<PAGE> 1
As filed with the Securities and Exchange Commission on November 4, 1997
Registration No. 33-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
________________
PATTERSON ENERGY, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 75-2504748
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)
4510 Lamesa Highway, Snyder, Texas 79549
(Address of Principal Executive Offices) (ZIP Code)
</TABLE>
PATTERSON ENERGY, INC.
NON-EMPLOYEE DIRECTORS'
STOCK OPTION PLAN, AS AMENDED(THE "PLAN")
(Full title of the plan)
CLOYCE A. TALBOTT
4510 LAMESA HIGHWAY
SNYDER, TX 79549
(Name and address of agent for service)
(915) 573-1104
(Telephone number, including area code, of agent for service)
COPIES TO:
<TABLE>
<S> <C>
JAMES C. BROWN, VICE PRESIDENT--FINANCE THOMAS H. MAXFIELD, ESQ.
4510 LAMESA HIGHWAY BAKER & HOSTETLER LLP
SNYDER, TEXAS 79549 303 EAST 17TH AVENUE, SUITE 1100
DENVER, COLORADO 80203
</TABLE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===========================================================================================================
Proposed Proposed maximum
Title of securities Amount to be maximum offering aggregate offering Amount of
to be registered registered price per share(1) price(1) registration fee
------------------- ------------------ ---------------- ------------------ ----------------
<S> <C> <C> <C> <C>
Common Stock 60,000 shares $56.00 $3,360,000 $1,019
===========================================================================================================
</TABLE>
(1) Determined in accordance with Rule 457(c) under the Securities Act of
1933, as amended.
================================================================================
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Information required by Part I to be contained in Section 10(a)
prospectus is omitted from this Registration Statement in accordance with Rule
428 adopted by the Securities and Exchange Commission under the Securities Act
of 1933 (the "Securities Act) and the Note to Part I of Form S-8.
<PAGE> 3
PROSPECTUS
60,000 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"), 60,000 shares (the "Shares") of the
Company's common stock, par value $0.01 per share (the "Common Stock"). See
"Selling Stockholders." The Shares being offered are those acquired by Selling
Stockholders upon exercise of options to purchase up to 60,000 shares of Common
Stock (the "Options") granted to Selling Stockholders under the Non-Employee
Directors' Stock Option Plan, as amended (the "Plan"), of the Company. 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 November 3, 1997, the closing sales price of the Common
Stock was $56.625 per share.
_____________________________
PROSPECTIVE PURCHASERS OF COMMON STOCK SHOULD CONSIDER CAREFULLY THE MATTERS
SET FORTH UNDER "RISK FACTORS" BEGINNING ON PAGE 4.
_____________________________
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 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."
November 4, 1997
<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).
2
<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-K for the fiscal year ended
December 31, 1996.
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997.
(c) The Company's Current Report on Form 8-K dated July 30, 1996, and
filed with the Commission on August 2, 1996, as amended by Form 8-K/A dated
July 30, 1996, and filed with the Commission on August 15, 1996, as further
amended by Form 8-K/A dated July 30, 1996, and filed with the Commission on
September 27, 1996.
(d) The Company's Current Report on Form 8-K dated January 3, 1997,
and filed with the Commission on January 16, 1997.
(e) The Company's Current Report on Form 8-K dated January 7, 1997,
and filed with the Commission on January 8, 1997.
(f) The Company's Current Report on Form 8-K dated January 27, 1997,
and filed with the Commission on February 12, 1997.
(g) The Company's Current Report on Form 8-K dated May 7, 1997, and
filed with the Commission on May 19, 1997.
(h) The Company's Current Report on Form 8-K dated June 3, 1997, and
filed with the Commission on June 11, 1997.
(i) The Company's Current Report on Form 8-K dated June 12, 1997, and
filed with the Commission on June 19, 1997, as amended by Form 8-K/A dated June
12, 1997, and filed with the Commission on August 12, 1997.
(j) The Company's Current Report on Form 8-K dated July 1, 1997, and
filed with the Commission on July 15, 1997.
(k) The Company Quarterly Report on Form 10-Q for the quarter ended
June 30, 1997, and filed with the Commission on August 14, 1997.
(l) The Company's Current Report on Form 8-K dated July 24, 1997, and
filed with the Commission on August 26, 1997.
(m) The Company's Current Report on Form 8-K dated August 5, 1997, and
filed with the Commission on August 26, 1997.
(n) 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 90 drilling rigs, 85 of which are
currently operable, and, at June 30, 1997, owner of leasehold interests in
approximately 59,750 gross (8,836 net) developed acres, 353 gross (88 net)
productive wells, and 122,029 gross (28,398 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
Chalk Trend, and in the Hardeman Basin in North Texas. The Company was
organized as a Texas corporation in January 1978 and was reorganized as a
Delaware corporation in 1993.
RECENT ACQUISITIONS
Since December 31, 1996, the Company has acquired a total of 29 drilling
rigs in three separate transactions. All of the rigs were fully operable at
the time of acquisition. The rigs are mechanical with depth ratings from 7,000
to 15,000 feet. These acquisitions have expanded the Company's drilling rig
fleet from 60 drilling rigs to 90 drilling rigs (85 of which are currently
operable). The following subparagraphs set forth a brief description of each
of the transactions:
-- Five drilling rigs, together with related equipment, two rig-
hauling trucks, an office, shop and a yard located in Hobbs, New
Mexico, were acquired in April 1997 from a privately-held company
based in Hobbs in consideration for a total of $5.5 million in
cash. These five rigs were added to the Company's drilling rig
fleet during April.
-- Twenty-one drilling rigs, together with related equipment, rig-
hauling trucks and trailers and a yard and shop located in
Abilene, Texas, were acquired from Wes-Tex Drilling Company
("Wes-Tex") in June 1997 for a purchase price of approximately
$35.4, consisting of $25 million in cash, 566,000 shares of Common
Stock of the Company valued at $15.75 per share, and a three-year
stock purchase warrant valued at $3.12 per share to purchase an
additional 400,000 shares of the Company's Common Stock
exercisable at $16.00 per share and approximately $190,000 of
other direct costs incurred relative to the transaction. These 21
rigs were added to the Company's drilling rig fleet during June.
Wes-Tex is a privately held company based in Abilene, Texas.
-- Three drilling rigs, together with related drilling equipment and
a vehicle were acquired in August 1997 from a privately held
company based in Midland, Texas in consideration for a cash
payment of $4.25 million. These rigs were added to the Company's
drilling rig fleet in August.
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 natural 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 natural gas operations. In recent years,
oil and natural 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 U.S. 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. The contract drilling
business has experienced increased demand for drilling services since
approximately 1995 due to stronger oil and natural gas prices. However, the
market for onshore contract drilling services was generally depressed between
mid-1982, when crude oil and natural gas prices began to weaken, and
approximately 1995. A particularly sharp decline in demand for contract
drilling services occurred in 1986
4
<PAGE> 7
because of the worldwide collapse in oil prices (to approximately $10.00 per
Bbl in April 1986 in the U.S.). Since this time and except during the
occasional upturns, there have been substantially more drilling rigs available
than necessary to meet demand in most operating and geographic segments of the
domestic drilling industry. As a result, drilling contractors have had
difficulty sustaining profit margins. 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 drilling rigs
could adversely affect rig utilization rates and pricing, even in an
environment 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.
SEVERE SHORTAGE OF DRILL PIPE IN THE CONTRACT DRILLING INDUSTRY. There
continues to be a severe shortage of drill pipe in the contract drilling
industry in the U.S. This shortage has caused the price of drill pipe to
increase significantly over the past approximate 40 months and has required
orders for new drill pipe to be placed at least one year in advance of expected
use. The price increase and the delay in delivery has caused the Company to
substantially increase capital expenditures in its contract drilling segment
over the past approximate 40 months, primarily with respect to new drill pipe
purchases. In the event the shortage continues, the Company may be unable to
obtain the drill pipe required for its contract drilling operations.
RECENT RAPID GROWTH; ASSOCIATED RISKS. The Company has experienced rapid
and substantial growth over the past four years, particularly in its contract
drilling segment, and, if favorable opportunities arise in the future, intends
to further expand its drilling fleet through selected acquisitions. Continued
growth could strain the Company's management, operations, employees and
resources. There can be no assurance that the Company will be able to manage
growth effectively or that it will be successful in maintaining the market
share attributable to operable drilling rigs acquired by the Company. If the
Company is unable to manage its growth, its business, results of operations or
financial condition could be materially adversely affected.
NO ASSURANCE OF ADDITIONAL GROWTH THROUGH ACQUISITIONS. The Company's
growth has been enhanced materially by strategic acquisitions that have
substantially increased the Company's drilling rig fleet. One element of the
Company's strategy is to make acquisitions in markets in which it currently
operates. While the Company believes that the land drilling industry is highly
fragmented and that significant acquisition opportunities are available, there
can be no assurance that suitable acquisition candidates can be found, and the
Company is likely to face competition from other companies for available
acquisition opportunities. In addition, if the prices paid by buyers of
drilling rigs remain at current levels or continue to rise, the Company may
find fewer acceptable acquisition opportunities. There can be no assurance
that the Company will have sufficient capital resources to complete
acquisitions, that acquisitions can be completed on terms acceptable to the
Company or that any completed acquisition would improve the Company's financial
condition, results of operations, business or prospects in any material manner.
CURRENT SHORTAGES OF QUALIFIED DRILLING RIG PERSONNEL. Increases in
domestic drilling demand since mid-1995 and recent increases in contract
drilling activity have resulted in a shortage of qualified drilling rig
personnel in the industry. If the Company is unable to attract and retain
sufficient qualified personnel, its ability to market and operate its drilling
rigs will be restricted. Further, labor shortages could result in wage
increases, which could reduce the Company's operating margins.
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 key man
insurance on the lives of Messrs. Talbott and Patterson in the amount of $3
million each.
RISKS OF OIL AND NATURAL GAS EXPLORATION, DEVELOPMENT AND PRODUCTION. The
search for oil and natural gas often results in unprofitable efforts, not only
from dry holes, but also from wells which, though productive, do not produce
oil or natural gas in sufficient quantities to return a profit on the costs
incurred. No assurance can be given that any oil or natural gas reserves
located by the Company in the future will be commercially productive. In
addition, the cost of drilling, completing and operating wells is often
uncertain, and drilling may be delayed or canceled as a result of many factors,
including unacceptably low oil and natural gas prices, oil and natural gas
property title problems, inclement weather conditions and financial instability
of well operators and working interest owners. Furthermore, the availability
of
5
<PAGE> 8
a ready market for the Company's oil and natural gas depends on numerous
factors beyond its control, including demand for and supply of oil and natural
gas, general economic conditions, proximity of natural gas reserves to
pipelines, weather conditions and government regulation.
COMPETITION. The Company encounters intense competition in its contract
drilling operations from other drilling contractors. The competitive
environment for contract drilling services 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 natural gas companies and individual producers
and operators in acquiring oil and natural 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
natural gas activities 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. Furthermore, a
portion of the Company's contract drilling is done on a turnkey basis, which
involves substantial economic risks. Under turnkey drilling contracts, the
Company contracts to drill a well to a contract depth under specified
conditions for a fixed price. The risks to the Company under this type of
drilling contract are substantially greater than on a well drilled on a daywork
or footage basis since the Company assumes most of the risks associated with
the drilling operations generally assumed by the operator of the well in a
daywork or footage contract, including risk of blowout, machinery breakdowns
and abnormal drilling conditions. Accordingly, if severe drilling problems are
encountered in drilling wells under a turnkey contract, the Company could
suffer substantial losses associated with that contract. For the year ended
December 31, 1996, and six months ended June 30, 1997, the percentage of the
Company's contract drilling operation revenues attributable to turnkey
contracts was 8.0% and 5.6%, respectively.
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 natural gas wells, including
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, disposal of produced water 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 natural gas wells below actual
production capacity in order to conserve supplies of oil and natural gas. In
addition, although the Company performed visual inspections on three yards
acquired by it during 1996, the Company did not obtain Phase I environmental
reports on any of the yards, which reports, if obtained, may have revealed
potential environmental liabilities not otherwise apparent from the Company's
visual inspection. The Company typically does not have indemnifications from
the respective sellers of the yards for preclosing environmental liabilities.
Accordingly, any loss resulting from environmental liabilities from any of
these yards, or from any other properties acquired or sold by the Company or
its predecessors in interest, may be borne by the Company.
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 based upon a
6
<PAGE> 9
review of production histories and other geologic, economic, ownership and
engineering data provided by the Company. These estimates are based on several
assumptions that the Securities and Exchange Commission requires oil and
natural 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 natural 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 of conducting drilling and
recompletion activities on these properties. Of the 249 wells operated by the
Company at March 31, 1997, the Company's directors, officers and/or their
respective affiliates were working interest owners in approximately 106 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 $30 million bank line of credit prohibit 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, including a stockholder rights plan. As a result of these
provisions, potential acquirers 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. See "Description of Capital
Stock."
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. However, such number of shares of Preferred Stock as is
sufficient to permit the exercise in full of the Rights (approximately 148,000
shares as of the date of this Prospectus) has been reserved for issuance upon
exercise of the Rights described under "Description of Capital Stock -
Stockholder Rights Plan."
SHARES ELIGIBLE FOR FUTURE SALE. As of the date of this Prospectus, the
Company had 14,807,266 shares of Common Stock outstanding, 14,104,765 shares of
which are freely tradable without substantial restriction or the requirement of
future registration under the Securities Act. Of the remaining 702,501 shares,
690,501 shares are held by "affiliates" of the Company, as that term is defined
in Rule 144 under the Securities Act, and may be sold subject to the provisions
of Rule 144, and 12,000 shares are eligible for sale under the Registration
Statement. In addition, the Company has reserved for issuance 600,000 shares
of Common Stock pursuant to the exercise of outstanding options and warrants
variously held by three non-affiliated persons. These shares will be eligible
for sale under a shelf registration statement to be filed by the Company with
the Commission on or about the date of this Prospectus. Also, 250,368 shares
of Common Stock issuable upon the exercise of outstanding employee and non-
employee director options that are vested (including 22,000 shares issuable
upon exercise of Options outstanding under the Plan) are eligible for sale in
the public market and 396,336 shares of Common Stock issuable upon exercise of
such options that are not vested (including 6,000 shares issuable upon exercise
of Options outstanding under the Plan) will become eligible for sale in the
public market as such options become vested and are exercised. Sales of
substantial amounts of common stock in the public market could adversely affect
the prevailing market price of the Common Stock.
No prediction can be made as to the effect, if any, that future sales of
shares or the availability of shares for sale will have on the market price for
Common Stock prevailing from time to time. Sales of substantial amounts of
Common Stock in the public market, or the perception of the availability of
shares for sale, could adversely affect the prevailing market price of the
Common Stock and could impair the Company's ability to raise capital through
the sale of its equity securities.
7
<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 $30 million bank line of credit prohibit
payment of dividends by the Company without the prior written consent of the
bank.
SELLING STOCKHOLDERS
The following table sets forth certain information as of October 31, 1997,
with respect to the Selling Stockholders and the beneficial ownership of Common
Stock by each of 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. The
Company may supplement this Prospectus from time to time to disclose the names,
relationships to the Company and holding of shares of the existing or
additional Selling Stockholders.
<TABLE>
<CAPTION>
Shares Owned Shares Owned
Before Offering Shares Being After Offering(1)
----------------------------- Offered -----------------
Name Number Percent In the Offering Number Percent
---- ------ ------- --------------- ------ -------
<S> <C> <C> <C> <C> <C>
Kenneth E. Davis(2) . . . . . . . . 77,625(3) * 12,000 74,215 *
Robert C. Gist(2) . . . . . . . . . 37,886(4) * 12,000 26,886 *
Vincent A. Rossi, Jr.(2) . . . . . 10,000(5) * 10,000 -0- -0-
</TABLE>
_________
* Less than 1%.
(1) Assumes all Shares offered hereby are sold.
(2) A director of the Company.
(3) Includes 12,000 Shares acquired by Mr. Davis pursuant to exercise of
Options granted under the Plan, but does not include an additional 2,000
Shares purchasable under Options exercisable more than 60 days from the
date hereof.
(4) Includes 12,000 Shares purchasable under Options currently exercisable
under the Plan, but does not include an additional 2,000 Shares purchasable
under Options exercisable more than 60 days from the date hereof.
(5) Includes 10,000 Shares purchasable under Options currently exercisable
under the Plan, but does not include an additional 2,000 Shares purchasable
under Options exercisable more than 60 days from the date hereof.
8
<PAGE> 11
DESCRIPTION OF CAPITAL STOCK
The Company is authorized to issue (i) 18,000,000 shares of Common Stock,
$0.01 Par Value, of which 14,807,266 shares are issued and outstanding as of
the date of this Prospectus, and (ii) 1,000,000 shares of Preferred Stock,
$0.01 Par Value, which no shares have been issued. Stockholders of the Company
will consider and vote upon a proposal at a special meeting of stockholders
proposed to be held in December 1997 or January 1998 to amend the Restated
Certificate of Incorporation of the Company to increase the Company's Common
Stock from 18,000,000 shares to 50,000,000 shares.
COMMON STOCK
Holders of Common Stock are entitled to one vote for each share of Common
Stock held of record on all matters submitted to a vote of stockholders.
Holders of a majority of the shares of Common Stock outstanding may authorize a
merger, consolidation, dissolution of the Company, the sale of all or
substantially all of the Company's assets if not made in the usual or ordinary
course of the Company's business, or an amendment of the Company's Restated
Certificate of Incorporation. In the event of liquidation, holders of Common
Stock are entitled to share pro rata in any distribution of the Company's
assets to holders of Common Stock after payment of liabilities and liquidation
preferences, if any, granted to holders of Preferred Stock. There are no
preemptive, subscription, conversion or redemption rights regarding the Common
Stock. Holders of Common Stock are entitled to receive such dividends as may
be declared on the Common Stock by the Board of Directors in its discretion out
of funds legally available for that purpose.
PREFERRED STOCK
Preferred Stock may be issued in series from time to time with such
designations, relative rights, priorities, preferences, qualifications,
limitations and restrictions thereof, to the extent that such are not fixed in
the Company's Restated Certificate of Incorporation, as the Board of Directors
determines. The rights, preferences, limitations and restrictions of different
series of Preferred Stock may differ with respect to dividend rates, amounts
payable on liquidation, voting rights, conversion rights, redemption
provisions, sinking fund provisions and other matters. The Board of Directors
may authorize the issuance of Preferred Stock which ranks senior to the Common
Stock with respect to the payment of dividends and the distribution of assets
on liquidation. In addition, the Board of Directors is authorized to fix the
limitations and restrictions, if any, upon the payment of dividends on Common
Stock to be effective while any shares of Preferred Stock are outstanding. The
Board of Directors, without stockholder approval, can issue Preferred Stock
with voting and conversion rights which could adversely affect the voting power
of the holders of Common Stock. The issuance of Preferred Stock may have the
effect of delaying, deferring or preventing a change in control of the Company.
The Company has not issued any shares of Preferred Stock. However, such number
of shares of Preferred Stock as is sufficient to permit the exercise in full of
the Rights pursuant to the Rights Agreement (approximately 148,000 shares as of
the date of this Prospectus) has been reserved for issuance upon exercise of
the Rights described under "---Stockholder Rights Plan."
STOCKHOLDER RIGHTS PLAN
General. In January 1997, the Board of Directors of the Company declared a
dividend distribution of one preferred share purchase right (a "Right") for
each outstanding share of Common Stock. The dividend was paid to the
stockholders of record on January 17, 1997 (the "Record Date"), and with
respect to Common Stock issued thereafter until the Distribution Date (as
defined below), and, in certain circumstances, with respect to Common Stock
issued after the Distribution Date. Except as set forth below, each Right,
when it becomes exercisable, entitles the registered holder to purchase from
the Company one one-hundredth of a share of Series A Participating Preferred
Stock, $0.01 par value (the "Preferred Shares"), of the Company at a price of
$166 per one one-hundredth of a Preferred Share (the "Purchase Price"), subject
to adjustment. The description and terms of the Rights are set forth in a
Rights Agreement (the "Rights Agreement") between the Company and Continental
Stock Transfer & Trust Company, as Rights Agent (the "Rights Agent"), dated as
of January 2, 1997. The following discussion is a summary of the material
terms of the Rights Agreement, a copy of which has been incorporated by
reference as an exhibit to the Registration Statement.
The Rights Agreement. Initially, the Rights will be attached to all
certificates representing Common Stock then outstanding, and no separate Right
Certificates will be distributed. The Rights will separate from the Common
Stock upon the earliest to occur of (i) a person or group of affiliated or
associated persons having acquired beneficial ownership of 15% or more of the
outstanding shares of Common Stock (except pursuant to a Permitted Offer, as
hereinafter defined), or (ii)
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<PAGE> 12
10 days (or such later date as the Board of Directors may determine) following
the commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in a person or group
becoming an Acquiring Person (as hereinafter defined) (the earliest of such
dates being called the "Distribution Date"). A person or group whose
acquisition of Common Stock causes a Distribution Date pursuant to clause (i)
above is an "Acquiring Person." The date that a person or group becomes an
Acquiring Person is the "Shares Acquisition Date."
The Rights Agreements provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Stock. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Stock certificates issued after the Record Date upon transfer or new
issuance of Common Stock will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Stock outstanding as of the Record Date, even without such notation or a
copy of a summary of the Rights being attached thereto, will also constitute
the transfer of the Rights associated with the Common Stock represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Stock as of the close of business on the
Distribution Date (and to each initial record holder of certain Common Stock
issued after the Distribution Date), and such separate Right Certificates alone
will evidence the Rights.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on January 2, 2007, unless earlier redeemed by the
Company as described below.
In the event that any person becomes an Acquiring Person (except pursuant
to a tender or exchange offer which is for all outstanding Common Stock at a
price and on terms which a majority of certain members of the Board of
Directors determines to be adequate and in the best interests of the Company,
its stockholders and other relevant constituencies, other than such Acquiring
Person, its affiliates and associates (a "Permitted Offer")), each holder of a
Right will thereafter have the right (the "Flip-In Right") to receive upon
exercise the number of shares of Common Stock or, in the discretion of the
Board of Directors of the Company, of one one-hundredths of a Preferred Share
(or, in certain circumstances, other securities of the Company) having a value
(immediately prior to such triggering event) equal to two times the Purchase
Price. Notwithstanding the foregoing, following the occurrence of the event
described above, all Rights that are, or (under certain circumstances specified
in the Rights Agreement) were, beneficially owned by any Acquiring Person or
any affiliate or associate thereof will be null and void.
In the event that, at any time following the Shares Acquisition Date, (i)
the Company is acquired in a merger or other business combination transaction
in which the holders of all of the outstanding Common Stock immediately prior
to the consummation of the transaction are not the holders of all of the
surviving company's voting power, or (ii) more than 50% of the Company's assets
or earning power is sold or transferred, in either case with or to an Acquiring
Person or any affiliate or associate or any other person in which such
Acquiring Person, affiliate or associate has an interest or any person acting
on behalf of or in concert with such Acquiring Person, affiliate or associate,
or, if in such transaction all holders of Common Stock are not treated alike,
any other person, then each holder of a Right (excepts Rights which previously
have been voided as set forth above) shall thereafter have the right (the
"Flip-Over Right") to receive, upon exercise, common shares of the acquiring
company having a value equal to two times the Purchase Price. The holder of a
Right will continue to have the Flip-Over Right whether or not such holder
exercises or surrenders the Flip-In Right.
The Purchase Price payable, and the number of Preferred Shares, shares of
Common Stock or other securities issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred Shares at a
price, or securities convertible into Preferred Shares with a conversion price,
less than the then current market price of the Preferred Shares or (iii) upon
the distribution to holders of the Preferred Shares of evidences of
indebtedness or assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-hundredths of a
Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Stock or a stock
dividend on the Common Stock payable in Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
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<PAGE> 13
Description of Preferred Shares. Preferred Shares purchasable upon
exercise of the Rights will not be redeemable. Each Preferred Share will be
entitled to a minimum preferential quarterly dividend payment of $0.01 per
share but, if greater, will be entitled to an aggregate dividend per share of
100 times the dividend declared per share of Common Stock. In the event of
liquidation, the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment of $1.00 per share; thereafter, and after the
holders of the Common Stock receive a liquidation payment of $0.01 per share,
the holders of the Preferred Shares and the holders of the Common Stock will
share the remaining assets in the ratio of 100 to 1 (as adjusted) for each
Preferred Share and share of Common Stock so held, respectively. Finally, in
the event of any merger, consolidation or other transaction in which shares of
Common Stock are exchanged, each Preferred Share will be entitled to receive
100 times the amount received per share of Common Stock. These rights are
protected by customary antidilution provisions. In the event that the amount
of accrued and unpaid dividends on the Preferred Shares is equivalent to six
fully quarterly dividends or more, the holders of the Preferred Shares shall
have the right, voting as a class, to elect two directors in addition to the
directors elected by the holders of the Common Stock until all cumulative
dividends on the Preferred Shares have been paid through the last quarterly
dividend payment date or until noncumulative dividends have been paid regularly
for at least one year.
Redemption. At any time prior to the earlier to occur of (i) a person
becoming an Acquiring Person or (ii) the expiration of the Rights, and under
certain other circumstances, the Company may redeem the Rights in whole, but
not in part, at a price of $0.01 per Right (the "Redemption Price"), which
redemption shall be effective upon the action of the Board of Directors.
Additionally, following the Shares Acquisition Date, the Company may redeem the
then outstanding Rights in whole, but not in part, at the Redemption Price
provided that such redemption is in connection with a merger or other business
combination transaction or series of transactions involving the Company in
which all holders of Common Stock are treated alike but not involving an
Acquiring Person or its affiliates or associates.
Anti-Takeover Effect. The distribution of the Rights may have the effect
of delaying, deferring or preventing a change in control of the Company
notwithstanding that a majority of the stockholders might benefit from such a
change in control.
OTHER PROVISIONS HAVING POSSIBLE ANTI-TAKEOVER EFFECT
Delaware, like many other states, permits a corporation to adopt a number
of measures through amendment of the corporate charter or bylaws or otherwise,
which, along with certain provisions of the Delaware General Corporation Law
(the "DGCL"), may have the effect of delaying or deterring any unsolicited
takeover attempts notwithstanding that a majority of the stockholders might
benefit from such a takeover or attempt. In connection with the Company's
reincorporation, the right of stockholders to cumulate votes in the election of
directors was eliminated. In addition, Section 203 of the DGCL, which will
apply to the Company since the Common Stock has been approved for quotation on
the Nasdaq National Market, restricts certain "business combinations" with an
"interested stockholder" for three years following the date such person becomes
an interested stockholder, unless the Board of Directors approves the business
combination. "Business combination" is defined to include mergers, sale of
assets and other similar transactions with an "interested stockholder." An
"interested stockholder" is defined as a person who, together with affiliates
and associates, owns (or, within the prior three years, did own) 15% or more of
the corporation's voting stock. By delaying or deterring unsolicited takeover
attempts, these provisions could adversely affect prevailing market prices for
the Company's Common Stock.
The Company's Restated Certificate of Incorporation and Bylaws contain
certain provisions that could discourage potential takeover attempts and make
more difficult attempts by stockholders to change management. The following
paragraphs set forth a summary of these provisions:
Special Meetings of Stockholders. The Restated Certificate of
Incorporation provides that special meetings of stockholders may be called only
by the Board of Directors (or a majority of the members thereof), the Chief
Executive Officer, the President or the holders of a majority of the
outstanding stock entitled to vote at such special meeting. This provision
will make it more difficult for stockholders to call a special meeting.
No Stockholder Action by Written Consent. The Restated Certificate of
Incorporation provides that stockholder action may be taken only at annual or
special meetings and not by written consent of the stockholders.
Advance Notice Requirements for Stockholder Proposals and Director
Nominations. The Bylaws provide that
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<PAGE> 14
stockholders seeking to bring business before an annual meeting of
stockholders, or to nominate candidates for election as directors at an annual
meeting of stockholders, must provide timely notice thereof in writing. To be
timely, a stockholder's notice must be delivered to, or mailed and received at,
the principal executive offices of the Company not less than 30 days nor more
than 60 days prior to the meeting as originally scheduled; provided that in the
event less than 40 days written notice is given to stockholders, notice by the
stockholder to be made timely must be received not later than the close of
business on the 10th day following the day on which such notice of the date of
the annual meeting was mailed. These Bylaws also specify certain requirements
for a stockholder's notice to be in proper written form. These provisions may
preclude some stockholders from bringing matters before the stockholders at an
annual meeting or from making nominations for directors at an annual meeting.
Authorized Class of Preferred Stock. See "---Preferred Stock" for
information concerning the Company's Preferred Stock.
TRANSFER AGENT
The transfer agent for the Common Stock is Continental Stock Transfer &
Trust Company, New York, New York.
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, 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, Regulation M, 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 LLP, Denver, Colorado.
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<PAGE> 15
EXPERTS
The consolidated balance sheets as of December 31, 1995 and 1996, and the
consolidated statements of income, stockholders' equity and cash flows for each
of the three years in the period ended December 31, 1996, incorporated by
reference in this Prospectus, have been included herein in reliance on the
report of Coopers & Lybrand L.L.P., independent accountants, given on the
authority of that firm as experts in auditing and accounting. With respect to
the unaudited interim financial information for the periods ended March 31,
1996 and 1997 and June 30, 1996 and 1997, incorporated by reference in this
Prospectus, the independent accountants have reported that they have applied
limited procedures in accordance with professional standards for a review of
such information. However, their separate reports included in the Company's
quarterly reports on Form 10-Q for the quarters ended March 31, 1997 and June
30, 1997, and incorporated by reference herein, states that they did not audit
and they do not express an opinion on that interim financial information.
Accordingly, the degree of reliance on their reports on such information should
be restricted in light of the limited nature of the review procedures applied.
The accountants are not subject to the liability provisions of Section 11 of
the Securities Act of 1933 for their reports on the unaudited interim financial
information because that report is not a "report" or a "part" of the
Registration Statement prepared or certified by the accountants within the
meaning of Sections 7 and 11 of the Securities Act.
The balance sheet of Patterson Drilling Company (formerly known as Tucker
Drilling Company, Inc.) as of March 31, 1996, and the related statements of
operations, changes in stockholders' equity and cash flows for each of the two
years in the 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, as indicated in their
report with respect thereto, and are incorporated herein by reference in
reliance upon the authority of said firm as experts in giving said reports.
The statements of assets acquired as of December 31, 1996 and 1995 for Wes-Tex
Drilling Company and the related statements of direct drilling revenue and
direct operating expenses for each of the three years in the period ended
December 31, 1996, incorporated by reference to this Prospectus, have been
included herein in reliance on the report of Davis, Kinard & Co., P.C.,
independent accountants, given on the authority of that firm as experts in
auditing and accounting. With respect to the unaudited interim financial
information as of March 31, 1997, and for the three-month periods ended March
31, 1997 and 1996, incorporated by reference in this Prospectus, Davis, Kinard
& Co., P.C. have reported that they have applied limited procedures in
accordance with professional standards for a review of such information.
However, their separate report included in the Company's Current Report on Form
8-K, as amended, dated June 12, 1997, and incorporated by reference herein,
states that they did not audit and they do not express an opinion on that
interim financial information. Accordingly, the degree of reliance on their
report of such information should be restricted in light of the limited nature
of review procedures applied. The accountants are not subject to the liability
provisions of Section 11 of the Securities Act of 1933 for their report on the
unaudited financial information because that report is not a "report" or a
"part" of the Registration Statement prepared or certified by the accountants
within the meaning of Sections 7 and 11 of the Securities Act.
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<PAGE> 16
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents have been filed by the Registrant with the
Securities and Exchange Commission and are hereby incorporated by reference
into this Registration Statement:
a) Annual Report on Form 10-K for the year ended December 31, 1996;
b) Quarterly Report on Form 10-Q for the quarter ended March 31, 1997;
c) Current Report on Form 8-K dated July 30, 1996, as amended by Form 8-
K/A dated July 30, 1996, as further amended by Form 8-K/A dated July
30, 1996;
d) Current Report on Form 8-K dated January 3, 1997;
e) Current Report on Form 8-K dated January 7, 1997;
f) Current Report on Form 8-K dated January 27, 1997;
g) Current Report on Form 8-K dated May 7, 1997;
h) Current Report on Form 8-K dated June 3, 1997;
i) Current Report on Form 8-K dated June 12, 1997, as amended by Form 8-
K/A dated June 12, 1997;
j) Current Report on Form 8-K dated July 1, 1997;
k) Quarterly Report on Form 10-Q for the quarter ended June 30, 1997;
l) Current Report on Form 8-K dated July 24, 1997;
m) Current Report on Form 8-K dated August 5, 1997; and
n) Description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A, which became
effective with the Securities and Exchange Commission on November 2,
1993.
All documents filed by the Registrant pursuant to Section 13(a), 13(c), 14
and 15(d) of the Securities Exchange Act of 1934 subsequent to the date of this
Registration Statement and prior to the filing of a post-effective amendment,
which indicates all shares under the Plan have been sold or which deregisters
all shares then remaining unsold under the Plan, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
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ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under provisions of the Restated Certificate of Incorporation, as amended,
of the Registrant, each person who is or was a director, officer or controlling
persons of the Registrant will be indemnified by the Registrant as a matter of
right to the extent permitted or authorized by law. The effects of the
Restated Certificate of Incorporation, as amended, and the Delaware General
Corporation Law may be summarized as follows:
(a) Under Delaware law, to the extent that such a person is
successful on the merits in defense of a suit or proceeding brought against
him by reason of the fact that he is a director or officer of the
Registrant, he shall be indemnified against expenses (including attorneys'
fees) reasonably incurred in connection with such action;
(b) In other circumstances, a director or officer of the Registrant
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 Registrant, 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 Registrant to
procure a judgment in its favor, such person will not be indemnified if he
has been adjudged to be liable to the Registrant 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 Registrant's Board of Directors,
by independent legal counsel, or by the stockholders of the Registrant; and
(c) The Registrant's Restated Certificate of Incorporation, as
amended, contains a provision which eliminates, to the fullest extent
permitted by the Delaware General Corporation Law, the liability of
directors of the Registrant from monetary damages arising from any breach
of fiduciary duties as a member of the Registrant's Board of Directors.
This provision will not eliminate liability, for among other matters,
breaches of duty of loyalty, acts or omissions not in good faith or knowing
violations of law. In addition, this provision will not eliminate or limit
the liability of a director for any act or omission occurring prior to the
date of the Registrant's reincorporation in the State of Delaware.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
A total of 12,000 shares (the "Shares") of the Registrant's Common Stock
was issued by the Registrant in October 1997 prior to the filing of this
Registration Statement with the Commission pursuant to exercise of options
granted under the Plan. These Shares are "restricted securities" within the
meaning of General Instruction C to Form S-8, and are being registered for
reoffer pursuant to the "reoffer prospectus," included as a part of this
Registration Statement.
The Registrant believes that the issuance of the Shares was exempt from the
registration requirements of Section 5 of the Securities Act of 1933 by virtue
of Section 4(2) thereof, as a transaction not involving a public offering.
More specifically, the Shares were issued to a director of the Registrant.
Such director was able to fend for himself with access to information upon
which an investment decision was made.
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<PAGE> 18
ITEM 8. EXHIBITS.
The following exhibits are filed herewith:
<TABLE>
<CAPTION>
Exhibit Item 601 Cross
Number Reference Document as Form S-8 Exhibit
------ --------------- ----------------------------
<S> <C> <C>
4.1 4 Excerpt from Restated Certificate of Incorporation, as amended, of Patterson
Energy, Inc.(1)
4.2 4 Rights Agreement dated as of January 2, 1997, between Patterson Energy, Inc.
and Continental Stock Transfer & Trust Company, as Rights Agent.(2)
5.1 5 Opinion of Baker & Hostetler LLP regarding legality of shares to be offered
10.1 10 Patterson Energy, Inc. 1993 Stock Incentive Plan, as amended
15.1 15 Awareness Letter of Coopers & Lybrand L.L.P.
15.2 15 Awareness Letter of Davis, Kinard & Co., P.C.
23.1 23 Consent of Independent Accountants, Coopers & Lybrand L.L.P.
23.2 23 Consent of Independent Public Accountants, Arthur Andersen LLP
23.3 23 Consent of M. Brian Wallace, independent petroleum engineer
23.4 23 Consent of Baker & Hostetler LLP (included in Exhibit 5.1)
23.5 23 Consent of Independent Accountants, Davis, Kinard & Co., P.C.
</TABLE>
______________________________
(1) (Filed as an Exhibit to Post-Effective Amendment No. 1 to Form S-8
(Registration No. 33-97972) filed with the Commission on July 17, 1997.
(2) Filed as an Exhibit to Form 8-A dated January 10, 1997.
Item 9. Undertakings.
1. The Registrant 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;
(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; and
(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 Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in
this Registration Statement.
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<PAGE> 19
(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 Registrant'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 "Act") 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.
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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 of the
requirements for filing on Form S-8 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 4th day of
November, 1997.
PATTERSON ENERGY, INC.
By: /s/ A. Glenn Patterson
-------------------------------------------
A. Glenn Patterson, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed as of November 4, 1997, by the
following persons in the capacities indicated:
<TABLE>
<S> <C>
/s/ Cloyce A. Talbott Chairman of the Board and Chief Executive Officer
--------------------------------------------------
Cloyce A. Talbott
(Principal Executive Officer)
/s/ A. Glenn Patterson Director, President and Chief Operating Officer
---------------------------------------------------
A. Glenn Patterson
/s/ Robert C. Gist Director
---------------------------------------------------
Robert C. Gist
/s/ Kenneth E. Davis Director
---------------------------------------------------
Kenneth E. Davis
/s/ Vincent A. Rossi, Jr. 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-5
<PAGE> 21
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Item 601 Cross
Number Reference Document as Form S-8 Exhibit Page No.
------ --------------- ---------------------------- --------
<S> <C> <C> <C>
4.1 4 Excerpt from Restated Certificate of Incorporation, as amended, of Patterson
Energy, Inc.(1)
4.2 4 Rights Agreement dated as of January 2, 1997, between Patterson Energy, Inc.
and Continental Stock Transfer & Trust Company, as Rights Agent.(2)
5.1 5 Opinion of Baker & Hostetler LLP regarding legality of shares to be offered
10.1 10 Patterson Energy, Inc. Non-Employee Directors' Stock Option Plan, as amended
15.1 15 Awareness Letter of Coopers & Lybrand L.L.P.
15.2 15 Awareness Letter of Davis, Kinard & Co., P.C.
23.1 23 Consent of Independent Accountants, Coopers & Lybrand L.L.P.
23.2 23 Consent of Independent Public Accountants, Arthur Andersen LLP
23.3 23 Consent of M. Brian Wallace, independent petroleum engineer
23.4 23 Consent of Baker & Hostetler LLP (included in Exhibit 5.1)
23.5 23 Consent of Independent Accountants, Davis, Kinard & Co., P.C.
</TABLE>
______________________________
(1) (Filed as an Exhibit to Post-Effective Amendment No. 1 to Form S-8
(Registration No. 33-97972) filed with the Commission on July 17, 1997.
(2) Filed as an Exhibit to Form 8-A dated January 10, 1997.
<PAGE> 1
EXHIBIT 5.1
[BAKER & HOSTETLER LLP LETTERHEAD]
November 4, 1997
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-8 of 60,000 shares of the Company's Common Stock, $0.01 Par Value
(the "Shares") covered by the Patterson Energy, Inc. Non-Employee Directors'
Stock Option Plan (the "Plan"). The Registration Statement on Form S-8 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 Restated Certificate of Incorporation, as
amended, the Bylaws and the Minutes of the Board of Directors 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 Company is
authorized to issue and to sell the Shares; and the Shares, when issued
pursuant to the terms of the Plan will be fully paid and nonassessable.
We hereby consent to the use of this opinion as a part of the
Registration Statement.
Very truly yours,
/s/ Baker & Hostetler LLP
BAKER & HOSTETLER LLP
<PAGE> 1
EXHIBIT 10.1
PATTERSON ENERGY, INC.
NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN, AS AMENDED
SECTION 1
PURPOSE
Patterson Energy, Inc. Non-Employee Directors' Stock Option Plan (the
"Plan") provides for the grant of Stock Options to non-employee directors
("Non-Employee Directors") of Patterson Energy, Inc. (the "Company") in order
to encourage and provide incentives for high level performance by the Non-
Employee Directors of the Company.
SECTION 2
NON-INCENTIVE STOCK OPTIONS
The Stock Options granted under the Plan shall be nonstatutory stock
options which are intended to be options that do not qualify as "incentive
stock options" under Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").
SECTION 3
ADMINISTRATION
3.1 Committee. The Plan shall be administered by the Board of Directors
of the Company (the "Board") or by a committee consisting of one or more
employee members of the Board (the "Committee"). The Committee or the Board,
as the case may be, shall have full authority to administer the Plan, including
authority to interpret and construe any provision of the Plan and any Stock
Option granted thereunder, and to adopt such rules and regulations for
administering the Plan as it may deem necessary in order to comply with the
requirements of the Code or in order to conform to any regulation or to any
change in any law or regulation applicable thereto. However, the Committee
shall have no authority, discretion or power to select the Non-Employee
Directors who will receive any Stock Option, determine the number of shares to
be issued hereunder or the time at which such Stock Options are to be granted,
establish the duration of the Stock Options or alter any other terms or
conditions specified in the Plan, except in the course of administering the
Plan pursuant to the provisions of the Plan. The Board of Directors may
reserve to itself any of the authority granted to the Committee as set forth
herein, and it may perform and discharge all of the functions and
responsibilities of the Committee at any time that a duly constituted Committee
is not appointed and serving. All references in this Plan to the "Committee"
shall be deemed to refer to the board whenever the Board is discharging the
powers and responsibilities of the Committee.
3.2 Actions of Committee. All actions taken and all interpretations and
determinations made by the Committee in good faith (including determination of
Fair Market Value) shall be final and binding upon all Option Holders, the
Company and all other interested persons. No member of the Committee shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan, and all members of the Committee shall, in
addition to their rights as directors, be fully protected by the Company with
respect to any such action, determination or interpretation.
SECTION 4
DEFINITIONS
4.1 "Common Stock." A share of Common Stock means a share of authorized
but unissued or reacquired Common Stock, $0.01 Par Value, of the Company.
4.2 "Fair Market Value." If the Common Stock is not traded publicly, the
Fair Market Value of a
1
<PAGE> 2
share of Common Stock on any date shall be determined, in good faith, by the
Board or the Committee after such consultation with outside accounting and
other experts as the Board or the Committee may deem advisable, and the Board
or the Committee shall maintain a written record of its method of determining
such value. If the Common Stock is traded publicly, the Fair Market Value of a
share of Common Stock on any date shall be the average of the representative
closing bid and asked prices, as quoted by the National Association of
Securities Dealers through NASDAQ (its automated system for reporting quotes),
for the date in question or, if the Common Stock is listed on the NASDAQ
National Market or is listed on a national stock exchange, the officially
quoted closing price on NASDAQ or such exchange, as the case may be, on the
date in question.
4.3 "Non-Employee Director." A Non-Employee Director is a member of the
Board of Directors of the Company who is not also an employee or officer of the
Company.
4.4 "Option Holder." An Option Holder is a Non-Employee Director to whom
a Stock Option is granted.
4.5 "Stock Option." A Stock Option is the right granted under the Plan to
a Non-Employee Director to purchase, at such time or times and at such price or
prices ("Option Price") as are determined pursuant to the Plan, the number of
shares of Common Stock determined pursuant to the Plan.
SECTION 5
OPTION GRANTS
5.1 Number of Shares. Upon the effective date of this Plan as provided in
Section 15 hereof or, if later, upon the initial election or appointment of a
Non-Employee Director to the Company's Board of Directors, each Non-Employee
Director shall be granted a Stock Option to purchase 10,000 shares of Common
Stock (subject to adjustment pursuant to Section 6.2 hereof) effective as of
the effective date of this Plan or, if later, the date such person is elected
or appointed to the Board of Directors. In addition, each Non-Employee
Director shall be granted a Stock Option to purchase 2,000 shares of Common
Stock (subject to adjustment pursuant to Section 6.2 hereof) effective as of
each anniversary date of the initial grant of a Stock Option to such Director
under the preceding sentence. In no event may any Non-Employee Director be
granted Stock Options to purchase more than 20,000 shares of Common Stock
(subject to adjustment pursuant to Section 6.2 hereof).
5.2 Vesting of Stock Options. Except as provided in Section 11, each
Stock Option granted under this Plan shall be vested as to one hundred percent
(100%) of the number of shares subject to such Stock Option upon the first
anniversary date the Stock Option is granted. No Stock Option shall be
exercisable if not vested.
5.3 Price. The purchase price per share of Common Stock for the shares to
be purchased pursuant to the exercise of any Stock Option shall be 100% of the
Fair Market Value of a share of Common Stock on the date on which the Non-
Employee Director is granted the Stock Option.
5.4 Other Terms. Except for the limitations set forth in Sections 5.1,
5.2, 5.3 and 7.1, the terms and provisions of Stock Options shall be as
determined from time to time by the Committee, and each Stock Option issued may
contain terms and provisions different from other Stock Options granted to the
same or other Stock Option recipients. Each Stock Option shall be evidenced by
a written agreement ("Option Agreement") containing such terms and provisions
as the Committee may determine, subject to the provisions of the Plan.
SECTION 6
SHARES OF COMMON STOCK SUBJECT TO THE PLAN
6.1 Maximum Number. Initially, the maximum aggregate number of shares of
Common Stock that may be made subject to Stock Options shall be 60,000
authorized but unissued shares of Common Stock. If any
2
<PAGE> 3
shares of Common Stock subject to Stock Options are not purchased or otherwise
paid for before such Stock Options expire, such shares again may be made
subject to Stock Options.
6.2 Adjustments for Stock Split; Stock Dividend, Etc. If, at any time
subsequent to the effective date of the Plan as provided in Section 15 hereof,
the number of shares of Common Stock is increased or decreased, or changed into
or exchanged for a different number or kind of shares of stock or other
securities of the Company or of another corporation (whether as a result of a
stock split, stock dividend, combination or exchange of shares, exchange for
other securities, reclassification, reorganization, redesignation, merger,
consolidation, recapitalization or otherwise): (i) there shall automatically
be substituted for each share subject to an unexercised Stock Option (in whole
or in part) granted under the Plan, the number and kind of shares of stock or
other securities into which each outstanding share shall be changed or for
which each such share shall be exchanged; and (ii) the option price per share
or unit of securities shall be increased or decreased proportionately so that
the aggregate purchase price for the securities subject to a Stock Option shall
remain the same as immediately prior to such event. In addition to the
foregoing, the Committee shall be entitled in the event of any such increase,
decrease or exchange of shares to make other adjustments to the securities
subject to a Stock Option, the provisions of the Plan, and to any related Stock
Option agreements (including adjustments which may provide for the elimination
of fractional shares), where necessary to preserve the terms and conditions of
any grants hereunder.
6.3 Determination by the Committee. Adjustments under this Section 6
shall be made by the Committee, whose determinations with regard thereto shall
be final and binding upon all parties thereto.
SECTION 7
EXERCISE OF STOCK OPTIONS
7.1 Time of Exercise. A Stock Option shall become exercisable commencing
at the time or times that it vests under Section 5.2, subject to Section 11.
Such times shall be set forth in the Option Agreement evidencing such Stock
Option. A Stock Option shall expire, to the extent not exercised, five years
after the date on which it was granted.
7.2 Termination of Director Status Before Exercise. If an Option Holder's
term as a director of the Company shall terminate for any reason other than the
Option Holder's death or disability, any Stock Option then held by the Option
Holder, to the extent then exercisable under the terms of this Plan and the
applicable Option Agreement(s), shall remain exercisable after the termination
of his director status for a period of three months (but in no event beyond
five years from the date of grant of the Stock Option). If the Option Holder's
director status is terminated because the Option Holder dies or becomes
disabled within the meaning of Section 22(e)(3) of the Code, any Stock Option
then held by the Option Holder, shall become immediately exercisable in full
and the applicable Option Agreement(s), shall remain exercisable after the
termination of his directorship for a period of twelve months (but in no event
beyond five years from the date of grant of the Stock Option). If the Stock
Option is not exercised during the applicable period, it shall be deemed to
have been forfeited and of no further force or effect.
7.3 Disposition of Forfeited Stock Options. Any shares of Common Stock
subject to Stock Options forfeited by an Option Holder shall not thereafter be
eligible for purchase by the Option Holder but may be made subject to Stock
Options granted to other Option Holders.
SECTION 8
NO EFFECT UPON STOCKHOLDER RIGHTS
Nothing in this Plan shall interfere in any way with the right of the
stockholders of the Company to remove the Option Holder from the Board of
Directors pursuant to applicable state laws and the Company's Certificate of
Incorporation and Bylaws.
3
<PAGE> 4
SECTION 9
NO RIGHTS AS A STOCKHOLDER
Except as expressly provided in this Plan, an Option Holder shall have no
rights as a stockholder with respect to any shares of Common Stock subject to a
Stock Option prior to the exercise of such Stock Option and the transfer of
Common Stock to the Option Holder. Except as provided in Section 6.2, no
adjustment shall be made in the number of shares of Common Stock issued to an
Option Holder, or in any other rights of the Option Holder upon exercise of a
Stock Option by reason of any dividend, distribution or other right granted to
stockholders for which the record date is prior to the date of exercise of the
Option Holder's Stock Option.
SECTION 10
ASSIGNABILITY
No Stock Option granted under this Plan, nor any other rights acquired by
an Option Holder under this Plan, shall be assignable or transferable by an
Option Holder, other than by will or the laws of descent and distribution. In
the event of the Option Holder's death while serving as a director, the Stock
Option may be exercised to the extent then exercisable under the applicable
Option Agreement by the personal representative of the Option Holder's estate
or, if no personal representative has been appointed, by the successor or
successors in interest determined under the Option Holder's will or under the
applicable laws of descent and distribution.
SECTION 11
CHANGE IN CONTROL
11.1 Options. Upon the occurrence of a Change of Control (as defined
below), notwithstanding any other provisions hereof or of any agreement to the
contrary, all Stock Options granted under this Plan shall vest and become
immediately exercisable in full and remain exercisable under the terms of the
applicable Option Agreement(s).
For purposes of this Plan, a Change of Control shall be deemed to have
occurred if: (i) a tender offer shall be made and consummated for the
ownership of 25% or more of the outstanding voting securities of the Company;
(ii) the Company shall be merged or consolidated with another corporation and,
as a result of such merger or consolidation, less than 25% of the outstanding
voting securities of the surviving or resulting corporation shall be owned in
the aggregate by the former stockholders of the Company as the same shall have
existed immediately prior to such merger or consolidation; or (iii) the Company
shall sell substantially all of its assets to another corporation which is not
a wholly owned subsidiary; or (iv) a person, within the meaning of Section
3(a)(9) or of Section 13(d)(3) (as in effect on the date hereof) of the
Securities Exchange Act of 1934 (the "Exchange Act"), shall acquire, other than
by reason of inheritance, 25% or more of the outstanding voting securities of
the Company (whether directly, indirectly, beneficially or of record). In
making any such determination, transfers made by a person to an affiliate of
such person (as determined by the Board of Directors of the Company), whether
by gift, devise or otherwise, shall not be taken into account. For purposes of
this Plan, ownership of voting securities shall take into account and shall
include ownership as determined by applying the provisions of Rule 13d-
3(d)(1)(i) as in effect on the date hereof pursuant to the Exchange Act.
Notwithstanding the provisions of subparagraph (iv) of this Section 11,
"person" is used in that subparagraph shall not include any holder who was the
beneficial owner of more than ten percent (10%) of the voting securities of the
Company on the date this Plan is approved by the Board of Directors.
SECTION 12
AMENDMENT
The Board may from time to time alter, amend, suspend or discontinue the
Plan, including, where
4
<PAGE> 5
applicable, any modifications or amendments as it shall deem advisable in order
to conform to any regulation or to any change in any law or regulation
applicable thereto; provided, however, that no such action shall adversely
affect the rights and obligations with respect to Stock Options at any time
outstanding under the Plan; and provided further that no such action shall,
without the approval of the stockholders of the Company, (i) materially
increase the maximum number of shares of Common Stock that may be made subject
to Stock Options (unless necessary to effect the adjustments required by
Section 6.2), (ii) materially increase the benefits accruing to Option Holders
under the Plan, or (iii) materially modify the requirements as to eligibility
for participation in the Plan. Subject to the foregoing, the provision of
Section 6 of the Plan which sets forth the number of shares of Common Stock for
which Stock Options shall be granted, the timing of Stock Option grants and the
Stock Option exercise price shall not be amended more than once every six (6)
months other than to comport with changes in the Code, ERISA or the rules
thereunder.
SECTION 13
REGISTRATION OF OPTIONED SHARES
The Stock Options shall not be exercisable unless the purchase of such
optioned shares is pursuant to an applicable effective registration statement
under the Securities Act of 1933, as amended (the "Act"), or unless, in the
opinion of counsel to the Company, the proposed purchase of such optioned
shares would be exempt from the registration requirements of the Act and from
the registration or qualification requirements of applicable state securities
laws.
SECTION 14
NONEXCLUSIVITY OF THE PLAN
Neither the adoption of the Plan by the Board nor the submission of the
Plan to stockholders of the Company for approval shall be construed as creating
any limitations on the power or authority of the Board to adopt such other or
additional compensation arrangements of whatever nature as the Board may deem
necessary or desirable or precluded or limit the continuation of any other
plan, practice or arrangement for the payment of compensation or fringe
benefits to Non-Employee Directors, which the Company now has lawfully put into
effect.
SECTION 15
EFFECTIVE DATE
This Plan was adopted by the Board of Directors of the Company on March 31,
1995 and will be effective at the close of business in Snyder, Texas on June 6,
1995, the date of the Company's 1995 Annual Meeting of Stockholders.
5
<PAGE> 1
EXHIBIT 15.1
November 4, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Patterson Energy, Inc.
Registration on Form S-8
We are aware that our reports dated April 30, 1997 and July 24, 1997, on our
reviews of interim financial information of Patterson Energy, Inc. for the
periods ended March 31, 1997 and June 30, 1997, and included in the Company's
Quarterly Reports on Form 10-Q for the quarters then ended are incorporated by
reference in this registration statement. Pursuant to Rule 436(c) under the
Securities Act of 1933, this report should not be considered a part of the
registration statement prepared or certified by us within the meaning of
Sections 7 and 11 of that Act.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Dallas, Texas
<PAGE> 1
EXHIBIT 15.2
November 4, 1997
Securities and Exchange commission
450 Fifth Street, N.W.
Washington, D.C. 20549
We are aware that our report dated July 7, 1997, on our review of interim
financial information of WES-TEX Drilling Company for the periods ended March
31, 1997 and 1996, included in Patterson Energy, Inc.'s Current Report on Form
8-K as amended, dated June 12, 1997, is incorporated by reference in Patterson
Energy, Inc.'s Registration Statement on Form S-8. Pursuant to Rule 436(c)
under the Securities Act of 1933, this report should not be considered a part
of the registration statement prepared or certified by us within the meaning of
Sections 7 and 11 of that Act.
/s/ Davis, Kinard & Co. P.C.
DAVIS, KINARD & CO. P.C.
Abilene, Texas
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement
of Patterson Energy, Inc. on Form S-8 of our report dated March 10, 1997, on
our audits of the consolidated financial statements of Patterson Energy, Inc.
as of December 31, 1995 and 1996 and for each of the three years in the period
ended December 31, 1996, which is included in Patterson Energy, Inc.'s Annual
Report on Form 10-K for the fiscal year ended December 31, 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
November 4, 1997
<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., Annual Report on Form 10-K for the year
ended December 31, 1996, and to all references to our firm included in this
Registration Statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
San Antonio, Texas
November 4, 1997
<PAGE> 1
EXHIBIT 23.3
CONSENT OF M. BRIAN WALLACE, INDEPENDENT PETROLEUM ENGINEER
I hereby consent to the incorporation by reference in this registration
statement of Patterson Energy, Inc. on Form S-8 of certain information
contained in Patterson Energy, Inc.'s Annual Report on Form 10-K for the fiscal
year ended December 31, 1996, which information is contained in my summary
reserve report dated February 5, 1997, relating to the oil and natural gas
reserves and revenues as of December 31, 1994, 1995 and 1996 of certain
properties owned by Patterson Energy, Inc. as of December 31, 1996.
/s/ M. Brian Wallace
M. BRIAN WALLACE, P.E.
Dallas, Texas
November 4, 1997
<PAGE> 1
EXHIBIT 23.5
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement of
Patterson Energy, Inc. on Form S-8 of our report dated July 7, 1997, on our
audits of the financial information of WES-TEX Drilling Company as of December
31, 1996 and 1995 and for each of the three years in the period ended December
31, 1996, which is included in Patterson Energy, Inc.'s Current Report on Form
8-K as amended, dated June 12, 1997. We also consent to the reference to our
firm under the caption "Experts".
/s/ Davis, Kinard & Co. P.C.
DAVIS, KINARD & CO. P.C.
Abilene, Texas
November 4, 1997
