Allis EX-10.48


    
      
        	 	
                EXHIBIT
                  10.48

              
	 	 
	
                September
                  2005

                Company
                  Fact Sheet

                 

                ALLIS-CHALMERS
                  ENERGY INC.

                AMEX:  
                  ALY

                 

                We're
                  All about Service

              	
                 

              
	
              	
                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

                
                  

                

                
                  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)

                  
                    

                  

                  
                    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

                      
                        

                      

                      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)

                      
                        

                      

                       

                       

                    

                  

                   

                

                

                  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.

                

              
	 	 	 


      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	  
              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.

            
	 	 	 


    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	  
              Fact Sheet	 	
              September
                2005

            
	 	 	 


    

    
      TAKING
        ADVANTAGE
        OF RECORD
        DRILLING
        ACTIVITY
        &
        BUSINESS
        EXECUTION...
        
          

        

      

      
        	10-Year
                U.S. Rig Count & Composition (1)	 	
                10-Year
                  Oil & Gas Prices

              
	
                 

              	 	
                 

              
	 	 	 


      

    

    
      
        ...TO
          ACHIEVE
          SIGNIFICANT
          GROWTH
          IN ITS NICHE
          MARKETS. 

        
          

        

      

      
        	Growth
                in Total Revenue	 	
                Growth
                  in Total EBITDA(2)

              
	
                 

              	 	
                 

              
	 	 	 


      

    

    
      
        
          ATTRACTIVE
            GROWTH
            OPPORTUNITIES 

        

        
          

        

      

      
        	ALY
                Growing at a Faster Pace than Competitorts	 	
                Diversified
                  Business Mix (2005E EBITDA) (2)

              
	
                 

              	 	
                 

              
	 	 	 


      

    

     

    
      
        

      

      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

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

     

      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

                  	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 


          

        

      

    

    
      
        
          

        

      

      1)
        Based
        on published 2005 Company guidance range.