<PAGE> 1
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 2
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 12, 1997
PATTERSON ENERGY, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-22664 75-2504748
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
P.O. BOX 1416, 4510 LAMESA HIGHWAY, SNYDER, TEXAS 79550
(Address of principal executive offices) (Zip Code)
(915) 573-1104
Registrant's telephone number, including area code
No Change
(Former name or former address, if changed since last report.)
- --------------------------------------------------------------------------------
<PAGE> 2
This Form 8-K/A is being filed to amend the Registrant's Current Report on
Form 8-K, dated June 12, 1997, and filed with the Securities and Exchange
Commission (the "Commission") on June 19, 1997, as amended by Form 8-K/A filed
with the Commission on August 12, 1997, by (a) changing the "Date of Report
(Date of earliest event reported)" reflected in such Form 8-K/A filed with the
Commission on August 12, 1997 from July 12, 1997 to June 12, 1997, and (b)
providing an update through September 30, 1997 pursuant to Part I, Item 11(b)
of Form S-3 of certain unaudited pro forma financial information relating to
the Registrant's acquisition of the contract drilling assets of Wes-Tex
Drilling Company.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(b) Pro forma financial information.
The following unaudited pro forma financial information for the nine months
ended September 30, 1997 is an update to, and should be read in conjunction
with, the pro forma financial information included in the Company's Form 8-K/A
dated June 12, 1997 and filed with the Securities and Exchange Commission on
August 12, 1997. The unaudited pro forma financial information herein reflects
adjustments necessary to give effect to the acquisition on June 12, 1997 by
Patterson Drilling Company, a wholly-owned subsidiary of Patterson Energy, Inc.
(the "Company"), of the contract drilling assets of Wes-Tex Drilling Company.
The unaudited pro forma statement of income for the nine months ended September
30, 1997 assumes the acquisition was completed on January 1, 1997. The pro
forma adjustments are based upon available information and certain assumptions
the Company believes are reasonable. The unaudited pro forma financial
information is not necessarily indicative of operating results that would have
occurred had the acquisition been consummated on January 1, 1997, nor are they
indicative of future operating results of the combined companies.
2
<PAGE> 3
PATTERSON ENERGY, INC. AND SUBSIDIARIES
PRO FORMA STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(Unaudited)
(in thousands, except per share data)
<TABLE>
<CAPTION>
Wes-Tex
Patterson Drilling
Energy, Inc. Company Adjustments Pro Forma
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
Operating revenues:
Drilling . . . . . . . . . . . . . . . $ 120,207 $ 24,584 $ (1,498)(b) $ 143,293
Oil and natural gas sales . . . . . . . 8,013 -- -- 8,013
Well operation fees . . . . . . . . . . 1,255 -- -- 1,255
Other . . . . . . . . . . . . . . . . . 16 -- -- 16
------------ ------------ ----------- ------------
129,491 24,584 (1,498) 152,577
------------ ------------ ----------- ------------
Operating costs and expenses:
Direct drilling costs . . . . . . . . . 89,049 21,269 (1,511)(b) 108,807
Lease operating and production . . . . 1,564 -- -- 1,564
Impairment of oil and natural gas
Properties . . . . . . . . . . . . . 750 -- -- 750
Exploration costs . . . . . . . . . . . 478 -- -- 478
Dry holes and abandonments . . . . . . 830 -- -- 830
Depreciation, depletion and
amortization . . . . . . . . . . . 12,188 692 933 (a) 13,813
General and administrative expense . . 4,459 1,286 -- 5,745
------------ ------------ ----------- ------------
109,318 23,247 (578) 131,987
------------ ------------ ----------- ------------
Operating income (loss) . . . . . . . . . . 20,173 1,337 (920) 20,590
Other income (expense):
Net gain on sale of assets . . . . . . 1,354 -- -- 1,354
Interest income . . . . . . . . . . . . 799 -- -- 799
Interest expense . . . . . . . . . . . (695) -- (220)(a) (915)
Other . . . . . . . . . . . . . . . . . 169 -- -- 169
------------ ------------ ----------- ------------
1,627 -- (220) 1,407
------------ ------------ ----------- ------------
Income before income taxes . . . . . . . . 21,800 1,337 (1,140) 21,997
------------ ------------ ----------- ------------
Income tax expense:
Current . . . . . . . . . . . . . . . . 6,702 -- 75 (a) 6,777
Deferred . . . . . . . . . . . . . . . 1,301 -- -- 1,301
------------ ------------ ----------- ------------
8,003 -- 75 8,078
------------ ------------ ----------- ------------
Net income . . . . . . . . . . . . . . . . $ 13,797 $ 1,337 $ (1,215) $ 13,919
============ ============ =========== ============
Net income per common share:
Primary . . . . . . . . . . . . . . . . $ 0.95 N/A N/A $ 0.96
============ ============ =========== ============
Fully diluted . . . . . . . . . . . . . $ 0.95 N/A N/A $ 0.95
============ ============ =========== ============
Weighted average number of common
shares outstanding:
Primary . . . . . . . . . . . . . . . . 14,470 N/A N/A 14,470
============ ============ =========== ============
Fully diluted . . . . . . . . . . . . . 14,576 N/A N/A 14,596
============ ============ =========== ============
</TABLE>
The accompanying notes are an integral part of this unaudited pro forma
statement of income.
3
<PAGE> 4
PATTERSON ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA STATEMENT OF INCOME
1. BASIS OF PRESENTATION
On June 12, 1997, Patterson Drilling Company, a wholly-owned
subsidiary of Patterson Energy, Inc. (the "Company"), consummated an
acquisition of the contract drilling assets of Wes-Tex Drilling Company
("Wes-Tex"), a privately-held, non-affiliated company based in Abilene,
Texas, for a purchase price of approximately $35.4 million, consisting
of $25.0 million in cash, 283,000 shares of the Company's common stock,
$0.01 par value, (valued at $31.50 per share), a three-year stock
purchase warrant (valued at $6.24 per share) to purchase 200,000
additional shares of the Company's common stock at an exercise price of
$32 per share and approximately $190,000 of other direct costs incurred
relative to the transaction. The acquisition was funded using $19.0
million of the Company's cash on hand and $6.0 million provided by the
Company's line of credit. The assets acquired consisted of 21 fully
operable drilling rigs, all related rolling stock and a shop and yard.
The Company did not assume any liabilities of Wes-Tex.
The unaudited pro forma financial information reflects
adjustments necessary to give effect to the acquisition on June 12,
1997 by the Company of the contract drilling assets of Wes-Tex, as
described above. The unaudited pro forma statement of income for the
nine months ended September 30, 1997, assumes the acquisition was
completed on January 1, 1997.
The pro forma adjustments are based upon available information
and certain assumptions the Company believes are reasonable. The
unaudited pro forma financial information is not necessarily
indicative of operating results that would have occurred had the
acquisition been consummated on January 1, 1997, nor are they
indicative of future operating results of the combined companies.
The contract drilling revenue and direct operating expenses of
Wes-Tex presented herein only include the revenues and expenses
directly associated with the drilling operations of Wes-Tex, as well
as the general and administrative expenses allocated to such drilling
activities. General and administrative expenses were allocated
proportionately based on revenues contributed by the drilling and oil
and natural gas production operations of Wes-Tex. Management believes
that this is a reasonable basis to allocate general and administrative
expenses.
2. FINANCIAL INFORMATION PRESENTED
The unaudited pro forma statement of income for the nine months
ended September 30, 1997 was prepared using the unaudited consolidated
financial statements for the quarterly period ended September 30, 1997
of the Company as reported under Form 10-Q and the unaudited financial
statements of Wes-Tex for the period ended June 12, 1997, the
acquisition date, and should be read in conjunction with such Form 10-Q
of the Company. The results of the contract drilling operations of
Wes-Tex, subsequent to June 12, 1997, are included in the consolidated
financial statements of the Company as of and for the period ended
September 30, 1997.
(continued)
4
<PAGE> 5
PATTERSON ENERGY, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED FINANCIAL INFORMATION - CONTINUED
3. PRO FORMA ADJUSTMENTS
a. Depreciation and amortization expense, interest expense and income
tax expense were adjusted to reflect increases resulting from the
acquisition of the contract drilling assets of Wes-Tex.
Depreciation expense was determined on a straight line basis using
depreciable lives consistent with those historically used by the
Company. Amortization expense was determined on a straight line
basis over five and fifteen years for the covenants not to compete
and goodwill, respectively. The related expense accounts were
increased as follows (in thousands):
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30,
ACCOUNT DESCRIPTION 1997
-------------------------------- ----------------
<S> <C>
Depreciation and amortization . . . . $ 933
Interest expense . . . . . . . . . . 220
Income tax expense . . . . . . . . . 75
</TABLE>
b. Contract drilling revenues and direct contract drilling costs
were adjusted to convert Wes-Tex's methodology of accounting for
wells in progress from the completed contract method for day
work and footage drilling arrangements to the percentage-of-
completion method utilized by the Company.
5
<PAGE> 6
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PATTERSON ENERGY, INC.
Date: December 17, 1997 /s/ James C. Brown
--------------------------
James C. Brown
Vice President-Finance
