<PAGE> 1
As filed with the Securities and Exchange Commission on October 4, 1996
Registration No. 333-___________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
PATTERSON ENERGY, INC.
(Exact name of registrant as specified in charter)
Delaware 75-2504748
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
4510 Lamesa Highway
Snyder, Texas 79549
(915) 573-1104
(Address, including zip code and telephone number, including area code, of
registrant's principal executive offices)
Cloyce A. Talbott
4510 Lamesa Highway
Snyder, Texas 79549
(915) 573-1104
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
Thomas H. Maxfield, Esq.
Baker & Hostetler
303 East Seventeenth Avenue
Suite 1100
Denver, Colorado 80203
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [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 earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================================================
Proposed maximum Proposed maximum
Title of each class of Amount to be offering price per aggregate offering Amount of
securities to be registered registered share(1) price(1) registration
==================================================================================================================================
<S> <C> <C> <C> <C>
Common Stock, par value $0.01 per share 258,077 Shares $17.50 $4,516,348 $1,368.59
==================================================================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, as amended, on the
basis of the average of the high and low reported sale prices of the
Registrant's Common Stock on October 1, 1996, as reported on the Nasdaq
National Market.
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 said Section 8(a),
may determine.
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<PAGE> 2
PATTERSON ENERGY, INC.
CROSS-REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATION S-K
<TABLE>
<CAPTION>
FORM S-3 ITEM
NUMBER AND CAPTION LOCATION IN PROSPECTUS
------------------ ----------------------
<S> <C> <C>
1. Forepart of the Registration Statement and Outside
Front Cover Page of Prospectus . . . . . . . . . Facing Page; Cross-Reference Sheet, Outside Front
Cover Page
2. Inside Front and Outside Back Cover Pages of
Prospectus . . . . . . . . . . . . . . . . . . . Inside Front Cover Page of Prospectus; Incorporation
of Certain Documents by Reference
3. Summary Information, Risk Factors and Ratio of
Earnings to Fixed Charges . . . . . . . . . . . Risk Factors, The Company
4. Use of Proceeds . . . . . . . . . . . . . . . . . . Use of Proceeds
5. Determination of Offering Price . . . . . . . . . . Not Applicable
6. Dilution . . . . . . . . . . . . . . . . . . . . . Not Applicable
7. Selling Security Holders . . . . . . . . . . . . . Selling Stockholders
8. Plan of Distribution . . . . . . . . . . . . . . . Plan of Distribution
9. Description of Securities to be Registered . . . . Not Applicable
10. Interests of Named Experts and Counsel . . . . . . Not Applicable
11. Material Changes . . . . . . . . . . . . . . . . . Recent Merger Acquisition
12. Incorporation of Certain Information by Reference . Incorporation of Certain Documents by Reference
13. Disclosure of Commission Position on Indemnification
for Securities Act Liabilities . . . . . . . . . . Not Applicable
</TABLE>
<PAGE> 3
PROSPECTUS
258,077 SHARES
PATTERSON ENERGY, INC.
COMMON STOCK
Patterson Energy, Inc., a Delaware corporation (the "Company"), is
registering for possible future resale, from time to time, by the holders
thereof (the "Selling Stockholders"), 258,077 shares (the "Shares") of the
Company's common stock, $0.01 par value (the "Common Stock"). Of the total
Shares, 133,077 shares are currently outstanding and the remaining 125,000
Shares are issuable upon exercise of options previously granted by the Company.
None of the 125,000 shares may be sold hereunder until such time as the related
option has been exercised and the exercise price for such Shares paid to the
Company by the optionholder. See "Selling Stockholders." As a part of the
issuance of certain of the Shares, the Company granted registration rights to
certain of the Selling Stockholders. Pursuant to the terms of these
registration rights, the Company is obligated to pay all fees and expenses
incurred by it incident to this offering. It is estimated that such fees and
expenses will be approximately $_______________. The Company intends to keep
the Registration Statement, of which the Prospectus is a part, effective for a
period of no longer than nine months from the date of this Prospectus. The
Company will not receive any proceeds from the sale of the Shares.
The Common Stock is traded on the Nasdaq National Market under the symbol
"PTEN." On October ___, 1996, the closing sales price of the Common Stock was
$____________ per share.
--------------------------
PROSPECTIVE PURCHASERS OF COMMON STOCK SHOULD CONSIDER CAREFULLY THE MATTERS
SET FORTH UNDER "RISK FACTORS."
--------------------------
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 SATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
--------------------------
The Selling Stockholders may offer the Shares offered hereby from time to
time to purchasers directly or through agents, brokers or dealers. The Shares
may be sold at market prices prevailing at the time of sale or at negotiated
prices. The agents, brokers or dealers through whom sales are made may be
deemed to be "underwriters" within the meaning of the Securities Act of 1933,
as amended (the "Securities Act"), and any amounts received by them in exchange
for their services in connection with such sales may be deemed to be
underwriting commissions. See "Plan of Distribution."
________________, 1996
<PAGE> 4
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE 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 ANY SECURITIES OFFERED HEREBY BY
ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.
AVAILABLE INFORMATION
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
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements, and other information may be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, as well as at the
following regional offices: 7 World Trade Center, Suite 1300, New York, New
York 10048, and Citicorp Center, Suite 1400, 500 West Madison Street, Chicago,
Illinois 60661-2511. Copies of such materials may be obtained at prescribed
rates from the Public Reference Section of the Commission at Judiciary Plaza,
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549. The Company's
Common Stock is traded on the Nasdaq National Market. The foregoing materials
can also be inspected at the National Association of Securities Dealers, Inc.,
1735 K. Street, N.W., Washington, D.C. 20006.
The Company has also filed with the Commission a Registration Statement on
Form S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act with respect to the Shares offered hereby.
This Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information
pertaining to the Company and the Shares offered hereby, reference is made to
the Registration Statement, copies of which may be inspected without charge at
the public reference facilities maintained by the Commission at Judiciary
Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and copies of
which may be obtained from the Commission upon payment of the prescribed fees.
In addition, the Commission maintains a web site that contains reports,
proxy and information statements, and other information regarding registrants
that file electronically with the Commission. The Company is such a filer.
The Commission's web site address is (http://www.sec.gov).
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<PAGE> 5
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission, are hereby incorporated by reference into this Prospectus:
(a) The Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1995.
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996.
(c) The Company's Current Report on Form 8-K dated April 22, 1996.
(d) The Company's Current Report on Form 8-K dated April 30, 1996.
(e) The Company's Current Report on Form 8-K dated May 16, 1996.
(f) The Company's Current Report on Form 8-K dated July 30, 1996, as
amended by Form 8-K/A dated July 30, 1996, and as further amended by Form 8-K/A
(Amendment No. 2) dated July 30, 1996.
(g) The Company's Current Report on Form 8-K dated July 30, 1996.
(h) The Company's Quarterly Report on Form 10-Q for quarter ended June
30, 1996.
(i) The Company's Current Report on Form 8-K dated September 27, 1996.
(j) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed with the Commission under
the Exchange Act.
All documents filed by the Company after the date of this Prospectus
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act and prior to
the termination of the offering hereunder shall be deemed to be incorporated by
reference into this Prospectus and to 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 herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide, without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of any such
person, a copy of any or all of the documents incorporated herein by reference,
other than exhibits to such documents (unless such exhibits are specifically
incorporated by reference in such documents). Written requests for such copies
should be directed to James C. Brown, Vice President - Finance, Patterson
Energy, Inc., at the Company's principal executive offices located at 4510
Lamesa Highway, Snyder, Texas 79549. Telephone requests may be directed to Mr.
Brown at (915) 573-1104.
3
<PAGE> 6
THE COMPANY
The Company is engaged in onshore contract drilling for oil and natural
gas, and, to a lesser extent in the exploration, development and production of
oil and natural gas. The Company owns 40 drilling rigs, 39 of which are
currently operable, and leasehold interests in approximately 48,000 gross
(8,000 net) developed acres, 354 gross (38 net) productive wells, and 64,000
gross (13,000 net) undeveloped acres. The Company's operations are conducted
in the Permian Basin in West Texas and Southeastern New Mexico, in South and
Southeast Texas, primarily in the Austin Chock Trend, and in the Hardeman Basin
in North Texas.
RECENT MERGER ACQUISITION
On July 30, 1996, the Company acquired Tucker Drilling Company, Inc.
("Tucker") pursuant to a merger of Tucker into a wholly-owned subsidiary of the
Company (the "Merger"). As a result of the Merger, Tucker became a
wholly-owned subsidiary of the Company operating under the name "Patterson
Drilling Company." A total of 1,577,514 shares of Common Stock of the Company
were issued to the stockholders of Tucker pursuant to the Merger, and an
additional 74,592 shares of Common Stock were reserved for issuance upon
exercise of Tucker stock options outstanding on the date of the Merger. The
Tucker stock options were assumed by the Company as a part of the Merger.
Tucker was engaged in the onshore contract drilling for oil and natural gas
and, to a lesser extent, in the exploration, development and production of oil
and gas. At the time of the Merger, Tucker owned 13 drilling rigs and
interests in developed and undeveloped oil and gas properties. Tucker's
contract drilling operations were conducted in West and North Texas in the
Permian and Hardeman Basins, and its oil and gas properties were located
primarily in West Texas. Tucker's drilling rigs and oil and gas properties are
included in the drilling rig and oil and gas property information set forth
under "The Company," above.
RISK FACTORS
In addition to the other information contained in, or incorporated by
reference into, this Prospectus, prospective purchasers in this offering should
carefully consider the following factors relating to the Company and its
businesses and the oil and gas industry when evaluating an investment in the
shares offered hereby.
VOLATILITY OF OIL AND NATURAL GAS PRICES. The Company's revenue,
profitability and future rate of growth are substantially dependent upon
prevailing prices for oil and natural gas, both with respect to its contract
drilling operations and its oil and gas operations. In recent years, oil and
gas prices and, therefore, the level of drilling, exploration, development and
production, have been extremely volatile. Prices are affected by market supply
and demand factors as well as actions of state and local agencies, the United
States, and foreign governments and international cartels. All of these
factors are beyond the control of the Company. Any significant or extended
decline in oil and/or natural gas prices will have a material adverse effect on
the Company's financial condition and operations and could impair access to
sources of capital.
MARKET CONDITIONS FOR CONTRACT DRILLING SERVICES. Except for occasional
upturns, the market for onshore contract drilling services has been depressed
since mid-1982, when crude oil and natural gas prices generally weakened. A
particularly sharp decline in demand for contract drilling services occurred in
1986 because of the world-wide collapse in oil prices (to approximately $10.00
per barrel in April 1986 in the United States). Since this time, there have
been substantially more rigs available than necessary to meet demand in most
operating and geographic segments of the industry. As a result, profit margins
for drilling contractors have been difficult to sustain. In addition to
adverse effects that future declines in demand could have on the Company,
ongoing movement or reactivation of onshore drilling rigs or new construction
of rigs could adversely affect contract drilling rates and utilization levels,
even in an environment
4
<PAGE> 7
of stronger oil and natural gas prices and increased drilling activity. The
Company cannot predict either the future level of demand for its contract
drilling services or future conditions in the contract drilling industry.
MANAGEMENT OF GROWTH. The Company has experienced rapid growth since its
IPO in November 1993, particularly in its contract drilling segment, and
intends to further expand its drilling fleet through selected acquisition
and/or mergers. Continued rapid growth can be expected to place a significant
strain on the Company's management, operations, employees and resources. There
can be no assurance that the Company will be able to manage growth effectively.
If the Company is unable to do so, its business, results of operations or
financial condition could be materially adversely affected.
SHORTAGE OF DRILL PIPE IN THE CONTRACT DRILLING INDUSTRY. Currently
there is a substantial shortage of drill pipe in the onshore contract drilling
industry in the United States. This shortage has caused the price of drill
pipe to increase significantly over the past 18 months and has required orders
for drill pipe to be placed at least 150 to 180 days in advance of expected
use. The price increase and the delay in delivery caused the Company to
substantially increase capital expenditures in its contract drilling segment
over the 27-month period ending approximately June 30, 1996, primarily with
respect to new drill pipe purchases. To date, the Company has been unable to
increase contract drilling rates to offset the increased capital costs. If the
Company is unable to increase its contract drilling rates to offset these
increased capital costs, the Company's contract drilling segment and its
operations because of higher levels of depreciation, would be further adversely
affected. In addition, should the shortage continue, the Company may be unable
to obtain the drill pipe required for its contract drilling operations, and its
oil and gas operations could be impaired because of the inability, or delays in
the ability, to drill wells in which the Company has a leasehold interest.
INDEBTEDNESS--CONSEQUENCE OF FAILURE TO SERVICE. All of the Company's
drilling rigs and certain of its developed oil and gas properties are pledged
as collateral for the Company's indebtedness for borrowed money. This
indebtedness, totalling approximately $15,900,000 at June 30, 1996, is recourse
indebtedness. The Company expects to continue to borrow money (if available)
from time to time in the future for general corporate purposes, which may
include acquisitions of drilling rigs and related equipment, and for oil and
gas leasehold acquisition, exploration and development. Any such borrowings
would also be recourse indebtedness, collateralized by assets of the Company.
The Company's ability to repay its indebtedness could be materially adversely
affected by a decline in general economic conditions in the oil and gas
industry or by unsuccessful results in the Company's contract drilling or oil
and gas activities. The inability of the Company to meet its debt obligations
could result in foreclosure actions against the Company and loss of the
collateralized assets and/or bankruptcy. In addition, two of the loan
agreements relating to this indebtedness contains certain financial covenants,
including maintenance of certain financial ratios. Failure to comply with
these covenants could result in default, which in turn could cause the loan to
be declared immediately due and payable.
RELIANCE ON KEY PERSONNEL. The Company is highly dependent upon its
executive officers and key employees. The unexpected loss of the services of
any of these individuals, particularly Cloyce A. Talbott or A. Glenn Patterson,
the Chief Executive Officer and the President of the Company, respectively,
could have a detrimental effect on the Company. The Company has no employment
agreements with any of its executive officers. The Company maintains for its
benefit key man insurance on the lives of Messrs. Talbott and Patterson in the
amount of $3 million each.
RISKS OF OIL AND GAS EXPLORATION, DEVELOPMENT AND PRODUCTION. The search
for oil and gas often results in unprofitable efforts, not only from dry holes,
but also from wells which, though productive, do not produce oil or gas in
sufficient quantities to return a profit on the costs incurred. No assurance
can be given that any oil or gas located by the Company in the future will be
in commercial quantities (revenues in excess of lease operating expenses). In
addition, the cost of drilling, completing and operating wells is often
uncertain, and drilling may be delayed or cancelled as a result of many
factors, including unacceptably low oil and gas prices, oil and gas property
title problems, inclement weather conditions and financial instability of well
operators and working interest owners. Furthermore, the availability of a
ready market for the Company's oil and gas depends on numerous factors beyond
its control including demand for and supply of oil and gas, general economic
conditions, proximity of gas reserves to pipelines, weather conditions and
government regulation.
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<PAGE> 8
COMPETITION. Both lines of business in which the Company engages are
highly competitive. The Company encounters intense competition in its contract
drilling operations from other drilling contractors. Competition in contract
drilling involves such factors as drilling rates, availability and condition of
drilling rigs and equipment, reputation and customer relations. The Company
faces strong competition from major oil companies, independent oil and gas
companies and individual producers and operators in acquiring oil and gas
leases for exploration and development. Many of the competitors in each of the
Company's lines of business have substantially greater financial and other
resources than the Company.
OPERATING HAZARDS AND UNINSURED RISKS. Contract drilling and oil and gas
exploration, development and production are subject to a number of risks and
hazards which could cause serious injury or death to persons, suspension of
drilling operations and serious damage to equipment or property of others and,
in addition to environmental damage, could cause substantial damage to
producing formations and surrounding areas. Damages to the environment could
result from the Company's operations, particularly through oil spills, gas
leaks, discharges of toxic gases or extensive uncontrolled fires. In addition,
the Company could become subject to liability for reservoir damages. The
occurrence of a significant event, including pollution or environmental damage,
could materially affect the Company's operations and financial condition.
Although the Company believes that it is adequately insured against normal and
foreseeable risks in its operations in accordance with industry standards, such
insurance may not be adequate to protect the Company against liability from all
consequences of well disasters, extensive fire damage or damage to the
environment. No assurance can be given that the Company will be able to
maintain adequate insurance in the future at rates it considers reasonable or
that any particular types of coverage will be available. The Company currently
has general liability coverage of $1,000,000 per occurrence with a $3,000,000
aggregate and excess liability and umbrella coverages of up to $20,000,000 per
occurrence with a $20,000,000 aggregate. In addition, the Company's workers
compensation insurance policy has a $100,000 deductible per occurrence, which,
if there were multiple claims, could have a material adverse effect upon the
Company's financial condition and operations. Furthermore, a portion of the
Company's contract drilling is done on a turnkey basis, which involves
substantial economic risks.
ENVIRONMENTAL AND OTHER GOVERNMENTAL REGULATION MATTERS. The Company's
operations are subject to numerous domestic laws and regulations that relate
directly or indirectly to the drilling of oil and gas wells, including, without
limitation, laws and regulations controlling the discharge of materials into
the environment, requiring removal and cleanup under certain circumstances or
otherwise relating to the protection of the environment. Laws and regulations
protecting the environment have generally become more stringent in recent
years, and may in certain circumstances impose strict liability, rendering a
person liable for environmental damage without regard to negligence or fault on
the part of such person. To date, the Company has not been required to expend
significant resources in order to comply with applicable environmental laws and
regulations nor has it incurred any fines or penalties for noncompliance.
However, compliance costs under existing legal requirements and under any new
requirements could become material, and the Company could incur liability in
the future for noncompliance. Additional matters subject to governmental
regulation include discharge permits for drilling operations, performance
bonds, reports concerning operations, spacing of wells, unitization and pooling
of properties and taxation. From time to time, regulatory agencies have
imposed price controls and limitations on production by restricting the rate of
flow of oil and gas wells below actual production capacity in order to conserve
supplies of oil and gas.
UNCERTAINTY OF OIL AND NATURAL GAS RESERVE ESTIMATES. Estimates of the
Company's proved developed reserves and future net revenues are based on
engineering reports prepared by an independent petroleum engineer. These
estimates are based on several assumptions that the Commission requires oil and
gas companies to use, including for example, constant oil and natural gas
prices. Such estimates are inherently imprecise indications of future net
revenues. Actual future production, revenues, taxes, production costs and
development costs may vary substantially from those assumed in the estimates.
Any significant variance could materially affect the estimates. In addition,
the Company's reserves might be subject to upward or downward adjustment based
on future production, results of future exploration and development, prevailing
oil and natural gas prices and other factors.
CONFLICTS OF INTEREST. Certain of the Company's directors and executive
officers and their respective affiliates have participated and may continue to
participate from time to time in oil and gas prospects and properties in which
the Company has an interest. Conflicts of interest may arise between such
persons and the Company as to the advisability
6
<PAGE> 9
of conducting drilling and recompletion activities on these properties. Of the
232 wells operated by the Company at June 30, 1996, the Company's directors,
officers and/or their respective affiliates were working interest owners in
approximately 100 wells.
NO PAST DIVIDENDS. The Company has paid no cash dividends on the Common
Stock in the past and does not intend to do so in the foreseeable future. The
terms of an existing $4,000,000 bank line of credit prohibits the payment of
dividends by the Company without the prior written consent of the bank.
ANTI-TAKEOVER MEASURES. The Company, a Delaware corporation, is subject
to the General Corporation Law of the State of Delaware, including Section 203,
an anti-takeover law enacted in 1988. The Company has also enacted certain
anti-takeover measures. As a result of these provisions, potential acquirors
of the Company may find it more difficult or be discouraged from attempting to
effect an acquisition transaction with the Company, thereby possibly depriving
holders of the Company's securities of certain opportunities to sell or
otherwise dispose of such securities at above- market prices pursuant to such
transactions.
SUPERIOR RIGHTS OF PREFERRED STOCK. The Company has a class of
authorized Preferred Stock. The Board of Directors, without stockholder
approval, may issue shares of the Preferred Stock with rights and preferences
adverse to the voting power or other rights of the holders of the Common Stock.
No Preferred Stock has been issued.
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<PAGE> 10
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares.
DIVIDEND POLICY
The Company has not paid cash dividends on the Common Stock in the past
and does not expect to pay any cash dividends on the Common Stock in the
foreseeable future. The Company instead intends to retain its earnings to
support the operations and growth of its businesses. Any future cash dividends
would depend on future earnings, capital requirements, the Company's financial
condition and other factors deemed relevant by the Board of Directors. In
addition, the terms of an existing $4,000,000 bank line of credit prohibits
payment of dividends by the Company without the prior written consent of the
bank.
SELLING STOCKHOLDERS
The following table sets forth certain information with respect to the
Selling Stockholders and the beneficial ownership of Common Stock by them
before and after the offering being made hereby. Such information was provided
to the Company by the Selling Stockholders for inclusion in this Prospectus.
Additional information concerning the Selling Stockholders and the Shares is
set forth in the notes to the table.
<TABLE>
<CAPTION>
Shares Being
Shares Owned Offered Shares Owned
Name Before Offering in the Offering After Offering(1)
---- ---------------------- --------------- --------------------
Number Percent Number Percent
------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Gregory Caputo(2) . . . . . . . . . . . . . 505(2) (3) 505 -0- -0-
Stephen J. De Groat(2) . . . . . . . . . . 10,574(2) (3) 3,791 6,783 (3)
George Eggers III(2) . . . . . . . . . . . 1,011(2) (3) 1,011 -0- -0-
Michael Golden(2) . . . . . . . . . . . . . 4,961(2) (3) 4,961 -0- -0-
Alan P. Hans(2) . . . . . . . . . . . . . . 505(2) (3) 505 -0- -0-
Lennox Securities, Inc.(2) . . . . . . . . 15,038(2) (3) 15,038 -0- -0-
Ben Lichtenberg(2) . . . . . . . . . . . . 7,056(2) (3) 7,056 -0- -0-
Nicholas F. Saunders(2) . . . . . . . . . . 505(2) (3) 505 -0- -0-
Steven Schwartz(2) . . . . . . . . . . . . 2,205(2) (3) 2,205 -0- -0-
Perry E. Esping(4) . . . . . . . . . . . . 172,500(4) 3.53 97,500 75,000 1.54
Peter Hoffman(5) . . . . . . . . . . . . . 100,000(5) 2.04 100,000 -0- -0-
Shimmerlik Corporate Communications,
Inc.(5) . . . . . . . . . . . . . . . . . 35,000(5) (3) 25,000 10,000 (3)
</TABLE>
- -----------------
(1) Assumes all Shares offered hereby are sold.
(2) These Shares were issued pursuant to the exercise of Redeemable Warrants
underlying warrants initially issued to the underwriters of the Company's
initial public offering ("IPO") in November 1993 (the "IPO
Underwriters"). Such warrants, which contained certain registration
rights, were transferred to the persons named in the table by the IPO
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<PAGE> 11
Underwriters in April 1994. Each of such persons was an officer or
otherwise affiliated with one of the two IPO Underwriters at the time of
the IPO. These persons exercised the Redeemable Warrants in November
1995 and demanded registration of their Shares in July 1996. Pursuant to
the exercise of the initial warrants, the Company is obligated to pay the
fees and expenses incurred by it incident to the offering of these
Shares. The terms of the registration rights of the IPO Underwriters
prohibited joinder of any other shares of the Company in any registration
demanded by the IPO Underwriters or their assignees. Waiver of this
prohibition was granted by the persons named in the table for the Shares
held by Perry E. Esping and the Shares underlying the options held by
Peter Hoffman and Shimmerlik Corporate Communications, Inc. See Notes
(4) and (5) below.
(3) Represents less than 1% of the outstanding shares of Common Stock.
(4) Seller to the Company of three drilling rigs and related drilling
equipment in May 1995 in consideration for 97,500 shares of Common Stock
and warrants to purchase an additional 75,000 Shares of Common Stock.
The 172,500 Shares stated in the table as owned by Mr. Esping includes
the 75,000 Shares underlying the warrants. As a part of the transaction
with Mr. Esping, the Company granted certain registration rights to him
with regard to the 97,500 Shares and the 75,000 Shares underlying the
warrants.
(5) During 1994 and 1995, the Company issued options covering a total of
125,000 Shares of Common Stock to the persons named in the table as
partial compensation for public relation services rendered by them to the
Company. The exercise price of the options range from $7.50 to $9.63 per
share. All options are currently exercisable. The Shares stated as
owned by Peter Hoffman ("Hoffman") and Shimmerlik Corporate
Communications, Inc. ("Shimmerlik") represent the Shares underlying the
options. The Shares stated as owned by Shimmerlik Corporate
Communications, Inc. ("Shimmerlik") represent 25,000 Shares underlying
the options and 10,000 Shares owned by an individual retirement account
of the President and sole stockholder of Shimmerlik. The Shares stated
as being offered in this offering by Shimmerlik represent the Shares
underlying the options issued to Shimmerlik. None of the Shares stated
as owned by Hoffman or Shimmerlik and being offered in this offering will
be sold in this offering unless the related options are first exercised
and the related exercise price is paid to the Company. Neither Hoffman
nor Shimmerlik was granted any registration rights with respect to their
options or the Shares underlying the options. The registration herein of
the Shares underlying the options was voluntarily made by the Company.
9
<PAGE> 12
PLAN OF DISTRIBUTION
The distribution of the Shares by the Selling Stockholders may be
effected from time to time in one or more transactions (which may involve block
transactions) on the Nasdaq National Market or otherwise, in negotiated
transactions, or a combination of such methods of sale, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. The Selling Stockholders may effect such
transactions by selling the Shares to or through broker dealers (which may
include the IPO Underwriters), and such broker-dealers may receive compensation
in the form of underwriting discounts, concessions or commissions from the
Selling Stockholders or purchasers of Shares for whom they may act as agent
(which compensation may be in excess of customary commissions). Such brokers
or dealers may be deemed to be "underwriters' within the meaning of the
Securities Act in connection with such sales and any commissions received by
them may be deemed to be underwriting compensation.
In accordance with applicable rules and regulations promulgated under the
Exchange Act, any person engaged in the distribution of any of the Shares may
not simultaneously engage in market activities with respect to any of the
Common Stock for a period of nine business days prior to the commencement of
such distribution. In addition and without limiting the foregoing, the Selling
Stockholders may be subject to applicable provisions of the Exchange Act and
the rules and regulations promulgated thereunder, including, without
limitation, Rules 10b-2, 10b-6 and 10b-7, which provisions may limit the timing
of purchases and sales of Shares by the Selling Stockholders.
The Company and the Selling Stockholders have agreed to indemnify each
other against certain liabilities, including liabilities, under the Securities
Act.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for the
Company by Baker & Hostetler, Denver, Colorado.
EXPERTS
The consolidated financial statements of the Company (i) as of December
31, 1994 and 1995, and for each of the three years in the period ended December
31, 1995, which are included in the Company's Annual Report on Form 10-KSB for
the year ended December 31, 1995, and (ii) the supplemental consolidated
financial statements of the Company as of December 31, 1994 and 1995, and for
each of the three years in the period ended December 31, 1995, which are
included in the Company's Current Report on Form 8-KA (Amendment No. 2) dated
July 30, 1996, incorporated in this Prospectus by reference have been audited
by Coopers & Lybrand L.L.P., independent accountants, given on the authority of
that firm as experts in accounting and auditing.
The financial statements of Tucker, as of March 31, 1996 and 1995, and
for each of the years in the three-year period ended March 31, 1996,
incorporated by reference in this Prospectus and elsewhere in the Registration
Statement, have been audited by Arthur Andersen LLP, independent public
accountants, to the extent and for the periods indicated in their reports, and
are incorporated herein by reference in reliance upon the authority of said
firm as experts in giving said reports.
10
<PAGE> 13
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Capitalized terms used but not defined in Part II have the meanings
ascribed to them in the Prospectus included as part of this Registration
Statement.
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses expected to be incurred in
connection with the issuance and distribution of Common Stock registered
hereby, all of which expenses, except for the Commission registration fee and
the NASD filing fee, are estimates:
<TABLE>
<CAPTION>
DESCRIPTION AMOUNT
----------- ------
<S> <C>
Securities and Exchange Commission registration fee . . . . . . . . . . . . . . . . . . . . . $1,368.59
Accounting fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
Legal fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
Blue Sky fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
Miscellaneous expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
---------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
=========
</TABLE>
------------------
* To be completed by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The DGCL provides for indemnification by a corporation of costs incurred
by directors, employees and agents in connection with an action, suit or
proceeding brought by reason of their position as a director, employee or
agent. The person being indemnified must have acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the corporation. The DGCL provides that a corporation may advance payment of
expenses. The DGCL further provides that the indemnification and advancement
of expenses provisions of the DGCL will not be deemed exclusive of any other
rights to which these indemnifications or advancements of expenses may be
entitled under bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action under official capacity and as to
action in another capacity when holding such office.
In addition to the general indemnification section, Delaware law provides
further protection for directors under Section 102(b)(7) of the DGCL. This
section was enacted in June 1986 and allows a Delaware corporation to include
in its certificate of incorporation a provision that eliminates and limits
certain personal liability of a director for monetary damages for certain
breaches of the director's fiduciary duty of care, provided that any such
provision does not (in the words of the statute) do any of the following:
"eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of this
Title [dealing with willful or negligent violation of the statutory
provision concerning dividends and stock purchases and redemptions], or
(iv) for any transaction from which the director derived an improper
personal benefit. No such provision shall eliminate or limit the
liability of a director for any act or omission occurring prior to the
date when such provision becomes effective...."
II-1
<PAGE> 14
The Board of Directors is empowered to make other indemnification as
authorized under any bylaw, agreement, the Certificate of Incorporation, Bylaws
or corporate resolution so long as the indemnification is consistent with the
DGCL.
The Company's Certificate of Incorporation provides that, to the fullest
extent permitted by the DGCL, a director of the Company will not be liable to
the Company or its stockholders for monetary damages for breach of fiduciary
duty as a director. The Company's Bylaws provide that to the extent that a
director or officer of the Company is successful on the merits of defense of a
suit or proceeding brought against him by reason of the fact that he is a
director or officer of the Company, he shall be indemnified against expenses
(including attorneys' fees) reasonably incurred in connection with such action.
In other circumstances, a director or officer of the Company may be indemnified
against expenses (including attorneys' fees), 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 and not opposed to the best interest of the
Company, and, with respect to a criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful; however, in an action or
suit by or in the right of the Company to procure a judgment in its favor, such
person will not be indemnified if he has been adjudged to be liable to the
Company unless and only to the extent that the Delaware Court of Chancery or
the court in which such action or suit was brought determines upon application
that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
deems proper. A determination that indemnification of a director or officer is
proper will be made by a disinterested majority of the Company's Board of
Directors, by independent legal counsel or by the stockholders of the Company.
The Company's Bylaws also provide that the Company may advance the payment of
expenses and that the indemnification and advancement of expenses provisions of
the Bylaws are nonexclusive. The Company maintains director and officer
liability insurance covering director and officer indemnification.
ITEM 16. EXHIBITS.
The following exhibits are filed herewith or incorporated by reference
herein:
<TABLE>
<CAPTION>
Exhibit Item 601 Cross
Number Reference Document as Form S-3 Exhibit
------ --------------- ----------------------------
<S> <C> <C>
5.1 5 Opinion of Baker & Hostetler re legality of the Shares to be offered
23.1 23 Consent of Coopers & Lybrand L.L.P.
23.2 23 Consent of Arthur Andersen LLP
23.3 23 Consent of Baker & Hostetler (included in Exhibit 5.1)
24.1 24 Powers of Attorney (included on the signature page hereto)
</TABLE>
II-2
<PAGE> 15
ITEM 17. UNDERTAKINGS.
1. The Company hereby undertakes:
(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, unless the information
required to be included in such post-effective amendment is
contained in a periodic report filed by the Company pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of
1934 and incorporated herein by reference;
(ii) to reflect in the Prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement,
unless the information required to be included in such
post-effective amendment is contained in a periodic report filed
by the Company pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 and incorporated herein by
reference;
(iii) to include any material information with respect
to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information
in the Registration Statement;
Provided, however, that paragraphs (1)(a)(i) and
(1)(a)(ii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Company pursuant to
Section 13 of Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in this Registration
Statement.
(b) That, for the purposes 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.
(c) 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.
(d) That, for purposes of determining any liability under
the Securities Act of 1933, each filing of the Company's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in this 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.
2. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Securities Act") may be permitted to directors,
officers and controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Company of expenses incurred or paid by a director, officer
or controlling person of the Company 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 Company will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-3
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Snyder, State of Texas on the 3rd day of October,
1996.
PATTERSON ENERGY, INC.
By: /s/ A. Glenn Patterson
------------------------------------
A. Glenn Patterson, President
Each of the undersigned officers and directors of Patterson Energy, Inc.
hereby appoints Cloyce A. Talbott, as attorney and agent for the undersigned,
with full power of substitution, for and in the name, place and stead of the
undersigned, to sign and file with the Securities and Exchange Commission under
the Securities Act of 1933 any and all amendments (including post-effective
amendments) and exhibits to this Registration Statement and any and all
applications, instruments or documents to be filed with the Securities and
Exchange Commission pertaining to the registration of the securities covered
hereby, with full power and authority to do and perform any and all acts and
things whatsoever requisite and necessary or desirable.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed as of October 3, 1996, by the
following persons in the capacities indicated:
<TABLE>
<S> <C>
/s/ Cloyce A. Talbott Chairman of the Board, Director and Chief
--------------------------------------------------- Executive Officer
Cloyce A. Talbott
Principal Executive Officer
/s/ A. Glenn Patterson President, Chief Operating Officer and Director
---------------------------------------------------
A. Glenn Patterson
/s/ Robert C. Gist Director
---------------------------------------------------
Robert C. Gist
Director
---------------------------------------------------
Kenneth E. Davis
Director
---------------------------------------------------
Vincent A. Rossi, Jr.
/s/ James C. Brown Vice President--Finance, Secretary and Treasurer
--------------------------------------------------- and Chief Financial Officer
James C. Brown
(Principal Accounting Officer)
</TABLE>
II-4
<PAGE> 17
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION Page No.
------ ----------- --------
<S> <C>
5.1 Opinion of Baker & Hostetler re legality of Shares to be offered
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Arthur Andersen LLP
23.3 Consent of Baker & Hostetler (included in Exhibit 5.1)
24.1 Powers of Attorney (included in the signature page hereto)
</TABLE>
<PAGE> 1
EXHIBIT 5.1
October 3, 1996
Patterson Energy, Inc.
4510 Lamesa Highway
Snyder, Texas 79549
Gentlemen:
We have acted as counsel for Patterson Energy, Inc. (the
"Company") in connection with the registration under the Securities Act of 1933
(the "Act") on Form S-3 of a total of 258,077 shares (the "Shares") of the
Company's issued and outstanding Common Stock, $0.01 par value, to be sold by
certain stockholders of the Company. The Registration Statement on Form S-3
and exhibits thereto filed with the Securities and Exchange Commission under
the Act are referred to herein as the "Registration Statement."
We have examined the Certificate of Incorporation of the Company,
the Bylaws of the Company, the Minutes of the Board of Directors and
stockholders of the Company, the applicable laws of the State of Delaware and a
copy of the Registration Statement.
Based on the foregoing and having regard for such legal
considerations as we deem relevant, we are of the opinion that the Shares have
been validly issued and are fully paid and nonassessable.
We hereby consent to the use of this opinion as part of the
Registration Statement.
Very truly yours,
/s/ Baker & Hostetler
BAKER & HOSTETLER
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement of Patterson Energy, Inc. on Form S-3 of our report dated February
28, 1996, on our audits of the consolidated financial statements of Patterson
Energy, Inc. as of December 31, 1995 and 1994, and for each of the three years
in the period ended December 31, 1995, which is included in Patterson Energy,
Inc.'s Annual Report on Form 10-KSB for the fiscal year ended December 31,
1995, and our report dated September 13, 1996, on our audits of the
supplemental consolidated financial statements of Patterson Energy, Inc. as of
December 31, 1995 and 1994, and for each of the three years in the period ended
December 31, 1995, which is included in Patterson Energy, Inc.'s Current Report
on Form 8-KA (Amendment No. 2) dated July 30, 1996. We also consent to the
reference to our firm under the caption "Experts."
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Dallas, Texas
October 3, 1996
<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 May 16, 1996,
included in the Patterson Energy, Inc., Current Report on Form 8-KA (Amendment
No. 2) dated July 30, 1996, and to all references to our firm included in this
Registration Statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
San Antonio, Texas
October 3, 1996
