PROSPECTUS
SUPERIOR ENERGY SERVICES, INC.
This prospectus relates to 11,761,779 shares of our common stock that
may be offered from time to time by the selling stockholders listed under
the heading "Selling Stockholders."
We have registered these shares to provide the selling stockholders
with freely transferable securities, but this registration does not
necessarily mean that the selling stockholders will offer or sell the
shares. We will not receive any proceeds from the sale of the shares sold
pursuant to this prospectus.
Our common stock is traded on the Nasdaq National Market under the
symbol "SESI." On May 25, 2000, the last reported sale price of our common
stock on the Nasdaq National Market was $10.3125 per share.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR INFORMATION THAT YOU SHOULD
CONSIDER BEFORE PURCHASING THE SHARES.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR
PASSED ON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS SUPPLEMENTED PROSPECTUS IS MAY 26, 2000.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You can inspect and copy that information
at the public reference room of the SEC at 450 Fifth Street, NW,
Washington, D.C. 20549. You may call the SEC at 1-800-SEC-0330 for more
information about the public reference room. The SEC also maintains an
Internet site that contains reports, proxy and information statements and
other information regarding registrants, like us, that file reports with
the SEC electronically. The SEC's Internet address is http://www.sec.gov.
We have filed a registration statement and related exhibits with the
SEC to register the common stock offered by this prospectus. The
registration statement contains additional information about us and our
securities. You may inspect the registration statement and exhibits
without charge at the SEC's public reference room, and you may obtain
copies from the SEC at prescribed rates.
The SEC allows us to "incorporate by reference" the information we
file with it, which means that we can disclose important information to you
by referring to documents on file with the SEC. The information
incorporated by reference is considered to be a part of this prospectus.
Certain information that we file later with the SEC will automatically
update and supersede this information.
We incorporate by reference the following documents that we have filed
with the SEC pursuant to the Securities Exchange Act of 1934:
* Our annual report on Form 10-K for the fiscal year ended
December 31, 1999 (filed March 30, 2000);
* Our quarterly report on Form 10-Q for the fiscal quarter ended
June 30, 1999 (filed August 16, 1999);
* Our current reports on Form 8-K filed March 22, 2000, April 4,
2000, April 20, 2000, May 3, 2000, May 5, 2000, May 8, 2000, May
11, 2000, May 12, 2000 and May 15, 2000;
* Our definitive proxy statement dated June 18, 1999;
* The description of our common stock set forth in our
registration statement on Form 8-A/A filed October 29, 1997; and
* All other documents filed by us with the SEC pursuant to
Sections 13(a), 14 or 15(d) of the Securities Exchange Act of
1934 after September 3, 1999 and prior to the termination of this
offering.
At your request, we will provide you with a free copy of any of these
filings (except for exhibits, unless the exhibits are specifically
incorporated by reference into the filing). You may request copies by
writing or telephoning us at:
Superior Energy Services, Inc.
1105 Peters Road
Harvey, Louisiana 70058
Attn: Investor Relations
(504) 362-4321
YOU SHOULD RELY ONLY ON INFORMATION INCORPORATED BY REFERENCE OR PROVIDED
IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE ELSE TO PROVIDE YOU WITH
DIFFERENT INFORMATION.
NOTICE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements in this prospectus and in some of the documents
that we incorporate by reference in this prospectus are forward-looking
statements about our expectations of what may happen in the future.
Statements that are not historical facts are forward-looking statements.
These statements are based on the beliefs and assumptions of our management
and on information currently available to us. Forward-looking statements
can sometimes be identified by our use of forward-looking words like
"anticipate," "believe," "estimate," "expect," "intend," "may," "plan" and
similar expressions.
Forward-looking statements are not guarantees of future performance.
They involve risks, uncertainties and assumptions. Our future results and
stockholder value may differ significantly from those expressed in or
implied by the forward-looking statements contained in this prospectus and
in the information incorporated in this prospectus. Many of the factors
that will determine these results and values are beyond our ability to
control or predict. We caution you that a number of important factors
could cause actual results to be very different from and worse than our
expectations expressed in or implied by any forward-looking statement.
These factors include, but are not limited to, those discussed in "Risk
Factors" beginning on page 4.
Management believes these forward-looking statements are reasonable.
However, you should not place undue reliance on these forward-looking
statements, which are based only on our current expectations. Forward-
looking statements speak only as of the date they are made, and we
undertake no obligation to publicly update any of them in light of new
information or future events.
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISKS BEFORE MAKING AN
INVESTMENT DECISION. ANY OF THE FOLLOWING RISKS COULD SERIOUSLY HARM OUR
BUSINESS OR ADVERSELY AFFECT OUR FINANCIAL RESULTS. AS A RESULT, THESE
RISKS COULD CAUSE A DECLINE IN THE TRADING PRICE OF OUR COMMON STOCK AND
YOU COULD LOSE ALL OR PART OF YOUR INVESTMENT. YOU SHOULD ALSO REFER TO
THE OTHER INFORMATION INCLUDED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS, INCLUDING OUR FINANCIAL STATEMENTS.
WE ARE IN A CYCLICAL INDUSTRY.
Our business depends in large part on the level of oilfield activity
in the Gulf of Mexico and along the Gulf Coast. The level of oil field
activity is affected in turn by the willingness of oil and gas companies to
make expenditures for the exploration, production and development of oil
and natural gas. The purchases of the products and services we provide
are, to a substantial extent, deferrable in the event oil and gas companies
reduce capital expenditures. Therefore, the willingness of our customers
to make expenditures is critical to our operations. The levels of such
capital expenditures are influenced by:
* oil and gas prices and industry perceptions of future prices,
* the cost of exploring for, producing and delivering oil and
gas,
* the ability of oil and gas companies to generate capital,
* the sale and expiration dates of leases in the United States,
* the discovery rate of new oil and gas reserves, and
* local and international political and economic conditions.
Although the production and development sectors of the oil and gas
industry are less immediately affected by changing prices, and, as a
result, less volatile than the exploration sector, producers generally
react to declining oil and gas prices by reducing expenditures. This has,
in the past, and may, in the future, adversely affect our business. We are
unable to predict future oil and gas prices or the level of oil and gas
industry activity. A prolonged low level of activity in the oil and gas
industry will adversely affect the demand for our products and services and
our financial condition and results of operations.
WE ARE VULNERABLE TO THE POTENTIAL DIFFICULTIES ASSOCIATED WITH RAPID
EXPANSION.
We have grown rapidly over the last several years through internal
growth and acquisitions of other companies. Our future success depends on
our ability to manage the rapid growth that we have experienced, and this
will demand increased responsibility from our management personnel. The
following factors could present difficulties to us:
* the lack of sufficient executive-level personnel;
* the increased administrative burdens; and
* the increased logistical problems common with large, expansive
operations.
If we do not manage these potential difficulties successfully, our
operating results could be adversely affected. The historical financial
information herein is not necessarily indicative of the results that would
have been achieved had we been operated on a fully integrated basis or the
results that may be realized in the future.
OUR INABILITY TO CONTROL THE INHERENT RISKS OF ACQUIRING BUSINESSES COULD
ADVERSELY AFFECT OUR OPERATIONS.
Acquisitions have been and may continue to be a key element of our
business strategy. We cannot assure you that we will be able to identify
and acquire acceptable acquisition candidates on terms favorable to us in
the future. We may be required to incur substantial indebtedness to
finance future acquisitions and also may issue equity securities in
connection with such acquisitions. Such additional debt service
requirements may impose a significant burden on our results of operations
and financial condition. The issuance of additional equity securities
could result in significant dilution to our stockholders. We cannot assure
you that we will be able to successfully consolidate the operations and
assets of any acquired business with our own business. Acquisitions may
not perform as expected when the acquisition was made and may be dilutive
to our overall operating results. In addition, our management may not be
able to effectively manage our increased size or operate a new line of
business.
WE ARE SUSCEPTIBLE TO ADVERSE WEATHER CONDITIONS IN THE GULF OF MEXICO.
Our operations are directly affected by the seasonal differences in
weather patterns in the Gulf of Mexico. These differences may result in
increased operations in the spring, summer and fall periods and a decrease
in the winter months. The seasonality of oil and gas industry activity as
a whole in the Gulf Coast region also affects our operations and sales of
equipment. Weather conditions generally result in higher drilling activity
in the spring, summer and fall months with the lowest activity in winter
months. The rainy weather, hurricanes and other storms prevalent in the
Gulf of Mexico and along the Gulf Coast throughout the year may also affect
our operations. Accordingly, our operating results may vary from quarter
to quarter, depending on factors outside of our control. As a result, full
year results are not likely to be a direct multiple of any particular
quarter or combination of quarters.
WE DEPEND ON SIGNIFICANT CUSTOMERS.
We derive a significant amount of our revenue from a small number of
major and independent oil and gas companies. Our inability to continue to
perform services for a number of our large existing customers, if not
offset by sales to new or other existing customers, could have a material
adverse effect on our business and operations.
OUR INDUSTRY IS HIGHLY COMPETITIVE.
We compete in highly competitive areas of the oil field services
industry. The products and services of each of our principal industry
segments are sold in highly competitive markets, and our revenues and
earnings may be affected by the following factors:
* changes in competitive prices;
* fluctuations in the level of activity and major markets;
* an increased number of liftboats in the Gulf of Mexico;
* general economic conditions; and
* governmental regulation.
We compete with the oil and gas industry's largest integrated oil
field services providers. We believe that the principal competitive
factors in the market areas that we serve are price, product and service
quality, availability and technical proficiency.
Our operations may be adversely affected if our current competitors or
new market entrants introduce new products or services with better
features, performance, prices or other characteristics than our products
and services. Further, additional liftboat capacity in the Gulf of Mexico
would increase competition for that service. Competitive pressures or
other factors also may result in significant price competition that could
have a material adverse effect on our results of operations and financial
condition. Finally, competition among oil field service and equipment
providers is also affected by each provider's reputation for safety and
quality. Although we believe that our reputation for safety and quality
service is good, you cannot be sure that we will be able to maintain our
competitive position.
THE DANGERS INHERENT IN OUR OPERATIONS AND THE POTENTIAL LIMITS ON
INSURANCE COVERAGE COULD EXPOSE US TO POTENTIALLY SIGNIFICANT LIABILITY
COSTS.
Our operations involve the use of liftboats, heavy equipment and
exposure to inherent risks, including equipment failure, blowouts,
explosions and fire. In addition, our liftboats are subject to operating
risks such as catastrophic marine disaster, adverse weather conditions,
mechanical failure, collisions, oil and hazardous substance spills and
navigation errors. The occurrence of any of these events could result in
our liability for personal injury and property damage, pollution or other
environmental hazards, loss of production or loss of equipment. In
addition, certain of our employees who perform services on offshore
platforms and vessels are covered by provisions of the Jones Act, the Death
on the High Seas Act and general maritime law. These laws make the
liability limits established by state workers' compensation laws
inapplicable to these employees and instead permit them or their
representatives to pursue actions against us for damages for job-related
injuries. In such actions, there is generally no limitation on our
potential liability.
Any litigation arising from a catastrophic occurrence involving our
services or equipment could result in large claims for damages. The
frequency and severity of such incidents affect our operating costs,
insurability and relationships with customers, employees and regulators.
Any increase in the frequency or severity of such incidents, or the general
level of compensation awards with respect to such incidents, could affect
our ability to obtain projects from oil and gas companies or insurance.
This could have a material adverse effect on us. We maintain what we
believe is prudent insurance protection. You cannot be sure that we will be
able to maintain adequate insurance in the future at rates we consider
reasonable or that our insurance coverage will be adequate to cover future
claims that may arise.
THE NATURE OF OUR INDUSTRY SUBJECTS US TO COMPLIANCE WITH REGULATORY AND
ENVIRONMENTAL LAWS.
Our business is significantly affected by state and federal laws and
other regulations relating to the oil and gas industry and by changes in
such laws and the level of enforcement of such laws. We are unable to
predict the level of enforcement of existing laws and regulations, how such
laws and regulations may be interpreted by enforcement agencies or court
rulings, or whether additional laws and regulations will be adopted. We
are also unable to predict the effect that any such events may have on us,
our business, or our financial condition.
Federal and state laws that require owners of non-producing wells to
plug the well and remove all exposed piping and rigging before the well is
permanently abandoned significantly affect the demand for our plug and
abandonment services. A decrease in the level of enforcement of such laws
and regulations in the future would adversely affect the demand for our
services and products. In addition, demand for our services is affected by
changing taxes, price controls and other laws and regulations relating to
the oil and gas industry generally. The adoption of laws and regulations
curtailing exploration and development drilling for oil and gas in our
areas of operations for economic, environmental or other policy reasons
could also adversely affect our operations by limiting demand for our
services.
We also have potential environmental liabilities with respect to our
offshore and onshore operations, including our environmental cleaning
services. Certain environmental laws provide for joint and several
liabilities for remediation of spills and releases of hazardous substances.
These environmental statutes may impose liability without regard to
negligence or fault. In addition, we may be subject to claims alleging
personal injury or property damage as a result of alleged exposure to
hazardous substances. We believe that our present operations substantially
comply with applicable federal and state pollution control and
environmental protection laws and regulations. We also believe that
compliance with such laws has had no material adverse effect on our
operations to date. However, such environmental laws are changed
frequently. Sanctions for noncompliance may include revocation of permits,
corrective action orders, administrative or civil penalties and criminal
prosecution. We are unable to predict whether environmental laws will in
the future materially adversely affect our operations and financial
condition.
THE COMPANY
We are the leading provider of post wellhead intervention, evaluation,
maintenance and abandonment services in the Gulf of Mexico. Over the past
few years, we have significantly expanded our geographic scope of
operations throughout the Gulf Coast region and the range of production
related services and equipment we provide through both internal growth and
strategic acquisitions.
The broad range of specialized oilfield services and equipment we
provide to oil and gas companies in the Gulf of Mexico and throughout the
Gulf Coast region include:
* plugging and abandonment services,
* the rental of specialized oilfield equipment,
* mechanical wireline services,
* the rental of liftboats,
* coiled tubing services,
* well pumping and stimulation services,
* data acquisition services,
* gas lift services,
* electric wireline services,
* environmental cleaning services,
* field management services, and
* the manufacture and sale of drilling instrumentation and oil
spill containment equipment.
Over the past few years, we have significantly expanded our geographic
scope of operations and the range of production related services we provide
through both internal growth and strategic acquisitions. In July 1999, we
completed the acquisition by merger of Cardinal Holding Corp., and in
November 1999, we completed the acquisition of Production Management
Companies, Inc., thereby making these companies two of our wholly-owned
subsidiaries. These acquisitions firmly established us as a market leader
in providing most offshore production related services using liftboats as
work platforms and allowed us to expand our scope of operations to include
offshore platform and property management services.
Superior is a Delaware corporation, and the mailing address of our
executive offices is 1105 Peters Road, Harvey, Louisiana 70058. Our
telephone number is (504) 362-4321.
USE OF PROCEEDS
We will not receive any proceeds from the sales of shares by the
selling stockholders.
SELLING STOCKHOLDERS
As a condition of the agreement and plan of merger executed in
connection with the Cardinal acquisition, we entered into a registration
rights agreement with virtually all of Cardinal's former stockholders, in
which we agreed to register for resale the shares of common stock received
by them in the merger and shares that were transferred to their permitted
transferees, subject to certain volume limitations.
The terms of the registration rights agreement required us to file a
registration statement with regard to the shares of common stock received
by the selling stockholders in the merger, and to keep the registration
statement effective until July 15, 2001. In addition, under the terms of
the registration rights agreement, no selling stockholder may sell pursuant
to the registration statement a greater number of shares of common stock
than could be sold without registration under Rule 144(e) of the Securities
Act of 1933. Under Rule 144(e), a selling stockholder may not sell, in any
three-month period, a number of shares that exceeds the greater of:
* one percent of our outstanding common stock;
* the average weekly reported volume of trading in our common
stock on the Nasdaq National Market during the four calendar
weeks preceding the filing of the Rule 144 notice, if required,
or, if not required, the date of receipt of the order to execute
the transaction by the broker or the date of the execution of the
transaction directly with a market maker.
The table below sets forth certain information as of May 18, 2000
regarding the remaining number of shares offered by each selling
stockholder under this prospectus. The selling stockholders may from time
to time offer the shares of common stock offered by this prospectus. We do
not know when or in what amounts the selling stockholders may offer shares
for resale and we cannot assure you that the selling stockholders will sell
any or all of the shares offered by this prospectus. Accordingly, we
cannot give you an estimate of the number of shares or the percentage of
our outstanding shares of common stock that will be held by each selling
stockholder after completion of this offering. Currently, all the selling
stockholders own less than one percent of our outstanding common stock
except for Kotts Capital Holdings, L.P., which owns approximately 11.4%,
CFE, Inc., which owns approximately 3.5%, and the three DLJ entities listed
below, which collectively beneficially own approximately 2.3%.
NUMBER OF NUMBER OF
SHARES SHARES
OWNED PRIOR TO COVERED BY THIS
SELLING STOCKHOLDERS OFFERING PROSPECTUS
- -------------------- -------- ----------
Kotts Capital Holdings, L.P. 7,756,095 7,686,095
CFE, Inc.(1) 2,341,826 2,341,826
DLJ Investment Partners, L.P. 1,275,010(2) 1,275,010(2)
DLJ Investment Funding, Inc. 181,605(2) 181,605(2)
DLJ ESC II, L.P. 121,246(2) 121,246(2)
Hibernia Corporation 27,264 27,264
Hibernia Capital Corporation 48,881 48,881
William Coe(3) 30,000 30,000
Stephen A. Weiss(3) 20,000 20,000
Shahe Sinanian(3) 10,000 10,000
Anthony Alaimo(4) 17,012 11,834
Bobby Lott(5) 11,971 3,768
----------- -----------
Total 11,840,910 11,757,529(6)
_______________
(1) Permitted transferee of General Electric Credit Corporation. On
February 26, 1998, Cardinal and its subsidiary entered into a credit
agreement with, among others, General Electric Capital Corporation as
administrative agent and lender. The debt underlying this credit agreement
was refinanced when Superior, as guarantor, entered into a credit agreement
dated as of July 15, 1999 with General Electric Capital Corporation as
administrative agent and lender and all of Superior's subsidiaries as
borrowers.
(2) DLJ Investment Partners, L.P., DLJ Investment Funding, Inc. and DLJ
ESC II, L.P. are affiliated entities. Although each indirectly
beneficially owns the shares held by the other two entities, the table only
lists those shares held directly by each.
(3) Permitted transferees of Kotts Capital Holdings, L.P.
(4) The selling stockholder is a former employee of Cardinal Services,
Inc.
(5) The selling stockholder is employed in a management position by
Cardinal Services, Inc.
(6) An additional 4,250 shares are also covered by this prospectus for
sale by Pat Richard, an employee of Cardinal Services, Inc., who is not a
party to the registration rights agreement.
_______________
Under the terms of the registration rights agreement, we have agreed
to indemnify the selling stockholders against liabilities that may arise as
a result of untrue statements or omissions of material facts in this
prospectus. However, we will not indemnify a selling stockholder if these
untrue statements were based on information that the selling stockholder
provided to us in writing for use in this prospectus. Nor will we
indemnify a selling stockholder if the selling stockholder's failure to
provide a copy of the most current prospectus to the purchaser gives rise
to the liabilities. Each selling stockholder has agreed to indemnify us
against liabilities that arise as a result of untrue statements or
omissions of material facts in this prospectus if those statements relate
to the selling stockholder or its plan of distribution and are based on
information provided to us by the selling stockholder for use in this
prospectus.
PLAN OF DISTRIBUTION
All the selling stockholders, including Mr. Richard, may sell their
shares directly or through broker-dealers acting as principal or agent.
The selling stockholders may sell their shares in one or more transactions,
at prices then prevailing or related to the then current market price or at
negotiated prices. The selling stockholders will determine the offering
price of the shares from time to time and the offering price may be higher
or lower than the market price of the shares on the Nasdaq National Market.
The methods by which the selling stockholders, or their pledgees,
donees, transferees or other successors in interest, may offer and sell
their shares may include, but are not limited to, the following:
* Privately negotiated transactions;
* Sales on the Nasdaq National Market or other exchanges on
which the common stock is listed at the time of sale at prices
and at terms then prevailing or at prices related to the then
current market price;
* Cross or block trades in which the broker or dealer so engaged
will attempt to sell the shares as agent, but may position and
resell a portion of the block as principal to facilitate the
transaction;
* A broker or dealer may purchase as principal and resell the
shares for its own account under this prospectus; or
* Ordinary brokerage transactions and transactions in which the
broker solicits purchasers.
To the extent required in connection with a particular offering, we
will set forth in a prospectus supplement or, if appropriate, in a post-
effective amendment, the terms of the offering, including among other
things, the number of shares of common stock to be sold, the public
offering price, the names of any dealers or agents and any applicable
commissions or discounts.
The selling stockholders and any dealers or agents participating in
the distribution of the offered shares may be deemed "underwriters" within
the meaning of the Securities Act of 1933, and any profit on the sale of
the offered shares by the selling stockholders and any commissions received
by any broker-dealers may be deemed to be underwriting commissions under
the Securities Act of 1933.
The selling stockholders will pay all fees, discounts and brokerage
commissions. We will pay all expenses of preparing and reproducing this
prospectus, including expenses of compliance with state securities laws and
filing fees with the SEC. We will not receive any proceeds of the sale of
any shares of our common stock offered under this prospectus.
LEGAL MATTERS
The validity of the shares of our common stock being offered hereby
will be passed upon for us by Jones, Walker, Waechter, Poitevent,
Carre`re & Dene`gre, L.L.P., New Orleans, Louisiana.
EXPERTS
The consolidated financial statements and schedule of Superior Energy
Services, Inc. and subsidiaries as of and for the year ended December 31,
1999, have been incorporated by reference herein in reliance upon the
report of KPMG LLP, independent certified public accountants, incorporated
by reference herein, and upon the authority of said firm as experts in
accounting and auditing.
The consolidated financial statements of Superior Energy Services,
Inc. and subsidiaries (formerly Cardinal Holding Corp.) as of December 31,
1998, and for each of the two years in the period ended December 31, 1998
appearing in Superior's annual report on Form 10-K for the year ended
December 31, 1999 have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements
are incorporated herein by reference in reliance upon such report given on
the authority of such firm as experts in accounting and auditing.
Future audited financial statements of the Company and the reports
thereon of the Company's independent public accounts will also be
incorporated by reference in this prospectus in reliance upon the authority
of those accountants as experts in giving those reports to the extent set
firm has audited those financial statements and consented to the use of
their reports thereon.
