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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 6, 1998
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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.)
4510 LAMESA HIGHWAY, SNYDER, TEXAS 79549
(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.)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On February 6, 1998, the Registrant consummated the acquisition of
Robertson Onshore Drilling Company ("Robertson"), a non-affiliated,
privately-owned company based in Dallas, Texas, in consideration for
approximately $40 million in cash. As previously announced, the two companies
entered into an agreement in principle on December 29, 1997, and executed a
definitive agreement of merger on January 20, 1998. The assets of Robertson
consisted primarily of 15 drilling rigs and a yard and shop located in Liberty
City, Texas. The $40 million purchase price was funded by the Registrant using
cash on hand and proceeds provided by its $60 million credit facility with
Norwest Bank Texas, N.A.
ITEM 5. OTHER EVENTS.
On February 10, 1998, the Registrant issued the following press
release:
PATTERSON ENERGY, INC. COMPLETES ACQUISITION OF
ROBERTSON ONSHORE DRILLING COMPANY
SNYDER, TEXAS, February 10, 1998--PATTERSON ENERGY, INC. (NASDAQ/NM:PTEN) and
Robertson Onshore Drilling Company ("Robertson") today announced that Patterson
completed the acquisition of the outstanding common stock of Robertson on
February 6, 1998. Robertson is a non-affiliated, privately-owned provider of
contract drilling services to the oil and natural gas industry. As previously
announced, the two companies entered into an agreement in principle on December
29, 1997 and executed a definitive agreement of merger on January 20, 1998.
In the transaction, Patterson acquired in consideration for $40 million in cash
15 fully operable drilling rigs, 10 of which are located in East Texas and five
of which are located in Louisiana and Mississippi, and a yard and shop located
in Liberty City, Texas. In addition to an increased drilling fleet, consummation
of this acquisition expands Patterson's contract drilling operations into East
Texas.
Patterson Energy, Inc., a Snyder, Texas based energy company, is one of the
leading providers of domestic land drilling services to major and independent
oil and gas companies and, to a lesser extent, is engaged in the development,
exploration, acquisition and production of oil and natural gas. With the
completion of the Robertson acquisition, Patterson now has 114 land-based
drilling rigs (107 of which are currently operable).
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
It is impracticable for the Registrant to provide the required
financial statements regarding the foregoing acquisition at this time. The
required financial statements will be filed not later than 60 days after the
date on which this Form 8-K must be filed.
(b) PRO FORMA FINANCIAL INFORMATION.
It is impracticable for the Registrant to provide the required
pro forma financial information regarding the foregoing acquisition at this
time. The required pro forma financial information will be filed not later than
60 days after the date on which this Form 8-K must be filed.
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(c) EXHIBITS.
2.1 Agreement and Plan of Merger, dated January 20, 1998, among Patterson
Energy, Inc., Patterson Onshore Drilling Company and Robertson Onshore
Drilling Company.(1)
99.1 Non-Competition Agreement, dated February 6, 1998, between and among
Patterson Energy, Inc., Patterson Onshore Drilling Company, Patterson
Drilling Company and Douglas Robertson.
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(1) Incorporated by reference to Item 7, "Financial Statements and Exhibits," of
Form 8-K dated January 23, 1998.
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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: February 20, 1998 /s/ James C. Brown
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James C. Brown
Vice President-Finance
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EXHIBIT INDEX
Exhibit Description Page Number
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2.1 Agreement and Plan of Merger, dated January 20, 1998, among
Patterson Energy, Inc., Patterson Onshore Drilling Company and
Robertson Onshore Drilling Company.(1)
99.1 Non-Competition Agreement, dated February 6, 1998, between and among
Patterson Energy, Inc., Patterson Onshore Drilling Company, Patterson
Drilling Company and Douglas Robertson.
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(1) Incorporated by reference to Item 7, "Financial Statements and Exhibits," of
Form 8-K dated January 23, 1998.
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EXHIBIT 99.1
PATTERSON ENERGY, INC.,
PATTERSON ONSHORE DRILLING COMPANY
AND
PATTERSON DRILLING COMPANY
NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT is made and entered into this
_____ day of February, 1998 (this "Agreement"), between and among PATTERSON
ENERGY, INC., a Delaware corporation ("PEC"), PATTERSON ONSHORE DRILLING
COMPANY, a Texas corporation ("PODC") wholly-owned indirectly by PEC, PATTERSON
DRILLING COMPANY, a Delaware corporation wholly-owned directly by PEC ("PDC"),
and DOUGLAS ROBERTSON ("D.W. Robertson"), an individual residing in Dallas,
Texas ("D.W. Robertson").
RECITALS:
A. Simultaneously with the execution of this Agreement, PEC and PODC
have consummated the transactions contemplated by that certain Agreement and
Plan of Merger dated January 20, 1998 (the "Merger Agreement"), among PEC, PODC
and Robertson Onshore Drilling Company, a Texas corporation ("Robertson"),
providing for, among other things, the merger (the "Merger") of Robertson into
PODC.
B. D.W. Robertson is or was an officer, a director and a shareholder
of Robertson.
C. The execution and delivery of this Agreement is a condition to the
consummation of the Merger contemplated by the Merger Agreement, and the parties
are entering into this Agreement in order to fulfill such condition.
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties, intending to be legally bound, hereby agree as follows:
1. Period of Agreement.
The period of this Agreement shall commence on the date hereof and
remain in effect until January 6, 2001 ("Non-Compete Period").
2. Covenant Not to Compete.
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(a) D.W. Robertson covenants and agrees that during the Non-Compete
Period, D.W. Robertson shall not, without the prior written consent of PEC, PODC
and PDC directly or indirectly, and whether as a principal or as an agent,
officer, director, employee, consultant, or otherwise, alone or in association
with any other person, carry on, be engaged, concerned, or take part in, render
services to, or own, share in the earnings of, or invest in the stock, bonds, or
other securities of, any person which is engaged in the oil and gas contract
drilling business (the "Competitive Business") within the so-called "Ark-La-Tex
region" and the states of Texas and Mississippi; provided, however, that D.W.
Robertson may (i) invest in stock, bonds, or other securities of any Competitive
Business (but without otherwise participating in the Competitive Business) if:
(A) such stock, bonds, or other securities are listed on any national securities
exchange or are registered under Section 12(g) of the Securities Exchange Act of
1934, as amended; (B) the investment does not exceed, in the case of any class
of capital stock of any one issuer, two percent (2%) of the issued and
outstanding shares, or, in the case of bonds or other securities of any one
issuer, two percent (2%) of the aggregate principal amount thereof issued and
outstanding; and (C) such investment would not prevent, directly or indirectly,
the transaction of business by PEC, PODC, PDC or any affiliate of PEC, PODC or
PDC with any state, district, territory, or possession of the United States or
any governmental subdivision, agency, or instrumentality thereof by virtue of
any statute, law, regulation or administrative practice. The period of time
during which D.W. Robertson is prohibited from engaging in certain activities by
this Section shall be extended by the length of time during which D.W. Robertson
is in breach of the terms of this section.
(b) It is understood by and between the parties hereto that the
foregoing covenant by D.W. Robertson not to enter into competition with PEC,
PODC or PDC as set forth in Section 2(a) hereof is an essential element of this
Agreement and the Merger Agreement and that, but for the agreement of D.W.
Robertson to comply with such covenant, neither PEC, PODC nor PDC would have
agreed to enter into this Agreement or the Merger Agreement. PEC, PODC and PDC
on the one hand and D.W. Robertson on the other hand have independently
consulted with their respective counsel and have been advised in all respects
concerning the reasonableness and propriety of such covenant, with specific
regard to the nature of the business conducted by PEC, PODC, PDC and their
respective affiliates. D.W. Robertson agrees that such covenant is reasonable in
scope, geographic area, and duration, and that compliance with such covenant
would not impose economic or professional hardship on D.W. Robertson.
3. Restrictions on Soliciting Business of PEC, PODC and PDC.
D.W. Robertson further covenants and agrees that during the
Non-Compete Period, D.W. Robertson will not, either for himself or for any other
person or entity, directly or indirectly, engage in any of the following
activities in a Competitive Business without the express prior written consent
of PEC, PODC and PDC:
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(a) Solicit or hire any of the employees of PEC, PODC or PDC or
solicit or take away any of PEC's, PODC's or PDC's customers, lessors, or
suppliers or attempt any of the foregoing:
(b) Acquire or attempt to acquire rights providing any product or
service in a Competitive Business within the territory described in Section 2
hereof; or
(c) Engage in any act which would interfere with or harm any business
relationship PEC, PODC or PDC has with any customer, lessor, employee, principal
or supplier.
4. Specific Performance.
Without intending to limit the remedies available to PEC, PODC or PDC,
D.W. Robertson acknowledges that PEC, PODC or PDC will have no adequate remedies
at law if D.W. Robertson violates the terms of Section 2 or 3, hereof. In such
event, D.W. Robertson agrees that PEC, PODC or PDC shall have the right, in
addition to any other rights it may have, to obtain in any court of competent
jurisdiction specific performance of such Sections of this Agreement or
injunctive relief to restrain any breach or threatened breach thereof. Nothing
herein shall be construed as prohibiting PEC, PODC or PDC from pursuing any
other remedies available to PEC, PODC or PDC (whether at law or in equity) for
such breach or threatened breach, including, without limitation, the recovery of
monetary damages from D.W. Robertson.
The provisions of this Section 4 shall survive the expiration,
termination or cancellation of this Agreement.
5. Attorneys Fees and Costs.
If an action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys fees, costs and necessary expenses in addition to any other
relief to which that party may be entitled. This provision is applicable to this
entire Agreement.
6. Representations and Warranties of PEC, PODC, PDC and D.W.
Robertson.
(a) Representations and Warranties of PEC, PODC and PDC. PEC, PODC and
PDC hereby jointly and severally represent and warrant to D.W. Robertson that:
(i) they have all requisite power to enter into and perform their obligations
under this Agreement; (ii) this Agreement has been duly and validly authorized
by all necessary corporate action on the part of PEC, PODC and PDC; (iii) the
execution of this Agreement by PEC, PODC and PDC and performance of their
obligations hereunder do not require the consent or approval of any other party;
and (iv) this Agreement is a valid and binding obligation of PEC, PODC and PDC.
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(b) Representations and Warranties of D.W. Robertson. D.W. Robertson
hereby represents and warrants to PEC, PODC and PDC that: (i) D.W. Robertson has
the capacity and power to enter into and perform obligations of D.W. Robertson
under this Agreement; (ii) D.W. Robertson has duly and validly executed this
Agreement; (iii) the execution of this Agreement and performance of obligations
of D.W. Robertson hereunder do not require the consent or approval of any other
party; and (iv) this Agreement constitutes a valid and binding obligation of
D.W. Robertson.
7. General Provisions.
(a) Compliance with Laws. The parties agree that they will comply with
all applicable laws and regulations of government bodies or agencies in their
respective performance of their obligations under this Agreement.
(b) Governing Law and Construction. This Agreement will be governed by
and construed in accordance with the laws of the State of Texas without
reference to its conflict-of-laws principles. This Agreement's final form
resulted from review and negotiations among the parties and their attorneys, and
no part of this Agreement should be construed against any party on the basis of
authorship.
(c) Forum for Dispute Resolution. If any dispute arises among the
parties concerning the interpretation or performance of any portion of this
Agreement which the parties are unable to resolve themselves, and any party
brings an action against any other party seeking a declaratory order, specific
performance, damages, or any other legal or equitable relief based on this
Agreement, the parties agree that the forum for any such action shall be an
appropriate federal or state court in Texas having jurisdiction, agree that
venue will be proper in such courts, and waive any objections based on
inconvenience of the forum, and further agree that the prevailing party in any
such action, as determined by the court, shall be awarded its reasonable
attorneys' fees and costs in addition to any relief or judgment the court
awards.
(d) Entire Agreement; Amendment. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter contained
herein and supersedes any previous oral or written communications,
representations, understandings or agreements with respect thereto. The terms of
this Agreement may be modified only in a writing, signed by authorized
representatives of both parties.
(e) Assignability. This Agreement will be binding upon the parties'
respective successors and permitted assigns. Neither party may assign this
Agreement and/or any of its rights and/or obligations hereunder without the
prior written consent of the other party, and any such attempted assignment will
be void; provided, however, that PEC, PODC or PDC may assign this Agreement to a
subsidiary or affiliate without the prior written consent of D.W. Robertson.
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(f) Waiver. A waiver of a breach or default under this Agreement will
not constitute a waiver of any other breach or default. Failure or delay by
either party to enforce compliance with any term or condition of this Agreement
will not constitute a waiver of such term or condition.
(g) Severability. If any provision of this Agreement is declared to be
invalid, the parties agree that such invalidity will not affect the validity of
the remaining provisions of this Agreement, and further agree, to the extent
possible, to substitute for the invalid provision a valid provision that
approximates the intent and economic effect of the invalid provision as closely
as possible.
(h) Headings. The titles of the Sections and subsections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
(i) Notice. Any notice, request, consent, demand or other
communication required to be given under this Agreement will be in writing and
will be given personally, by facsimile or by mailing the same, first-class,
postage prepaid to the appropriate address and facsimile number set forth below
or to such other person or at such other address as may hereafter be designated
by like notice. Notices by mail will be considered delivered and become
effective three days after the mailing thereof. All notices by facsimile will be
considered delivered and become effective immediately upon the confirmed (by
answer back or other tangible printed verification or successful receipt)
sending thereof.
To PEC:
Patterson Energy, Inc.
4510 Lamesa Highway
P.O. Drawer 1410
Snyder, Texas 79550
Facsimile: (915) 573-0281
Attention: Cloyce A. Talbott
Chairman and Chief Executive Officer
To PODC:
Patterson Onshore Drilling Company
4510 Lamesa Highway
P.O. Drawer 1410
Snyder, Texas 79550
Facsimile: (915) 573-0281
Attention: A. Glenn Patterson
President and Chief Operating Officer
To PDC:
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Patterson Drilling Company
4510 Lamesa Highway
P.O. Drawer 1410
Snyder, Texas 79550
Facsimile: (915) 573-0281
Attention: A. Glenn Patterson
President and Chief Operating Officer
To D.W. Robertson:
D.W. Robertson
6043 Meadowcrest
Dallas, Texas 75230
(j) Counterparts. This Agreement may be executed in counterparts and
by the parties hereto in separate counterparts, each of which will be deemed an
original, but all of which together will constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by their respective representatives as of the day and year first above
written.
"PEC"
PATTERSON ENERGY, INC.
By: /s/ CLOYCE A. TALBOTT
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Cloyce A. Talbott
Chairman and Chief Executive Officer
"PODC"
PATTERSON ONSHORE DRILLING COMPANY
By: /s/ A. GLENN PATTERSON
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A. Glenn Patterson
President and Chief Operating Officer
"PDC"
PATTERSON DRILLING COMPANY
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By: /s/ A. GLENN PATTERSON
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A. Glenn Patterson
President and Chief Operating Officer
"D.W. ROBERTSON"
/s/ D.W. ROBERTSON
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D.W. ROBERTSON
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