Item 7.01 Regulation FD Disclosure
Exchange Offer
In connection with Superior Energy Services, Inc.'s (the "Company") announcement
that its wholly owned subsidiary, SESI, L.L.C. (the "Issuer"), has commenced a
private offer to exchange (the "Exchange Offer") up to $500 million of its
$800 million aggregate principal amount of outstanding 7.125% Senior Notes due
2021 (the "Original Notes") for up to $500 million of newly issued 7.125% Senior
Notes due 2021 of the Issuer (the "New Notes"), the Company is disclosing
certain information to current investors in a private offering memorandum dated
January 6, 2020 (the "Offering Memorandum"). In connection with the Exchange
Offer, the Issuer is also soliciting consents (the "Consent Solicitation") from
eligible holders of the Original Notes to amend the indenture dated December 6,
2011, governing the Original Notes, upon the terms and subject to the conditions
set forth in the Offering Memorandum, to amend the liens covenant in the
indenture governing the Original Notes to permit the issuance of secured notes
by the Issuer.
The New Notes will be offered and sold only to qualified institutional buyers in
the United States pursuant to Rule 144A and outside the United States pursuant
to Regulation S under the Securities Act of 1933, as amended (the "Securities
Act"). The New Notes have not been registered under the Securities Act or any
state securities laws and may not be offered or sold in the United States absent
registration or an applicable exemption from the registration requirements of
the Securities Act and applicable state laws. The Exchange Offer is not being
made to persons in any jurisdiction in which the making or acceptance thereof
would not be in compliance with the securities, blue sky or other laws of such
jurisdiction. This Current Report on Form 8-K does not constitute an offer to
sell, nor a solicitation of an offer to buy, the New Notes in the United States
or elsewhere.
The Exchange Offer and Consent Solicitation are being conducted in connection
with the Company's previously announced entry into a definitive agreement to
divest its U.S. service rig, coiled tubing, wireline, pressure control,
flowback, fluid management and accommodations service lines and combine them
with Forbes Energy Services Ltd.'s complementary service lines to create a new,
publicly traded consolidation platform for U.S. completion, production and water
solutions (the "Combination"). The consummation of the Exchange Offer is a
condition of the Combination; however, the consummation of the Combination is
not a condition of the Exchange Offer and Consent Solicitation.
On January 6, 2020, the Company issued a press release announcing that the
Issuer commenced the Exchange Offer. The full text of the press release is
incorporated herein by reference as Exhibit 99.1 to this Current Report on Form
8-K.
Recent Developments
The Baker Hughes U.S. land rig count declined by 49 rigs from the week ending
October 4, 2019 through the week ending December 27, 2019. This rig count
decline is greater than what the Company expected, and the Company believes it
is impacting the Company's industry generally. The industry slowdown will
primarily impact the Company's drilling products and services segment results
for the fourth quarter of 2019 and the Company now expects revenue in this
segment to decrease by 10% to 15% sequentially, lower than initial expectations
of a 5% to 10% decline. Additionally, certain completion tools projects, which
were anticipated to occur during the fourth quarter of 2019 have shifted to
2020. The Company now expects its technical solutions segment revenue to be
approximately flat sequentially, which is lower than the Company's initial
expectations of as much as a 10% increase.
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On January 6, 2020, the Company issued a press release announcing such Recent
Developments. The full text of the press release is incorporated herein by
reference as Exhibit 99.2 to this Current Report on Form 8-K.
Pro Forma Financial Information
In connection with the Exchange Offer, the Company is disclosing certain
unaudited pro forma financial information to prospective eligible investors in
an offering memorandum and consent solicitation statement dated January 6, 2020
(the "Offering Memorandum"). The Company is furnishing on this Current Report on
Form 8-K unaudited pro forma condensed consolidated financial information of the
Company and unaudited pro forma condensed combined financial information of
Spieth Newco, Inc. ("Newco") excerpted from the Offering Memorandum. Such
unaudited pro forma condensed consolidated financial information of the Company
and Newco (collectively, the "Unaudited Pro Forma Financial Information") is
incorporated herein by reference as Exhibit 99.3.
The Unaudited Pro Forma Financial Information is provided for illustrative
purposes only and does not purport to represent what the actual consolidated
results of operations of the Company or Newco, as applicable, would have been
had the transactions occurred on the dates assumed, nor is it necessarily
indicative of the future consolidated results of operations or consolidated
financial position of the Company or Newco, as applicable.
The information provided pursuant to this Item 7.01 is "furnished" and shall not
be deemed to be "filed" with the Securities and Exchange Commission (the "SEC")
or incorporated by reference in any filing under the Securities Exchange Act of
1934, as amended, or the Securities Act, except as shall be expressly set forth
by specific reference in any such filings.
Information set forth in this Current Report (including the exhibits attached
hereto) contains forward-looking statements within the meaning of the federal
securities laws and the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are generally identified by the words "believe,"
"expect," "anticipate," "estimate," "intend," "plan," "may," "should," "could,"
"will," "would," and "will be," and variations of such words and similar
expressions, although not all forward-looking statements contain these
identifying words. Such statements are subject to significant risks, assumptions
and uncertainties, including, without limitation, risks and uncertainties
relating to the commencement of the Exchange Offer. A discussion of factors that
may affect future results is contained in the Company's Annual Report on Form
10-K for the year ended December 31, 2018, as such factors may be updated from
time to time in the Company's periodic filings with the SEC. Other unknown or
unpredictable factors also could have a material adverse effect on our business,
financial condition and results of operations. In addition, in light of these
risks and uncertainties, the matters referred to in the forward-looking
statements contained in this Current Report on Form 8-K may not in fact occur.
Accordingly, you should not place undue reliance on these statements. The
Company undertakes no obligation to correct or update any forward-looking
statement, whether as a result of new information, future events, or otherwise,
except to the extent required under federal securities laws.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
Exhibit
No. Description
99.1 Press release, dated January 6, 2020, announcing the Exchange
Offer.
99.2 Press release, dated January 6, 2020, announcing certain Recent
Developments.
99.3 Unaudited pro forma condensed consolidated financial information
of the Company and unaudited pro forma condensed combined financial
information of Newco.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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