120,000(3) * 120,000 0 0%
Darissco Diversified
Investments, Inc. 27,000(3) * 27,000 0 0%
GAM Arbitrage, Inc. 37,500(3) * 37,500 0 0%
KA Investments, LDC 62,500(3) * 22,500 40,000 *
Lake Management LDC 127,500(3) * 127,500 0 0%
Leonardo, L.P. 187,500(3) * 187,500 0 0%
Raphael, L.P. 45,000(3) * 45,000 0 0%
Richcourt $ Strategies, Inc. 30,000(3) * 30,000 0 0%
The Tail Wind Fund 90,000(3) * 90,000 0 0%
Windward Island Limited 22,500(3) * 22,500 0 0%
Wood Gundy London, Ltd. 112,500(3) * 112,500 0 0%
Orez Ltd. 389,952(4) 1.35 389,952 0 0%
---------
1,386,952
=========
</TABLE>
- ---------------------------
* represents less than 1%
(1) Assumes all shares of Common Stock offered hereby are sold.
(2) Based on 28,681,620 shares of the Company outstanding as of November
24, 1997.
(3) Constitutes shares issued or issuable upon the exercise of warrants
granted pursuant to the Settlement Agreement dated September 26, 1997,
among the Company and the Settling Holders.
(4) Constitutes shares issuable pursuant to a warrant to purchase Common
Stock granted pursuant to a Regulation S Subscription Agreement dated
April 23, 1997, between the Company and Orez Ltd.
PLAN OF DISTRIBUTION
The Company is registering the Shares on behalf of the Selling
Stockholders. All costs, expenses and fees in connection with the registration
of the Shares offered hereby will be borne by the Company. Brokerage
commissions, if any, attributable to the sale of Shares will be borne by the
Selling Stockholders (or his donees or pledgees).
The Shares may be sold from time to time by or for the account of the
Selling Stockholders in the over-the-counter market, on the NASDAQ SmallCap
Market or otherwise at prices and on terms then prevailing or at prices related
to the then current market price, or in negotiated transactions. The Shares
may be sold by any one or more of the following methods: (a) a block trade in
which the broker or dealer so engaged will attempt to sell the securities as
agent but may position and resell a portion of the block as principal to
facilitate the transaction; (b) purchases by a broker or dealer as principal
and resale by such broker or dealer for its account pursuant to this
Prospectus; (c) ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and (d) privately negotiated transactions. Each
Selling Stockholder will act independently of the Company in making decisions
with respect to the timing, manner and size of each sale. To the Company's
knowledge, no Selling Stockholder has entered into any agreements,
understandings or arrangements with any underwriters or broker-dealers
regarding the sale of the Shares, nor does the Company know the identity of the
brokers or market makers which will participate in the offering. The Selling
Stockholders may effect such transactions by selling the Shares directly to
purchasers or to or through broker-dealers which may act as agents or
principals. In effecting sales, broker-dealers engaged by the Selling
Stockholders may arrange for other broker-dealers to participate. Such
broker-dealers may receive compensation in the form of discounts, concessions
or commissions from the Selling Stockholders and/or the purchasers of Common
Stock for whom such broker- dealers may act as agents or to whom they sell as
principal, or both (which compensation as to
-8-
<PAGE> 10
a particular broker-dealer might be in excess of customary commissions). Each
of the Selling Stockholders and any broker-dealers that act in connection with
the sale of the Shares might be deemed to be "underwriters" within the meaning
of Section 2(11) of the Securities Act and any commission received by them and
any profit on the resale of the shares of Common Stock as principal might be
deemed to be underwriting discounts and commissions under the Securities Act.
Each Selling Stockholder may agree to indemnify any agent, dealer or
broker-dealer that participates in transactions involving sales of the shares
against certain liabilities, including liabilities arising under the Securities
Act. Liabilities under the federal securities laws cannot be waived. Because
each Selling Stockholder may be deemed to be an "underwriter" within the
meaning of Section 2(11) of the Securities Act, each Selling Stockholder will
be subject to prospectus delivery requirements under the Securities Act.
Furthermore, each Selling Stockholder, any broker or dealer and any "affiliated
purchasers" will be subject to the applicable provisions of the Exchange Act
and the Securities Act and the rules and regulations thereunder, including,
without limitation, Regulation M under the Exchange Act, which provisions may
limit the timing of the purchases and sales of the Company's securities by the
Selling Stockholders, any broker or dealer and any "affiliated purchasers."
The Company will receive no portion of the proceeds of the sale of the
Shares offered hereby and will bear all costs and expenses incident to their
registration.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Article XV of the Company's Certificate of Incorporation ("Article XV")
eliminates the personal liability of the Company's directors to the Company or
its stockholders for monetary damages for breach of fiduciary duty except under
certain circumstances. Directors remain liable for (i) any breach of the duty
of loyalty to the Company or its stockholders, (ii) any act or omission not in
good faith or which involves intentional misconduct or a knowing violation of
law, (iii) any violation of Section 174 of the Delaware General Corporation Law
("DGCL"), which proscribes the payment of dividends and stock purchases or
redemptions under certain circumstances, and (iv) any transaction from which a
director derived an improper personal benefit.
Article XV further provides that future repeal or amendment of its terms
will not adversely affect any rights of directors existing thereunder with
respect to acts or omissions occurring prior to such repeal or amendment.
Article XV also incorporates any future amendments to Delaware law which
further eliminate or limit the liability of directors.
Under Section 145 of the DGCL, directors and officers as well as other
employees and individuals may be indemnified against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement in connection
with specified actions, suits or proceedings, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
corporation -- a "derivative action"), if they acted in good faith and in a
manner they reasonably believed to be in or not opposed to the best interests
of the Company, and with respect to any criminal action or proceeding, had no
reasonable cause to believe their conduct was unlawful. A similar standard of
care is applicable in the case of derivative actions, except that
indemnification extends only to expenses (including attorneys' fees) incurred
in connection with defense or settlement of such an action and the DGCL
requires court approval before there can be any indemnification where the
person seeking indemnification has been found liable to the Company.
Article VIII of the Company's Bylaws provides that the Company shall
indemnify any person to whom, and to the extent, indemnification may be granted
pursuant to Section 145 of the DGCL.
Article XI of the Company's Certificate of Incorporation provides that
each person who was or is made a party to, or is involved in any action, suit
or proceeding by reason of the fact that he is or was a director, officer or
employee of the Company will be indemnified by the Company against all expenses
and liabilities, including attorneys' fees, reasonably incurred by or imposed
upon him, except in such case where the director, officer or employee is
adjudged guilty of willful misfeasance or malfeasance in the performance of his
duties. Article XI also provides that the right of indemnification shall be in
addition to and not exclusive of all other rights, to which such director,
officer or employee may be entitled.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors and officers and controlling persons pursuant
to the foregoing provisions, the Company has been
-9-
<PAGE> 11
advised that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon by
Fulbright & Jaworski L.L.P.
EXPERTS
The consolidated financial statements included in the Company's Annual
Report on Form 10-K for the fiscal years ended August 31, 1997 and 1996,
incorporated by reference in this Prospectus have been audited by Arthur
Andersen LLP, independent public accountants, to the extent and for the periods
set forth in their reports incorporated herein by reference, and are
incorporated herein in reliance upon the authority of said firm as experts in
accounting and auditing.
The consolidated financial statements included in the Company's Annual
Report on Form 10-K for the fiscal year ended August 31, 1995, incorporated by
reference in this Prospectus have been audited by Hairston, Kemp, Sanders &
Stich, P.C., independent public accountants, to the extent and for the periods
set forth in their report incorporated herein by reference, and are
incorporated herein in reliance upon the authority of said firm as experts in
accounting and auditing.
-10-
<PAGE> 12
================================================================================
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE SECURITIES OFFERED HEREBY IN
ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents . . . . . . . . . . . . . . 2
Recent Developments . . . . . . . . . . . . . . . . . . . . . . 2
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . 3
Disclosure Regarding Forward-Looking
Statements . . . . . . . . . . . . . . . . . . . . . . . . . 5
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . 6
Selling Stockholders . . . . . . . . . . . . . . . . . . . . . 7
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . 8
Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 9
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . 10
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
================================================================================
================================================================================
1,346,952 SHARES
PONDER INDUSTRIES, INC.
COMMON STOCK
---------------
P R O S P E C T U S
MARCH 27, 1998
---------------
================================================================================
<PAGE> 13
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with this offering are:
SEC registration fee $ 447
Legal fees and expenses* 10,000
Miscellaneous* 6,000
-------
Total $16,447
=======
------------------
* Estimated
The Company has agreed to pay all the costs and expenses of
this offering.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law empowers the
Registrant to, and the Bylaws of the Registrant provide that it shall,
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding by reason of
the fact that he is or was a director, officer, employee or agent of the
Registrant, or is or was serving at the request of the Registrant as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interest
of the Registrant, and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful; except that, in the
case of an action or suit by or in the right of the Registrant, no
indemnification may be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Registrant unless and only to
the extent that the Court of Chancery or the court in which such action or suit
was brought shall determine that such person is fairly and reasonably entitled
to indemnity for proper expenses.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
the Company pursuant to the foregoing provisions, the Company has been informed
that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
The Registrant maintains directors' and officers' liability insurance
that covers the directors and officers of the Registrant.
ITEM 16. EXHIBITS.
Exhibit No. Exhibit
- ----------- -------
5.1 Opinion of Fulbright & Jaworski L.L.P. regarding legality
(filed herewith)
23.1 Consent of Fulbright & Jaworski L.L.P. (contained in Exhibit
5.1)
23.2 Consent of Arthur Andersen LLP (filed herewith)
23.3 Consent of Hairston, Kemp, Sanders & Stich, P.C. (filed
herewith)
24.1 Power of Attorney (included on signature page).
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include any
material information with respect to the plan
II-1
<PAGE> 14
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes that, insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-2
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston and State of Texas the 27th day of March,
1998.
PONDER INDUSTRIES, INC.
By: /s/ Eugene L. Butler
---------------------------------------
Eugene L. Butler
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears
below constitutes and appoints Eugene L. Butler and Gerald A. Slaughter, or
either of them, his true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
and all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting said attorney-in-fact and agent,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent or either of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ Eugene L. Butler Chairman of the Board, March 27, 1998
- ---------------------------------- President, Chief Executive Officer
Eugene L. Butler and a Director
(Principal Executive Officer)
/s/ Frank J. Wall* Senior Vice President of Operations March 27, 1998
- ---------------------------------- and a Director
Frank J. Wall
/s/ Gerald A. Slaughter Senior Vice President March 27, 1998
- ---------------------------------- and Chief Financial Officer
Gerald A. Slaughter (Principal Financial and
Accounting Officer)
/s/ Rittie W. Milliman, Sr.* Director March 27, 1998
- ----------------------------------
Rittie W. Milliman, Sr.
/s/ John Roane* Director March 27, 1998
- ----------------------------------
John Roane
/s/ John M. Le Seelleur* Director March 27, 1998
- ----------------------------------
John M. Le Seelleur
/s/ Joe R. Nemec* Director March 27, 1998
- ----------------------------------
Joe R. Nemec
/s/ Steven A. Webster* Director March 27, 1998
- ----------------------------------
Steven A. Webster
/s/ William R. Ziegler* Director March 27, 1998
- ----------------------------------
William R. Ziegler
*By:/s/ Gerald A. Slaughter
------------------------------
Gerald A. Slaughter
as Attorney-In-Fact
</TABLE>
II-3
<PAGE> 16
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT PAGE
- ---------- ------- ----
<S> <C> <C>
5.1 Opinion of Fulbright & Jaworski L.L.P. regarding legality (previously filed) II-8
23.1 Consent of Fulbright & Jaworski L.L.P. (contained in Exhibit 5) II-8
23.2 Consent of Arthur Andersen LLP (filed herewith) . . . . . . . . . . . . . II-9
23.3 Consent of Hairston, Kemp, Sanders & Stich, P.C. (filed herewith) . . . . II-10
24.1 Power of Attorney (included on signature page) . . . . . . . . . . . . . . II-5
</TABLE>
II-4
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated October 17, 1997
(except with respect to the matters discussed in Note 19, as to which the date
is February 4, 1998) included in Ponder Industries, Inc.'s Form 10-K for the
year ended August 31, 1997 and to all references to our Firm included in this
registration statement.
/s/ Arthur Andersen LLP
San Antonio, Texas
March 24, 1998
II-5
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated November 20, 1995
included in Ponder Industries, Inc.'s Form 10-K for the year ended August 31,
1997 and to all references to our firm included in this registration statement.
/s/ Hairston, Kemp, Sanders & Stich, P.C.
San Antonio, Texas
March 24, 1998
II-6
