EXHIBIT 10.48
   
September 2005
Company Fact Sheet
 
ALLIS-CHALMERS ENERGY INC.
AMEX:   ALY
 
We're All about Service
 [large-logo.jpg]
WWW.ALCHENERGY.COM
   

 
Investor Considerations:
      Price (Sept. 16, 2005)
$10.20
•  Positioned in High-Growth Niche Markets. Allis- Chalmers strategically
pursues markets that are growing faster than the oilfield services industry.
 
•  Positive Industry Backdrop. Approximately 80%-85% of ALY’s revenue is derived
from natural gas drilling activities. With national average gas prices in 2005
more than twice that of 2002, natural gas drilling activity has moved to record
highs. With industrywide predictions of further increases in overall E&P
spending in 2005 and 2006, the Company believes industry demand for its drilling
services will continue to remain strong.
 
•  Established Growth Track Record. Since its effective inception in 2001, ALY
has grown its total revenues at an average annual rate of 115%, principally
driven through strategic acquisition. Likewise, EBITDA5) has grown from a slight
loss in 2001 to $7.8 million in 2004 and to $8.0 million for the first six
months of 2005.
 
•  Growth Continuing into 2005. Excluding any benefit from future acquisitions,
and using the midpoint of its 2005 guidance, Allis-Chalmers expects to achieve
annual growth in 2005 of over 80% in revenues, a doubling of EBITDA, and
potentially fivetimes the diluted EPS results of 2004. (2005 guidance was given
on May 5, 2005 and has not been updated or reiterated herewith.)
 
•  Proven Acquisition Expertise. ALY successfully acquired and integrated ten
organizations over the last four years, including three in 2005. Given the
highly fragmented nature of the oilfield service industry, strategic
acquisitions are expected to remain a key driver fueling long term earnings
growth.
 
•   Improving Balance Sheet. ALY strengthened its balance sheet in 2004 bringing
its net debt to capital below 40% at year-end 2004 from 87% at year-end 2003.
Recently, ALY completed a secondary offering (8/05) of 5.8 million shares, with
1.8 million newly issued and expanded its bank credit facility (7/05).
 
•  Experienced Management Team. Averaging nearly 20 years of experience, the
members of the management team have strong reputations and have developed long
lasting relationships with major independent and small exploration and
production companies.
 
 
Stock Data

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Symbol /
Exchange:                                                                                            
ALY / AMEX
52-Week
Range:                                                                                                     $1.75-$14.70
Diluted Shares Outstanding
1):                                                                                   
16.9 mm
Market
Capitalization:                                                                                                 
$170 mm
Total Enterprise Value (TEV)
2):                                                                                 
$205 mm
Avg. Daily Stock Volume
(2005):                                                                                 154,000
Insider Ownership
3):                                                                                                        
28.3%
Public
Float:                                                                                                                       
71.1%
Institutional Ownership
4):                                                                                                  
N/A
 
Financial Data & Guidance (FY Dec; 12/31/04 audited)

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Select Income
Statement:                                                                
2004                    2005E5)
Revenue:                                                                                       
$47.7 mm               $87.6 mm
EBITDA
6):                                                                                      
$7.8 mm                $15.9 mm
Diluted
EPS:                                                                                       
$0.09                        $0.37
TEV /
EBITDA:                                                                                   
 26.3x                        12.9x
P /
E:                                                                                                 
   113.3x                        27.6x
 
Select Balance
Sheet:                                                                      
2004                      2Q05
Total
Cash:                                                                                      $7.3
mm                   $2.7 mm
Total
Debt:                                                                                     $30.5
mm                $37.9 mm
Total Stockholders’
Equity:                                                        $35.1
mm                $40.2 mm
Net Debt / Net
Capital:                                                                      
39.7%                      46.7%
 
Business Composition

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EBITDA
Mix                                                                                       
2004                   2005E5)
Casing
Services:                                                                                      
44%                       32%
Directional
Drilling:                                                                                 
33%                       32%
Compressed Air
Drilling:                                                                        
23%                       19%
Production
Services:                                                                                 
0%                         9%
Rental
Tools:                                                                                              
0%                         8%
 
Stock Price (Sep 20047) - Present)

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1) Diluted shares reflect average outstanding as of second quarter 2005 (15.1 MM
shares) adjusted for the primary shares sold in the secondary offering (1.8 MM
shares).
2) Total Enterprise Value (TEV) is defined as current Market Capitalization,
plus Total Debt, less Total Cash as of the latest financial filing with the SEC.
3) Represents executive officers and directors as disclosed in SEC Form 424B4
filing August 31, 2005.
4) As tracked by Thomson Financial.
5) Based on midpoint of 2005E company guidance range which is detailed in last
page of Fact Sheet.
6) EBITDA is a non-GAAP financial measure; see last page of Fact Sheet for Reg.
G Reconciliation.
7) Stock price history since listing on the American Stock Exchange, September
13, 2004.
     

 
 

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[logo.jpg]   Fact Sheet  
September 2005
     
OUR SHARED VISION
 
Allis-Chalmers Energy Inc. is a multi-faceted oilfield services company. ALY’s
objective is to provide its oil and gas customers the most technologically
advanced equipment and operating personnel in the most productive, safe and cost
effective manner.
 
The Company provides its services both on land and offshore to operators in the
United States, Mexico and most recently the Middle East. In achieving excellence
in all aspects of its operations, the Company strives to be the “first call”
when its services are required, helping to mitigate sector cycles in the
process.
 
The services provided will continue to grow through strategic acquisitions,
geographic expansion and diversification in many aspects of the upstream
drilling and production market. The Company’s goal is to achieve a leading
position in markets that are growing faster than the oilfield services industry
overall.
 
Allis-Chalmers is committed to maintaining the highest ethical standards in all
aspects of its business, and is committed to investor transparency. The Company
also recognizes that its people are its greatest assets, and is dedicated to
making all of its employees proud shareholders of Allis-Chalmers Energy.
 
TAKING ADVANTAGE
 
In early 2000, Munawar (Micki) Hidayatallah founded OilQuip Rentals to serve an
oil industry that he believed was in the midst of a long term bullish cycle.
Over the last five years, he and his team have consummated ten acquisitions,
including the reverse merger of Allis-Chalmers in May 2001. Over the same time,
the highest natural gas and crude oil prices in over 20 years have driven
industry drilling activity to record levels; this is especially true for natural
gas, which is nearing three times the drilling rigs running than were running in
early 2000. Currently, ALY receives 80%-85% of its revenues from gas drilling
services; however, most of its services can be utilized for either gas or oil
drilling activity.
 
The execution of its marketing strategy has enabled Allis-Chalmers to obtain an
increase in revenues between 2002 and 2004 that is greater than the growth in
the active rig count. Looking forward, ALY expects to remain a high-growth
company with projected revenue growth of 70%-100% in 2005 over 2004, excluding
future acquisitions.
 
Allis-Chalmers is focused on building a successful long term track record with
investors as it has operationally done with its customers. The management team
will continue to focus on growth opportunities that will enhance shareholder
value
 
COMPANY OVERVIEW
 
Since 2001, Allis-Chalmers has built a balanced and diversified portfolio of
oilfield service companies. Key to this has been management’s ability to
successfully, and repeatedly, acquire and integrate strategic and complementary
skill-sets. To date, ten such acquisitions have been made, including three in
2005. ALY expects it will continue to grow organically through increased service
offerings in its operating locations as well as through targeted, strategic
acquisitions.
 
The Company’s operations are carried out in five primary business lines. Each
operation has its own technical expertise and historical success, along with a
common commitment to providing its customers with the highest quality equipment
and services.
 
1) Directional & Horizontal Drilling:
This segment provides directional, horizontal and "measurement while drilling"
services to oil and gas companies operating on both land and offshore in the
domestic United States. Since 2002 ALY has increased its team of directional
drillers from 10 to more than 60.
 
2) Casing & Tubing:
This segment supplies specialized equipment and trained operators to install
casing and tubing, change out drill pipe and retrieve production tubing for both
onshore and offshore drilling and workover operations in Texas, the Gulf Coast
and Mexico. In September 2005, ALY expanded its operations and entered the
higher profit margin offshore market by acquiring used equipment from Patterson
Services, Inc.
 
3) Compressed Air Drilling:
This segment provides compressed air and related products and services for the
air drilling, workover, completion, and transmission segments of the oil, gas
and geothermal industries. In July 2005, ALY acquired the remaining equity
interest in AirComp LLC and the compressed air drilling assets of W.T.
Enterprises, Inc.
 
4) Production Services:
Production Services provides chemical injection techniques and installation of
capillary coil tubing to increase production in producing oil and gas wells. ALY
started this segment with the purchase of Downhole Injection Systems in December
2004, and expanded its capabilities with the purchase of Capcoil in May 2005.
 
5) Rental Tools:
The Rental Tools segment provides specialty rental tools for the oil and gas
industry, such as supplying spiral heavy weight drill pipe. ALY initiated this
segment with the purchase of Safco in September 2004, and expanded its market
presence with the purchase of Delta in April 2005.
     

 
 

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[logo.jpg]   Fact Sheet  
September 2005
     

TAKING ADVANTAGE OF RECORD DRILLING ACTIVITY & BUSINESS EXECUTION…

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10-Year U.S. Rig Count & Composition (1)  
10-Year Oil & Gas Prices
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…TO ACHIEVE SIGNIFICANT GROWTH IN ITS NICHE MARKETS. 

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Growth in Total Revenue  
Growth in Total EBITDA(2)
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 [barchart2.jpg]
     

ATTRACTIVE GROWTH OPPORTUNITIES 

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ALY Growing at a Faster Pace than Competitorts  
Diversified Business Mix (2005E EBITDA) (2)
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1) Source: Baker Hughes
2) EBITDA is a non-GAAP financial measure; see last page for Regulation G GAAP
reconciliation and published 2005 Company guidance.
3) Relative performance history since listing on the American Stock Exchange,
September 13, 2004.
4) 2005E EPS and EBITDA represent mean of Wall Street expectations as compiled
by Thomson/First Call. 2005E EPS and EBITDA for ALY is based on the midpoint of
2005 Company guidance; there is no guarantee, however, that the Company will
achieve the result of such estimates.
5) Total Enterprise Value is defined as market capitalization (using diluted
shares outstanding) plus total debt less total cash as of latest SEC filing
available.
6) Fiscal Year September
 
 

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Allis-Chalmers Energy Inc.
AMEX: ALY
Corporate Headquarters
5075 Westheimer, Suite 890
Houston, Texas, 77056
713-369-0550
invest@alchenergy.com
 
Reader Advisory and Forward Looking Statements
 
This Fact Sheet is presented as a brief company overview for the information of
investors, analysts and other parties with an interest in Allis-Chalmers Energy
Inc. (herein referred to as “the Company”, “Allis-Chalmers” and by its stock
exchange ticker, “ALY”). The management of Allis-Chalmers hopes that this Fact
Sheet will encourage analysts and investors to investigate more about the
Company through its Securities and Exchange Commission (SEC) filings, press
releases and other public materials. This Fact Sheet does not constitute an
offer to sell or a solicitation of an offer to buy any securities of the
Company. This Fact Sheet contains forward-looking statements, including, in
particular, statements about ALY’s plans, strategies and prospects. These
statements are based on the Company’s current assumptions, expectations and
projections about future events, which are subject to a wide range of business
risks. The Company encourages investors to review the information regarding the
risks inherent to Allis-Chalmers and the energy industry in which it operates,
as described in its Form 10-K for the year ended December 31, 2004, a copy of
which is available free of charge over the Internet at the SEC’s website
(http://www.sec.gov). This Fact Sheet does not purport to be all-inclusive or to
contain all of the information that a reader may desire as to the structure or
the affairs of the Company. Although the Company believes that the assumptions
reflected in these forward-looking statements are reasonable, the Company can
give no assurance that these assumptions will prove to be correct or that
financial or market forecasts, savings or other benefits anticipated in the
forward-looking statements will be achieved. Forward-looking statements are not
guarantees of future performance and actual results may differ materially from
those projected. The information contained in this Fact Sheet is only current as
of its date, and the Company undertakes no obligation to update this Fact Sheet.
 
REGULATION G EBITDA RECONCILIATION & 2005 COMPANY GUIDANCE
 
This Fact Sheet contains references to the non-GAAP financial measure of
Earnings (net income) before Interest, Taxes, Depreciation, and Amortization, or
EBITDA. Reconciliations of this financial measure to the most directly
comparable GAAP financial measure are provided in the table below. Management
believes EBITDA is useful to an investor in evaluating ALY’s operating
performance because it is widely used by investors in the energy industry to
measure a company’s operating performance, it helps investors more meaningfully
evaluate and compare the results of the Company’s operations from period to
period by removing the impact of the Company’s capital structure and asset base
from ALY’s operating results and it is used by management as a measure of
operating performance, in presentations to its board of directors, as a basis
for strategic planning and forecasting and as a component for setting incentive
compensation.
 
Reconciliation of EBITDA to GAAP Net Income (Loss) ($mm)

                               
Historical Results
 
Company Guidance
 
Year Ended December 31,
 
2001
 
2002
 
2003
 
2004
 
2005E1)
 
2005E1)
                     
Lo case
 
Hi Case
 
Consolidated EBITDA (loss)
   
($0.3
)
$
1.4
 
$
5.6
 
$
7.8
 
$
14.2
 
$
17.5
 
Depreciation and amortization
   
1.1
   
2.6
   
2.9
   
3.6
   
6.0
   
6.0
 
GAAP Income / (loss) from operations
  $
($1.4
)
$
(1.2
)
$
2.6
 
$
4.2
 
$
8.2
 
$
11.5
 
Interest expense, net
   
0.9
   
2.3
   
2.5
   
2.8
   
2.2
   
2.2
 
Income taxes
   
0.0
   
0.3
   
0.4
   
0.5
   
0.6
   
0.7
 
Gains on asset sales & litigation
   
0.0
   
0.0
   
3.4
   
0.0
   
0.1
   
0.1
 
Minority Interest, other expense & dividends
   
0.0
   
0.7
   
1.0
   
0.2
   
0.6
   
0.7
 
Net income (loss) from continuing operations
   
(2.3
)
 
(4.3
)
 
2.3
   
0.8
 
$
4.9
 
$
8.0
 
(Loss) from discontinued operations & (Loss) from
                                     
sale of discontinued operations
   
(2.3
)
 
0.0
   
0.0
   
0.0
   
0
   
0
 
Net income (loss) to common
  $
(4.6
)
$
(4.3
)
$
2.3
 
$
0.8
 
$
5.0
 
$
8.1
 
Weighted Average Diluted Shares O/S (mm)
   
0.8
   
3.8
   
5.9
   
9.5
   
18.0
   
18.0
 
Diluted EPS
  $
(5.79
)
$
(1.14
)
$
0.50
 
$
0.09
 
$
0.28
 
$
0.45
                                         

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1) Based on published 2005 Company guidance range.
 
 

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