e10vq

0000950123-11-067831.txt : 20110725 0000950123-11-067831.hdr.sgml : 20110725 20110725143450 ACCESSION NUMBER: 0000950123-11-067831 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20110630 FILED AS OF DATE: 20110725 DATE AS OF CHANGE: 20110725 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BASIC ENERGY SERVICES INC CENTRAL INDEX KEY: 0001109189 STANDARD INDUSTRIAL CLASSIFICATION: OIL, GAS FIELD SERVICES, NBC [1389] IRS NUMBER: 542091194 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-32693 FILM NUMBER: 11984380 BUSINESS ADDRESS: STREET 1: 400 W. ILLINOIS, SUITE 800 CITY: MIDLAND STATE: TX ZIP: 79701 BUSINESS PHONE: 4326205500 MAIL ADDRESS: STREET 1: 400 W. ILLINOIS, SUITE 800 CITY: MIDLAND STATE: TX ZIP: 79701 FORMER COMPANY: FORMER CONFORMED NAME: SIERRA WELL SERVICE INC DATE OF NAME CHANGE: 20000313 10-Q 1 h83341e10vq.htm FORM 10-Q e10vq

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2011


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-32693

Basic Energy Services, Inc.

(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)		54-2091194 (I.R.S. Employer Identification No.)

500 W. Illinois, Suite 100 Midland, Texas (Address of principal executive offices)		79701 (Zip code)

(432) 620-5500

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer o		Accelerated filer þ		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

42,428,030 shares of the registrant’s Common Stock were outstanding as of July 20, 2011.

BASIC ENERGY SERVICES, INC.

Index to Form 10-Q


Part I. FINANCIAL INFORMATION			4
Item 1. Financial Statements			4
Consolidated Balance Sheets as of June 30, 2011 (Unaudited) and December 31, 2010			4
Consolidated Statements of Operations and Comprehensive Income for the three months and six months ended June 30, 2011 and 2010 (Unaudited)			5
Consolidated Statements of Stockholders’ Equity for the six months ended June 30, 2011 (Unaudited)			6
Consolidated Statements of Cash Flows for the six months ended June 30, 2011 and 2010 (Unaudited)			7
Notes to the Unaudited Consolidated Financial Statements			8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			25
Management’s Overview			25
Segment Overview			26
Operating Cost Overview			29
Critical Accounting Policies and Estimates			29
Results of Operations			31
Liquidity and Capital Resources			33
Other Matters			39
Item 3. Quantitative and Qualitative Disclosures About Market Risk			39
Item 4. Controls and Procedures			39
Part II. OTHER INFORMATION			40
Item 1. Legal Proceedings			40
Item 1A. Risk Factors			40
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			40
Item 6. Exhibits			41
Signatures			43

CAUTIONARY STATEMENT

REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report contains certain statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, among other things, the risk factors discussed in this quarterly report and in our most recent annual report on Form 10-K and other factors, most of which are beyond our control.

The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “plan,” “expect,” “indicate” and similar expressions are intended to identify forward-looking statements. All statements other than statements of current or historical fact contained in this quarterly report are forward-looking statements. Although we believe that the forward-looking statements contained in this quarterly report are based upon reasonable assumptions, the forward-looking events and circumstances discussed in this quarterly report may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements.

Important factors that may affect our expectations, estimates or projections include:

	•		a decline in, or substantial volatility of, oil and natural gas prices, and any related changes in expenditures by our customers;

	•		the effects of future acquisitions on our business;

	•		changes in customer requirements in markets or industries we serve;

	•		competition within our industry;

	•		general economic and market conditions;

	•		our access to current or future financing arrangements;

	•		our ability to replace or add workers at economic rates; and

	•		environmental and other governmental regulations.

Our forward-looking statements speak only as of the date of this quarterly report. Unless otherwise required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

This quarterly report includes market share and industry data and forecasts that we obtained from internal company surveys (including estimates based on our knowledge and experience in the industry in which we operate), market research, consultant surveys, publicly available information, and industry publications and surveys. Industry surveys and publications, consultant surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable. Although we believe such information is accurate and reliable, we have not independently verified any of the data from third party sources cited or used for our management’s industry estimates, nor have we ascertained the underlying economic assumptions relied upon therein. For example, the number of onshore well servicing rigs in the U.S. could be lower than our estimate to the extent our two larger competitors have continued to report as stacked rigs equipment that is not actually complete or subject to refurbishment. Statements as to our position relative to our competitors or as to market share refer to the most recent available data.

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Basic Energy Services, Inc.
Consolidated Balance Sheets
(in thousands, except share data)


	June 30,			December 31,
	2011			2010
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	220,910		$	47,918
Trade accounts receivable, net of allowance of $1,997 and $3,078, respectively		200,092			150,364
Accounts receivable — related parties		44			42
Income tax receivable		78,195			79,480
Inventories		25,662			21,556
Prepaid expenses		6,334			5,425
Other current assets		6,632			18,193
Deferred tax assets		8,430			8,290

Total current assets		546,299			331,268

Property and equipment, net		693,891			625,702
Deferred debt costs, net of amortization		16,348			6,835
Goodwill		16,287			16,150
Other intangible assets, net of amortization		43,727			45,833
Other assets		12,555			4,025

Total assets	$	1,329,107		$	1,029,813

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	39,787		$	40,477
Accrued expenses		61,780			51,237
Current portion of long-term debt		27,816			24,231
Other current liabilities		166			3,309

Total current liabilities		129,549			119,254

Long-term debt, net of unamortized discount or premium on notes of $1,991 and $9,425, respectively		762,190			474,628
Deferred tax liabilities		117,636			123,393
Other long-term liabilities		11,369			10,615
Commitments and contingencies
Stockholders’ equity:
Preferred stock; $.01 par value; 5,000,000 shares authorized; none designated or issued at June 30, 2011 and December 31, 2010, respectively		—			—
Common stock; $.01 par value; 80,000,000 shares authorized; 42,432,309 shares issued, and 42,394,955 shares outstanding at June 30, 2011; 42,394,809 shares issued, and 41,310,447 shares outstanding at December 31, 2010.		424			424
Additional paid-in capital		343,385			335,927
Retained earnings (deficit)		(35,446	)		(27,544	)
Treasury stock, at cost, 37,354 and 1,084,362 shares at June 30, 2011 and December 31, 2010, respectively		—			(6,884	)

Total stockholders’ equity		308,363			301,923

Total liabilities and stockholders’ equity	$	1,329,107		$	1,029,813

See accompanying notes to consolidated financial statements.

Basic Energy Services, Inc.
Consolidated Statements of Operations and Comprehensive Income
(in thousands, except per share amounts)


	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
	(Unaudited)						(Unaudited)
Revenues:
Completion and remedial services	$	121,807		$	61,533		$	219,314		$	106,767
Fluid services		81,415			58,801			153,760			110,948
Well servicing		83,881			49,529			153,028			91,325
Contract drilling		9,752			5,269			16,807			9,058


Total revenues		296,855			175,132			542,909			318,098


Expenses:
Completion and remedial services		68,827			37,660			123,760			67,383
Fluid services		51,688			43,425			99,916			84,365
Well servicing		57,409			36,734			105,849			68,834
Contract drilling		7,393			3,725			11,878			6,995
General and administrative, including stock-based compensation of $2,078 and $1,439 in three months ended June 30, 2011 and 2010, and $3,758 and $2,589 in the six months ended June 30, 2011 and 2010, respectively		34,138			26,820			65,479			51,897
Depreciation and amortization		34,784			34,250			67,764			67,348
(Gain) loss on disposal of assets		942			463			(763	)		1,174


Total expenses		255,181			183,077			473,883			347,996


Operating income (loss)		41,674			(7,945	)		69,026			(29,898	)

Other income (expense):
Interest expense		(11,842	)		(11,778	)		(23,184	)		(23,442	)
Interest income		23			24			28			50
Gain on bargain purchase		—			1,772			—			1,772
Loss on early extinguishment of debt		—			—			(49,366	)		—
Other income (expense)		102			111			259			192


Income (loss) from continuing operations before income taxes		29,957			(17,816	)		(3,237	)		(51,326	)

Income tax benefit (expense)		(13,407	)		7,144			1,294			19,063



Net income (loss)	$	16,550		$	(10,672	)	$	(1,943	)	$	(32,263	)


Earnings (loss) per share of common stock:
Basic	$	0.41		$	(0.27	)	$	(0.05	)	$	(0.81	)


Diluted	$	0.40		$	(0.27	)	$	(0.05	)	$	(0.81	)

See accompanying notes to consolidated financial statements.

Basic Energy Services, Inc.
Consolidated Statements of Stockholders’ Equity
(in thousands, except share data)


					Additional									Total
	Common Stock				Paid-In			Treasury			Retained			Stockholders’
	Shares		Amount		Capital			Stock			Earnings			Equity
Balance — December 31, 2010		42,394,809	$	424	$	335,927		$	(6,884	)	$	(27,544	)	$	301,923

Issuances of restricted stock		—		—		(32	)		5,783			(5,751	)		—
Amortization of share-based compensation		—		—		3,758			—			—			3,758
Purchase of treasury stock		—		—		—			(1,761	)		—			(1,761	)
Exercise of stock options / vesting of restricted stock		37,500		—		3,732			2,862			(208	)		6,386
Net loss		—		—		—			—			(1,943	)		(1,943	)

Balance — June 30, 2011 (unaudited)		42,432,309	$	424	$	343,385		$	—		$	(35,446	)	$	308,363

See accompanying notes to consolidated financial statements.

Basic Energy Services, Inc.
Consolidated Statements of Cash Flows
(in thousands)


	Six Months Ended June 30,
	2011			2010
	(Unaudited)
Cash flows from operating activities:
Net loss	$	(1,943	)	$	(32,263	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		67,764			67,348
Gain on bargain purchase		—			(1,772	)
Accretion on asset retirement obligation		65			81
Change in allowance for doubtful accounts		(1,081	)		(953	)
Amortization of deferred financing costs		967			762
Amortization of discount on senior secured notes		6,484			937
Non-cash compensation		3,758			2,589
Loss on early extinguishment of debt (non-cash)		3,940			—
Premium on retirement of 11.625% senior secured notes		36,179			—
(Gain) loss on disposal of assets		(763	)		1,174
Deferred income taxes		(6,088	)		(3,311	)

Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable		(48,744	)		(30,886	)
Inventories		(4,106	)		(1,439	)
Prepaid expenses and other current assets		(1,102	)		3,747
Other assets		(8,531	)		(2,981	)
Accounts payable		(690	)		3,379
Excess tax expense (benefit) from exercise of employee stock options / vesting of restricted stock		(3,508	)		360
Income tax payable		4,793			(15,460	)
Other liabilities		(2,328	)		1,587
Accrued expenses		10,515			5,505

Net cash provided by (used in) operating activities		55,581			(1,596	)

Cash flows from investing activities:
Purchase of property and equipment		(114,873	)		(25,555	)
Proceeds from sale of assets		17,996			1,787
Change in restricted cash		—			(1,124	)
Payments for other long-term assets		(287	)		(350	)
Payments for businesses, net of cash acquired		(10	)		(10,312	)

Net cash used in investing activities		(97,174	)		(35,554	)

Cash flows from financing activities:
Proceeds from debt		498,850			—
Payments of debt		(238,291	)		(13,805	)
Premium on retirement of 11.625% senior secured notes		(36,179	)		—
Purchase of treasury stock		(1,761	)		(316	)
Excess tax (expense) benefit from exercise of employee stock options / vesting of restricted stock		3,508			(360	)
Tax withholding from exercise of stock options		(2,529	)		(8	)
Exercise of employee stock options		5,407			65
Deferred loan costs and other financing activities		(14,420	)		(8	)

Net cash provided by (used in) financing activities		214,585			(14,432	)


Net increase (decrease) in cash and equivalents		172,992			(51,582	)

Cash and cash equivalents — beginning of period		47,918			125,357

Cash and cash equivalents — end of period	$	220,910		$	73,775

See accompanying notes to consolidated financial statements.

BASIC ENERGY SERVICES, INC.

Notes to Consolidated Financial Statements
June 30, 2011 (unaudited)

1. Basis of Presentation and Nature of Operations

Basis of Presentation

The accompanying unaudited consolidated financial statements of Basic Energy Services, Inc. and subsidiaries (“Basic” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments which are of a normal recurring nature considered necessary for a fair presentation have been made in the accompanying unaudited financial statements.

Nature of Operations

Basic provides a wide range of well site services to oil and natural gas drilling and producing companies, including completion and remedial services, fluid services and well site construction services, well servicing and contract drilling. These services are primarily provided using Basic’s fleet of equipment. Basic’s operations are concentrated in the major United States onshore oil and gas producing regions in Texas, New Mexico, Oklahoma, Arkansas, Kansas, Louisiana, Wyoming, North Dakota, Colorado, Utah, Montana, West Virginia, and Pennsylvania.

2. Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Basic and its wholly-owned subsidiaries. Basic has no variable interest in any other organization, entity, partnership, or contract. All intercompany transactions and balances have been eliminated.

Estimates and Uncertainties

Preparation of the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Areas where critical accounting estimates are made by management include:

•

Depreciation and amortization of property and equipment and intangible assets

•

Impairment of property and equipment, goodwill and intangible assets

•

Allowance for doubtful accounts

•

Litigation and self-insured risk reserves

•

Fair value of assets acquired and liabilities assumed

•

Future cash flows

•

Stock-based compensation

•

Income taxes

•

Asset retirement obligations

Revenue Recognition

Completion and Remedial Services — Completion and remedial services consists primarily of pumping services, focused on cementing, acidizing and fracturing, nitrogen units, coiled tubing units, snubbing units, and rental and fishing tools. Basic recognizes revenue when services are performed, collection of the relevant receivables is probable, persuasive evidence of an arrangement exists and the price is fixed or determinable. Basic prices completion and remedial services by the hour, day, or project depending on the type of service performed. When Basic provides multiple services to a customer, revenue is allocated to the services performed based on the fair value of the services.

Fluid Services — Fluid services consists primarily of the sale, transportation, storage and disposal of fluids used in drilling, production and maintenance of oil and natural gas wells, and well site construction and maintenance services. Basic recognizes revenue when services are performed, collection of the relevant receivables is probable, persuasive evidence of an arrangement exists and the price is fixed or determinable. Basic prices fluid services by the job, by the hour or by the quantities sold, disposed of or hauled.

Well Servicing — Well servicing consists primarily of maintenance services, workover services, completion services, plugging and abandonment services and rig manufacturing and servicing. Basic recognizes revenue when services are performed, collection of the relevant receivables is probable, persuasive evidence of an arrangement exists and the price is fixed or determinable. Basic prices well servicing by the hour or by the day of service performed. Rig manufacturing revenue is recognized when the rig is accepted by the customer, based on the completed contract method by individual rig.

Contract Drilling — Contract drilling consists primarily of drilling wells to a specified depth using drilling rigs. Basic recognizes revenues based on either a “daywork” contract, in which an agreed upon rate per day is charged to the customer, or a “footage” contract, in which an agreed upon rate is charged per the number of feet drilled.

Taxes assessed on sales transactions are presented on a net basis and are not included in revenue.

Inventories

For rental and fishing tools, inventories consisting mainly of grapples and drill bits are stated at the lower of cost or market, with cost being determined by the average cost method. Other inventories, consisting mainly of manufacturing raw materials, rig components, repair parts, drilling and completion materials and gravel, are held for use in the operations of Basic and are stated at the lower of cost or market, with cost being determined on the first-in, first-out (“FIFO”) method.

Property and Equipment

Property and equipment are stated at cost or at estimated fair value at acquisition date if acquired in a business combination. Expenditures for repairs and maintenance are charged to expense as incurred and additions and improvements that significantly extend the lives of the assets are capitalized. Upon sale or other retirement of depreciable property, the cost and accumulated depreciation and amortization are removed from the related accounts and any gain or loss is reflected in operations. All property and equipment are depreciated or amortized (to the extent of estimated salvage values) on the straight-line method. The components of a well servicing rig generally require replacement or refurbishment during the well servicing rig’s life and are depreciated over their estimated useful lives, which range from 3 to 15 years. The costs of the original components of a purchased or acquired well servicing rig are not maintained separately from the base rig.

Impairments

Long-lived assets, such as property, plant, and equipment, and purchased intangibles subject to amortization, are reviewed for impairment at least annually, or whenever, in management’s judgment, events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of such assets to estimated undiscounted future cash flows expected to be generated by the assets. Expected future cash flows and carrying values are aggregated at their lowest identifiable level. If the carrying amount of such assets exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of such assets exceeds the fair value of the assets. Assets to be disposed of would be separately presented in the consolidated balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities, if material, of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the consolidated balance sheet. These assets are normally sold within a short period of time through a third party auctioneer.

Basic’s goodwill and trade name intangibles are considered to have an indefinite useful economic life and are not amortized. Basic assesses impairment of its goodwill and trade name intangibles annually as of December 31 or on an interim basis if events or circumstances indicate that the fair value of the assets has decreased below the assets’ carrying value. A two-step process is required for testing impairment of goodwill. First, the fair value of each reporting unit is compared to its carrying value to determine whether an indication of impairment exists. If impairment is indicated, then the fair value of the reporting unit’s goodwill is determined by allocating the unit’s fair value to its assets and liabilities (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination. The amount of impairment for goodwill is measured as the excess of its carrying value over its fair value.

Deferred Debt Costs

Basic capitalizes certain costs in connection with obtaining its borrowings, such as lender’s fees and related attorney’s fees. These costs are amortized to interest expense using the effective interest method.

Deferred debt costs were approximately $19.6 million net of accumulated amortization of $3.3 million and $10.7 million net of accumulated amortization of $3.9 million at June 30, 2011 and December 31, 2010, respectively. Amortization of deferred debt costs totaled approximately $535,000 and $380,000 for the three months ended June 30, 2011 and 2010, respectively. Amortization of deferred debt costs totaled approximately $967,000 and $762,000 for the six months ended June 30, 2011 and 2010, respectively.

Basic recorded a charge of $3.9 million during the first quarter of 2011 related to the write-off of debt costs associated with its 11.625% Senior Secured Notes and $30.0 million revolving credit facility. On February 15, 2011, Basic terminated the revolving credit facility and completed the closing for an early tender for approximately $224.7 million of the Senior Secured Notes and delivered to the trustee amounts required to satisfy and discharge remaining obligations for the outstanding notes. Basic also incurred $2.9 million of deferred debt costs associated with the $165.0 million revolving credit facility entered into on February 15, 2011. Additionally, on June 13, 2011, Basic incurred $11.5 million of deferred debt costs associated with the issuance of additional 7.75% Senior Notes due 2019.

Goodwill and Other Intangible Assets

Goodwill and other intangible assets not subject to amortization are tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. Basic completes its assessment of goodwill and trade name intangible impairment December 31 of each year.

Basic had trade names of $1.8 million as of June 30, 2011 and December 31, 2010. Trade names have an indefinite life and are tested for impairment annually.

The changes in the carrying amount of goodwill for the six months ended June 30, 2011 are as follows (in thousands):


	Completion and
	Remedial			Fluid		Well		Contract
	Services			Services		Servicing		Drilling		Total
Balance as of December 31, 2010	$	10,771		$	488	$	4,891	$	—	$	16,150
Goodwill adjustments		(74	)		148		63		—		137

Balance as of June 30, 2011	$	10,697		$	636	$	4,954	$	—	$	16,287

Basic’s intangible assets subject to amortization consist of customer relationships, non-compete agreements and rig engineering plans. The gross carrying amount of customer relationships subject to amortization was $48.0 million at both June 30, 2011 and December 31, 2010. The gross carrying amount of non-compete agreements subject to amortization totaled approximately $4.3 million and $4.9 million at June 30, 2011 and December 31, 2010, respectively. The gross carrying amount of rig engineering plans subject to amortization was $746,000 at both June 30, 2011 and December 31, 2010. Accumulated amortization related to these intangible assets totaled approximately $11.1 million and $9.6 million at June 30, 2011 and December 31, 2010, respectively. Amortization expense for the three months ended June 30, 2011 and 2010 was approximately $1.0 million and $844,000, respectively. Amortization expense for the six months ended June 30, 2011 and 2010 was approximately $2.1 million and $1.7 million, respectively. Other intangibles net of accumulated amortization allocated to reporting units as of June 30, 2011 were $30.0 million,

$2.5 million, $4.6 million and $4.8 million for completion and remedial services, fluid services, well servicing, and contract drilling, respectively. No adjustments were made to prior periods to reflect subsequent adjustments to acquisitions due to immateriality.

Customer relationships are amortized over a 15-year life, non-compete agreements are amortized over a five-year life, and rig engineering plans are amortized over a 15-year life.

Stock-Based Compensation

Basic’s stock-based awards consist of stock options and restricted stock. Stock options issued are valued on the grant date using the Black-Scholes-Merton option-pricing model, and restricted stock issued is valued based on the fair value of Basic’s common stock at the grant date. All stock-based awards are adjusted for an expected forfeiture rate and amortized over the vesting period.

Income Taxes

Basic recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using statutory tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in the period that includes the statutory enactment date. A valuation allowance for deferred tax assets is recognized when it is more likely than not that the benefit of deferred tax assets will not be realized.

Interest charges are recorded in interest expense and penalties are recorded in income tax expense.

Concentrations of Credit Risk

Financial instruments, which potentially subject Basic to concentration of credit risk, consist primarily of temporary cash investments and trade receivables. Basic restricts investment of temporary cash investments to financial institutions with high credit standing. Basic’s customer base consists primarily of multi-national and independent oil and natural gas producers. Basic performs ongoing credit evaluations of its customers but generally does not require collateral on its trade receivables. Credit risk is considered by management to be limited due to the large number of customers comprising its customer base. Basic maintains an allowance for potential credit losses on its trade receivables, and such losses have been within management’s expectations.

Basic did not have any one customer that represented 10% or more of consolidated revenue during the three months or six months ended June 30, 2011 or 2010.

Asset Retirement Obligations

Basic records the fair value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets and capitalizes an equal amount as a cost of the asset depreciating it over the life of the asset. Subsequent to the initial measurement of the asset retirement obligation, the obligation is adjusted at the end of each quarter to reflect the passage of time, changes in the estimated future cash flows underlying the obligation, acquisition or construction of assets, and settlements of obligations.

Environmental

Basic is subject to extensive federal, state and local environmental laws and regulations. These laws, which are constantly changing, regulate the discharge of materials into the environment and may require Basic to remove or mitigate the adverse environmental effects of disposal or release of petroleum, chemicals and other substances at various sites. Environmental expenditures are expensed or capitalized depending on the future economic benefit. Expenditures that relate to an existing condition caused by past operations and that have no future economic benefits are expensed. Liabilities for expenditures of a non-capital nature are recorded when environmental assessment and/or remediation is probable and the costs can be reasonably estimated.

Litigation and Self-Insured Risk Reserves

Basic estimates its reserves related to litigation and self-insured risks based on the facts and circumstances specific to the litigation and self-insured claims, its past experience with similar claims and the likelihood of the future event occurring. Basic maintains accruals on the consolidated balance sheets to cover self-insurance retentions (See note 6).

Recent Accounting Pronouncements

In January 2010, the FASB issued ASU No. 2010-06, “Improving Disclosures about Fair Value Measurements” (“ASU No. 2010-06”). ASU No. 2010-06 requires the disclosure of significant transfers in and out of Level 1 and Level 2 fair value measurements. It also requires that Level 3 fair value measurements present information about purchases, sales, issuances and settlements. Fair value disclosures should also disclose valuation techniques and inputs used to measure both recurring and nonrecurring fair value measurements. This update became effective for Basic on January 1, 2010 except for the disclosures about purchases, sales, issuances, and settlements in the roll forward in activity in Level 3 fair value measurements, which became effective on January 1, 2011. This update did not change the techniques Basic uses to measure fair value and has not had a material impact on its consolidated financial statements.

In December 2010, the FASB issued ASU No. 2010-09, “Business Combinations: Disclosure of Supplementary Pro Forma Information for Business Combinations” (“ASU 2010-29”). ASU 2010-29 addresses diversity in the interpretation of the pro forma revenue and earnings disclosure requirements for business combinations. If a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The Company adopted ASU 2010-29 on January 1, 2011. This update had no impact on the Company’s financial position, results of operations or cash flows.

3. Acquisitions

In 2010, Basic acquired either substantially all of the assets or all of the outstanding capital stock of each of the following businesses, each of which was accounted for using the purchase method of accounting. The following table summarizes the provisional values at the date of acquisition (in thousands):


		Total Cash Paid (net of cash
	Closing Date	acquired)
Rocky Mountain Cementers, Inc.	March 1, 2010	$	687
New Tech Systems, Inc	April 20, 2010	$	900
Taylor Rig, LLC	May 3, 2010	$	8,734
Platinum Pressure Services, Inc. and Admiral Well Service, Inc.	December 16, 2010	$	39,942

Total 2010		$	50,263

The operations of each of the acquisitions listed above are included in Basic’s statement of operations as of each respective closing date. Basic does not believe the pro forma effect of any of the acquisitions completed in 2010 is material, either individually or when aggregated, to the reported results of operations.

Contingent Earn-out Arrangements and Purchase Price Allocations

Contingent earn-out arrangements are generally arrangements entered into on certain acquisitions to encourage the owner/manager to continue operating and building the business after the purchase transaction. The contingent earn-out arrangements of the related acquisitions are generally linked to certain financial measures and performance of the assets acquired in the various acquisitions. For acquisitions that occurred prior to January 1, 2009, all amounts paid or reasonably accrued for related to the contingent earn-out payments are reflected as increases to the goodwill associated with the acquisition or compensation expense depending on the terms and conditions of the earn-out arrangement. For any acquisition that occurred after December 31, 2008, the contingent earn-out is measured at fair value at the date of acquisition and any adjustments to that fair value are recorded through the statement of operations.

4. Property and Equipment

Property and equipment consisted of the following (in thousands):


	June 30,		December 31,
	2011		2010
Land	$	5,391	$	5,361
Buildings and improvements		35,310		32,047
Well service units and equipment		429,343		416,015
Fluid services equipment		159,073		148,989
Brine and fresh water stations		11,306		10,969
Frac/test tanks		183,611		151,379
Pressure pumping equipment		186,575		171,892
Construction equipment		28,571		27,799
Contract drilling equipment		76,281		44,181
Disposal facilities		70,129		66,388
Vehicles		44,645		39,844
Rental equipment		45,964		43,502
Aircraft		4,251		4,251
Software		22,248		22,296
Other		9,547		7,345

		1,312,245		1,192,258
Less accumulated depreciation and amortization		618,354		566,556

Property and equipment, net	$	693,891	$	625,702

Basic is obligated under various capital leases for certain vehicles and equipment that expire at various dates during the next five years. The gross amount of property and equipment and related accumulated amortization recorded under capital leases and included above consisted of the following (in thousands):


	June 30,		December 31,
	2011		2010
Light vehicles	$	27,622	$	25,800
Well service units and equipment		1,536		1,791
Fluid services equipment		77,472		65,874
Pressure pumping equipment		22,352		18,293
Construction equipment		1,269		1,269
Software		15,548		15,548
Other		244		244

		146,043		128,819
Less accumulated amortization		58,793		56,087

	$	87,250	$	72,732

Amortization of assets held under capital leases of approximately $5.2 million and $5.9 million for the three months ended June 30, 2011 and 2010, respectively, and $10.2 million and $10.9 million for the six months ended June 30, 2011 and 2010, respectively, is included in depreciation and amortization expense in the consolidated statements of operations.

5. Long-Term Debt

Long-term debt consisted of the following (in thousands):


	June 30,		December 31,
	2011		2010
Credit Facilities:
Revolver	$	21,850	$	—
7.125% Senior Notes		225,000		225,000
11.625% Senior Secured Notes		—		225,000
7.75% Senior Notes		475,000		—
Unamortized (discount) premium		1,991		(9,425	)
Capital leases and other notes		66,165		58,284

		790,006		498,859
Less current portion		27,816		24,231

	$	762,190	$	474,628

7.125% Senior Notes due 2016

On April 12, 2006, Basic issued $225.0 million of 7.125% Senior Notes due April 2016 (the “7.125% Senior Notes”) in a private placement. Proceeds from the sale of the 7.125% Senior Notes were used to retire the outstanding balance on Basic’s $90.0 million Term B Loan and to pay down approximately $96.0 million under Basic’s previous revolving credit facility. The 7.125% Senior Notes are unsecured. Under the terms of the sale of the 7.125% Senior Notes, Basic was required to take appropriate steps to offer to exchange other 7.125% Senior Notes with the same terms that have been registered with the Securities and Exchange Commission for the private placement 7.125% Senior Notes. Basic completed the exchange offer for all of the 7.125% Senior Notes on October 16, 2006.

Basic issued the 7.125% Senior Notes pursuant to an indenture, dated as of April 12, 2006, by and among Basic, the guarantor parties thereto and The Bank of New York Trust Company, N.A., as trustee (the “7.125% Senior Notes Indenture”). Interest on the 7.125% Senior Notes accrues at a rate of 7.125% per year. Interest payments on the 7.125% Senior Notes are due semi-annually, on April 15 and October 15.

The 7.125% Senior Notes are redeemable at the option of Basic on or after April 15, 2011 at the specified redemption price as described in the 7.125% Senior Notes Indenture.

Following a change of control, as defined in the 7.125% Senior Notes Indenture, Basic will be required to make an offer to repurchase all or any portion of the 7.125% Senior Notes at a purchase price of 101% of the principal amount, plus accrued and unpaid interest to the date of repurchase.

The 7.125% Senior Notes Indenture contains covenants that, among other things, limit the ability of Basic and its restricted subsidiaries to incur additional indebtedness; pay dividends or repurchase or redeem capital stock; make certain investments; incur liens; enter into certain types of transactions with affiliates; limit dividends or other payments by restricted subsidiaries; and sell assets or consolidate or merge with or into other companies. These limitations are subject to a number of important qualifications and exceptions set forth in the 7.125% Senior Notes Indenture. At June 30, 2011, Basic was in compliance with the restrictive covenants under the 7.125% Senior Notes Indenture.

As part of the issuance of the above-mentioned 7.125% Senior Notes, Basic incurred debt issuance costs of approximately $4.6 million, which are being amortized to interest expense using the effective interest method over the term of the 7.125% Senior Notes.

The 7.125% Senior Notes are jointly and severally, and unconditionally, guaranteed on a senior unsecured basis by all of Basic’s current subsidiaries, other than three immaterial subsidiaries. As of June 30, 2011, these three subsidiaries held no assets and performed no operations. Basic Energy Services, Inc., the ultimate parent company, does not have any independent operating assets or operations.

7.75% Senior Notes due 2019

guaranteed on a senior unsecured basis by all of Basic’s current subsidiaries, other than three immaterial subsidiaries. The 7.75% Senior Notes and the guarantees rank (i) equally in right of payment with any of Basic’s and the subsidiary guarantors’ existing and future senior indebtedness, including Basic’s existing 7.125% Senior Notes and the related guarantees, and (ii) effectively junior to all existing or future liabilities of Basic’s subsidiaries that do not guarantee the 7.75% Senior Notes and to Basic’s and the subsidiary guarantors’ existing or future secured indebtedness to the extent of the value of the collateral therefore.

The 7.75% Senior Notes were offered and sold in private transactions in accordance with Rule 144A and Regulation S under the Securities Act of 1933, as amended (the “Securities Act”).

The purchase price for the $275.0 million of 7.75% Senior Notes issued on February 15, 2011 was 100.000% of their principal amount and the purchase price for the $200.0 million of 7.75% Senior Notes issued on June 13, 2011 was 101.000%, plus accrued interest from February 15, 2011. Basic received net proceeds from the issuance of the 7.75% Senior Notes of approximately $465.5 million after premiums and offering expenses. Basic used a portion of the net proceeds from the February 2011 offering to fund its tender offer and consent solicitation for its 11.625% Senior Secured Notes and to redeem any of the Senior Secured Notes not purchased in the tender offer. Basic also intends to use a portion of the net proceeds from the June 2011 offering to fund the $180.0 million purchase price for the Maverick companies acquisition completed in July 2011 and for general corporate purposes.

The 7.75% Senior Notes were issued pursuant to an indenture dated as of February 15, 2011 (the “7.75% Senior Notes Indenture”), by and among Basic, the guarantors party thereto and Wells Fargo Bank, N.A., as trustee . Interest on the 7.75% Senior Notes accrues from and including February 15, 2011 at a rate of 7.75% per year. Interest on the 7.75% Senior Notes is payable semi-annually in arrears on February 15 and August 15 of each year, commencing on August 15, 2011. The 7.75% Senior Notes mature on February 15, 2019.

The 7.75% Senior Notes Indenture contains covenants that, among other things, limit Basic’s ability and the ability of certain of its subsidiaries to: incur additional indebtedness; pay dividends or repurchase or redeem capital stock; make certain investments; incur liens; enter into certain types of transactions with its affiliates; limit dividends or other payments by Basic’s restricted subsidiaries to Basic; and sell assets or consolidate or merge with or into other companies. These and other covenants that are contained in the 7.75% Senior Notes Indenture are subject to important exceptions and qualifications set forth in the 7.75% Senior Notes Indenture. At June 30, 2011, Basic was in compliance with the restrictive covenants under the 7.75% Senior Notes Indenture.

Basic may, at its option, redeem all or part of the 7.75% Senior Notes, at any time on or after February 15, 2015, at a redemption price equal to 100% of the principal amount thereof, plus a premium declining ratably to par and accrued and unpaid interest to the date of redemption.

At any time before February 15, 2014, Basic, at its option, may redeem up to 35% of the aggregate principal amount of the 7.75% Senior Notes issued under the 7.75% Senior Notes Indenture with the net cash proceeds of one or more qualified equity offerings at a redemption price of 107.750% of the principal amount of the 7.75% Senior Notes to be redeemed, plus accrued and unpaid interest to the date of redemption, as long as:

•

at least 65% of the aggregate principal amount of the 7.75% Senior Notes issued under the 7.75% Senior Notes Indenture remains outstanding immediately after the occurrence of such redemption; and

•

such redemption occurs within 90 days of the date of the closing of any such qualified equity offering.

In addition, at any time before February 15, 2015, Basic may redeem some or all of the 7.75% Senior Notes at a redemption price equal to 100% of the principal amount of the 7.75% Senior Notes, plus an applicable premium and accrued and unpaid interest to the date of redemption.

Following a change of control, as defined in the 7.75% Senior Notes Indenture, Basic will be required to make an offer to repurchase all or a portion of the Notes at 101% of their principal amount, plus accrued and unpaid interest to the date of repurchase.

Revolving Credit Facility

On February 15, 2011, in connection with the 7.75% Senior Notes offering, Basic entered into a new $165.0 million revolving credit facility (the “Credit Agreement”) with Merrill Lynch, Pierce, Fenner & Smith Incorporated and Capital One, National Association, as joint lead arrangers and joint book managers, the lenders party thereto and Bank of America, N.A., as administrative agent. The Credit Agreement includes an accordion feature whereby the total credit available to Basic can be increased by up to $100.0 million under certain circumstances, subject to additional lender commitments. The obligations under the Credit Agreement are guaranteed on a joint and several basis by each of Basic’s current subsidiaries, other than three immaterial subsidiaries, and are secured by substantially all assets of Basic and the guarantors as collateral under a related Security Agreement (the “Security Agreement”). As of June 30, 2011, the non-guarantor subsidiaries held no assets and performed no operations.

Borrowings under the Credit Agreement mature on January 15, 2016, and Basic has the ability at any time to prepay the Credit Agreement without premium or penalty. At Basic’s option, advances under the Credit Agreement may be comprised of (i) alternate base rate loans, at a variable base interest rate plus a margin ranging from 1.50% to 2.25% based on Basic’s leverage ratio or (ii) Eurodollar loans, at a variable base interest rate plus a margin ranging from 2.50% to 3.25% based on Basic’s leverage ratio. Basic will pay a commitment fee equal to 0.50% on the daily unused amount of the commitments under the Credit Agreement.

The Credit Agreement contains various covenants that, subject to agreed upon exceptions, limit Basic’s ability and the ability of certain of Basic’s subsidiaries to:

•

incur indebtedness;

•

grant liens;

•

enter into sale and leaseback transactions;

•

make loans, capital expenditures, acquisitions and investments;

•

change the nature of business;

•

acquire or sell assets or consolidate or merge with or into other companies;

•

declare or pay dividends;

•

enter into transactions with affiliates;

•

enter into burdensome agreements;

•

prepay, redeem or modify or terminate other indebtedness;

•

change accounting policies and reporting practices; and

•

amend organizational documents.

The Credit Agreement also contains covenants that, among other things, limit the amount of capital contributions Basic may make and require Basic to maintain specified ratios or conditions as follows:

•

a minimum consolidated interest coverage ratio of not less than 2.50:1.00;

•

a maximum consolidated leverage ratio not to exceed:

•

4.25:1.00 for the quarter ending March 31, 2011; and

•

4.00:1.00 after March 31, 2011; and

•

a maximum consolidated senior secured leverage ratio of 2.00:1.00.

If an event of default occurs under the Credit Agreement, then the lenders may (i) terminate their commitments under the Credit Agreement, (ii) declare any outstanding loans under the Credit Agreement to be immediately due and payable after applicable grace periods and (iii) foreclose on the collateral secured by the Security Agreement.

Basic had $21.9 million outstanding under the Credit Agreement as of June 30, 2011. At June 30, 2011, Basic was in compliance with its covenants under the Credit Agreement.

Other Debt

Basic has a variety of other capital leases and notes payable outstanding that are generally customary in its business. None of these debt instruments are individually material. Basic’s leases with Banc of America Leasing & Capital, LLC require us to maintain a minimum debt service coverage ratio of 1.05 to 1.00. At June 30, 2011, Basic was in compliance with this covenant.

Basic’s interest expense consisted of the following (in thousands):


	Six Months Ended June 30,
	2011		2010
Cash payments for interest	$	18,630	$	21,802
Commitment and other fees paid		438		9
Amortization of debt issuance costs and discount or premium on notes		1,213		1,699
Change in accrued interest		2,871		(73	)
Other		32		5

	$	23,184	$	23,442

Losses on Extinguishment of Debt

In February 2011, upon the retirement of the 11.625% Senior Secured Notes and the termination of Basic’s $30.0 million revolving credit facility, Basic wrote off unamortized debt issuance costs of approximately $3.9 million and unamortized discount of $9.2 million. Basic also paid a premium of $36.2 million to the holders of the 11.625% Senior Secured Notes for the early termination of the notes.

6. Commitments and Contingencies

Environmental

Basic is subject to various federal, state and local environmental laws and regulations that establish standards and requirements for protection of the environment. Basic cannot predict the future impact of such standards and requirements which are subject to change and can have retroactive effectiveness. Basic continues to monitor the status of these laws and regulations. Management believes that the likelihood of any of these items resulting in a material adverse impact to Basic’s financial position, liquidity, capital resources or future results of operations is remote.

Currently, Basic has not been fined, cited or notified of any environmental violations that would have a material adverse effect upon its financial position, liquidity or capital resources. However, management does recognize that by the very nature of its business, material costs could be incurred in the near term to bring Basic into total compliance. The amount of such future expenditures is not determinable due to several factors, including the unknown magnitude of possible contamination, the unknown timing and extent of

the corrective actions which may be required, the determination of Basic’s liability in proportion to other responsible parties and the extent to which such expenditures are recoverable from insurance or indemnification.

During April 2011, Basic and certain officers received notice from the Travis County District Attorney of a pending investigation of a potential felony criminal case referred by Texas Parks & Wildlife and the Texas Environmental Enforcement Task Force, to be presented to a Travis County grand jury. The potential matter relates to a land farm owned by Basic located in Jefferson County, Texas. While Basic is currently responding to additional inquiries regarding the investigation and believes the investigation may also relate to alleged unlawful discharges, Basic has not been informed of any specific potential charges at this time. Basic does not believe it is probable or reasonably possible that this matter will result in any material adverse effect on its financial condition, results of operations or liquidity; however, there can be no assurance as to the ultimate outcome of this matter.

Litigation

Self-Insured Risk Accruals

Basic is self-insured up to retention limits as it relates to workers’ compensation, general liability claims, and medical and dental coverage of its employees. Basic generally maintains no physical property damage coverage on its workover rig fleet, with the exception of certain of its 24-hour workover rigs and newly manufactured rigs. Basic has deductibles per occurrence for workers’ compensation, general liability claims, and medical and dental coverage of $500,000, $500,000, and $250,000, respectively. Basic has lower deductibles per occurrence for automobile liability. Basic maintains accruals in the accompanying consolidated balance sheets related to self-insurance retentions by using third-party data and claims history.

At June 30, 2011 and December 31, 2010, self-insured risk accruals totaled approximately $16.8 million net of a $8,000 receivable for medical and dental coverage and $16.6 million net of a $164,000 receivable for medical and dental coverage, respectively.

7. Stockholders’ Equity

Common Stock

At June 30, 2011 and December 31, 2010, Basic had 80,000,000 shares of common stock, par value $.01 per share, authorized.

During the year ended 2010, Basic issued 53,975 shares of common stock from treasury stock upon the exercise of stock options.

In March 2010, Basic granted various employees 588,600 restricted shares of common stock which vest over a five-year period.

In March 2010, the Compensation Committee of Basic’s Board of Directors approved grants of performance-based stock awards to certain members of management. In February 2011, it was determined that 285,281 shares, or 150% of the target number of shares, were earned based on Basic’s achievement of total stockholder return over the performance period from January 1, 2010 through December 31, 2010, as compared to other members of a defined peer group. These restricted shares remain subject to vesting over a three-year period, with the first shares vesting on March 15, 2012.

In March 2011, Basic granted various employees 510,399 restricted shares of common stock that vest over a three-year period.

During the six months ended June 30, 2011, Basic issued 390,750 shares of common stock from treasury stock for the exercise of stock options and 37,500 shares of newly-issued common stock for the exercise of stock options.

Treasury Stock

Basic has acquired treasury shares through net share settlements for payment of payroll taxes upon the vesting of restricted stock. Basic acquired a total of 40,381 shares through net share settlements during 2010 and 76,077 shares through net share settlements during the first six months of 2011.

Preferred Stock

At June 30, 2011 and December 31, 2010, Basic had 5,000,000 shares of preferred stock, par value $.01 per share, authorized, of which none was designated, issued or outstanding.

8. Incentive Plan

In May 2003, Basic’s board of directors and stockholders approved the Basic Energy Services, Inc. 2003 Incentive Plan (as amended effective May 24, 2011) (the “Plan”), which provides for granting of incentive awards in the form of stock options, restricted stock, performance awards, bonus shares, phantom shares, cash awards and other stock-based awards to officers, employees, directors and consultants of Basic. The Plan assumed awards of the plans of Basic’s predecessors that were awarded and remained outstanding prior to adoption of the Plan. The Plan provides for the issuance of 8,350,000 shares. The Plan is administered by the Plan committee, and in the absence of a Plan committee, by the Board of Directors, which determines the awards and the associated terms of the awards and interprets its provisions and adopts policies for implementing the Plan. The number of shares authorized under the Plan and the number of shares subject to an award under the Plan will be adjusted for stock splits, stock dividends, recapitalizations, mergers and other changes affecting the capital stock of Basic.

During the three months ended June 30, 2011 and 2010, compensation expense related to share-based arrangements was approximately $2.1 million and $1.4 million, respectively. For compensation expense recognized during the three months ended June 30, 2011 and 2010, Basic recognized a tax benefit of approximately $930,000 and $577,000, respectively. During the six months ended June 30, 2011 and 2010, compensation expense related to share-based arrangements was approximately $3.8 million and $2.6 million, respectively. For compensation expense recognized during the six months ended June 30, 2011 and 2010, Basic recognized a tax benefit of approximately $1.5 million and $962,000, respectively.

As of June 30, 2011, there was approximately $20.0 million of total unrecognized compensation related to non-vested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of 2.86 years. The total fair value of share-based awards vested during the six months ended June 30, 2011 and 2010 was approximately $8.6 million and $3.8 million, respectively. The actual tax benefit realized for the tax deduction from vested share-based awards was $2.8 million and $578,000 for the six months ended June 30, 2011 and 2010, respectively.

Stock Option Awards

The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option-pricing model. Basic is required to estimate the expected forfeiture rate and only recognize expense for those options expected to vest. Options granted under the Plan expire 10 years from the date they are granted, and generally vest over a three- to five-year service period.

The following table reflects the summary of stock options outstanding at June 30, 2011 and the changes during the six months then ended:


						Weighted
				Weighted		Average		Aggregate
	Number of			Average		Remaining		Instrinsic
	Options			Exercise		Contractual		Value
	Granted			Price		Term (Years)		(000’s)
Non-statutory stock options:
Outstanding, beginning of period		1,414,450		$	11.44
Options granted		—
Options forfeited		(5,000	)	$	6.98
Options exercised		(428,250	)	$	6.71
Options expired		(3,000	)	$	26.84

Outstanding, end of period		978,200		$	13.49		3.67	$	17,592


Exercisable, end of period		955,200		$	13.27		3.62	$	17,389


Vested or expected to vest, end of period		973,600		$	13.44		3.66	$	17,551

The total intrinsic value of share options exercised during the six months ended June 30, 2011 and 2010 was approximately $8.3 million and $24,000, respectively.

Cash received from share option exercises under the Plan was approximately $2.9 million and $58,000 for the six months ended June 30, 2011 and 2010, respectively. The actual tax benefit realized for the tax deductions from options exercised was $3.0 million and $9,000 for the six months ended June 30, 2011 and 2010, respectively.

Basic has a history of issuing treasury and newly-issued shares to satisfy share option exercises.

Restricted Stock Awards

On March 10, 2011, the Compensation Committee of Basic’s Board of Directors approved grants of performance-based stock awards to certain members of management. The performance-based awards are tied to Basic’s achievement of total stockholder return over the performance period from January 1, 2011 through December 31, 2011, as compared to other members of a defined peer group. The number of shares to be issued will range from 0% to 150% of the 148,683 target number of shares depending on the performance noted above. Any shares earned at the end of the performance period will then remain subject to vesting over a three-year period, with the first shares vesting March 15, 2013. As of June 30, 2011, Basic estimated that 129.2% of the target number of performance-based awards will be earned.

A summary of the status of Basic’s non-vested share grants at June 30, 2011 and changes during the six months ended June 30, 2011 is presented in the following table:


				Weighted Average
	Number of			Grant Date Fair
Nonvested Shares	Shares			Value Per Share
Nonvested at beginning of period		1,802,573		$	11.06
Granted during period		702,931			19.49
Vested during period		(329,018	)		13.45
Forfeited during period		(74,023	)		12.65

Nonvested at end of period		2,102,463		$	13.44

9. Related Party Transactions

Basic had receivables from employees of approximately $44,000 and $42,000 as of June 30, 2011 and December 31, 2010, respectively. During 2006, Basic entered into a lease agreement with Darle Vuelta Cattle Co., LLC, an affiliate of the Chief Executive Officer, for approximately $69,000. The term of the lease is five years and will continue on a year-to-year basis unless terminated by either party. In December 2010, Basic entered into a lease agreement with Darle Vuelta Cattle Co., LLC, for the right to operate a salt water disposal well, brine well and fresh water well. The term of the lease is two years and will continue until the salt water disposal well and brine well are plugged and no fresh water is being sold. The lease payments are the greater of the sum of $0.10 per barrel of disposed oil and gas waste and $0.05 per barrel of brine or fresh water sold, or $5,000 per month.

10. Earnings Per Share

Basic’s basic earnings per common share are determined by dividing net earnings applicable to common stock by the weighted average number of common shares actually outstanding during the period. Diluted earnings per common share is based on the increased number of shares that would be outstanding assuming conversion of dilutive outstanding securities using the “as if converted” method. The following table sets forth the computation of basic and diluted earnings per share (in thousands, except share data):


	Three Months Ended June 30,					Six Months Ended June 30,
	2011		2010			2011			2010
	(Unaudited)					(Unaudited)
Numerator (both basic and diluted):
Net income (loss)	$	16,550	$	(10,672	)	$	(1,943	)	$	(32,263	)

Denominator:
Denominator for basic earnings (loss) per share		40,356,049		39,724,030			40,135,143			39,672,891

Stock options		422,110		—			—			—
Unvested restricted stock		557,505		—			—			—

Denominator for diluted earnings (loss) per share		41,335,664		39,724,030			40,135,143			39,672,891


Basic earnings (loss) per common share:	$	0.41	$	(0.27	)	$	(0.05	)	$	(0.81	)


Diluted earnings (loss) per common share:	$	0.40	$	(0.27	)	$	(0.05	)	$	(0.81	)

Stock options and unvested shares of restricted stock of approximately 524,000 were excluded in the computation of diluted earnings per share for the three months ended June 30, 2010, as the effect would have been anti-dilutive due to the net loss in the period. Stock options and unvested shares of restricted stock of approximately 1,222,000 and 859,000, respectively, were excluded in the computation of diluted earnings per share for the six months ended June 30, 2011 and 2010, respectively, as the effect would have been anti-dilutive due to the net loss in each of these periods.

11. Business Segment Information

Basic’s reportable business segments are Completion and Remedial Services, Fluid Services, Well Servicing, and Contract Drilling. The following is a description of the segments:

Completion and Remedial Services: This segment utilizes a fleet of pressure pumping units, air compressor packages specially configured for underbalanced drilling operations, cased-hole wireline units, an array of specialized rental equipment and fishing tools, and snubbing units. The largest portion of this business consists of pumping services focused on cementing, acidizing and fracturing services in niche markets.

Fluid Services: This segment utilizes a fleet of trucks and related assets, including specialized tank trucks, storage tanks, water wells, disposal facilities, construction and other related equipment. Basic employs these assets to provide, transport, store and dispose of a variety of fluids, as well as provide well site construction and maintenance services. These services are required in most workover, completion and remedial projects and are routinely used in daily producing well operations.

Well Servicing: This business segment encompasses a full range of services performed with a mobile well servicing rig, including the installation and removal of downhole equipment and elimination of obstructions in the well bore to facilitate the flow of oil and natural gas. These services are performed to establish, maintain and improve production throughout the productive life of an oil and natural gas well and to plug and abandon a well at the end of its productive life. Well servicing equipment and capabilities such as Basic’s are essential to facilitate most other services performed on a well. This segment also includes the manufacturing, refurbishment and servicing of mobile well servicing rigs and associated equipment.

Contract Drilling: This segment utilizes drilling rigs and associated equipment for drilling wells to a specified depth for customers on a contract basis.

Basic’s management evaluates the performance of its operating segments based on operating revenues and segment profits. Corporate expenses include general corporate expenses associated with managing all reportable operating segments. Corporate assets consist principally of working capital and debt financing costs.

The following table sets forth certain financial information with respect to Basic’s reportable segments (in thousands):


	Completion
	and Remedial			Fluid			Well			Contract			Corporate
	Services			Services			Servicing			Drilling			and Other		Total
*Three Months Ended June 30, 2011 (Unaudited)*
Operating revenues	$	121,807		$	81,415		$	83,881		$	9,752		$	—	$	296,855
Direct operating costs		(68,827	)		(51,688	)		(57,409	)		(7,393	)		—	$	(185,317	)

Segment profits	$	52,980		$	29,727		$	26,472		$	2,359		$	—	$	111,538


Depreciation and amortization	$	9,841		$	10,359		$	10,398		$	2,326		$	1,860	$	34,784

Capital expenditures, (excluding acquisitions)	$	12,638		$	12,847		$	11,633		$	2,986		$	2,327	$	42,431

*Three Months Ended June 30, 2010 (Unaudited)*
Operating revenues	$	61,533		$	58,801		$	49,529		$	5,269		$	—	$	175,132
Direct operating costs		(37,660	)		(43,425	)		(36,734	)		(3,725	)		—		(121,544	)

Segment profits	$	23,873		$	15,376		$	12,795		$	1,544		$	—	$	53,588


Depreciation and amortization	$	8,121		$	9,478		$	12,562		$	1,882		$	2,207	$	34,250

Capital expenditures, (excluding acquisitions)	$	3,429		$	4,013		$	5,305		$	795		$	921	$	14,463

*Six Months Ended June 30, 2011 (Unaudited)*
Operating revenues	$	219,314		$	153,760		$	153,028		$	16,807		$	—	$	542,909
Direct operating costs		(123,760	)		(99,916	)		(105,849	)		(11,878	)		—	$	(341,403	)

Segment profits	$	95,554		$	53,844		$	47,179		$	4,929		$	—	$	201,506


Depreciation and amortization	$	17,909		$	19,764		$	22,351		$	4,233		$	3,507	$	67,764

Capital expenditures, (excluding acquisitions)	$	30,359		$	33,503		$	37,889		$	7,176		$	5,946	$	114,873
Identifiable assets	$	231,977		$	195,403		$	247,077		$	70,245		$	584,405	$	1,329,107

*Six Months Ended June 30, 2010 (Unaudited)*
Operating revenues	$	106,767		$	110,948		$	91,325		$	9,058		$	—	$	318,098
Direct operating costs		(67,383	)		(84,365	)		(68,834	)		(6,995	)		—	$	(227,577	)

Segment profits	$	39,384		$	26,583		$	22,491		$	2,063		$	—	$	90,521


Depreciation and amortization	$	15,952		$	18,895		$	24,703		$	3,716		$	4,082	$	67,348

Capital expenditures, (excluding acquisitions)	$	6,053		$	7,170		$	9,373		$	1,410		$	1,549	$	25,555
Identifiable assets	$	185,854		$	183,971		$	245,041		$	39,624		$	357,235	$	1,011,725

The following table reconciles the segment profits reported above to the operating income as reported in the consolidated statements of operations (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Segment profits	$	111,538		$	53,588		$	201,506		$	90,521

General and administrative expenses		(34,138	)		(26,820	)		(65,479	)		(51,897	)
Depreciation and amortization		(34,784	)		(34,250	)		(67,764	)		(67,348	)
Gain (loss) on disposal of assets		(942	)		(463	)		763			(1,174	)

Operating income (loss)	$	41,674		$	(7,945	)	$	69,026		$	(29,898	)

12. Supplemental Schedule of Cash Flow Information

The following table reflects non-cash financing and investing activity during the following periods:


	Six Months Ended June 30,
	2011		2010
	(In thousands)
Capital leases issued for equipment	$	24,104	$	6,691
Asset retirement obligation additions	$	11	$	12

Basic paid no income taxes during the six months ended June 30, 2011 or for the same period in 2010. Basic paid interest of approximately $18.6 million and $21.8 million during the six months ended June 30, 2011 and 2010, respectively.

13. Fair Value Measurements

Fair value is the price that would be received to sell an asset or the amount paid to transfer a liability in an orderly transaction between market participants (an exit price) at the measurement date. Fair value is a market based measurement considered from the perspective of a market participant. Basic uses market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation. These inputs can be readily observable, market corroborated, or unobservable. If observable prices or inputs are not available, unobservable prices or inputs are used to estimate the current fair value, often using an internal valuation model. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the item being valued. Basic primarily applies a market approach for recurring fair value measurements using the best available information while utilizing valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

There is a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Basic classifies fair value balances based on the observability of those inputs. The three levels of the fair value hierarchy are as follows:

Level 1—Quoted prices in active markets for identical assets or liabilities that Basic has the ability to access. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2—Inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable. These inputs are either directly observable in the marketplace or indirectly observable through corroboration with market data for substantially the full contractual term of the asset or liability being measured.

Level 3—Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

In valuing certain assets and liabilities, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. For disclosure purposes, assets and liabilities are classified in their entirety in the fair value hierarchy level based on the lowest level of input that is significant to the overall fair value measurement. Basic’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement within the fair value hierarchy levels.

Basic’s asset retirement obligation related to its salt water disposal sites, brine water wells, gravel pits and land farm sites, each of which is subject to rules and regulations regarding usage and eventual closure, is measured using primarily Level 3 inputs. The significant unobservable inputs to this fair value measurement include estimates of plugging, abandonment and remediation costs, inflation rate and well life. The inputs are calculated based on historical data as well as current estimated costs. The fair value is calculated by taking the present value of the expected cash flow at the time of the closure of the site. The following table reflects the changes in the fair value of the liability during the six months ended June 30, 2011 (in thousands):


	Asset
	Retirement
	Obligation
Balance, December 31, 2010	$	1,983

Additional asset retirement obligation		11
Accretion expense		65
Settlements		(57	)

Balance, June 30, 2011	$	2,002

14. Subsequent Events

On July 7, 2011, Basic completed the acquisition of substantially all of the operating assets of Lone Star Anchor Trucking, Inc. for total cash consideration of $10.1 million. This acquisition will operate in Basic’s fluid services segment.

On July 8, 2011, Basic completed the acquisition of the outstanding equity interests of the Maverick companies (“Maverick”) for total cash consideration of $180.0 million, net of working capital acquired. Maverick provides stimulation, coil tubing and thru-tubing services and will operate in Basic’s completion and remedial services segment.

On July 15, 2011, Basic amended its existing revolving credit facility, increasing the available credit from $165.0 million to $225.0 million. No changes were made to the collateral, interest rates, or guarantors as part of this amendment.

During July 2011, Basic received aggregate federal income tax refunds of approximately $80.1 million relating to Basic’s 2009 and 2010 tax returns.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Overview

We provide a wide range of well site services to oil and natural gas drilling and producing companies, including completion and remedial services, fluid services and well site construction services, well servicing and contract drilling. Our results of operations reflect the impact of our acquisition strategy as a leading consolidator in the domestic land-based well services industry. Our acquisitions have increased our breadth of service offerings at the well site and expanded our market presence. In implementing our acquisition strategy, we purchased businesses and assets in four separate acquisitions from January 1, 2010 to June 30, 2011. Our weighted average number of fluid service trucks increased from 791 in the first quarter of 2010 to 837 in the second quarter of 2011. Our weighted average number of well servicing rigs increased from 405 in the first quarter of 2010 to 412 in the second quarter of 2011. These acquisitions make our revenues, expenses and income not directly comparable between periods.

Our operating revenues from each of our segments, and their relative percentages of our total revenues, consisted of the following (dollars in millions):

Revenues:


	Six Months Ended June 30,
	2011				2010
Revenues:
Completion and remedial services	$	219.3	41	%	$	106.8	33	%
Fluid services		153.8	28	%		110.9	35	%
Well servicing		153.0	28	%		91.3	29	%
Contract drilling		16.8	3	%		9.1	3	%

Total revenues	$	542.9	100	%	$	318.1	100	%

Our core businesses depend on our customers’ willingness to make expenditures to produce, develop and explore for oil and natural gas in the United States. Industry conditions are influenced by numerous factors, such as the supply of and demand for oil and natural gas, domestic and worldwide economic conditions, political instability in oil producing countries and merger and divestiture activity among oil and natural gas producers. The volatility of the oil and natural gas industry, and the consequent impact on exploration and production activity, has adversely impacted, and could continue to adversely impact, the level of drilling and workover activity by some of our customers. This volatility affects the demand for our services and the price of our services.

In the first half of 2009, utilization and pricing for our services declined due to low oil and natural gas prices. In the third quarter of 2009, oil prices began to increase and remained relatively stable through 2010. In the first half of 2011, oil prices have increased, primarily due to political instability in several oil producing countries. This trend in oil prices has caused utilization and pricing for our services to increase in our oil-based operating areas. Utilization and pricing for our services in our natural gas-based operating areas throughout 2010 and in the first half of 2011 have remained depressed due to low natural gas prices.

We expect that our utilization levels across all of our business segments should show further improvements through the remainder of 2011 as demand continues to rise based on strong pricing, particularly in our established oil-oriented market areas. Despite current lower natural gas prices, discussions with customers indicate that demand in our natural gas-oriented market areas should remain flat with current levels.

We derive a significant portion of our revenues from services supporting production from existing oil and natural gas operations. Demand for these production-related services, including well servicing and fluid services, tends to remain relatively stable, even in moderate oil and natural gas price environments, as ongoing maintenance spending is required to sustain production. As oil and natural gas prices fluctuate, demand for all of our services changes correspondingly as our customers must balance maintenance and capital expenditures against their available cash flows. Because our services are required to support drilling and workover activities, we are also subject to changes in capital spending by our customers as oil and natural gas prices increase or decrease.

We believe that the most important performance measures for our lines of business are as follows:

•

Completion and Remedial Services — segment profits as a percent of revenues;

	•		Fluid Services — trucking hours, revenue per truck, segment profits per truck and segment profits as a percent of revenues;

	•		Well Servicing — rig hours, rig utilization rate, revenue per rig hour, profits per rig hour and segment profits as a percent of revenues; and

	•		Contract Drilling — rig operating days, revenue per drilling day, profits per drilling day and segment profits as a percent of revenues.

Segment profits are computed as segment operating revenues less direct operating costs. These measurements provide important information to us about the activity and profitability of our lines of business. For a detailed analysis of these indicators for our company, see below in “Segment Overview.”

We will continue to evaluate opportunities to expand our business through selective acquisitions and internal growth initiatives. In July of 2011 we acquired substantially all of the operating assets of Lone Star Anchor Trucking, Inc. and all of the outstanding equity interests of the Maverick companies. Our capital investment decisions are determined by an analysis of the projected return on capital employed for each of those alternatives, which is substantially driven by the cost to acquire existing assets from a third party, the capital required to build new equipment and the point in the oil and natural gas commodity price cycle. Based on these factors, we make capital investment decisions that we believe will support our long-term growth strategy. While we believe our costs of integration for prior acquisitions have been reflected in our historical results of operations, integration of acquisitions may result in unforeseen operational difficulties or require a disproportionate amount of our management’s attention.

Selected Acquisitions

During 2010, we made four acquisitions that complemented our existing business segments. These included, among others:

Taylor Rig, LLC

On May 3, 2010, we acquired all the assets of Taylor Rig, LLC for total consideration of $8.7 million in cash. This acquisition has been included in our well servicing segment.

Platinum Pressure Services, Inc. and Admiral Well Service, Inc.

On December 16, 2010, we acquired all of the outstanding stock of Platinum Pressure Services, Inc. (“Platinum”) and Admiral Well Service, Inc., a wholly owned subsidiary of Platinum, for total cash consideration of $39.9 million including working capital. This acquisition operates in our completion and remedial services and well servicing segments.

During the first six months of 2011, we did not complete any material acquisitions.

Segment Overview

Completion and Remedial Services

During the first six months of 2011, our completion and remedial services segment represented 41% of our revenues. Revenues from our completion and remedial services segment are generally derived from a variety of services designed to complete and stimulate new oil and natural gas production or place cement slurry within the wellbores. Our completion and remedial services segment includes pumping services, rental and fishing tool operations, cased-hole wireline services, snubbing and underbalanced drilling.

Our pumping services concentrate on providing single truck, lower-horsepower cementing, acidizing and fracturing services in selected markets. Our total hydraulic horsepower capacity for our pressure pumping operations was 176,000 and 142,000 at June 30, 2011 and June 30, 2010, respectively.

In this segment, we generally derive our revenues on a project-by-project basis in a competitive bidding process. Our bids are generally based on the amount and type of equipment and personnel required, with the materials consumed billed separately. During periods of decreased spending by oil and gas companies, we may be required to discount our rates to remain competitive, which would cause lower segment profits.

The following is an analysis of our completion and remedial services segment for each of the quarters in 2010, the full year ended December 31, 2010 and the quarters ended March 31, 2011 and June 30, 2011 (dollars in thousands):


			Segment
	Revenues		Profits%
2010:
First Quarter	$	45,234		34	%
Second Quarter	$	61,533		39	%
Third Quarter	$	73,725		41	%
Fourth Quarter	$	80,944		43	%
Full Year	$	261,436		40	%
2011:
First Quarter	$	97,507		44	%
Second Quarter	$	121,807		44	%

We gauge the performance of our completion and remedial services segment based on the segment’s operating revenues and segment profits as a percent of revenues.

The increase in completion and remedial services revenue to $121.8 million in the second quarter of 2011 from $97.5 million in the first quarter of 2011 as a result of improved pricing and expansion of our fleets. Segment profit percentage remained flat at 44% for both the second quarter of 2011 and the first quarter of 2011.

Fluid Services

During the first six months of 2011, our fluid services segment represented 28% of our revenues. Revenues in our fluid services segment are earned from the sale, transportation, storage and disposal of fluids used in the drilling, production and maintenance of oil and natural gas wells. Revenues also include well site construction and maintenance services. The fluid services segment has a base level of business consisting of transporting and disposing of salt water produced as a by-product of the production of oil and natural gas. These services are necessary for our customers and generally have a stable demand but typically produce lower relative segment profits than other parts of our fluid services segment. Fluid services for completion and workover projects typically require fresh or brine water for making drilling mud, circulating fluids or frac fluids used during a job, and all of these fluids require storage tanks and hauling and disposal. Because we can provide a full complement of fluid sales, trucking, storage and disposal required on most drilling and workover projects, the add-on services associated with drilling and workover activity enable us to generate higher segment profits. The higher segment profits are due to the relatively small incremental labor costs associated with providing these services in addition to our base fluid services segment. Revenues from our well site construction services are derived primarily from preparing and maintaining access roads and well locations, installing small diameter gathering lines and pipelines, constructing foundations to support drilling rigs and providing maintenance services for oil and natural gas facilities. We typically price fluid services by the job, by the hour or by the quantities sold, disposed of or hauled.

The following is an analysis of our fluid services operations for each of the quarters in 2010, the full year ended December 31, 2010 and the quarters ended March 31, 2011 and June 30, 2011 (dollars in thousands):


	Weighted						Segment Profits
	Average Number of				Revenue Per		Per Fluid
	Fluid Service		Trucking		Fluid Service		Service		Segment
	Trucks		Hours		Truck		Truck		Profits%
2010:
First Quarter		791		431,700	$	66	$	14		22	%
Second Quarter		797		468,600	$	74	$	19		26	%
Third Quarter		789		475,200	$	80	$	20		25	%
Fourth Quarter		782		476,100	$	85	$	27		31	%
Full Year		790		1,851,600	$	305	$	80		26	%
2011:
First Quarter		820		494,700	$	88	$	29		33	%
Second Quarter		837		525,700	$	97	$	36		37	%

We gauge activity levels in our fluid services segment based on trucking hours, revenue and segment profits per fluid service truck, and segment profits as a percent of revenues.

Revenue per fluid service truck increased by 10% to $97,000 in the second quarter of 2011 compared to $88,000 in the first quarter of 2011, primarily due to the increasing rates being charged to customers and higher utilization for trucking and frac tank rentals. Segment profit percentage increased to 37% in the second quarter of 2011 from 33% in the first quarter of 2011.

Well Servicing

During the first six months of 2011, our well servicing segment represented 28% of our revenues. Revenue in our well servicing segment is derived from maintenance, workover, completion, manufacturing and plugging and abandonment services. We provide maintenance-related services as part of the normal, periodic upkeep of producing oil and natural gas wells. Maintenance-related services represent a relatively consistent component of our business. Workover and completion services generate more revenue per hour than maintenance work, due to the use of auxiliary equipment, but demand for workover and completion services fluctuates more with the overall activity level in the industry. We also have a rig manufacturing and servicing facility that builds new workover rigs, performs large-scale refurbishments of used workover rigs and provides maintenance services on previously manufactured rigs.

We typically charge our customers for services on an hourly basis at rates that are determined by the type of service and equipment required, market conditions in the region in which the rig operates, the ancillary equipment provided on the rig and the necessary personnel. Depending on the type of job, we may also charge by the project or by the day. We measure our activity levels by the total number of hours worked by all of the rigs in our fleet. We monitor our fleet utilization levels, with full utilization deemed to be 55 hours per week per rig. Our fleet increased from a weighted average number of 405 rigs in the first quarter of 2010 to 412 in the second quarter of 2011.

The following is an analysis of our well servicing operations for each of the quarters in 2010, the full year ended December 31, 2010 and the quarters ended March 31, 2011 and June 30, 2011:


	Weighted
	Average				Rig					Profits
	Number of		Rig		Utilization			Revenue Per		Per Rig		Segment
	Rigs		Hours		Rate			Rig Hour		Hour		Profits%
2010:
First Quarter		405		135,700		46.9	%	$	308	$	71		23	%
Second Quarter		404		153,900		53.3	%	$	316	$	83		26	%
Third Quarter		404		159,400		55.2	%	$	319	$	74		21	%
Fourth Quarter		407		164,400		56.5	%	$	331	$	90		24	%
Full Year		405		613,400		53.0	%	$	319	$	81		23	%
2011:
First Quarter		412		184,700		62.7	%	$	356	$	105		30	%
Second Quarter		412		205,700		69.8	%	$	376	$	122		32	%

We gauge activity levels in our well servicing segment based on rig hours, rig utilization rate, revenue per rig hour, segment profits per rig hour and segment profits as a percent of revenues. Revenue per rig hour and profits per rig hour in the table above do not include revenues and profits from the rig manufacturing and maintenance division of this business segment.

Rig utilization increased to 69.8% in the second quarter of 2011, compared to 62.7% in the first quarter of 2011. The increase was caused by improving economic conditions and increased oil prices that allowed our customers to increase spending. Our segment profit percentage increased slightly to 32% during the second quarter of 2011 from 30% during the first quarter of 2011.

Contract Drilling

During the first six months of 2011, our contract drilling segment represented 3% of our revenues. Revenues from our contract drilling segment are derived primarily from the drilling of new wells.

Within this segment, we typically charge our drilling rig customers at a “daywork” daily rate, or “footage” at an established rate per number of feet drilled. We measure the activity level of our drilling rigs on a weekly basis by calculating a rig utilization rate based on a seven-day work week per rig. Our contract drilling rig fleet had a weighted average of ten rigs during the second quarter of 2011 compared to a weighted average of six rigs in the first quarter of 2011, due to the purchase of four drilling rigs.

The following is an analysis of our contract drilling segment for each of the quarters in 2010, the full year ended December 31, 2010 and the quarters ended March 31, 2011 and June 30, 2011:


	Weighted
	Average		Rig
	Number of		Operating		Revenue		Profits		Segment
	Rigs		Days		Per Day		Per Day		Profits%
2010:
First Quarter		9		420	$	9,000	$	1,200		14	%
Second Quarter		9		527	$	10,000	$	2,900		29	%
Third Quarter		9		523	$	10,600	$	2,700		26	%
Fourth Quarter		6		536	$	11,500	$	3,800		33	%
Full Year		8		2,006	$	10,400	$	2,800		27	%
2011:
First Quarter		6		522	$	13,500	$	4,900		36	%
Second Quarter		10		714	$	13,700	$	3,300		24	%

We gauge activity levels in our drilling operations based on rig operating days, revenue per drilling day, profits per drilling day and segment profits as a percent of revenues.

The increase in revenue per day to $13,700 in the second quarter of 2011 from $13,500 in the first quarter of 2011 was due primarily to improved pricing for our services. The decrease in segment profit percentage to 24% in the second quarter of 2011 from 36% in the first quarter of 2011 was due to costs associated with the start-up of four drilling rigs purchased in 2011.

Operating Cost Overview

Our operating costs are comprised primarily of labor, including workers’ compensation and health insurance, repair and maintenance, fuel and insurance. The majority of our employees are paid on an hourly basis. We also incur costs to employ personnel to sell and supervise our services and perform maintenance on our fleet. These costs are not directly tied to our level of business activity. Compensation for our administrative personnel in local operating yards and in our corporate office is accounted for as general and administrative expenses. Repair and maintenance is performed by our crews, company maintenance personnel and outside service providers. Insurance is generally a fixed cost regardless of utilization and relates to the number of rigs, trucks and other equipment in our fleet, employee payroll and safety record.

Critical Accounting Policies and Estimates

Our unaudited consolidated financial statements are impacted by the accounting policies used and the estimates and assumptions made by management during their preparation. A complete summary of our critical accounting policies is included in note 2 of the notes to our historical audited consolidated financial statements in our most recent annual report on Form 10-K. The following is a discussion of our critical accounting policies and estimates.

Critical Accounting Policies

We have identified below certain accounting policies that are of particular importance in the presentation of our financial position, results of operations and cash flows and that require the application of significant judgment by management.

Property and Equipment. Property and equipment are stated at cost or at estimated fair value at acquisition date if acquired in a business combination. Expenditures for repairs and maintenance are charged to expenses as incurred. We also review the capitalization of refurbishment of workover rigs as described in note 2 of the notes to our unaudited consolidated financial statements.

Impairments. We review our assets for impairment at least annually, or whenever, in management’s judgment, events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recovered over its remaining service life. Provisions for asset impairment are charged to income when the sum of the estimated future cash flows, on an undiscounted basis, is less than the asset’s carrying amount. When impairment is indicated, an impairment charge is recorded based on an estimate of future cash flows on a discounted basis.

Self-Insured Risk Accruals. We are self-insured up to retention limits with regard to workers’ compensation, general liability claims, and medical and dental coverage of our employees. We generally maintain no physical property damage coverage on our workover rig fleet, with the exception of certain of our 24-hour workover rigs and newly manufactured rigs. We have deductibles per occurrence for workers’ compensation, general liability claims, and medical and dental coverage of $500,000, $500,000 and $250,000 respectively. We have lower deductibles per occurrence for automobile liability. We maintain accruals in our consolidated balance sheets related to self-insurance retentions by using third-party actuarial data and claims history.

Revenue Recognition. We recognize revenues when the services are performed, collection of the relevant receivables is probable, persuasive evidence of the arrangement exists and the price is fixed and determinable.

Income Taxes. We recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using statutory tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in the period that includes the statutory enactment date. A valuation allowance for deferred tax assets is recognized when it is more likely than not that the benefit of deferred tax assets will not be realized.

Critical Accounting Estimates

The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the balance sheet date and the amounts of revenues and expenses recognized during the reporting period. We analyze our estimates based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. However, actual results could differ from such estimates. The following is a discussion of our critical accounting estimates.

Depreciation and Amortization. In order to depreciate and amortize our property and equipment and our intangible assets with finite lives, we estimate the useful lives and salvage values of these items. Our estimates may be affected by such factors as changing market conditions, technological advances in the industry or changes in regulations governing the industry.

Impairment of Property and Equipment. Our impairment of property and equipment requires us to estimate undiscounted future cash flows. Actual impairment charges are recorded using an estimate of discounted future cash flows. The determination of future cash flows requires us to estimate rates and utilization in future periods and such estimates can change based on market conditions, technological advances in the industry or changes in regulations governing the industry.

Impairment of Goodwill. Our goodwill is considered to have an indefinite useful economic life and is not amortized. We assess impairment of our goodwill annually as of December 31 or on an interim basis if events or circumstances indicate that the fair value of the asset has decreased below its carrying value. A two-step process is required for testing impairment. First, the fair value of each reporting unit is compared to its carrying value to determine whether an indication of impairment exists. If impairment is indicated, then the fair value of the reporting unit’s goodwill is determined by allocating the unit’s fair value to its assets and liabilities (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination. The amount of impairment for goodwill is measured as the excess of its carrying value over its fair value.

Allowance for Doubtful Accounts. We estimate our allowance for doubtful accounts based on an analysis of historical collection activity and specific identification of overdue accounts. Factors that may affect this estimate include (1) changes in the financial positions of our significant customers and (2) a decline in commodity prices that could affect our entire customer base.

Litigation and Self-Insured Risk Reserves. We estimate our reserves related to litigation and self-insured risk based on the facts and circumstances specific to the litigation and self-insured risk claims and our past experience with similar claims. The actual outcome of litigated and insured claims could differ significantly from estimated amounts. As discussed in “Self-Insured Risk Accruals” above with respect to our critical accounting policies, we maintain accruals on our balance sheet to cover self-insured retentions. These accruals are based on certain assumptions developed using third-party data and historical data to project future losses. Loss estimates in the calculation of these accruals are adjusted based upon actual claim settlements and reported claims.

Fair Value of Assets Acquired and Liabilities Assumed. We estimate the fair value of assets acquired and liabilities assumed in business combinations, which involves the use of various assumptions. These estimates may be affected by such factors as changing

market conditions, technological advances in the industry or changes in regulations governing the industry. The most significant assumptions, and the ones requiring the most judgment, involve the estimated fair value of property and equipment, intangible assets and the resulting amount of goodwill, if any. We test annually for impairment the goodwill and intangible assets with indefinite useful lives recorded in business combinations. This requires us to estimate the fair values of our own assets and liabilities at the reporting unit level. Therefore, considerable judgment, similar to that described above in connection with our estimation of the fair value of an acquired company, is required to assess goodwill and certain intangible assets for impairment.

Cash Flow Estimates. Our estimates of future cash flows are based on the most recent available market and operating data for the applicable asset or reporting unit at the time the estimate is made. Our cash flow estimates are used for asset impairment analyses.

Stock-Based Compensation. Our stock-based awards consist of stock options and restricted stock. Stock options issued are valued on the grant date using the Black-Scholes-Merton option-pricing model and restricted stock issued is valued based on the fair value of our common stock at the grant date. All stock-based awards are adjusted for an expected forfeiture rate and amortized over the vesting period.

Income Taxes. The amount and availability of our loss carryforwards (and certain other tax attributes) are subject to a variety of interpretations and restrictive tests. The utilization of such carryforwards could be limited or lost upon certain changes in ownership and the passage of time. Accordingly, although we believe substantial loss carryforwards are available to us, no assurance can be given concerning the realization of such loss carryforwards, or whether or not such loss carryforwards will be available in the future.

Asset Retirement Obligations. We record the fair value of an asset retirement obligation as a liability in the period in which we incur a legal obligation associated with the retirement of tangible long-lived assets and capitalize an equal amount as a cost of the asset, depreciating it over the life of the asset. Subsequent to the initial measurement of the asset retirement obligation, the obligation is adjusted at the end of each quarter to reflect the passage of time, changes in the estimated future cash flows underlying the obligation, acquisition or construction of assets, and settlement of obligations.

Results of Operations

The following is a comparison of our results of operations for the three months and six months ended June 30, 2011 compared to the three months and six months ended June 30, 2010, respectively. For additional segment-related information and trends, please read “— Segment Overview” above.

Three Months Ended June 30, 2011 Compared to Three Months Ended June 30, 2010

Revenues. Revenues increased by 70% to $296.9 million during the second quarter of 2011 from $175.1 million during the same period in 2010. This increase was primarily due to increased demand by our customers for our services, which resulted from higher commodity prices and drilling and well maintenance activity among our customers.

Completion and remedial services revenues increased by 98% to $121.8 million during the second quarter of 2011 compared to $61.5 million in the same period in 2010. The increase in revenue between these periods was due to improved utilization of equipment, resulting from higher drilling and completion activity, as well as improved pricing for our services. Total hydraulic horsepower increased to 176,000 at June 30, 2011 from 142,000 at June 30, 2010.

Fluid services revenues increased by 38% to $81.4 million during the second quarter of 2011 compared to $58.8 million in the same period in 2010. Our revenue per fluid service truck increased 31% to $97,000 in the second quarter of 2011 compared to $74,000 in the same period in 2010, which reflects increases in both utilization and pricing for our services. Our weighted average number of fluid service trucks increased 5% to 837 during the second quarter of 2011 from 797 in the same period in 2010.

Well servicing revenues increased by 69% to $83.9 million during the second quarter of 2011 compared to $49.5 million during the same period in 2010. The higher revenues were due to the 34% increase in rig hours to 205,700 during the second quarter of 2011 from 153,900 during the second quarter of 2010. There was also an increase in revenue per rig hour to $376 during the second quarter of 2011 from $316 during the second quarter of 2010. Our average number of well servicing rigs increased to 412 during the second quarter of 2011 compared to 404 in the same period in 2010, primarily due to the acquisition of Platinum Pressure Services, Inc. (“Platinum”) in the fourth quarter of 2010.

Contract drilling revenues increased by 85% to $9.8 million during the second quarter of 2011 compared to $5.3 million in the same period in 2010. The number of rig operating days increased 35% to 714 in the second quarter of 2011 compared to 527 in the second quarter of 2010. This increase was due to the addition of four drilling rigs in the first six months of 2011 and an increase in new well starts in the Permian Basin, a region in which all of our drilling rigs operate, along with higher dayrates.

Direct Operating Expenses. Direct operating expenses, which primarily consist of labor , including workers’ compensation and health insurance, repair and maintenance, fuel and insurance, increased by 53% to $185.3 million during the second quarter of 2011 from $121.5 million in the same period in 2010. This increase was primarily due to increased activity in each of our four business segments.

Direct operating expenses for the completion and remedial services segment increased by 83% to $68.8 million during the second quarter of 2011 as compared to $37.7 million for the same period in 2010 due primarily to personnel and other costs associated with increased activity levels overall and in our pumping services line. Segment profits increased to 44% of revenues during the second quarter of 2011 compared to 39% for the same period in 2010, due to higher utilization and improved pricing for our services.

Direct operating expenses for the fluid services segment increased by 19% to $51.7 million during the second quarter of 2011 as compared to $43.4 million for the same period in 2010, mainly due to personnel and other costs associated with increased activity levels. Segment profits were 37% of revenues during the second quarter of 2011 compared to 26% for the same period in 2010 due to improved pricing for our services.

Direct operating expenses for the well servicing segment increased by 56% to $57.4 million during the second quarter of 2011 as compared to $36.7 million for the same period in 2010. The increase in direct operating expenses was due to increased activity along with increased payroll, insurance and incentive compensation costs. Segment profits were 32% of revenues during the second quarter of 2011 compared to 26% for the same period in 2010 due to improved pricing and higher utilization for our services.

Direct operating expenses for the contract drilling segment increased to $7.4 million during the second quarter of 2011 from $3.7 million for the same period in 2010. Segment profits for this segment decreased to 24% of revenues during the second quarter of 2011 compared to 29% for the same period in 2010, primarily due to costs associated with the start-up of four drilling rigs purchased in 2011.

General and Administrative Expenses. General and administrative expenses increased by 27% to $34.1 million during the second quarter of 2011 from $26.8 million for the same period in 2010, due mainly to increased personnel costs, including payroll taxes and incentive compensation, and the full quarter effect of the general and administrative expense from the Platinum acquisition that was completed on December 16, 2010. General and administrative expenses included $2.1 million and $1.4 million of stock-based compensation expense during the second quarter of 2011 and 2010, respectively.

Depreciation and Amortization Expenses. Depreciation and amortization expenses were $34.8 million during the second quarter of 2011 as compared to $34.3 million for the same period in 2010.

Interest Expense. Interest expense remained flat at $11.8 million for both the second quarter of 2011 and the same period in 2010.

Income Tax Expense. There was income tax expense of $13.4 million during the second quarter of 2011 as compared to an income tax benefit of $7.1 million for the same period in 2010. Our effective tax rate during the second quarter of 2011 and 2010 was approximately 45% and 40%, respectively.

Six Months Ended June 30, 2011 Compared to Six Months Ended June 30, 2010

Revenues. Revenues increased by 71% to $542.9 million during the first six months of 2011 from $318.1 million during the same period in 2010. This increase was primarily due to increased expenditures by our customers for our services.

Completion and remedial services revenues increased by 105% to $219.3 million during the first six months of 2011 compared to $106.8 million in the same period in 2010. The increase in revenue between these periods was due primarily to improved utilization of equipment, resulting from higher drilling and completion activity, as well as improved pricing for our services. The increased revenues also reflect the impact of our Platinum business acquired in December 2010. Total hydraulic horsepower increased to 176,000 at June 30, 2011 from 142,000 at June 30, 2010.

Fluid services revenues increased by 39% to $153.7 million during the first six months of 2011 compared to $110.9 million in the same period in 2010. Our weighted average number of fluid service trucks increased by 4% to 828 during the first six months of 2011 from 794 in the same period in 2010, and our revenue per fluid service truck increased to $186,000 in the first six months of 2010 compared to $140,000 in the same period in 2010, which reflects the increase in utilization and pricing for these services.

Well servicing revenues increased by 68% to $153.0 million during the first six months of 2011 compared to $91.3 million during the same period in 2010. This increase was due to the 35% increase in rig hours to 390,400 during the first six months of 2011 from 289,600 during the same period in 2010. Revenue per rig hour increased 17% to $366 during the first six months of 2011 from $312 during the first six months of 2010, due to increased pricing and activity for our services. Our average number of well servicing rigs increased to 412 during the first six months of 2011 compared to 405 in the same period in 2010.

Contract drilling revenues increased by 86% to $16.8 million during the first six months of 2011 compared to $9.1 million in the same period in 2010. The number of rig operating days increased to 1,236 in the first six months of 2011 compared to 947 in the first six months of 2010. This increase was due to the addition of four drilling rigs in the first six months of 2011 and increases in new well starts in the Permian Basin, a region in which all of our drilling rigs operate, along with higher day rates.

Direct Operating Expenses. Direct operating expenses, which primarily consist of labor, including workers’ compensation and health insurance, fuel and maintenance and repair costs, increased by 50% to $341.4 million during the first six months of 2011 from $227.6 million in the same period in 2010. This increase was primarily due to the increased activity in each of our four business segments.

Direct operating expenses for the completion and remedial services segment increased by 84% to $123.8 million during the first six months of 2011 as compared to $67.4 million for the same period in 2010, due primarily to increased activity levels. Segment profits increased to 44% of revenues during the first six months of 2011 compared to 37% for the same period in 2010, due to higher utilization of our services and improved pricing for our services.

Direct operating expenses for the fluid services segment increased by 18% to $99.9 million during the first six months of 2011 as compared to $84.4 million for the same period in 2010. Segment profits were 35% of revenues during the first six months of 2011 compared to 24% for the same period in 2010, primarily due to increases in pricing along with increased activity levels.

Direct operating expenses for the well servicing segment increased by 54% to $105.8 million during the first six months of 2011 as compared to $68.8 million for the same period in 2010, while rig hours increased 35% to 390,400 in the first six months of 2011 from 289,600 for the same period in 2010. The increase in direct operating expenses is primarily due to the increase in rig hours. Segment profits were higher at 31% of revenues during the first six months of 2011 compared to 25% for the same period in 2010.

Direct operating expenses for the contract drilling segment increased by 70% to $11.9 million during the first six months of 2011 as compared to $7.0 million for the same period in 2010. Segment profits for this segment were 29% of revenues during the first six months of 2011 compared to 23% for the same period in 2010, mainly due to increases in pricing for our services.

General and Administrative Expenses. General and administrative expenses increased by 26% to $65.5 million during the first six months of 2011 from $51.9 million for the same period in 2010, which included $3.8 million and $2.6 million in stock-based compensation expense during the first six months of 2011 and 2010, respectively. The increase was primarily due to increased personnel costs, including payroll taxes, and the full six-month effect of the general and administrative expense from the Platinum acquisition that was completed on December 16, 2010.

Depreciation and Amortization Expenses. Depreciation and amortization expenses were $67.8 million during the first six months of 2011 as compared to $67.3 million for the same period in 2010, reflecting the increase in the size of and investment in our asset base.

Interest Expense. Interest expense remained flat at $23.2 million during the first six months of 2011 compared to $23.4 million for the same period in 2010.

Income Tax Expense. There was an income tax benefit of $1.3 million during the first six months of 2011 as compared to an income tax benefit of $19.1 million for the same period in 2010. Our effective tax rate during the first six months of 2011 and 2010 was approximately 40% and 37%, respectively.

Liquidity and Capital Resources

As of June 30, 2011, our primary capital resources were net proceeds from our 7.75% Senior Notes offerings, net cash flows from our operations, utilization of capital leases and our $165.0 million revolving credit facility. As of June 30, 2011, we had unrestricted cash and cash equivalents of $220.9 million compared to $47.9 million as of December 31, 2010. This increase was due in part to the issuance of $200.0 million of 7.75% notes in June 2011. We used $180.0 million of these proceeds to acquire the Maverick group of

companies on July 8, 2011. When appropriate, we will consider public or private debt and equity offerings and non-recourse transactions to meet our liquidity needs.

Net Cash Provided by Operating Activities

Cash provided by operating activities was $55.6 million for the six months ended June 30, 2011 as compared to cash used in operating activities of $1.6 million during the same period in 2010. Operating cash flow in the first six months of 2011 was higher mainly due to the increase in profitability due to higher revenues offset by the increase in accounts receivable.

Capital Expenditures

Capital expenditures are the main component of our investing activities. Cash capital expenditures (including acquisitions) during the first six months of 2011 were $114.9 million as compared to $35.9 million in the same period of 2010. We added $24.1 million of additional assets through our capital lease program during the first six months of 2011 compared to $6.7 million of additional assets in the same period in 2010.

For 2011, we now plan to spend at least $183 million for capital expenditures, including amounts spent to purchase four drilling rigs, of which $130 million will be paid for through operating cash flow and existing cash balances and the remainder through capital leases. Based on our view of short-term operating conditions, our capital expenditure program may be increased or decreased accordingly. The foregoing budget excludes acquisitions of other businesses. We do not budget acquisitions in the normal course of business, and we regularly engage in discussions related to potential acquisitions related to the well services industry.

Capital Resources and Financing

We currently believe that our operating cash flows, available funds from our revolving credit facility, and cash on hand will be sufficient to fund our near term liquidity requirements.

Our ability to access additional sources of financing will be dependent on our operating cash flows and demand for our services, which could be negatively impacted due to the extreme volatility of commodity prices and declines in capital and debt markets.

7.125% Senior Notes due 2016

In April 2006, we completed a private offering of $225.0 million aggregate principal amount of 7.125% Senior Notes due April 15, 2016 (the “7.125% Senior Notes”). The 7.125% Senior Notes were jointly and severally guaranteed by each of our restricted subsidiaries (currently all of our subsidiaries other than three immaterial subsidiaries). As of June 30, 2011, these three subsidiaries held no assets and performed no operations. The net proceeds from the offering were used to retire our outstanding Term B Loan balance and to pay down the outstanding balance under our previous credit facility. Remaining proceeds were used for general corporate purposes, including acquisitions.

We issued the 7.125% Senior Notes pursuant to an indenture, dated as of April 12, 2006, by and among us, the guarantor parties thereto and The Bank of New York Trust Company, N.A., as trustee (the “7.125% Senior Notes Indenture”).

Interest on the 7.125% Senior Notes accrues at a rate of 7.125% per year. Interest on the 7.125% Senior Notes is payable in cash semi-annually in arrears on April 15 and October 15 of each year. The 7.125% Senior Notes mature on April 15, 2016. The 7.125% Senior Notes and the guarantees are unsecured and rank equally with all of our and the guarantors’ existing and future unsecured and unsubordinated obligations. The 7.125% Senior Notes and the guarantees rank senior in right of payment to any of our and the guarantors’ existing and future obligations that are, by their terms, expressly subordinated in right of payment to the 7.125% Senior Notes and the guarantees. The 7.125% Senior Notes and the guarantees are effectively subordinated to our and the guarantors’ secured obligations to the extent of the value of the assets securing such obligations.

The 7.125% Senior Notes Indenture contains covenants that limit our ability and the ability of certain of our subsidiaries to:

	•		incur additional indebtedness;

	•		pay dividends or repurchase or redeem capital stock;

	•		make certain investments;

	•		incur liens;

	•		enter into certain types of transactions with affiliates;

	•		limit dividends or other payments by restricted subsidiaries; and

	•		sell assets or consolidate or merge with or into other companies.

These limitations are subject to a number of important qualifications and exceptions.

Upon an Event of Default (as defined in the 7.125% Senior Notes Indenture), the trustee or the holders of at least 25% in aggregate principal amount of the 7.125% Senior Notes then outstanding may declare all of the amounts outstanding under the 7.125% Senior Notes to be due and payable immediately.

We may, at our option, redeem all or part of the 7.125% Senior Notes, at any time on or after April 15, 2011 at a redemption price equal to 100% of the principal amount thereof, plus a premium declining ratably to par and accrued and unpaid interest, if any, to the date of redemption.

Following a change of control, as defined in the 7.125% Senior Notes Indenture, we will be required to make an offer to repurchase all or any portion of the 7.125% Senior Notes at a purchase price of 101% of their principal amount, plus accrued and unpaid interest to the date of repurchase.

11.625% Senior Secured Notes due 2014

On July 31, 2009, we issued $225.0 million aggregate principal amount of 11.625% Senior Secured Notes due 2014 (the “Senior Secured Notes”) in a private placement. The Senior Secured Notes were jointly and severally, and unconditionally, guaranteed on a senior secured basis initially by all of our current subsidiaries other than two immaterial subsidiaries.

The net proceeds from the issuance of the Senior Secured Notes were $207.7 million after discounts of $12.1 million and offering expenses of $5.2 million. We used the net proceeds from the offering, along with other funds, to repay all outstanding indebtedness under our $225.0 million revolving credit facility, which we terminated in connection with the offering.

The Senior Secured Notes and the related guarantees were issued pursuant to an indenture dated as of July 31, 2009 (the “Senior Secured Notes Indenture”), by and among us, the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., a national banking association, as trustee. The obligations under the Senior Secured Notes Indenture were secured as set forth in the Senior Secured Notes Indenture and in a Secured Notes Security Agreement, in favor of the trustee, by a first-priority lien (other than Permitted Collateral Liens, as defined in the Senior Secured Notes Indenture) in favor of the trustee, on the Collateral described in the Secured Notes Security Agreement.

Interest on the Senior Secured Notes accrued at a rate of 11.625% per year. Interest on the Senior Secured Notes was payable semi-annually in arrears on February 1 and August 1 of each year, commencing on February 1, 2010. The Senior Secured Notes provided for a maturity on August 1, 2014.

The Senior Secured Notes Indenture contained covenants that, among other things, limit our ability and the ability of certain of our subsidiaries to:

	•		incur additional indebtedness;

	•		pay dividends or repurchase or redeem capital stock;

	•		make certain investments;

	•		incur liens;

	•		enter into certain types of transactions with our affiliates;

	•		limit dividends or other payments by our restricted subsidiaries to us; and

	•		sell assets (including Collateral under the Secured Notes Security Agreement), or consolidate or merge with or into other companies.

These limitations were subject to a number of important exceptions and qualifications.

On February 1, 2011, Basic announced a cash tender offer and consent solicitation with respect to any and all of the $225.0 million aggregate outstanding principal amount of the Senior Secured Notes. On February 15, 2011, Basic completed the closing for an early tender for approximately $224.7 million of the Senior Secured Notes and delivered to the trustee amounts required to satisfy and discharge remaining obligations for the outstanding notes. The tender offer expired on March 2, 2011, and as of June 30, 2011, all obligations of Basic under the Senior Secured Notes Indenture have been satisfied and no Senior Secured Notes remain outstanding.

7.75% Senior Notes due 2019

On February 15, 2011, we successfully completed the issuance and sale of $275.0 million and on June 13, 2011, we successfully completed the issuance and sale of an additional $200.0 million, for an aggregate principal amount of $475.0 million of 7.75% Senior Notes due 2019 (the “7.75% Senior Notes”). The 7.75% Senior Notes are jointly and severally, and unconditionally, guaranteed on a senior unsecured basis initially by all of our current subsidiaries other than three immaterial subsidiaries. The 7.75% Senior Notes and the guarantees rank (i) equally in right of payment with any of our and the subsidiary guarantors’ existing and future senior indebtedness, including our existing 7.125% Senior Notes and the related guarantees, and (ii) effectively junior to all existing or future liabilities of our subsidiaries that do not guarantee the 7.75% Senior Notes and to our and the subsidiary guarantors’ existing or future secured indebtedness to the extent of the value of the collateral therefor.

The 7.75% Senior Notes and the guarantees were offered and sold in private transactions in accordance with Rule 144A and Regulation S under the Securities Act of 1933, as amended. The purchase price for the $275.0 million of 7.75% Senior Notes issued on February 15, 2011 and guarantees was 100.000% of their principal amount and the purchase price for the $200.0 million of 7.75% Senior Notes issued on June 13, 2011 and guarantees was 101.000%, plus accrued interest from February 15, 2011. We received net proceeds from the issuance of the 7.75% Senior Notes of approximately $465.5 million after premiums and offering expenses. We used a portion of the net proceeds from the offering to fund our tender offer and consent solicitation for our Senior Secured Notes and to redeem the Senior Secured Notes not purchased in the tender offer. We also used a portion of the net proceeds from this offering to fund the $180.0 million purchase price for our Maverick companies acquisition completed in July 2011 and for general corporate purposes.

The 7.75% Senior Notes and the guarantees were issued pursuant to an indenture dated as of February 15, 2011 (the “7.75% Senior Notes Indenture”), by and among us, the guarantors party thereto and Wells Fargo Bank, N.A., as trustee. Interest on the 7.75% Senior Notes accrues from and including February 15, 2011 at a rate of 7.75% per year. Interest on the 7.75% Senior Notes is payable semi-annually in arrears on February 15 and August 15 of each year, commencing on August 15, 2011. The 7.75% Senior Notes mature on February 15, 2019.

The 7.75% Senior Notes Indenture contains covenants that, among other things, limit our ability and the ability of certain of our subsidiaries to:

	•		incur additional indebtedness;

	•		pay dividends or repurchase or redeem capital stock;

	•		make certain investments;

	•		incur liens;

	•		enter into certain types of transactions with affiliates;

	•		limit dividends or other payments by our restricted subsidiaries to us; and

•

sell assets or consolidate or merge with or into other companies.

These and other covenants that are contained in the 7.75% Senior Notes Indenture are subject to important exceptions and qualifications.

Additionally, during any period of time that the 7.75% Senior Notes have a Moody’s rating of Baa3 or higher or an Standard & Poor’s rating of BBB- or higher and no default has occurred and is then continuing, certain of the restrictive covenants contained in the 7.75% Senior Notes Indenture will cease to apply.

We may, at our option, redeem all or part of the 7.75% Senior Notes, at any time on or after February 15, 2015, at a redemption price equal to 100% of the principal amount thereof, plus a premium declining ratably to par and accrued and unpaid interest to the date of redemption.

At any time before February 15, 2014, we, at our option, may redeem up to 35% of the aggregate principal amount of the 7.75% Senior Notes issued under the 7.75% Senior Notes Indenture with the net cash proceeds of one or more qualified equity offerings at a redemption price of 107.750% of the principal amount of the 7.75% Senior Notes to be redeemed, plus accrued and unpaid interest to the date of redemption, as long as:

	•		at least 65% of the aggregate principal amount of the 7.75% Senior Notes issued under the 7.75% Senior Notes Indenture remains outstanding immediately after the occurrence of such redemption; and

	•		such redemption occurs within 90 days of the date of the closing of any such qualified equity offering.

In addition, at any time before February 15, 2015, we may redeem some or all of 7.75% Senior Notes at a redemption price equal to 100% of the principal amount of the 7.75% Senior Notes, plus an applicable premium and accrued and unpaid interest to the date of redemption.

Following a change of control, as defined in the 7.75% Senior Notes Indenture, Basic will be required to make an offer to repurchase all or a portion of the 7.75% Senior Notes at 101% of their principal amount, plus accrued and unpaid interest to the date of repurchase.

New Revolving Credit Facility

On February 15, 2011, in connection with the initial offering of 7.75% Senior Notes, we terminated our previous $30.0 million secured revolving credit facility with Capital One, National Association, and entered into a new $165.0 million revolving credit facility (the “Credit Agreement”) with Merrill Lynch, Pierce, Fenner & Smith Incorporated and Capital One, National Association, as joint lead arrangers and joint book managers, the lenders party thereto and Bank of America, N.A., as administrative agent. The Credit Agreement includes an accordion feature whereby the total credit available to Basic can be increased by up to $100.0 million under certain circumstances, subject to additional lender commitments. The obligations under the Credit Agreement are guaranteed on a joint and several basis by each of Basic’s current subsidiaries, other than three immaterial subsidiaries, and are secured by substantially all assets of Basic and the guarantors as collateral under a related Security Agreement (the “Security Agreement”). As of June 30, 2011, the non-guarantor subsidiaries held no assets and performed no operations. On July 15, 2011, we exercised the accordion feature and amended the Credit Agreement to increase our total credit available from $165.0 million to $225.0 million.

The Credit Agreement contains various covenants that, subject to agreed upon exceptions, limit Basic’s ability and the ability of certain of Basic’s subsidiaries to:

	•		incur indebtedness;

	•		grant liens;

	•		enter into sale and leaseback transactions;

	•		make loans, capital expenditures, acquisitions and investments;

	•		change the nature of business;

	•		acquire or sell assets or consolidate or merge with or into other companies;

	•		declare or pay dividends;

	•		enter into transactions with affiliates;

	•		enter into burdensome agreements;

	•		prepay, redeem or modify or terminate other indebtedness;

	•		change accounting policies and reporting practices; and

	•		amend organizational documents.

	•		a minimum consolidated interest coverage ratio of not less than 2.50:1.00;

	•		a maximum consolidated leverage ratio not to exceed:

	•		4.25:1.00 for the quarter ending March 31, 2011; and

	•		4.00:1.00 after March 31, 2011; and

•

a maximum consolidated senior secured leverage ratio of 2.00:1.00.

We had $21.9 million outstanding under the Credit Agreement as of June 30, 2011. At June 30, 2011, we were in compliance with our covenants under the Credit Agreement.

Other Debt

We have a variety of other capital leases and notes payable outstanding that is generally customary in our business. None of these debt instruments is material individually. Our leases with Banc of America Leasing & Capital, LLC require us to maintain a minimum debt service coverage ratio of 1.05 to 1.00. As of June 30, 2011, we had total capital leases of approximately $66.2 million.

Preferred Stock

At June 30, 2011 and December 31, 2010, we had 5,000,000 shares of $.01 par value preferred stock authorized, of which none was designated, issued or outstanding.

Other Matters

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Net Operating Losses

As of June 30, 2011, we had approximately $41.6 million of net operating loss carryforwards.

Recent Accounting Pronouncements

In December 2010, the FASB issued ASU No. 2010-09, “Business Combinations: Disclosure of Supplementary Pro Forma Information for Business Combinations” (“ASU 2010-29”). ASU 2010-29 addresses diversity in the interpretation of the pro forma revenue and earnings disclosure requirements for business combinations. If a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. Basic adopted ASU 2010-29 on January 1, 2011. This update had no impact on Basic’s financial position, results of operations or cash flows.

Impact of Inflation on Operations

Management is of the opinion that inflation has not had a significant impact on our business.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of June 30, 2011, we had no material changes to the disclosure on this matter made in our Annual Report on Form 10-K for the year ended December 31, 2010.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Based on their evaluation as of the end of the period covered by this report, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are effective to ensure that information required to be disclosed in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and effective to ensure that information required to be disclosed in such reports is accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

During the most recent fiscal quarter, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, Basic is a party to litigation or other legal proceedings that Basic considers to be a part of the ordinary course of business. Basic is not currently involved in any legal proceedings that it considers probable or reasonably possible, individually or in the aggregate, to result in a material adverse effect on its financial condition, results of operations or liquidity. The information regarding litigation and environmental matters described in note 6 of the notes to our unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q is incorporated herein by reference.

ITEM 1A. RISK FACTORS

For information regarding risks that may affect our business, see the risk factors included in our most recent annual report on Form 10-K under the heading “Risk Factors.”

In addition to the risk factors disclosed in our Form 10-K, the following are additional risk factors that should be considered in connection with our business:

Federal and state legislative and regulatory initiatives related to hydraulic fracturing could result in operating restrictions or delays in the completion of oil and natural gas wells that may reduce demand for our well servicing activities and could adversely affect our financial position, results of operations and cash flows.

We provide hydraulic fracturing services to our customers. Hydraulic fracturing is a commonly used process that involves injection of water, sand, and certain chemicals to fracture the hydrocarbon-bearing rock formation to allow flow of hydrocarbons into the wellbore. The federal Energy Policy Act of 2005 amended the Underground Injection Control (“UIC”) provisions of the federal Safe Drinking Water Act (“SDWA”) to exclude certain hydraulic fracturing practices from the definition of “underground injection”. The EPA has asserted regulatory authority over certain hydraulic fracturing activities involving diesel fuel and has begun the process of drafting guidance relating to such practices. In addition, repeal of the SDWA exclusion of hydraulic fracturing has been advocated by certain advocacy organizations and others in the public. In March 2011, companion bills entitled the Fracturing Responsibility and Awareness of Chemicals (FRAC) Act were reintroduced in the United States Senate and House of Representatives. These bills, which are currently under consideration by Congress, would repeal the exemption for hydraulic fracturing from the SDWA, which would have the effect of allowing the EPA to promulgate new regulations and permitting requirements for hydraulic fracturing, and would require the disclosure of the chemical constituents of hydraulic fracturing fluids to a regulatory agency, which would make the information public via the internet. Scrutiny of hydraulic fracturing activities continues in other ways, with the EPA having commenced a study of the potential environmental impacts of hydraulic fracturing, the initial results of which are expected to be available by late 2012 and the final results of which are expected in 2014. The U.S. Department of the Interior has also announced that it will consider regulations relating to the use of hydraulic fracturing techniques on public lands and disclosure of fracturing fluid constituents. In addition, some states and localities have adopted, and others are considering adopting, regulations or ordinances that could restrict hydraulic fracturing in certain circumstances, that would require, with some exceptions, disclosure of constituents of hydraulic fracturing fluids, or that would impose higher taxes, fees or royalties on natural gas production. Moreover, public debate over hydraulic fracturing and shale gas production has been increasing, and has resulted in delays of well permits in some areas.

In 2010, a committee of the U.S. House of Representatives undertook investigations into hydraulic fracturing practices involving the use of diesel fuel in hydraulic fracturing fluids, including requesting information from various field services companies including us. We responded to that request and have received no further communication from the committee with regard to that investigation. However, on January 31, 2011, Representative Henry Waxman and other members of Congress wrote to the EPA asserting that various companies, including us, had engaged in hydraulic fracturing operations requiring a permit without obtaining such a permit. We have no knowledge as to whether or how the EPA will respond to that letter.

Increased regulation and attention given to the hydraulic fracturing process could lead to greater opposition, including litigation, to oil and gas production activities using hydraulic fracturing techniques. Additional legislation or regulation could also lead to operational delays or increased operating costs in the production of oil and natural gas, including from the developing shale plays, incurred by our customers or could make it more difficult to perform hydraulic fracturing. The adoption of any federal, state or local laws or the implementation of regulations or ordinances restricting or increasing the costs of hydraulic fracturing could potentially increase our costs of operations and cause a decrease in the completion of new oil and natural gas wells and an associated decrease in demand for our well servicing activities, any or all of which could adversely affect our financial position, results of operations and cash flows.

Potential listing of species as “endangered” under the federal Endangered Species Act could result in increased costs and new operating restrictions or delays on our oil and natural gas exploration and production customers, which could adversely reduce the amount of contract drilling services that we provide to such customers.

The federal Endangered Species Act, referred to as the “ESA,” and analogous state laws regulate a variety of activities, including oil and gas development, which could have an adverse effect on species listed as threatened or endangered under the ESA or their habitats. The designation of previously unidentified endangered or threatened species could cause oil and natural gas exploration and production operators to incur additional costs or become subject to operating delays, restrictions or bans in affected areas, which impacts could adversely reduce the amount of drilling activities in affected areas, including support services that we provide to such operators under our contract drilling services segment. Numerous species have been listed or proposed for protected status in areas in which we provide or could in the future provide field services. For instance, the Sand Dune Lizard, referred to as “Lizard,” a small lizard found in southeastern New Mexico and west Texas, an area where we provide a significant level of contract drilling services to oil and natural gas exploration and production operators, was proposed for listing as an endangered species under the ESA in December 2010 by the U.S. Fish & Wildlife Service, also referred to as the “FWS”. The lesser prairie chicken, sage grouse and certain wildflower species, among others, are also species that have been or are being considered for protected status under the ESA and whose range can coincide with oil and natural gas production activities. The presence of protected species in areas where operators whom we provide contract drilling services conduct exploration and production operations could impair such operators’ ability to timely complete well drilling and development and, consequently, adversely affect the amount of contract drilling or other field services that we provided to such operators, which reduction of services could have a significant adverse effect on our results of operations and financial position.

We are subject to environmental, health and safety laws and regulations that may expose us to significant liabilities for penalties, damages or costs of remediation or compliance.

Our operations are subject to federal, regional, state and local laws and regulations relating to protection of natural resources and the environment, health and safety aspects of our operations and waste management, including the transportation and disposal of waste and other materials. These laws and regulations may impose numerous obligations on our operations, including the acquisition of permits to conduct regulated activities, the incurrence of capital expenditures to mitigate or prevent releases of materials from our facilities, the imposition of substantial liabilities for pollution resulting from our operations and the application of specific health and safety criteria addressing worker protection. Failure to comply with these laws and regulations could result in investigations such as the investigation described in note 6 of the notes to our unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q, restrictions or orders suspending well operations, the assessment of administrative, civil and criminal penalties, the revocation of permits and the issuance of corrective action orders, any of which could have a material adverse effect on our business, results of operations and financial condition.

There is inherent risk of environmental costs and liabilities in our business as a result of our handling of petroleum hydrocarbons and oilfield and industrial wastes, air emissions and wastewater discharges related to our operations, and historical industry operations and waste disposal practices. Our fluid services segment includes disposal operations into injection wells that pose risks of environmental liability, including leakage from the wells to surface or subsurface soils, surface water or groundwater. Some environmental laws and regulations may impose strict liability, which means that in some situations, we could be exposed to liability as a result of our conduct that was without fault or lawful at the time it occurred or as a result of the conduct of, or conditions caused by, prior operators or other third parties. Clean-up costs and other damages arising as a result of environmental laws and costs associated with changes in environmental laws and regulations could be substantial and could have a material adverse effect on our financial condition and results of operations.

Laws protecting the environment generally have become more stringent over time and are expected to continue to do so, which could lead to material increases in costs for future environmental compliance and remediation. The modification or interpretation of existing laws or regulations, or the adoption of new laws or regulations, could curtail exploratory or developmental drilling for oil and natural gas and could limit well servicing opportunities. We may not be able to recover some or any of our costs of compliance with these laws and regulations from insurance.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Purchase of Equity Securities by the Issuer and Affiliated Purchasers

The following table summarizes stock repurchase activity for the three months ended June 30, 2011:


	Issuer Purchases of Equity Securities
					Total Number of		Approximate Dollar Value
					Shares Purchased as		of Shares that May Yet
	Total Number of		Average Price Paid		Part of Publicly		be Purchased Under
Period	Shares Purchased (1)		per Share		Announced Program		the Program
April 1 — April 30		590	$	24.76		—	$	—
May 1 — May 31		1,129	$	27.52		—	$	—
June 1 — June 30		—	$	—		—	$	—
Total		1,719	$	26.57		—	$	—


(1)		These shares were repurchased from various employees to provide such employees the cash amounts necessary to pay certain tax liabilities associated with the vesting of restricted shares owned by them. The shares were repurchased on various dates based on the closing price per share on the date of repurchase.

ITEM 6. EXHIBITS


Exhibit
No.		Description
3.1*		Amended and Restated Certificate of Incorporation of the Company, dated September 22, 2005. (Incorporated by reference to Exhibit 3.1 of the Company’s Registration Statement on Form S-1 (SEC File No. 333-127517), filed on September 28, 2005)

3.2*		Amended and Restated Bylaws of the Company, effective as of March 9, 2010. (Incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on March 15, 2010)

4.1*		Specimen Stock Certificate representing common stock of the Company. (Incorporated by reference to Exhibit 3.1 of the Company’s Registration Statement on Form S-1 (SEC File No. 333-127517), filed on November 4, 2005)

4.2*		Indenture dated April 12, 2006, among the Company, the guarantors party thereto, and The Bank of New York Trust Company, N.A., as trustee. (Incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on April 13, 2006)

4.3*		Form of 7.125% Senior Note due 2016. (Included in the Indenture filed as Exhibit 4.1 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on April 13, 2006)

4.4*		First Supplemental Indenture dated as of July 14, 2006 to Indenture dated as of April 12, 2006 among the Company as Issuer, the Subsidiary Guarantors named therein and The Bank of New York Trust Company, N.A., as trustee. (Incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on July 20, 2006)

4.5*		Second Supplemental Indenture dated as of April 26, 2007 and effective as of March 7, 2007 to Indenture dated as of April 12, 2006 among the Company as Issuer, the Subsidiary Guarantors named therein and the Bank of New York Trust Company, N.A., as trustee. (Incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K (SEC File No 001-32693), filed on May 1, 2007)

4.6*		Third Supplemental Indenture dated as of April 26, 2007 to Indenture dated as of April 12, 2006 among the Company as Issuer, the Subsidiary Guarantors named therein and the Bank of New York Trust Company, N.A., as trustee. (Incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K (SEC File No 001-32693), filed on May 1, 2007)

4.7*		Fourth Supplemental Indenture dated as of February 9, 2009 to Indenture dated as of April 12, 2006 among the Company as Issuer, the Subsidiary Guarantors named therein and the Bank of New York Mellon Trust Company, N.A., as Trustee. (Incorporated by reference to Exhibit 4.7 of the Company’s Annual Report on Form 10-K (SEC File No. 001-32693), filed on March 9, 2009)

4.8*		Fifth Supplemental Indenture dated as of July 23, 2009 to Indenture dated as of April 12, 2006 among the Company as Issuer, the Subsidiary Guarantors named therein and the Bank of New York Mellon Trust Company, N.A., as Trustee. (Incorporated by reference to Exhibit 4.8 of the Company’s Annual Report on Form 10-K (SEC File No. 001-32693), filed on March 1, 2010)

4.9*		Sixth Supplemental Indenture dated as of December 22, 2010 to Indenture dated as of April 12, 2006, by and among Basic Energy Services, Inc. as Issuer, the Subsidiary Guarantors named therein and The Bank of New York Mellon Trust Company, N.A. as trustee. (Incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on December 22, 2010)

4.10*		Indenture dated as of February 15, 2011, among Basic Energy Services, Inc. as Issuer, the Guarantors named therein and Wells Fargo Bank, N.A., as trustee. (Incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on February 18, 2011)

4.11*		Form of 7.75% Senior Note due 2019. (Included as Exhibit A to Exhibit 4.2 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on February 18, 2011)

4.12*		Registration Rights Agreement dated as of February 15, 2011, by and among Basic, the Guarantors named therein and the initial purchasers party thereto. (Incorporated by reference to Exhibit 4.4 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on February 18, 2011)

4.13*		Registration Rights Agreement dated as of June 13, 2011, by and among Basic, the Guarantors named therein and the initial purchasers party thereto. (Incorporated by reference to Exhibit 4.3 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on June 13, 2011)

10.1*		First Amendment to Fourth Amended and Restated Basic Energy Services, Inc. 2003 Incentive Plan. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K/A (SEC File No. 001-32693), filed on June 1, 2011)

10.2*		Amendment No. 1 to Credit Agreement, dated as of June 7, 2011, by and among Basic as Borrower, the lenders party thereto and Bank of America, N.A., as administrative agent, a swing line lender and l/c issuer. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on June 7, 2011)

10.3*		Amendment No. 2 to Credit Agreement, dated as of July 15, 2011, by and among Basic as Borrower, the lenders party thereto and Bank of America, N.A., as administrative agent, a swing line lender and l/c issuer. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on July 21, 2011)

10.4*		Purchase and Sale Agreement dated as of July 6, 2011, by and among Maverick Stimulation Company, LLC, Maverick Coil Tubing Services, LLC, MCM Holdings, LLC, Maverick Thru-Tubing, LLC, The Maverick Companies, LLC, Maverick Solutions, LLC, MSM Leasing, LLC and the sellers listed therein and Basic Energy Services, L.P. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on July 11, 2011)


Exhibit
No.		Description
31.1#		Certification by Chief Executive Officer required by Rule 13a-14(a) and 15d-14(a) under the Exchange Act

31.2#		Certification by Chief Financial Officer required by Rule 13a-14(a) and 15d-14(a) under the Exchange Act

32.1#		Certification of Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2#		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.CAL#		XBRL Calculation Linkbase Document

101.DEF#		XBRL Definition Linkbase Document

101.INS#		XBRL Instance Document

101.LAB#		XBRL Labels Linkbase Document

101.PRE#		XBRL Presentation Linkbase Document

101.SCH#		XBRL Schema Document


*		Incorporated by reference

#		Filed with this report

SIGNATURES

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.


	BASIC ENERGY SERVICES, INC.
By :	/s/ Kenneth V. Huseman
	Name:	Kenneth V. Huseman
	Title:	President, Chief Executive Officer and Director (Principal Executive Officer)



By:	/s/ Alan Krenek
		Name:	Alan Krenek
		Title:	Senior Vice President, Chief Financial Officer, Treasurer and Secretary (Principal Financial Officer and Principal Accounting Officer)

Date: July 25, 2011

Exhibit Index


Exhibit
No.		Description
3.1*		Amended and Restated Certificate of Incorporation of the Company, dated September 22, 2005. (Incorporated by reference to Exhibit 3.1 of the Company’s Registration Statement on Form S-1 (SEC File No. 333-127517), filed on September 28, 2005)

3.2*		Amended and Restated Bylaws of the Company, effective as of March 9, 2010. (Incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on March 15, 2010)

4.1*		Specimen Stock Certificate representing common stock of the Company. (Incorporated by reference to Exhibit 3.1 of the Company’s Registration Statement on Form S-1 (SEC File No. 333-127517), filed on November 4, 2005)

4.2*		Indenture dated April 12, 2006, among the Company, the guarantors party thereto, and The Bank of New York Trust Company, N.A., as trustee. (Incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on April 13, 2006)

4.3*		Form of 7.125% Senior Note due 2016. (Included in the Indenture filed as Exhibit 4.1 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on April 13, 2006)

4.4*		First Supplemental Indenture dated as of July 14, 2006 to Indenture dated as of April 12, 2006 among the Company as Issuer, the Subsidiary Guarantors named therein and The Bank of New York Trust Company, N.A., as trustee. (Incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on July 20, 2006)

4.5*		Second Supplemental Indenture dated as of April 26, 2007 and effective as of March 7, 2007 to Indenture dated as of April 12, 2006 among the Company as Issuer, the Subsidiary Guarantors named therein and the Bank of New York Trust Company, N.A., as trustee. (Incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K (SEC File No 001-32693), filed on May 1, 2007)

4.6*		Third Supplemental Indenture dated as of April 26, 2007 to Indenture dated as of April 12, 2006 among the Company as Issuer, the Subsidiary Guarantors named therein and the Bank of New York Trust Company, N.A., as trustee. (Incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K (SEC File No 001-32693), filed on May 1, 2007)

4.7*		Fourth Supplemental Indenture dated as of February 9, 2009 to Indenture dated as of April 12, 2006 among the Company as Issuer, the Subsidiary Guarantors named therein and the Bank of New York Mellon Trust Company, N.A., as Trustee. (Incorporated by reference to Exhibit 4.7 of the Company’s Annual Report on Form 10-K (SEC File No. 001-32693), filed on March 9, 2009)

4.8*		Fifth Supplemental Indenture dated as of July 23, 2009 to Indenture dated as of April 12, 2006 among the Company as Issuer, the Subsidiary Guarantors named therein and the Bank of New York Mellon Trust Company, N.A., as Trustee. (Incorporated by reference to Exhibit 4.8 of the Company’s Annual Report on Form 10-K (SEC File No. 001-32693), filed on March 1, 2010)

4.9*		Sixth Supplemental Indenture dated as of December 22, 2010 to Indenture dated as of April 12, 2006, by and among Basic Energy Services, Inc. as Issuer, the Subsidiary Guarantors named therein and The Bank of New York Mellon Trust Company, N.A. as trustee. (Incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on December 22, 2010)

4.10*		Indenture dated as of February 15, 2011, among Basic Energy Services, Inc. as Issuer, the Guarantors named therein and Wells Fargo Bank, N.A., as trustee. (Incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on February 18, 2011)


Exhibit
No.		Description
4.11*		Form of 7.75% Senior Note due 2019. (Included as Exhibit A to Exhibit 4.2 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on February 18, 2011)

4.12*		Registration Rights Agreement dated as of February 15, 2011, by and among Basic, the Guarantors named therein and the initial purchasers party thereto. (Incorporated by reference to Exhibit 4.4 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on February 18, 2011)

4.13*		Registration Rights Agreement dated as of June 13, 2011, by and among Basic, the Guarantors named therein and the initial purchasers party thereto. (Incorporated by reference to Exhibit 4.3 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on June 13, 2011)

10.1*		First Amendment to Fourth Amended and Restated Basic Energy Services, Inc. 2003 Incentive Plan (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K/A (SEC File No. 001-32693), filed on June 1, 2011)

10.2*		Amendment No. 1 to Credit Agreement, dated as of June 7, 2011, by and among Basic as Borrower, the lenders party thereto and Bank of America, N.A., as administrative agent, a swing line lender and l/c issuer. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on June 7, 2011)

10.3*		Amendment No. 2 to Credit Agreement, dated as of July 15, 2011, by and among Basic as Borrower, the lenders party thereto and Bank of America, N.A., as administrative agent, a swing line lender and l/c issuer. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on July 21, 2011)

10.4*		Purchase and Sale Agreement dated as of July 6, 2011, by and among Maverick Stimulation Company, LLC, Maverick Coil Tubing Services, LLC, MCM Holdings, LLC, Maverick Thru-Tubing, LLC, The Maverick Companies, LLC, Maverick Solutions, LLC, MSM Leasing, LLC and the sellers listed therein and Basic Energy Services, L.P. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on July 11, 2011)

31.1#		Certification by Chief Executive Officer required by Rule 13a-14(a) and 15d-14(a) under the Exchange Act

31.2#		Certification by Chief Financial Officer required by Rule 13a-14(a) and 15d-14(a) under the Exchange Act

32.1#		Certification of Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2#		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.CAL#		XBRL Calculation Linkbase Document

101.DEF#		XBRL Definition Linkbase Document

101.INS#		XBRL Instance Document

101.LAB#		XBRL Labels Linkbase Document

101.PRE#		XBRL Presentation Linkbase Document

101.SCH#		XBRL Schema Document


*		Incorporated by reference

#		Filed with this report

EX-31.1 2 h83341exv31w1.htm EX-31.1 exv31w1

Exhibit 31.1

CERTIFICATION BY CHIEF EXECUTIVE OFFICER PURSUANT TO
RULE 13a-14(a) AND 15d-14(a) UNDER THE EXCHANGE ACT

I, Kenneth V. Huseman, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Basic Energy Services, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 25, 2011


/s/ Kenneth V. Huseman
Kenneth V. Huseman
Chief Executive Officer

EX-31.2 3 h83341exv31w2.htm EX-31.2 exv31w2

Exhibit 31.2

CERTIFICATION BY CHIEF FINANCIAL OFFICER PURSUANT TO
RULE 13a-14(a) AND 15d-14(a) UNDER THE EXCHANGE ACT

I, Alan Krenek, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Basic Energy Services, Inc.;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 25, 2011


/s/ Alan Krenek
Alan Krenek
Chief Financial Officer

EX-32.1 4 h83341exv32w1.htm EX-32.1 exv32w1

Exhibit 32.1

CERTIFICATION BY CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Basic Energy Services, Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kenneth V. Huseman, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.


/s/ Kenneth V. Huseman
Kenneth V. Huseman
Chief Executive Officer

July 25, 2011

EX-32.2 5 h83341exv32w2.htm EX-32.2 exv32w2

Exhibit 32.2

CERTIFICATION BY CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Basic Energy Services, Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Alan Krenek, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.


/s/ Alan Krenek
Alan Krenek
Chief Financial Officer

July 25, 2011

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<div align="left" style="font-family: 'Times New Roman',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"><b></b> </div>   <div align="center" style="font-size: 10pt"><b> </b></div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>1. Basis of Presentation and Nature of Operations</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Basis of Presentation</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The accompanying unaudited consolidated financial statements of Basic Energy Services, Inc. and subsidiaries (“Basic” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments which are of a normal recurring nature considered necessary for a fair presentation have been made in the accompanying unaudited financial statements. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Nature of Operations</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic provides a wide range of well site services to oil and natural gas drilling and producing companies, including completion and remedial services, fluid services and well site construction services, well servicing and contract drilling. These services are primarily provided using Basic’s fleet of equipment. Basic’s operations are concentrated in the major United States onshore oil and gas producing regions in Texas, New Mexico, Oklahoma, Arkansas, Kansas, Louisiana, Wyoming, North Dakota, Colorado, Utah, Montana, West Virginia, and Pennsylvania. </div> </div>

<div align="left" style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>2. Summary of Significant Accounting Policies</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Principles of Consolidation</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The accompanying consolidated financial statements include the accounts of Basic and its wholly-owned subsidiaries. Basic has no variable interest in any other organization, entity, partnership, or contract. All intercompany transactions and balances have been eliminated. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Estimates and Uncertainties</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Preparation of the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Areas where critical accounting estimates are made by management include: </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Depreciation and amortization of property and equipment and intangible assets</td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Impairment of property and equipment, goodwill and intangible assets</td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Allowance for doubtful accounts</td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Litigation and self-insured risk reserves</td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Fair value of assets acquired and liabilities assumed</td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Future cash flows</td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Stock-based compensation</td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Income taxes</td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>Asset retirement obligations</td> </tr> </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div style="margin-top: 6pt"> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Revenue Recognition</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Completion and Remedial Services — </i>Completion and remedial services consists primarily of pumping services, focused on cementing, acidizing and fracturing, nitrogen units, coiled tubing units, snubbing units, and rental and fishing tools. Basic recognizes revenue when services are performed, collection of the relevant receivables is probable, persuasive evidence of an arrangement exists and the price is fixed or determinable. Basic prices completion and remedial services by the hour, day, or project depending on the type of service performed. When Basic provides multiple services to a customer, revenue is allocated to the services performed based on the fair value of the services. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Fluid Services — </i>Fluid services consists primarily of the sale, transportation, storage and disposal of fluids used in drilling, production and maintenance of oil and natural gas wells, and well site construction and maintenance services. Basic recognizes revenue when services are performed, collection of the relevant receivables is probable, persuasive evidence of an arrangement exists and the price is fixed or determinable. Basic prices fluid services by the job, by the hour or by the quantities sold, disposed of or hauled. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Well Servicing </i>— Well servicing consists primarily of maintenance services, workover services, completion services, plugging and abandonment services and rig manufacturing and servicing. Basic recognizes revenue when services are performed, collection of the relevant receivables is probable, persuasive evidence of an arrangement exists and the price is fixed or determinable. Basic prices well servicing by the hour or by the day of service performed. Rig manufacturing revenue is recognized when the rig is accepted by the customer, based on the completed contract method by individual rig. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Contract Drilling — </i>Contract drilling consists primarily of drilling wells to a specified depth using drilling rigs. Basic recognizes revenues based on either a “daywork” contract, in which an agreed upon rate per day is charged to the customer, or a “footage” contract, in which an agreed upon rate is charged per the number of feet drilled. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Taxes assessed on sales transactions are presented on a net basis and are not included in revenue. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Inventories</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     For rental and fishing tools, inventories consisting mainly of grapples and drill bits are stated at the lower of cost or market, with cost being determined by the average cost method. Other inventories, consisting mainly of manufacturing raw materials, rig components, repair parts, drilling and completion materials and gravel, are held for use in the operations of Basic and are stated at the lower of cost or market, with cost being determined on the first-in, first-out (“FIFO”) method. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Property and Equipment</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Property and equipment are stated at cost or at estimated fair value at acquisition date if acquired in a business combination. Expenditures for repairs and maintenance are charged to expense as incurred and additions and improvements that significantly extend the lives of the assets are capitalized. Upon sale or other retirement of depreciable property, the cost and accumulated depreciation and amortization are removed from the related accounts and any gain or loss is reflected in operations. All property and equipment are depreciated or amortized (to the extent of estimated salvage values) on the straight-line method. The components of a well servicing rig generally require replacement or refurbishment during the well servicing rig’s life and are depreciated over their estimated useful lives, which range from 3 to 15 years. The costs of the original components of a purchased or acquired well servicing rig are not maintained separately from the base rig. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Impairments</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Long-lived assets, such as property, plant, and equipment, and purchased intangibles subject to amortization, are reviewed for impairment at least annually, or whenever, in management’s judgment, events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of such assets to estimated undiscounted future cash flows expected to be generated by the assets. Expected future cash flows and carrying values are aggregated at their lowest identifiable level. If the carrying amount of such assets exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of such assets exceeds the fair value of the assets. Assets to be disposed of would be separately presented in the consolidated balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities, if material, of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the consolidated balance sheet. These assets are normally sold within a short period of time through a third party auctioneer. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic’s goodwill and trade name intangibles are considered to have an indefinite useful economic life and are not amortized. Basic assesses impairment of its goodwill and trade name intangibles annually as of December 31 or on an interim basis if events or circumstances indicate that the fair value of the assets has decreased below the assets’ carrying value. A two-step process is required for testing impairment of goodwill. First, the fair value of each reporting unit is compared to its carrying value to determine whether an indication of impairment exists. If impairment is indicated, then the fair value of the reporting unit’s goodwill is determined by allocating the unit’s fair value to its assets and liabilities (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination. The amount of impairment for goodwill is measured as the excess of its carrying value over its fair value. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Deferred Debt Costs</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic capitalizes certain costs in connection with obtaining its borrowings, such as lender’s fees and related attorney’s fees. These costs are amortized to interest expense using the effective interest method. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Deferred debt costs were approximately $19.6 million net of accumulated amortization of $3.3 million and $10.7 million net of accumulated amortization of $3.9 million at June 30, 2011 and December 31, 2010, respectively. Amortization of deferred debt costs totaled approximately $535,000 and $380,000 for the three months ended June 30, 2011 and 2010, respectively. Amortization of deferred debt costs totaled approximately $967,000 and $762,000 for the six months ended June 30, 2011 and 2010, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic recorded a charge of $3.9 million during the first quarter of 2011 related to the write-off of debt costs associated with its 11.625% Senior Secured Notes and $30.0 million revolving credit facility. On February 15, 2011, Basic terminated the revolving credit facility and completed the closing for an early tender for approximately $224.7 million of the Senior Secured Notes and delivered to the trustee amounts required to satisfy and discharge remaining obligations for the outstanding notes. Basic also incurred $2.9 million of deferred debt costs associated with the $165.0 million revolving credit facility entered into on February 15, 2011. Additionally, on June 13, 2011, Basic incurred $11.5 million of deferred debt costs associated with the issuance of additional 7.75% Senior Notes due 2019. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Goodwill and Other Intangible Assets</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Goodwill and other intangible assets not subject to amortization are tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. Basic completes its assessment of goodwill and trade name intangible impairment December 31 of each year. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic had trade names of $1.8 million as of June 30, 2011 and December 31, 2010. Trade names have an indefinite life and are tested for impairment annually. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The changes in the carrying amount of goodwill for the six months ended June 30, 2011 are as follows (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="40%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2">Completion and</td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2">Remedial</td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2">Fluid</td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2">Well</td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2">Contract</td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Services</td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Services</td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Servicing</td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Drilling</td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Total</td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Balance as of December 31, 2010 </div></td> <td> </td> <td align="left">$</td> <td align="right">10,771</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">488</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">4,891</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">16,150</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Goodwill adjustments </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(74</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">148</td> <td> </td> <td> </td> <td> </td> <td align="right">63</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">137</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Balance as of June 30, 2011 </div></td> <td> </td> <td align="left">$</td> <td align="right">10,697</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">636</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">4,954</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">16,287</td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic’s intangible assets subject to amortization consist of customer relationships, non-compete agreements and rig engineering plans. The gross carrying amount of customer relationships subject to amortization was $48.0 million at both June 30, 2011 and December 31, 2010. The gross carrying amount of non-compete agreements subject to amortization totaled approximately $4.3 million and $4.9 million at June 30, 2011 and December 31, 2010, respectively. The gross carrying amount of rig engineering plans subject to amortization was $746,000 at both June 30, 2011 and December 31, 2010. Accumulated amortization related to these intangible assets totaled approximately $11.1 million and $9.6 million at June 30, 2011 and December 31, 2010, respectively. Amortization expense for the three months ended June 30, 2011 and 2010 was approximately $1.0 million and $844,000, respectively. Amortization expense for the six months ended June 30, 2011 and 2010 was approximately $2.1 million and $1.7 million, respectively. Other intangibles net of accumulated amortization allocated to reporting units as of June 30, 2011 were $30.0 million, $2.5 million, $4.6 million and $4.8 million for completion and remedial services, fluid services, well servicing, and contract drilling, respectively. No adjustments were made to prior periods to reflect subsequent adjustments to acquisitions due to immateriality. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Customer relationships are amortized over a 15-year life, non-compete agreements are amortized over a five-year life, and rig engineering plans are amortized over a 15-year life. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Stock-Based Compensation</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic’s stock-based awards consist of stock options and restricted stock. Stock options issued are valued on the grant date using the Black-Scholes-Merton option-pricing model, and restricted stock issued is valued based on the fair value of Basic’s common stock at the grant date. All stock-based awards are adjusted for an expected forfeiture rate and amortized over the vesting period. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Income Taxes</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using statutory tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in the period that includes the statutory enactment date. A valuation allowance for deferred tax assets is recognized when it is more likely than not that the benefit of deferred tax assets will not be realized. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Interest charges are recorded in interest expense and penalties are recorded in income tax expense. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Concentrations of Credit Risk</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Financial instruments, which potentially subject Basic to concentration of credit risk, consist primarily of temporary cash investments and trade receivables. Basic restricts investment of temporary cash investments to financial institutions with high credit standing. Basic’s customer base consists primarily of multi-national and independent oil and natural gas producers. Basic performs ongoing credit evaluations of its customers but generally does not require collateral on its trade receivables. Credit risk is considered by management to be limited due to the large number of customers comprising its customer base. Basic maintains an allowance for potential credit losses on its trade receivables, and such losses have been within management’s expectations. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic did not have any one customer that represented 10% or more of consolidated revenue during the three months or six months ended June 30, 2011 or 2010. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Asset Retirement Obligations</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic records the fair value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets and capitalizes an equal amount as a cost of the asset depreciating it over the life of the asset. Subsequent to the initial measurement of the asset retirement obligation, the obligation is adjusted at the end of each quarter to reflect the passage of time, changes in the estimated future cash flows underlying the obligation, acquisition or construction of assets, and settlements of obligations. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Environmental</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic is subject to extensive federal, state and local environmental laws and regulations. These laws, which are constantly changing, regulate the discharge of materials into the environment and may require Basic to remove or mitigate the adverse environmental effects of disposal or release of petroleum, chemicals and other substances at various sites. Environmental expenditures are expensed or capitalized depending on the future economic benefit. Expenditures that relate to an existing condition caused by past operations and that have no future economic benefits are expensed. Liabilities for expenditures of a non-capital nature are recorded when environmental assessment and/or remediation is probable and the costs can be reasonably estimated. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Litigation and Self-Insured Risk Reserves</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic estimates its reserves related to litigation and self-insured risks based on the facts and circumstances specific to the litigation and self-insured claims, its past experience with similar claims and the likelihood of the future event occurring. Basic maintains accruals on the consolidated balance sheets to cover self-insurance retentions (See note 6). </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Recent Accounting Pronouncements</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In January 2010, the FASB issued ASU No. 2010-06, “<i>Improving Disclosures about Fair Value Measurements</i>” (“ASU No. 2010-06”). ASU No. 2010-06 requires the disclosure of significant transfers in and out of Level 1 and Level 2 fair value measurements. It also requires that Level 3 fair value measurements present information about purchases, sales, issuances and settlements. Fair value disclosures should also disclose valuation techniques and inputs used to measure both recurring and nonrecurring fair value measurements. This update became effective for Basic on January 1, 2010 except for the disclosures about purchases, sales, issuances, and settlements in the roll forward in activity in Level 3 fair value measurements, which became effective on January 1, 2011. This update did not change the techniques Basic uses to measure fair value and has not had a material impact on its consolidated financial statements. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In December 2010, the FASB issued ASU No. 2010-09, “<i>Business Combinations: Disclosure of Supplementary Pro Forma Information for Business Combinations” </i>(“ASU 2010-29”). ASU 2010-29 addresses diversity in the interpretation of the pro forma revenue and earnings disclosure requirements for business combinations. If a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The Company adopted ASU 2010-29 on January 1, 2011. This update had no impact on the Company’s financial position, results of operations or cash flows. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>3. Acquisitions</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In 2010, Basic acquired either substantially all of the assets or all of the outstanding capital stock of each of the following businesses, each of which was accounted for using the purchase method of accounting. The following table summarizes the provisional values at the date of acquisition (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="56%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Total Cash Paid (net of cash</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Closing Date</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>acquired)</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Rocky Mountain Cementers, Inc. </div></td> <td> </td> <td colspan="3" align="right" nowrap="nowrap">March 1, 2010</td> <td> </td> <td align="left">$</td> <td align="right">687</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">New Tech Systems, Inc </div></td> <td> </td> <td colspan="3" align="right">April 20, 2010</td> <td> </td> <td align="left">$</td> <td align="right">900</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Taylor Rig, LLC </div></td> <td> </td> <td colspan="3" align="right">May 3, 2010</td> <td> </td> <td align="left">$</td> <td align="right">8,734</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Platinum Pressure Services, Inc. and Admiral Well Service, Inc. </div></td> <td> </td> <td colspan="3" align="right" nowrap="nowrap">December 16, 2010</td> <td> </td> <td align="left">$</td> <td align="right">39,942</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 0px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Total 2010</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">50,263</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 0px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The operations of each of the acquisitions listed above are included in Basic’s statement of operations as of each respective closing date. Basic does not believe the pro forma effect of any of the acquisitions completed in 2010 is material, either individually or when aggregated, to the reported results of operations. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Contingent Earn-out Arrangements and Purchase Price Allocations</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Contingent earn-out arrangements are generally arrangements entered into on certain acquisitions to encourage the owner/manager to continue operating and building the business after the purchase transaction. The contingent earn-out arrangements of the related acquisitions are generally linked to certain financial measures and performance of the assets acquired in the various acquisitions. For acquisitions that occurred prior to January 1, 2009, all amounts paid or reasonably accrued for related to the contingent earn-out payments are reflected as increases to the goodwill associated with the acquisition or compensation expense depending on the terms and conditions of the earn-out arrangement. For any acquisition that occurred after December 31, 2008, the contingent earn-out is measured at fair value at the date of acquisition and any adjustments to that fair value are recorded through the statement of operations. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>4. Property and Equipment</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Property and equipment consisted of the following (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>December 31,</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Land </div></td> <td> </td> <td align="left">$</td> <td align="right">5,391</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">5,361</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Buildings and improvements </div></td> <td> </td> <td> </td> <td align="right">35,310</td> <td> </td> <td> </td> <td> </td> <td align="right">32,047</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Well service units and equipment </div></td> <td> </td> <td> </td> <td align="right">429,343</td> <td> </td> <td> </td> <td> </td> <td align="right">416,015</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Fluid services equipment </div></td> <td> </td> <td> </td> <td align="right">159,073</td> <td> </td> <td> </td> <td> </td> <td align="right">148,989</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Brine and fresh water stations </div></td> <td> </td> <td> </td> <td align="right">11,306</td> <td> </td> <td> </td> <td> </td> <td align="right">10,969</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Frac/test tanks </div></td> <td> </td> <td> </td> <td align="right">183,611</td> <td> </td> <td> </td> <td> </td> <td align="right">151,379</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Pressure pumping equipment </div></td> <td> </td> <td> </td> <td align="right">186,575</td> <td> </td> <td> </td> <td> </td> <td align="right">171,892</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Construction equipment </div></td> <td> </td> <td> </td> <td align="right">28,571</td> <td> </td> <td> </td> <td> </td> <td align="right">27,799</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Contract drilling equipment </div></td> <td> </td> <td> </td> <td align="right">76,281</td> <td> </td> <td> </td> <td> </td> <td align="right">44,181</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Disposal facilities </div></td> <td> </td> <td> </td> <td align="right">70,129</td> <td> </td> <td> </td> <td> </td> <td align="right">66,388</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Vehicles </div></td> <td> </td> <td> </td> <td align="right">44,645</td> <td> </td> <td> </td> <td> </td> <td align="right">39,844</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Rental equipment </div></td> <td> </td> <td> </td> <td align="right">45,964</td> <td> </td> <td> </td> <td> </td> <td align="right">43,502</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Aircraft </div></td> <td> </td> <td> </td> <td align="right">4,251</td> <td> </td> <td> </td> <td> </td> <td align="right">4,251</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Software </div></td> <td> </td> <td> </td> <td align="right">22,248</td> <td> </td> <td> </td> <td> </td> <td align="right">22,296</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Other </div></td> <td> </td> <td> </td> <td align="right">9,547</td> <td> </td> <td> </td> <td> </td> <td align="right">7,345</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right">1,312,245</td> <td> </td> <td> </td> <td> </td> <td align="right">1,192,258</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Less accumulated depreciation and amortization </div></td> <td> </td> <td> </td> <td align="right">618,354</td> <td> </td> <td> </td> <td> </td> <td align="right">566,556</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Property and equipment, net </div></td> <td> </td> <td align="left">$</td> <td align="right">693,891</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">625,702</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic is obligated under various capital leases for certain vehicles and equipment that expire at various dates during the next five years. The gross amount of property and equipment and related accumulated amortization recorded under capital leases and included above consisted of the following (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>December 31,</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Light vehicles </div></td> <td> </td> <td align="left">$</td> <td align="right">27,622</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">25,800</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Well service units and equipment </div></td> <td> </td> <td> </td> <td align="right">1,536</td> <td> </td> <td> </td> <td> </td> <td align="right">1,791</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Fluid services equipment </div></td> <td> </td> <td> </td> <td align="right">77,472</td> <td> </td> <td> </td> <td> </td> <td align="right">65,874</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Pressure pumping equipment </div></td> <td> </td> <td> </td> <td align="right">22,352</td> <td> </td> <td> </td> <td> </td> <td align="right">18,293</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Construction equipment </div></td> <td> </td> <td> </td> <td align="right">1,269</td> <td> </td> <td> </td> <td> </td> <td align="right">1,269</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Software </div></td> <td> </td> <td> </td> <td align="right">15,548</td> <td> </td> <td> </td> <td> </td> <td align="right">15,548</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Other </div></td> <td> </td> <td> </td> <td align="right">244</td> <td> </td> <td> </td> <td> </td> <td align="right">244</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right">146,043</td> <td> </td> <td> </td> <td> </td> <td align="right">128,819</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Less accumulated amortization </div></td> <td> </td> <td> </td> <td align="right">58,793</td> <td> </td> <td> </td> <td> </td> <td align="right">56,087</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left">$</td> <td align="right">87,250</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">72,732</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Amortization of assets held under capital leases of approximately $5.2 million and $5.9 million for the three months ended June 30, 2011 and 2010, respectively, and $10.2 million and $10.9 million for the six months ended June 30, 2011 and 2010, respectively, is included in depreciation and amortization expense in the consolidated statements of operations. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>5. Long-Term Debt</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Long-term debt consisted of the following (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>December 31,</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Credit Facilities: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Revolver </div></td> <td> </td> <td align="left">$</td> <td align="right">21,850</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">7.125% Senior Notes </div></td> <td> </td> <td> </td> <td align="right">225,000</td> <td> </td> <td> </td> <td> </td> <td align="right">225,000</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">11.625% Senior Secured Notes </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">225,000</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">7.75% Senior Notes </div></td> <td> </td> <td> </td> <td align="right">475,000</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Unamortized (discount) premium </div></td> <td> </td> <td> </td> <td align="right">1,991</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(9,425</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Capital leases and other notes </div></td> <td> </td> <td> </td> <td align="right">66,165</td> <td> </td> <td> </td> <td> </td> <td align="right">58,284</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right">790,006</td> <td> </td> <td> </td> <td> </td> <td align="right">498,859</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Less current portion </div></td> <td> </td> <td> </td> <td align="right">27,816</td> <td> </td> <td> </td> <td> </td> <td align="right">24,231</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left">$</td> <td align="right">762,190</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">474,628</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>7.125% Senior Notes due 2016</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     On April 12, 2006, Basic issued $225.0 million of 7.125% Senior Notes due April 2016 (the “7.125% Senior Notes”) in a private placement. Proceeds from the sale of the 7.125% Senior Notes were used to retire the outstanding balance on Basic’s $90.0 million Term B Loan and to pay down approximately $96.0 million under Basic’s previous revolving credit facility. The 7.125% Senior Notes are unsecured. Under the terms of the sale of the 7.125% Senior Notes, Basic was required to take appropriate steps to offer to exchange other 7.125% Senior Notes with the same terms that have been registered with the Securities and Exchange Commission for the private placement 7.125% Senior Notes. Basic completed the exchange offer for all of the 7.125% Senior Notes on October 16, 2006. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic issued the 7.125% Senior Notes pursuant to an indenture, dated as of April 12, 2006, by and among Basic, the guarantor parties thereto and The Bank of New York Trust Company, N.A., as trustee (the “7.125% Senior Notes Indenture”). Interest on the 7.125% Senior Notes accrues at a rate of 7.125% per year. Interest payments on the 7.125% Senior Notes are due semi-annually, on April 15 and October 15. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The 7.125% Senior Notes are redeemable at the option of Basic on or after April 15, 2011 at the specified redemption price as described in the 7.125% Senior Notes Indenture. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Following a change of control, as defined in the 7.125% Senior Notes Indenture, Basic will be required to make an offer to repurchase all or any portion of the 7.125% Senior Notes at a purchase price of 101% of the principal amount, plus accrued and unpaid interest to the date of repurchase. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The 7.125% Senior Notes Indenture contains covenants that, among other things, limit the ability of Basic and its restricted subsidiaries to incur additional indebtedness; pay dividends or repurchase or redeem capital stock; make certain investments; incur liens; enter into certain types of transactions with affiliates; limit dividends or other payments by restricted subsidiaries; and sell assets or consolidate or merge with or into other companies. These limitations are subject to a number of important qualifications and exceptions set forth in the 7.125% Senior Notes Indenture. At June 30, 2011, Basic was in compliance with the restrictive covenants under the 7.125% Senior Notes Indenture. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     As part of the issuance of the above-mentioned 7.125% Senior Notes, Basic incurred debt issuance costs of approximately $4.6 million, which are being amortized to interest expense using the effective interest method over the term of the 7.125% Senior Notes. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The 7.125% Senior Notes are jointly and severally, and unconditionally, guaranteed on a senior unsecured basis by all of Basic’s current subsidiaries, other than three immaterial subsidiaries. As of June 30, 2011, these three subsidiaries held no assets and performed no operations. Basic Energy Services, Inc., the ultimate parent company, does not have any independent operating assets or operations. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>7.75% Senior Notes due 2019</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     On February 15, 2011, Basic successfully completed the issuance and sale of $275.0 million and on June 13, 2011, Basic successfully completed the issuance and sale of an additional $200.0 million, for an aggregate principal amount of $475.0 million of 7.75% Senior Notes due 2019 (the “7.75% Senior Notes”). The 7.75% Senior Notes are jointly and severally, and unconditionally, guaranteed on a senior unsecured basis by all of Basic’s current subsidiaries, other than three immaterial subsidiaries. The 7.75% Senior Notes and the guarantees rank (i) equally in right of payment with any of Basic’s and the subsidiary guarantors’ existing and future senior indebtedness, including Basic’s existing 7.125% Senior Notes and the related guarantees, and (ii) effectively junior to all existing or future liabilities of Basic’s subsidiaries that do not guarantee the 7.75% Senior Notes and to Basic’s and the subsidiary guarantors’ existing or future secured indebtedness to the extent of the value of the collateral therefore. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The 7.75% Senior Notes were offered and sold in private transactions in accordance with Rule 144A and Regulation S under the Securities Act of 1933, as amended (the “Securities Act”). </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The purchase price for the $275.0 million of 7.75% Senior Notes issued on February 15, 2011 was 100.000% of their principal amount and the purchase price for the $200.0 million of 7.75% Senior Notes issued on June 13, 2011 was 101.000%, plus accrued interest from February 15, 2011. Basic received net proceeds from the issuance of the 7.75% Senior Notes of approximately $465.5 million after premiums and offering expenses. Basic used a portion of the net proceeds from the February 2011 offering to fund its tender offer and consent solicitation for its 11.625% Senior Secured Notes and to redeem any of the Senior Secured Notes not purchased in the tender offer. Basic also intends to use a portion of the net proceeds from the June 2011 offering to fund the $180.0 million purchase price for the Maverick companies acquisition completed in July 2011 and for general corporate purposes. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The 7.75% Senior Notes were issued pursuant to an indenture dated as of February 15, 2011 (the “7.75% Senior Notes Indenture”), by and among Basic, the guarantors party thereto and Wells Fargo Bank, N.A., as trustee . Interest on the 7.75% Senior Notes accrues from and including February 15, 2011 at a rate of 7.75% per year. Interest on the 7.75% Senior Notes is payable semi-annually in arrears on February 15 and August 15 of each year, commencing on August 15, 2011. The 7.75% Senior Notes mature on February 15, 2019. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The 7.75% Senior Notes Indenture contains covenants that, among other things, limit Basic’s ability and the ability of certain of its subsidiaries to: incur additional indebtedness; pay dividends or repurchase or redeem capital stock; make certain investments; incur liens; enter into certain types of transactions with its affiliates; limit dividends or other payments by Basic’s restricted subsidiaries to Basic; and sell assets or consolidate or merge with or into other companies. These and other covenants that are contained in the 7.75% Senior Notes Indenture are subject to important exceptions and qualifications set forth in the 7.75% Senior Notes Indenture. At June 30, 2011, Basic was in compliance with the restrictive covenants under the 7.75% Senior Notes Indenture. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic may, at its option, redeem all or part of the 7.75% Senior Notes, at any time on or after February 15, 2015, at a redemption price equal to 100% of the principal amount thereof, plus a premium declining ratably to par and accrued and unpaid interest to the date of redemption. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     At any time before February 15, 2014, Basic, at its option, may redeem up to 35% of the aggregate principal amount of the 7.75% Senior Notes issued under the 7.75% Senior Notes Indenture with the net cash proceeds of one or more qualified equity offerings at a redemption price of 107.750% of the principal amount of the 7.75% Senior Notes to be redeemed, plus accrued and unpaid interest to the date of redemption, as long as: </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>at least 65% of the aggregate principal amount of the 7.75% Senior Notes issued under the 7.75% Senior Notes Indenture remains outstanding immediately after the occurrence of such redemption; and</td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>such redemption occurs within 90 days of the date of the closing of any such qualified equity offering.</td> </tr> </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div style="margin-top: 6pt"> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In addition, at any time before February 15, 2015, Basic may redeem some or all of the 7.75% Senior Notes at a redemption price equal to 100% of the principal amount of the 7.75% Senior Notes, plus an applicable premium and accrued and unpaid interest to the date of redemption. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Following a change of control, as defined in the 7.75% Senior Notes Indenture, Basic will be required to make an offer to repurchase all or a portion of the Notes at 101% of their principal amount, plus accrued and unpaid interest to the date of repurchase. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Revolving Credit Facility</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     On February 15, 2011, in connection with the 7.75% Senior Notes offering, Basic entered into a new $165.0 million revolving credit facility (the “Credit Agreement”) with Merrill Lynch, Pierce, Fenner & Smith Incorporated and Capital One, National Association, as joint lead arrangers and joint book managers, the lenders party thereto and Bank of America, N.A., as administrative agent. The Credit Agreement includes an accordion feature whereby the total credit available to Basic can be increased by up to $100.0 million under certain circumstances, subject to additional lender commitments. The obligations under the Credit Agreement are guaranteed on a joint and several basis by each of Basic’s current subsidiaries, other than three immaterial subsidiaries, and are secured by substantially all assets of Basic and the guarantors as collateral under a related Security Agreement (the “Security Agreement”). As of June 30, 2011, the non-guarantor subsidiaries held no assets and performed no operations. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Borrowings under the Credit Agreement mature on January 15, 2016, and Basic has the ability at any time to prepay the Credit Agreement without premium or penalty. At Basic’s option, advances under the Credit Agreement may be comprised of (i) alternate base rate loans, at a variable base interest rate plus a margin ranging from 1.50% to 2.25% based on Basic’s leverage ratio or (ii) Eurodollar loans, at a variable base interest rate plus a margin ranging from 2.50% to 3.25% based on Basic’s leverage ratio. Basic will pay a commitment fee equal to 0.50% on the daily unused amount of the commitments under the Credit Agreement. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The Credit Agreement contains various covenants that, subject to agreed upon exceptions, limit Basic’s ability and the ability of certain of Basic’s subsidiaries to: </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>incur indebtedness;</td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>grant liens;</td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>enter into sale and leaseback transactions;</td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>make loans, capital expenditures, acquisitions and investments;</td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>change the nature of business;</td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>acquire or sell assets or consolidate or merge with or into other companies;</td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>declare or pay dividends;</td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>enter into transactions with affiliates;</td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>enter into burdensome agreements;</td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>prepay, redeem or modify or terminate other indebtedness;</td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>change accounting policies and reporting practices; and</td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>amend organizational documents.</td> </tr> </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The Credit Agreement also contains covenants that, among other things, limit the amount of capital contributions Basic may make and require Basic to maintain specified ratios or conditions as follows: </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>a minimum consolidated interest coverage ratio of not less than 2.50:1.00;</td> </tr> </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div style="margin-top: 6pt"> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>a maximum consolidated leverage ratio not to exceed:</td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="6%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>4.25:1.00 for the quarter ending March 31, 2011; and</td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="6%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>4.00:1.00 after March 31, 2011; and</td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="3%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td>a maximum consolidated senior secured leverage ratio of 2.00:1.00.</td> </tr> </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     If an event of default occurs under the Credit Agreement, then the lenders may (i) terminate their commitments under the Credit Agreement, (ii) declare any outstanding loans under the Credit Agreement to be immediately due and payable after applicable grace periods and (iii) foreclose on the collateral secured by the Security Agreement. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic had $21.9 million outstanding under the Credit Agreement as of June 30, 2011. At June 30, 2011, Basic was in compliance with its covenants under the Credit Agreement. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Other Debt</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic has a variety of other capital leases and notes payable outstanding that are generally customary in its business. None of these debt instruments are individually material. Basic’s leases with Banc of America Leasing & Capital, LLC require us to maintain a minimum debt service coverage ratio of 1.05 to 1.00. At June 30, 2011, Basic was in compliance with this covenant. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic’s interest expense consisted of the following (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six Months Ended June 30,</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Cash payments for interest </div></td> <td> </td> <td align="left">$</td> <td align="right">18,630</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">21,802</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Commitment and other fees paid </div></td> <td> </td> <td> </td> <td align="right">438</td> <td> </td> <td> </td> <td> </td> <td align="right">9</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Amortization of debt issuance costs and discount or premium on notes </div></td> <td> </td> <td> </td> <td align="right">1,213</td> <td> </td> <td> </td> <td> </td> <td align="right">1,699</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Change in accrued interest </div></td> <td> </td> <td> </td> <td align="right">2,871</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(73</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Other </div></td> <td> </td> <td> </td> <td align="right">32</td> <td> </td> <td> </td> <td> </td> <td align="right">5</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left">$</td> <td align="right">23,184</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">23,442</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Losses on Extinguishment of Debt</i> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In February 2011, upon the retirement of the 11.625% Senior Secured Notes and the termination of Basic’s $30.0 million revolving credit facility, Basic wrote off unamortized debt issuance costs of approximately $3.9 million and unamortized discount of $9.2 million. Basic also paid a premium of $36.2 million to the holders of the 11.625% Senior Secured Notes for the early termination of the notes. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>6. Commitments and Contingencies</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Environmental</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic is subject to various federal, state and local environmental laws and regulations that establish standards and requirements for protection of the environment. Basic cannot predict the future impact of such standards and requirements which are subject to change and can have retroactive effectiveness. Basic continues to monitor the status of these laws and regulations. Management believes that the likelihood of any of these items resulting in a material adverse impact to Basic’s financial position, liquidity, capital resources or future results of operations is remote. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Currently, Basic has not been fined, cited or notified of any environmental violations that would have a material adverse effect upon its financial position, liquidity or capital resources. However, management does recognize that by the very nature of its business, material costs could be incurred in the near term to bring Basic into total compliance. The amount of such future expenditures is not determinable due to several factors, including the unknown magnitude of possible contamination, the unknown timing and extent of the corrective actions which may be required, the determination of Basic’s liability in proportion to other responsible parties and the extent to which such expenditures are recoverable from insurance or indemnification. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     During April 2011, Basic and certain officers received notice from the Travis County District Attorney of a pending investigation of a potential felony criminal case referred by Texas Parks & Wildlife and the Texas Environmental Enforcement Task Force, to be presented to a Travis County grand jury. The potential matter relates to a land farm owned by Basic located in Jefferson County, Texas. While Basic is currently responding to additional inquiries regarding the investigation and believes the investigation may also relate to alleged unlawful discharges, Basic has not been informed of any specific potential charges at this time. Basic does not believe it is probable or reasonably possible that this matter will result in any material adverse effect on its financial condition, results of operations or liquidity; however, there can be no assurance as to the ultimate outcome of this matter. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Litigation</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     From time to time, Basic is a party to litigation or other legal proceedings that Basic considers to be a part of the ordinary course of business. Basic is not currently involved in any legal proceedings that it considers probable or reasonably possible, individually or in the aggregate, to result in a material adverse effect on its financial condition, results of operations or liquidity. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Self-Insured Risk Accruals</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic is self-insured up to retention limits as it relates to workers’ compensation, general liability claims, and medical and dental coverage of its employees. Basic generally maintains no physical property damage coverage on its workover rig fleet, with the exception of certain of its 24-hour workover rigs and newly manufactured rigs. Basic has deductibles per occurrence for workers’ compensation, general liability claims, and medical and dental coverage of $500,000, $500,000, and $250,000, respectively. Basic has lower deductibles per occurrence for automobile liability. Basic maintains accruals in the accompanying consolidated balance sheets related to self-insurance retentions by using third-party data and claims history. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     At June 30, 2011 and December 31, 2010, self-insured risk accruals totaled approximately $16.8 million net of a $8,000 receivable for medical and dental coverage and $16.6 million net of a $164,000 receivable for medical and dental coverage, respectively. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>7. Stockholders’ Equity</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><b><i>Common Stock</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     At June 30, 2011 and December 31, 2010, Basic had 80,000,000 shares of common stock, par value $.01 per share, authorized. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     During the year ended 2010, Basic issued 53,975 shares of common stock from treasury stock upon the exercise of stock options. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In March 2010, Basic granted various employees 588,600 restricted shares of common stock which vest over a five-year period. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In March 2010, the Compensation Committee of Basic’s Board of Directors approved grants of performance-based stock awards to certain members of management. In February 2011, it was determined that 285,281 shares, or 150% of the target number of shares, were earned based on Basic’s achievement of total stockholder return over the performance period from January 1, 2010 through December 31, 2010, as compared to other members of a defined peer group. These restricted shares remain subject to vesting over a three-year period, with the first shares vesting on March 15, 2012. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In March 2011, Basic granted various employees 510,399 restricted shares of common stock that vest over a three-year period. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     During the six months ended June 30, 2011, Basic issued 390,750 shares of common stock from treasury stock for the exercise of stock options and 37,500 shares of newly-issued common stock for the exercise of stock options. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Treasury Stock</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic has acquired treasury shares through net share settlements for payment of payroll taxes upon the vesting of restricted stock. Basic acquired a total of 40,381 shares through net share settlements during 2010 and 76,077 shares through net share settlements during the first six months of 2011. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Preferred Stock</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     At June 30, 2011 and December 31, 2010, Basic had 5,000,000 shares of preferred stock, par value $.01 per share, authorized, of which none was designated, issued or outstanding. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>8. Incentive Plan</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In May 2003, Basic’s board of directors and stockholders approved the Basic Energy Services, Inc. 2003 Incentive Plan (as amended effective May 24, 2011) (the “Plan”), which provides for granting of incentive awards in the form of stock options, restricted stock, performance awards, bonus shares, phantom shares, cash awards and other stock-based awards to officers, employees, directors and consultants of Basic. The Plan assumed awards of the plans of Basic’s predecessors that were awarded and remained outstanding prior to adoption of the Plan. The Plan provides for the issuance of 8,350,000 shares. The Plan is administered by the Plan committee, and in the absence of a Plan committee, by the Board of Directors, which determines the awards and the associated terms of the awards and interprets its provisions and adopts policies for implementing the Plan. The number of shares authorized under the Plan and the number of shares subject to an award under the Plan will be adjusted for stock splits, stock dividends, recapitalizations, mergers and other changes affecting the capital stock of Basic. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     During the three months ended June 30, 2011 and 2010, compensation expense related to share-based arrangements was approximately $2.1 million and $1.4 million, respectively. For compensation expense recognized during the three months ended June 30, 2011 and 2010, Basic recognized a tax benefit of approximately $930,000 and $577,000, respectively. During the six months ended June 30, 2011 and 2010, compensation expense related to share-based arrangements was approximately $3.8 million and $2.6 million, respectively. For compensation expense recognized during the six months ended June 30, 2011 and 2010, Basic recognized a tax benefit of approximately $1.5 million and $962,000, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     As of June 30, 2011, there was approximately $20.0 million of total unrecognized compensation related to non-vested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of 2.86 years. The total fair value of share-based awards vested during the six months ended June 30, 2011 and 2010 was approximately $8.6 million and $3.8 million, respectively. The actual tax benefit realized for the tax deduction from vested share-based awards was $2.8 million and $578,000 for the six months ended June 30, 2011 and 2010, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Stock Option Awards</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option-pricing model. Basic is required to estimate the expected forfeiture rate and only recognize expense for those options expected to vest. Options granted under the Plan expire 10 years from the date they are granted, and generally vest over a three- to five-year service period. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table reflects the summary of stock options outstanding at June 30, 2011 and the changes during the six months then ended: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Weighted</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Weighted</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Average</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Aggregate</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Number of</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Average</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Remaining</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Instrinsic</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Options</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Exercise</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Contractual</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Value</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Granted</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Price</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Term (Years)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>(000’s)</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Non-statutory stock options: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Outstanding, beginning of period </div></td> <td> </td> <td> </td> <td align="right">1,414,450</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">11.44</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Options granted </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Options forfeited </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(5,000</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">6.98</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Options exercised </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(428,250</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">6.71</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Options expired </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(3,000</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">26.84</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Outstanding, end of period </div></td> <td> </td> <td> </td> <td align="right">978,200</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">13.49</td> <td> </td> <td> </td> <td> </td> <td align="right">3.67</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">17,592</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Exercisable, end of period </div></td> <td> </td> <td> </td> <td align="right">955,200</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">13.27</td> <td> </td> <td> </td> <td> </td> <td align="right">3.62</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">17,389</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Vested or expected to vest, end of period </div></td> <td> </td> <td> </td> <td align="right">973,600</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">13.44</td> <td> </td> <td> </td> <td> </td> <td align="right">3.66</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">17,551</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr>  </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The total intrinsic value of share options exercised during the six months ended June 30, 2011 and 2010 was approximately $8.3 million and $24,000, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Cash received from share option exercises under the Plan was approximately $2.9 million and $58,000 for the six months ended June 30, 2011 and 2010, respectively. The actual tax benefit realized for the tax deductions from options exercised was $3.0 million and $9,000 for the six months ended June 30, 2011 and 2010, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic has a history of issuing treasury and newly-issued shares to satisfy share option exercises. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Restricted Stock Awards</i></b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     On March 10, 2011, the Compensation Committee of Basic’s Board of Directors approved grants of performance-based stock awards to certain members of management. The performance-based awards are tied to Basic’s achievement of total stockholder return over the performance period from January 1, 2011 through December 31, 2011, as compared to other members of a defined peer group. The number of shares to be issued will range from 0% to 150% of the 148,683 target number of shares depending on the performance noted above. Any shares earned at the end of the performance period will then remain subject to vesting over a three-year period, with the first shares vesting March 15, 2013. As of June 30, 2011, Basic estimated that 129.2% of the target number of performance-based awards will be earned. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     A summary of the status of Basic’s non-vested share grants at June 30, 2011 and changes during the six months ended June 30, 2011 is presented in the following table: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Weighted Average</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Number of</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Grant Date Fair</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>Nonvested Shares</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Shares</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Value Per Share</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Nonvested at beginning of period </div></td> <td> </td> <td> </td> <td align="right">1,802,573</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">11.06</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Granted during period </div></td> <td> </td> <td> </td> <td align="right">702,931</td> <td> </td> <td> </td> <td> </td> <td align="right">19.49</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Vested during period </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(329,018</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">13.45</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Forfeited during period </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(74,023</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">12.65</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Nonvested at end of period </div></td> <td> </td> <td> </td> <td align="right">2,102,463</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">13.44</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr>  </table> </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>9. Related Party Transactions</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic had receivables from employees of approximately $44,000 and $42,000 as of June 30, 2011 and December 31, 2010, respectively. During 2006, Basic entered into a lease agreement with Darle Vuelta Cattle Co., LLC, an affiliate of the Chief Executive Officer, for approximately $69,000. The term of the lease is five years and will continue on a year-to-year basis unless terminated by either party. In December 2010, Basic entered into a lease agreement with Darle Vuelta Cattle Co., LLC, for the right to operate a salt water disposal well, brine well and fresh water well. The term of the lease is two years and will continue until the salt water disposal well and brine well are plugged and no fresh water is being sold. The lease payments are the greater of the sum of $0.10 per barrel of disposed oil and gas waste and $0.05 per barrel of brine or fresh water sold, or $5,000 per month. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>10. Earnings Per Share</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic’s basic earnings per common share are determined by dividing net earnings applicable to common stock by the weighted average number of common shares actually outstanding during the period. Diluted earnings per common share is based on the increased number of shares that would be outstanding assuming conversion of dilutive outstanding securities using the “as if converted” method. The following table sets forth the computation of basic and diluted earnings per share (in thousands, except share data): </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three Months Ended June 30,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six Months Ended June 30,</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>(Unaudited)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>(Unaudited)</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><i>Numerator (both basic and diluted):</i> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Net income (loss) </div></td> <td> </td> <td align="left">$</td> <td align="right">16,550</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(10,672</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(1,943</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(32,263</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><i>Denominator:</i> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Denominator for basic earnings (loss) per share </div></td> <td> </td> <td> </td> <td align="right">40,356,049</td> <td> </td> <td> </td> <td> </td> <td align="right">39,724,030</td> <td> </td> <td> </td> <td> </td> <td align="right">40,135,143</td> <td> </td> <td> </td> <td> </td> <td align="right">39,672,891</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Stock options </div></td> <td> </td> <td> </td> <td align="right">422,110</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Unvested restricted stock </div></td> <td> </td> <td> </td> <td align="right">557,505</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:30px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Denominator for diluted earnings (loss) per share </div></td> <td> </td> <td> </td> <td align="right">41,335,664</td> <td> </td> <td> </td> <td> </td> <td align="right">39,724,030</td> <td> </td> <td> </td> <td> </td> <td align="right">40,135,143</td> <td> </td> <td> </td> <td> </td> <td align="right">39,672,891</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:30px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><i>Basic earnings (loss) per common share:</i> </div></td> <td> </td> <td align="left">$</td> <td align="right">0.41</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(0.27</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(0.05</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(0.81</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:30px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><i>Diluted earnings (loss) per common share:</i> </div></td> <td> </td> <td align="left">$</td> <td align="right">0.40</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(0.27</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(0.05</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(0.81</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:30px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Stock options and unvested shares of restricted stock of approximately 524,000 were excluded in the computation of diluted earnings per share for the three months ended June 30, 2010, as the effect would have been anti-dilutive due to the net loss in the period. Stock options and unvested shares of restricted stock of approximately 1,222,000 and 859,000, respectively, were excluded in the computation of diluted earnings per share for the six months ended June 30, 2011 and 2010, respectively, as the effect would have been anti-dilutive due to the net loss in each of these periods. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>11. Business Segment Information</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic’s reportable business segments are Completion and Remedial Services, Fluid Services, Well Servicing, and Contract Drilling. The following is a description of the segments: </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Completion and Remedial Services: </i>This segment utilizes a fleet of pressure pumping units, air compressor packages specially configured for underbalanced drilling operations, cased-hole wireline units, an array of specialized rental equipment and fishing tools, and snubbing units. The largest portion of this business consists of pumping services focused on cementing, acidizing and fracturing services in niche markets. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Fluid Services: </i>This segment utilizes a fleet of trucks and related assets, including specialized tank trucks, storage tanks, water wells, disposal facilities, construction and other related equipment. Basic employs these assets to provide, transport, store and dispose of a variety of fluids, as well as provide well site construction and maintenance services. These services are required in most workover, completion and remedial projects and are routinely used in daily producing well operations. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Well Servicing: </i>This business segment encompasses a full range of services performed with a mobile well servicing rig, including the installation and removal of downhole equipment and elimination of obstructions in the well bore to facilitate the flow of oil and natural gas. These services are performed to establish, maintain and improve production throughout the productive life of an oil and natural gas well and to plug and abandon a well at the end of its productive life. Well servicing equipment and capabilities such as Basic’s are essential to facilitate most other services performed on a well. This segment also includes the manufacturing, refurbishment and servicing of mobile well servicing rigs and associated equipment. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Contract Drilling: </i>This segment utilizes drilling rigs and associated equipment for drilling wells to a specified depth for customers on a contract basis. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic’s management evaluates the performance of its operating segments based on operating revenues and segment profits. Corporate expenses include general corporate expenses associated with managing all reportable operating segments. Corporate assets consist principally of working capital and debt financing costs. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table sets forth certain financial information with respect to Basic’s reportable segments (in thousands): </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="28%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Completion</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>and Remedial</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Fluid</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Well</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Contract</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Corporate</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Services</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Services</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Servicing</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Drilling</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>and Other</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Total</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b><i>Three Months Ended June 30, 2011 (Unaudited)</i></b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Operating revenues </div></td> <td> </td> <td align="left">$</td> <td align="right">121,807</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">81,415</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">83,881</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">9,752</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">296,855</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Direct operating costs </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(68,827</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(51,688</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(57,409</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(7,393</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(185,317</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Segment profits </div></td> <td> </td> <td align="left">$</td> <td align="right">52,980</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">29,727</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">26,472</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">2,359</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">111,538</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Depreciation and amortization </div></td> <td> </td> <td align="left">$</td> <td align="right">9,841</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">10,359</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">10,398</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">2,326</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">1,860</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">34,784</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Capital expenditures,<br /> (excluding acquisitions) </div></td> <td> </td> <td align="left">$</td> <td align="right">12,638</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">12,847</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">11,633</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">2,986</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">2,327</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">42,431</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b><i>Three Months Ended June 30, 2010 (Unaudited)</i></b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Operating revenues </div></td> <td> </td> <td align="left">$</td> <td align="right">61,533</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">58,801</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">49,529</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">5,269</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">175,132</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Direct operating costs </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(37,660</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(43,425</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(36,734</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(3,725</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(121,544</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Segment profits </div></td> <td> </td> <td align="left">$</td> <td align="right">23,873</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">15,376</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">12,795</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">1,544</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">53,588</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Depreciation and amortization </div></td> <td> </td> <td align="left">$</td> <td align="right">8,121</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">9,478</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">12,562</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">1,882</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">2,207</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">34,250</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Capital expenditures,<br /> (excluding acquisitions) </div></td> <td> </td> <td align="left">$</td> <td align="right">3,429</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">4,013</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">5,305</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">795</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">921</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">14,463</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b><i>Six Months Ended June 30, 2011 (Unaudited)</i></b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Operating revenues </div></td> <td> </td> <td align="left">$</td> <td align="right">219,314</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">153,760</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">153,028</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">16,807</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">542,909</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Direct operating costs </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(123,760</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(99,916</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(105,849</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(11,878</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(341,403</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Segment profits </div></td> <td> </td> <td align="left">$</td> <td align="right">95,554</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">53,844</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">47,179</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">4,929</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">201,506</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Depreciation and amortization </div></td> <td> </td> <td align="left">$</td> <td align="right">17,909</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">19,764</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">22,351</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">4,233</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">3,507</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">67,764</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Capital expenditures,<br /> (excluding acquisitions) </div></td> <td> </td> <td align="left">$</td> <td align="right">30,359</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">33,503</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">37,889</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">7,176</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">5,946</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">114,873</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Identifiable assets </div></td> <td> </td> <td align="left">$</td> <td align="right">231,977</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">195,403</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">247,077</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">70,245</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">584,405</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">1,329,107</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b><i>Six Months Ended June 30, 2010 (Unaudited)</i></b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Operating revenues </div></td> <td> </td> <td align="left">$</td> <td align="right">106,767</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">110,948</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">91,325</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">9,058</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">318,098</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Direct operating costs </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(67,383</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(84,365</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(68,834</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(6,995</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(227,577</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Segment profits </div></td> <td> </td> <td align="left">$</td> <td align="right">39,384</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">26,583</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">22,491</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">2,063</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">90,521</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Depreciation and amortization </div></td> <td> </td> <td align="left">$</td> <td align="right">15,952</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">18,895</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">24,703</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">3,716</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">4,082</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">67,348</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Capital expenditures,<br /> (excluding acquisitions) </div></td> <td> </td> <td align="left">$</td> <td align="right">6,053</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">7,170</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">9,373</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">1,410</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">1,549</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">25,555</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Identifiable assets </div></td> <td> </td> <td align="left">$</td> <td align="right">185,854</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">183,971</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">245,041</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">39,624</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">357,235</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">1,011,725</td> <td> </td> </tr>  </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table reconciles the segment profits reported above to the operating income as reported in the consolidated statements of operations (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three Months Ended June 30,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six Months Ended June 30,</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Segment profits </div></td> <td> </td> <td align="left">$</td> <td align="right">111,538</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">53,588</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">201,506</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">90,521</td> <td> </td> </tr> <tr> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">General and administrative expenses </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(34,138</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(26,820</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(65,479</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(51,897</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Depreciation and amortization </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(34,784</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(34,250</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(67,764</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(67,348</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Gain (loss) on disposal of assets </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(942</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(463</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">763</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(1,174</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Operating income (loss) </div></td> <td> </td> <td align="left">$</td> <td align="right">41,674</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(7,945</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">69,026</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(29,898</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>12. Supplemental Schedule of Cash Flow Information</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table reflects non-cash financing and investing activity during the following periods: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six Months Ended June 30,</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6">(In thousands)</td> <td> </td> </tr>   <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Capital leases issued for equipment </div></td> <td> </td> <td align="left">$</td> <td align="right">24,104</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">6,691</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Asset retirement obligation additions </div></td> <td> </td> <td align="left">$</td> <td align="right">11</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">12</td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic paid no income taxes during the six months ended June 30, 2011 or for the same period in 2010. Basic paid interest of approximately $18.6 million and $21.8 million during the six months ended June 30, 2011 and 2010, respectively. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>13. Fair Value Measurements</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Fair value is the price that would be received to sell an asset or the amount paid to transfer a liability in an orderly transaction between market participants (an exit price) at the measurement date. Fair value is a market based measurement considered from the perspective of a market participant. Basic uses market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation. These inputs can be readily observable, market corroborated, or unobservable. If observable prices or inputs are not available, unobservable prices or inputs are used to estimate the current fair value, often using an internal valuation model. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the item being valued. Basic primarily applies a market approach for recurring fair value measurements using the best available information while utilizing valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     There is a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Basic classifies fair value balances based on the observability of those inputs. The three levels of the fair value hierarchy are as follows: </div> <div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Level 1—Quoted prices in active markets for identical assets or liabilities that Basic has the ability to access. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Level 2—Inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable. These inputs are either directly observable in the marketplace or indirectly observable through corroboration with market data for substantially the full contractual term of the asset or liability being measured. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Level 3—Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In valuing certain assets and liabilities, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. For disclosure purposes, assets and liabilities are classified in their entirety in the fair value hierarchy level based on the lowest level of input that is significant to the overall fair value measurement. Basic’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement within the fair value hierarchy levels. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic’s asset retirement obligation related to its salt water disposal sites, brine water wells, gravel pits and land farm sites, each of which is subject to rules and regulations regarding usage and eventual closure, is measured using primarily Level 3 inputs. The significant unobservable inputs to this fair value measurement include estimates of plugging, abandonment and remediation costs, inflation rate and well life. The inputs are calculated based on historical data as well as current estimated costs. The fair value is calculated by taking the present value of the expected cash flow at the time of the closure of the site. The following table reflects the changes in the fair value of the liability during the six months ended June 30, 2011 (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="88%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Asset</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Retirement</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Obligation</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Balance, December 31, 2010 </div></td> <td> </td> <td align="left">$</td> <td align="right">1,983</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Additional asset retirement obligation </div></td> <td> </td> <td> </td> <td align="right">11</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Accretion expense </div></td> <td> </td> <td> </td> <td align="right">65</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Settlements </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(57</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Balance, June 30, 2011 </div></td> <td> </td> <td align="left">$</td> <td align="right">2,002</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>14. Subsequent Events</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     On July 7, 2011, Basic completed the acquisition of substantially all of the operating assets of Lone Star Anchor Trucking, Inc. for total cash consideration of $10.1 million. This acquisition will operate in Basic’s fluid services segment. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     On July 8, 2011, Basic completed the acquisition of the outstanding equity interests of the Maverick companies (“Maverick”) for total cash consideration of $180.0 million, net of working capital acquired. Maverick provides stimulation, coil tubing and thru-tubing services and will operate in Basic’s completion and remedial services segment. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     On July 15, 2011, Basic amended its existing revolving credit facility, increasing the available credit from $165.0 million to $225.0 million. No changes were made to the collateral, interest rates, or guarantors as part of this amendment. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     During July 2011, Basic received aggregate federal income tax refunds of approximately $80.1 million relating to Basic’s 2009 and 2010 tax returns. </div> </div>

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Document and Entity Information (USD $)	6 Months Ended
Document and Entity Information (USD $)	Jun. 30, 2011	Jul. 20, 2011	Jun. 30, 2010
Document and Entity Information [Abstract]
Entity Registrant Name	BASIC ENERGY SERVICES INC
Entity Central Index Key	0001109189
Document Type	10-Q
Document Period End Date	Jun. 30, 2011
Amendment Flag	false
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 121,143,061
Entity Common Stock, Shares Outstanding		42,428,030

XML 15 R10.htm IDEA: XBRL DOCUMENT

Acquisitions

6 Months Ended

Jun. 30, 2011

Acquisitions [Abstract]

Acquisitions

3. Acquisitions


		Total Cash Paid (net of cash
	Closing Date	acquired)
Rocky Mountain Cementers, Inc.	March 1, 2010	$	687
New Tech Systems, Inc	April 20, 2010	$	900
Taylor Rig, LLC	May 3, 2010	$	8,734
Platinum Pressure Services, Inc. and Admiral Well Service, Inc.	December 16, 2010	$	39,942

Total 2010		$	50,263

Contingent Earn-out Arrangements and Purchase Price Allocations

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141
-Paragraph 51, 52
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6909870&loc=d3e1500-128463

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6911361&loc=d3e7000-128479

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6911361&loc=d3e6927-128479

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6911361&loc=d3e7008-128479

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
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-Section 50
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-URI http://asc.fasb.org/extlink&oid=6909870&loc=d3e1490-128463

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
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-URI http://asc.fasb.org/extlink&oid=6911361&loc=d3e6996-128479

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
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-URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4922-128472

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4934-128472

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Appendix F
-Paragraph F4
-Subparagraph e

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4926-128472

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
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-Section 50
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-URI http://asc.fasb.org/extlink&oid=6909870&loc=d3e1383-128463

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
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-Section 50
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-URI http://asc.fasb.org/extlink&oid=6909870&loc=d3e1392-128463

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
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-URI http://asc.fasb.org/extlink&oid=6909870&loc=d3e1497-128463

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Paragraph 67-73
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=6909870&loc=d3e1524-128463

Reference 17: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 88-16
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 18: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6909870&loc=d3e1486-128463

Reference 19: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4845-128472

+ Details

XML 16 R11.htm IDEA: XBRL DOCUMENT

Property and Equipment

6 Months Ended

Jun. 30, 2011

Property and Equipment [Abstract]

Property and Equipment

4. Property and Equipment

Property and equipment consisted of the following (in thousands):


	June 30,		December 31,
	2011		2010
Land	$	5,391	$	5,361
Buildings and improvements		35,310		32,047
Well service units and equipment		429,343		416,015
Fluid services equipment		159,073		148,989
Brine and fresh water stations		11,306		10,969
Frac/test tanks		183,611		151,379
Pressure pumping equipment		186,575		171,892
Construction equipment		28,571		27,799
Contract drilling equipment		76,281		44,181
Disposal facilities		70,129		66,388
Vehicles		44,645		39,844
Rental equipment		45,964		43,502
Aircraft		4,251		4,251
Software		22,248		22,296
Other		9,547		7,345

		1,312,245		1,192,258
Less accumulated depreciation and amortization		618,354		566,556

Property and equipment, net	$	693,891	$	625,702


	June 30,		December 31,
	2011		2010
Light vehicles	$	27,622	$	25,800
Well service units and equipment		1,536		1,791
Fluid services equipment		77,472		65,874
Pressure pumping equipment		22,352		18,293
Construction equipment		1,269		1,269
Software		15,548		15,548
Other		244		244

		146,043		128,819
Less accumulated amortization		58,793		56,087

	$	87,250	$	72,732

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References+ Details

XML 17 R12.htm IDEA: XBRL DOCUMENT

Long-Term Debt

6 Months Ended

Jun. 30, 2011

Long-Term Debt [Abstract]

Long-Term Debt

5. Long-Term Debt

Long-term debt consisted of the following (in thousands):


	June 30,		December 31,
	2011		2010
Credit Facilities:
Revolver	$	21,850	$	—
7.125% Senior Notes		225,000		225,000
11.625% Senior Secured Notes		—		225,000
7.75% Senior Notes		475,000		—
Unamortized (discount) premium		1,991		(9,425	)
Capital leases and other notes		66,165		58,284

		790,006		498,859
Less current portion		27,816		24,231

	$	762,190	$	474,628

7.125% Senior Notes due 2016

The 7.125% Senior Notes are redeemable at the option of Basic on or after April 15, 2011 at the specified redemption price as described in the 7.125% Senior Notes Indenture.

7.75% Senior Notes due 2019

On February 15, 2011, Basic successfully completed the issuance and sale of $275.0 million and on June 13, 2011, Basic successfully completed the issuance and sale of an additional $200.0 million, for an aggregate principal amount of $475.0 million of 7.75% Senior Notes due 2019 (the “7.75% Senior Notes”). The 7.75% Senior Notes are jointly and severally, and unconditionally, guaranteed on a senior unsecured basis by all of Basic’s current subsidiaries, other than three immaterial subsidiaries. The 7.75% Senior Notes and the guarantees rank (i) equally in right of payment with any of Basic’s and the subsidiary guarantors’ existing and future senior indebtedness, including Basic’s existing 7.125% Senior Notes and the related guarantees, and (ii) effectively junior to all existing or future liabilities of Basic’s subsidiaries that do not guarantee the 7.75% Senior Notes and to Basic’s and the subsidiary guarantors’ existing or future secured indebtedness to the extent of the value of the collateral therefore.

The 7.75% Senior Notes were offered and sold in private transactions in accordance with Rule 144A and Regulation S under the Securities Act of 1933, as amended (the “Securities Act”).

•

at least 65% of the aggregate principal amount of the 7.75% Senior Notes issued under the 7.75% Senior Notes Indenture remains outstanding immediately after the occurrence of such redemption; and

•

such redemption occurs within 90 days of the date of the closing of any such qualified equity offering.

Revolving Credit Facility

The Credit Agreement contains various covenants that, subject to agreed upon exceptions, limit Basic’s ability and the ability of certain of Basic’s subsidiaries to:

•

incur indebtedness;

•

grant liens;

•

enter into sale and leaseback transactions;

•

make loans, capital expenditures, acquisitions and investments;

•

change the nature of business;

•

acquire or sell assets or consolidate or merge with or into other companies;

•

declare or pay dividends;

•

enter into transactions with affiliates;

•

enter into burdensome agreements;

•

prepay, redeem or modify or terminate other indebtedness;

•

change accounting policies and reporting practices; and

•

amend organizational documents.

•

a minimum consolidated interest coverage ratio of not less than 2.50:1.00;

•

a maximum consolidated leverage ratio not to exceed:

•

4.25:1.00 for the quarter ending March 31, 2011; and

•

4.00:1.00 after March 31, 2011; and

•

a maximum consolidated senior secured leverage ratio of 2.00:1.00.

Basic had $21.9 million outstanding under the Credit Agreement as of June 30, 2011. At June 30, 2011, Basic was in compliance with its covenants under the Credit Agreement.

Other Debt

Basic’s interest expense consisted of the following (in thousands):


	Six Months Ended June 30,
	2011		2010
Cash payments for interest	$	18,630	$	21,802
Commitment and other fees paid		438		9
Amortization of debt issuance costs and discount or premium on notes		1,213		1,699
Change in accrued interest		2,871		(73	)
Other		32		5

	$	23,184	$	23,442

Losses on Extinguishment of Debt

XML 18 R13.htm IDEA: XBRL DOCUMENT

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jun. 30, 2011
Commitments and Contingencies [Abstract]
Commitments and Contingencies	6. Commitments and Contingencies *Environmental* Basic is subject to various federal, state and local environmental laws and regulations that establish standards and requirements for protection of the environment. Basic cannot predict the future impact of such standards and requirements which are subject to change and can have retroactive effectiveness. Basic continues to monitor the status of these laws and regulations. Management believes that the likelihood of any of these items resulting in a material adverse impact to Basic’s financial position, liquidity, capital resources or future results of operations is remote. Currently, Basic has not been fined, cited or notified of any environmental violations that would have a material adverse effect upon its financial position, liquidity or capital resources. However, management does recognize that by the very nature of its business, material costs could be incurred in the near term to bring Basic into total compliance. The amount of such future expenditures is not determinable due to several factors, including the unknown magnitude of possible contamination, the unknown timing and extent of the corrective actions which may be required, the determination of Basic’s liability in proportion to other responsible parties and the extent to which such expenditures are recoverable from insurance or indemnification. During April 2011, Basic and certain officers received notice from the Travis County District Attorney of a pending investigation of a potential felony criminal case referred by Texas Parks & Wildlife and the Texas Environmental Enforcement Task Force, to be presented to a Travis County grand jury. The potential matter relates to a land farm owned by Basic located in Jefferson County, Texas. While Basic is currently responding to additional inquiries regarding the investigation and believes the investigation may also relate to alleged unlawful discharges, Basic has not been informed of any specific potential charges at this time. Basic does not believe it is probable or reasonably possible that this matter will result in any material adverse effect on its financial condition, results of operations or liquidity; however, there can be no assurance as to the ultimate outcome of this matter. *Litigation* From time to time, Basic is a party to litigation or other legal proceedings that Basic considers to be a part of the ordinary course of business. Basic is not currently involved in any legal proceedings that it considers probable or reasonably possible, individually or in the aggregate, to result in a material adverse effect on its financial condition, results of operations or liquidity. *Self-Insured Risk Accruals* Basic is self-insured up to retention limits as it relates to workers’ compensation, general liability claims, and medical and dental coverage of its employees. Basic generally maintains no physical property damage coverage on its workover rig fleet, with the exception of certain of its 24-hour workover rigs and newly manufactured rigs. Basic has deductibles per occurrence for workers’ compensation, general liability claims, and medical and dental coverage of $500,000, $500,000, and $250,000, respectively. Basic has lower deductibles per occurrence for automobile liability. Basic maintains accruals in the accompanying consolidated balance sheets related to self-insurance retentions by using third-party data and claims history. At June 30, 2011 and December 31, 2010, self-insured risk accruals totaled approximately $16.8 million net of a $8,000 receivable for medical and dental coverage and $16.6 million net of a $164,000 receivable for medical and dental coverage, respectively.

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 450
-SubTopic 20
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6952336&loc=d3e14435-108349

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 460
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6398077&loc=d3e12565-110249

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 14
-Paragraph 3
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 440
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6394976&loc=d3e25287-109308

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 9, 10, 11, 12
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.25)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6449706&loc=d3e16207-108621

+ Details

XML 19 R14.htm IDEA: XBRL DOCUMENT

Stockholders Equity	6 Months Ended
Stockholders Equity	Jun. 30, 2011
Stockholders' Equity [Abstract]
Stockholders' Equity	7. Stockholders’ Equity *Common Stock* At June 30, 2011 and December 31, 2010, Basic had 80,000,000 shares of common stock, par value $.01 per share, authorized. During the year ended 2010, Basic issued 53,975 shares of common stock from treasury stock upon the exercise of stock options. In March 2010, Basic granted various employees 588,600 restricted shares of common stock which vest over a five-year period. In March 2010, the Compensation Committee of Basic’s Board of Directors approved grants of performance-based stock awards to certain members of management. In February 2011, it was determined that 285,281 shares, or 150% of the target number of shares, were earned based on Basic’s achievement of total stockholder return over the performance period from January 1, 2010 through December 31, 2010, as compared to other members of a defined peer group. These restricted shares remain subject to vesting over a three-year period, with the first shares vesting on March 15, 2012. In March 2011, Basic granted various employees 510,399 restricted shares of common stock that vest over a three-year period. During the six months ended June 30, 2011, Basic issued 390,750 shares of common stock from treasury stock for the exercise of stock options and 37,500 shares of newly-issued common stock for the exercise of stock options. *Treasury Stock* Basic has acquired treasury shares through net share settlements for payment of payroll taxes upon the vesting of restricted stock. Basic acquired a total of 40,381 shares through net share settlements during 2010 and 76,077 shares through net share settlements during the first six months of 2011. *Preferred Stock* At June 30, 2011 and December 31, 2010, Basic had 5,000,000 shares of preferred stock, par value $.01 per share, authorized, of which none was designated, issued or outstanding.

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Article 3

Reference 2: http://www.xbrl.org/2003/role/presentationRef
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-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 29, 30, 31
-Article 5

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB TOPIC 4.E)
-URI http://asc.fasb.org/extlink&oid=6228006&loc=d3e74512-122707

Reference 4: http://www.xbrl.org/2003/role/presentationRef
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-Topic 505
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-Topic 505
-SubTopic 10
-Section S99
-Paragraph 4
-Subparagraph (SAB TOPIC 4.C)
-URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187143-122770

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 129
-Paragraph 2, 3, 4, 5, 6, 7, 8
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Preferred Stock
-URI http://asc.fasb.org/extlink&oid=6521494

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Article 4

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187085-122770

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-Name Staff Accounting Bulletin (SAB)
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-Section C

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-Name Accounting Standards Codification
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-Subparagraph (SX 210.5-02.29-31)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

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-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 4
-Section 08
-Paragraph d

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section E

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6405834&loc=d3e23285-112656

Reference 17: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644

Reference 18: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(d),(e))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 19: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 43
-Chapter 1
-Section B
-Paragraph 7, 11A
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 20: http://www.xbrl.org/2003/role/presentationRef
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-Paragraph 2
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Reference 21: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 12
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 22: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
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-Paragraph 6
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-Publisher FASB
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-Topic 505
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21564-112644

+ Details

XML 20 R15.htm IDEA: XBRL DOCUMENT

Incentive Plan

6 Months Ended

Jun. 30, 2011

Incentive Plan [Abstract]

Incentive Plan

8. Incentive Plan

Stock Option Awards

The following table reflects the summary of stock options outstanding at June 30, 2011 and the changes during the six months then ended:


						Weighted
				Weighted		Average		Aggregate
	Number of			Average		Remaining		Instrinsic
	Options			Exercise		Contractual		Value
	Granted			Price		Term (Years)		(000’s)
Non-statutory stock options:
Outstanding, beginning of period		1,414,450		$	11.44
Options granted		—
Options forfeited		(5,000	)	$	6.98
Options exercised		(428,250	)	$	6.71
Options expired		(3,000	)	$	26.84

Outstanding, end of period		978,200		$	13.49		3.67	$	17,592


Exercisable, end of period		955,200		$	13.27		3.62	$	17,389


Vested or expected to vest, end of period		973,600		$	13.44		3.66	$	17,551

The total intrinsic value of share options exercised during the six months ended June 30, 2011 and 2010 was approximately $8.3 million and $24,000, respectively.

Basic has a history of issuing treasury and newly-issued shares to satisfy share option exercises.

Restricted Stock Awards

A summary of the status of Basic’s non-vested share grants at June 30, 2011 and changes during the six months ended June 30, 2011 is presented in the following table:


				Weighted Average
	Number of			Grant Date Fair
Nonvested Shares	Shares			Value Per Share
Nonvested at beginning of period		1,802,573		$	11.06
Granted during period		702,931			19.49
Vested during period		(329,018	)		13.45
Forfeited during period		(74,023	)		12.65

Nonvested at end of period		2,102,463		$	13.44

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
-Paragraph 53
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14

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-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64, 65, A240
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-Topic 718
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-Topic 505
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-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666

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-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901

+ Details

XML 21 R16.htm IDEA: XBRL DOCUMENT

Related Party Transactions	6 Months Ended
Related Party Transactions	Jun. 30, 2011
Related Party Transactions [Abstract]
Related Party Transactions	9. Related Party Transactions Basic had receivables from employees of approximately $44,000 and $42,000 as of June 30, 2011 and December 31, 2010, respectively. During 2006, Basic entered into a lease agreement with Darle Vuelta Cattle Co., LLC, an affiliate of the Chief Executive Officer, for approximately $69,000. The term of the lease is five years and will continue on a year-to-year basis unless terminated by either party. In December 2010, Basic entered into a lease agreement with Darle Vuelta Cattle Co., LLC, for the right to operate a salt water disposal well, brine well and fresh water well. The term of the lease is two years and will continue until the salt water disposal well and brine well are plugged and no fresh water is being sold. The lease payments are the greater of the sum of $0.10 per barrel of disposed oil and gas waste and $0.05 per barrel of brine or fresh water sold, or $5,000 per month.

- Definition

The entire disclosure for related party transactions, including the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(k))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 3A
-Section 04
-Paragraph b

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 57
-Paragraph 1-4
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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-Number 210
-Article 4
-Section 08
-Paragraph k

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-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39603-107864

+ Details

XML 22 R17.htm IDEA: XBRL DOCUMENT

Earnings Per Share

6 Months Ended

Jun. 30, 2011

Earnings Per Share [Abstract]

Earnings Per Share

10. Earnings Per Share


	Three Months Ended June 30,					Six Months Ended June 30,
	2011		2010			2011			2010
	(Unaudited)					(Unaudited)
Numerator (both basic and diluted):
Net income (loss)	$	16,550	$	(10,672	)	$	(1,943	)	$	(32,263	)

Denominator:
Denominator for basic earnings (loss) per share		40,356,049		39,724,030			40,135,143			39,672,891

Stock options		422,110		—			—			—
Unvested restricted stock		557,505		—			—			—

Denominator for diluted earnings (loss) per share		41,335,664		39,724,030			40,135,143			39,672,891


Basic earnings (loss) per common share:	$	0.41	$	(0.27	)	$	(0.05	)	$	(0.81	)


Diluted earnings (loss) per common share:	$	0.40	$	(0.27	)	$	(0.05	)	$	(0.81	)

- Definition

The entire disclosure for earnings per share.

+ References+ Details

XML 23 R18.htm IDEA: XBRL DOCUMENT

Business Segment Information

6 Months Ended

Jun. 30, 2011

Business Segment Information [Abstract]

Business Segment Information

11. Business Segment Information

Basic’s reportable business segments are Completion and Remedial Services, Fluid Services, Well Servicing, and Contract Drilling. The following is a description of the segments:

Contract Drilling: This segment utilizes drilling rigs and associated equipment for drilling wells to a specified depth for customers on a contract basis.

The following table sets forth certain financial information with respect to Basic’s reportable segments (in thousands):


	Completion
	and Remedial			Fluid			Well			Contract			Corporate
	Services			Services			Servicing			Drilling			and Other		Total
*Three Months Ended June 30, 2011 (Unaudited)*
Operating revenues	$	121,807		$	81,415		$	83,881		$	9,752		$	—	$	296,855
Direct operating costs		(68,827	)		(51,688	)		(57,409	)		(7,393	)		—	$	(185,317	)

Segment profits	$	52,980		$	29,727		$	26,472		$	2,359		$	—	$	111,538


Depreciation and amortization	$	9,841		$	10,359		$	10,398		$	2,326		$	1,860	$	34,784

Capital expenditures, (excluding acquisitions)	$	12,638		$	12,847		$	11,633		$	2,986		$	2,327	$	42,431

*Three Months Ended June 30, 2010 (Unaudited)*
Operating revenues	$	61,533		$	58,801		$	49,529		$	5,269		$	—	$	175,132
Direct operating costs		(37,660	)		(43,425	)		(36,734	)		(3,725	)		—		(121,544	)

Segment profits	$	23,873		$	15,376		$	12,795		$	1,544		$	—	$	53,588


Depreciation and amortization	$	8,121		$	9,478		$	12,562		$	1,882		$	2,207	$	34,250

Capital expenditures, (excluding acquisitions)	$	3,429		$	4,013		$	5,305		$	795		$	921	$	14,463

*Six Months Ended June 30, 2011 (Unaudited)*
Operating revenues	$	219,314		$	153,760		$	153,028		$	16,807		$	—	$	542,909
Direct operating costs		(123,760	)		(99,916	)		(105,849	)		(11,878	)		—	$	(341,403	)

Segment profits	$	95,554		$	53,844		$	47,179		$	4,929		$	—	$	201,506


Depreciation and amortization	$	17,909		$	19,764		$	22,351		$	4,233		$	3,507	$	67,764

Capital expenditures, (excluding acquisitions)	$	30,359		$	33,503		$	37,889		$	7,176		$	5,946	$	114,873
Identifiable assets	$	231,977		$	195,403		$	247,077		$	70,245		$	584,405	$	1,329,107

*Six Months Ended June 30, 2010 (Unaudited)*
Operating revenues	$	106,767		$	110,948		$	91,325		$	9,058		$	—	$	318,098
Direct operating costs		(67,383	)		(84,365	)		(68,834	)		(6,995	)		—	$	(227,577	)

Segment profits	$	39,384		$	26,583		$	22,491		$	2,063		$	—	$	90,521


Depreciation and amortization	$	15,952		$	18,895		$	24,703		$	3,716		$	4,082	$	67,348

Capital expenditures, (excluding acquisitions)	$	6,053		$	7,170		$	9,373		$	1,410		$	1,549	$	25,555
Identifiable assets	$	185,854		$	183,971		$	245,041		$	39,624		$	357,235	$	1,011,725

The following table reconciles the segment profits reported above to the operating income as reported in the consolidated statements of operations (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Segment profits	$	111,538		$	53,588		$	201,506		$	90,521

General and administrative expenses		(34,138	)		(26,820	)		(65,479	)		(51,897	)
Depreciation and amortization		(34,784	)		(34,250	)		(67,764	)		(67,348	)
Gain (loss) on disposal of assets		(942	)		(463	)		763			(1,174	)

Operating income (loss)	$	41,674		$	(7,945	)	$	69,026		$	(29,898	)

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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-Publisher FASB
-Name Accounting Standards Codification
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-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 131
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+ Details

XML 24 R19.htm IDEA: XBRL DOCUMENT

Supplemental Schedule of Cash Flow Information

6 Months Ended

Jun. 30, 2011

Supplemental Schedule of Cash Flow Information [Abstract]

Supplemental Schedule of Cash Flow Information

12. Supplemental Schedule of Cash Flow Information

The following table reflects non-cash financing and investing activity during the following periods:


	Six Months Ended June 30,
	2011		2010
	(In thousands)
Capital leases issued for equipment	$	24,104	$	6,691
Asset retirement obligation additions	$	11	$	12

- Definition

The entire disclosure for supplemental cash flow activities, including cash, noncash, and part noncash transactions, for the period. Noncash is defined as information about all investing and financing activities of an enterprise during a period that affect recognized assets or liabilities but that do not result in cash receipts or cash payments in the period. "Part noncash" refers to that portion of the transaction not resulting in cash receipts or cash payments in the period.

+ References+ Details

XML 25 R2.htm IDEA: XBRL DOCUMENT

Consolidated Balance Sheets (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Current assets:
Cash and cash equivalents	$ 220,910	$ 47,918
Trade accounts receivable, net of allowance of $1,997 and $3,078, respectively	200,092	150,364
Accounts receivable - related parties	44	42
Income tax receivable	78,195	79,480
Inventories	25,662	21,556
Prepaid expenses	6,334	5,425
Other current assets	6,632	18,193
Deferred tax assets	8,430	8,290
Total current assets	546,299	331,268
Property and equipment, net	693,891	625,702
Deferred debt costs, net of amortization	16,348	6,835
Goodwill	16,287	16,150
Other intangible assets, net of amortization	43,727	45,833
Other assets	12,555	4,025
Total assets	1,329,107	1,029,813
Current liabilities:
Accounts payable	39,787	40,477
Accrued expenses	61,780	51,237
Current portion of long-term debt	27,816	24,231
Other current liabilities	166	3,309
Total current liabilities	129,549	119,254
Long-term debt, net of unamortized discount or premium on notes of $1,991 and $9,425, respectively	762,190	474,628
Deferred tax liabilities	117,636	123,393
Other long-term liabilities	11,369	10,615
Commitments and contingencies
Stockholders' equity:
Preferred stock; $.01 par value; 5,000,000 shares authorized; none designated or issued at June 30, 2011 and December 31, 2010, respectively	0	0
Common stock; $.01 par value; 80,000,000 shares authorized; 42,432,309 shares issued, and 42,394,955 shares outstanding at June 30, 2011; 42,394,809 shares issued, and 41,310,447 shares outstanding at December 31, 2010.	424	424
Additional paid-in capital	343,385	335,927
Retained earnings (deficit)	(35,446)	(27,544)
Treasury stock, at cost, 37,354 and 1,084,362 shares at June 30, 2011 and December 31, 2010, respectively	0	(6,884)
Total stockholders' equity	308,363	301,923
Total liabilities and stockholders' equity	$ 1,329,107	$ 1,029,813

XML 26 R20.htm IDEA: XBRL DOCUMENT

Fair Value Measurements

6 Months Ended

Jun. 30, 2011

Fair Value Measurements [Abstract]

Fair Value Measurements

13. Fair Value Measurements


	Asset
	Retirement
	Obligation
Balance, December 31, 2010	$	1,983

Additional asset retirement obligation		11
Accretion expense		65
Settlements		(57	)

Balance, June 30, 2011	$	2,002

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
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-Paragraph 17-22, 27, 28
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+ Details

XML 27 R21.htm IDEA: XBRL DOCUMENT

Subsequent Events	6 Months Ended
Subsequent Events	Jun. 30, 2011
Subsequent Events [Abstract]
Subsequent Events	14. Subsequent Events On July 7, 2011, Basic completed the acquisition of substantially all of the operating assets of Lone Star Anchor Trucking, Inc. for total cash consideration of $10.1 million. This acquisition will operate in Basic’s fluid services segment. On July 8, 2011, Basic completed the acquisition of the outstanding equity interests of the Maverick companies (“Maverick”) for total cash consideration of $180.0 million, net of working capital acquired. Maverick provides stimulation, coil tubing and thru-tubing services and will operate in Basic’s completion and remedial services segment. On July 15, 2011, Basic amended its existing revolving credit facility, increasing the available credit from $165.0 million to $225.0 million. No changes were made to the collateral, interest rates, or guarantors as part of this amendment. During July 2011, Basic received aggregate federal income tax refunds of approximately $80.1 million relating to Basic’s 2009 and 2010 tax returns.

XML 28 R3.htm IDEA: XBRL DOCUMENT

Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data	Jun. 30, 2011	Dec. 31, 2010
Current assets:
Allowance for trade accounts receivable	$ 1,997	$ 3,078
LIABILITIES AND STOCKHOLDERS' EQUITY
Unamortized discount or premium on notes, long-term debt	$ 1,991	$ 9,425
Stockholders' equity:
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	80,000,000	80,000,000
Common stock, shares issued	42,432,309	42,394,809
Common stock, shares outstanding	42,394,955	41,310,447
Treasury stock, shares	37,354	1,084,362

XML 29 R4.htm IDEA: XBRL DOCUMENT

Consolidated Statements of Operations and Comprehensive Income (Unaudited) (USD $) In Thousands, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Revenues:
Completion and remedial services	$ 121,807	$ 61,533	$ 219,314	$ 106,767
Fluid services	81,415	58,801	153,760	110,948
Well servicing	83,881	49,529	153,028	91,325
Contract drilling	9,752	5,269	16,807	9,058
Total revenues	296,855	175,132	542,909	318,098
Expenses:
Completion and remedial services	68,827	37,660	123,760	67,383
Fluid services	51,688	43,425	99,916	84,365
Well servicing	57,409	36,734	105,849	68,834
Contract drilling	7,393	3,725	11,878	6,995
General and administrative, including stock-based compensation of $2,078 and $1,439 in three months ended June 30, 2011 and 2010, and $3,758 and $2,589 in the six months ended June 30, 2011 and 2010, respectively	34,138	26,820	65,479	51,897
Depreciation and amortization	34,784	34,250	67,764	67,348
(Gain) loss on disposal of assets	942	463	(763)	1,174
Total expenses	255,181	183,077	473,883	347,996
Operating income (loss)	41,674	(7,945)	69,026	(29,898)
Other income (expense):
Interest expense	(11,842)	(11,778)	(23,184)	(23,442)
Interest income	23	24	28	50
Gain on bargain purchase		1,772		1,772
Loss on early extinguishment of debt			(49,366)
Other income (expense)	102	111	259	192
Income (loss) from continuing operations before income taxes	29,957	(17,816)	(3,237)	(51,326)
Income tax benefit (expense)	(13,407)	7,144	1,294	19,063
Net income (loss)	$ 16,550	$ (10,672)	$ (1,943)	$ (32,263)
Earnings (loss) per share of common stock:
Diluted	$ 0.40	$ (0.27)	$ (0.05)	$ (0.81)
Basic	$ 0.41	$ (0.27)	$ (0.05)	$ (0.81)

XML 30 R5.htm IDEA: XBRL DOCUMENT

Consolidated Statements of Operations and Comprehensive Income (Unaudited) (Parenthetical) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Expenses:
Stock-based compensation included in general and administrative expense	$ 2,078	$ 1,439	$ 3,758	$ 2,589

XML 31 R6.htm IDEA: XBRL DOCUMENT

Consolidated Statements of Stockholders' Equity (USD $) In Thousands, except Share data	Total	Common Stock	Additional Paid-In Capital	Treasury Stock	Retained Earnings
Balance at Dec. 31, 2010	$ 301,923	$ 424	$ 335,927	$ (6,884)	$ (27,544)
Balance, shares at Dec. 31, 2010		42,394,809
Issuances of restricted stock			(32)	5,783	(5,751)
Amortization of share-based compensation	3,758		3,758
Purchase of treasury stock	(1,761)			(1,761)
Exercise of stock options / vesting of restricted stock, shares		37,500
Exercise of stock options / vesting of restricted stock	6,386		3,732	2,862	(208)
Net loss	(1,943)				(1,943)
Balance at Jun. 30, 2011	$ 308,363	$ 424	$ 343,385	$ 0	$ (35,446)
Balance, shares at Jun. 30, 2011		42,432,309

- Definition

This element represents the amount of recognized equity-based compensation during the period, that is, the amount recognized as expense in the income statement (or as asset if compensation is capitalized). Alternate captions include the words "stock-based compensation".

+ References

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-Name Statement of Financial Accounting Standard (FAS)
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-Subparagraph b
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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-Subparagraph (b)
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 944
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-Paragraph 1
-Subparagraph (SX 210.7-04.22)
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-URI http://asc.fasb.org/extlink&oid=6880815&loc=d3e20235-122688

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-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 38
-Subparagraph a
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-Name Accounting Research Bulletin (ARB)
-Number 51
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-Appendix A

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-Glossary Other Comprehensive Income
-URI http://asc.fasb.org/extlink&oid=6519514

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Reference 12: http://www.xbrl.org/2003/role/presentationRef
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-URI http://asc.fasb.org/extlink&oid=6518256

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-URI http://asc.fasb.org/extlink&oid=6879464&loc=d3e573970-122913

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-Name Regulation S-X (SX)
-Number 210
-Article 5
-Section 03
-Paragraph 19

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-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 28, 29, 30
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Paragraph 20
-Article 9

+ Details

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

+ References+ Details

- Definition

Value of stock related to Restricted Stock Awards issued during the period, net of the stock value of such awards forfeited.

+ References+ Details

- Definition

Equity impact of the cost of common and preferred stock that were repurchased during the period. Recorded using the cost method.

+ References+ Details

XML 32 R7.htm IDEA: XBRL DOCUMENT

Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Cash flows from operating activities:
Net loss	$ (1,943)	$ (32,263)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	67,764	67,348
Gain on bargain purchase		(1,772)
Accretion on asset retirement obligation	65	81
Change in allowance for doubtful accounts	(1,081)	(953)
Amortization of deferred financing costs	967	762
Amortization of discount on senior secured notes	6,484	937
Non-cash compensation	3,758	2,589
Loss on early extinguishment of debt (non-cash)	3,940
Premium on retirement of 11.625% senior secured notes	36,179
(Gain) loss on disposal of assets	(763)	1,174
Deferred income taxes	(6,088)	(3,311)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(48,744)	(30,886)
Inventories	(4,106)	(1,439)
Prepaid expenses and other current assets	(1,102)	3,747
Other assets	(8,531)	(2,981)
Accounts payable	(690)	3,379
Excess tax expense (benefit) from exercise of employee stock options / vesting of restricted stock	(3,508)	360
Income tax payable	4,793	(15,460)
Other liabilities	(2,328)	1,587
Accrued expenses	10,515	5,505
Net cash provided by (used in) operating activities	55,581	(1,596)
Cash flows from investing activities:
Purchase of property and equipment	(114,873)	(25,555)
Proceeds from sale of assets	17,996	1,787
Change in restricted cash		(1,124)
Payments for other long-term assets	(287)	(350)
Payments for businesses, net of cash acquired	(10)	(10,312)
Net cash used in investing activities	(97,174)	(35,554)
Cash flows from financing activities:
Proceeds from debt	498,850
Payments of debt	(238,291)	(13,805)
Premium on retirement of 11.625% senior secured notes	(36,179)
Purchase of treasury stock	(1,761)	(316)
Excess tax (expense) benefit from exercise of employee stock options / vesting of restricted stock	3,508	(360)
Tax withholding from exercise of stock options	(2,529)	(8)
Exercise of employee stock options	5,407	65
Deferred loan costs and other financing activities	(14,420)	(8)
Net cash provided by (used in) financing activities	214,585	(14,432)
Net increase (decrease) in cash and equivalents	172,992	(51,582)
Cash and cash equivalents - beginning of period	47,918	125,357
Cash and cash equivalents - end of period	$ 220,910	$ 73,775

XML 33 R8.htm IDEA: XBRL DOCUMENT

Basis of Presentation and Nature of Operations	6 Months Ended
Basis of Presentation and Nature of Operations	Jun. 30, 2011
Basis of Presentation and Nature of Operations [Abstract]
Basis of Presentation and Nature of Operations	1. Basis of Presentation and Nature of Operations *Basis of Presentation* The accompanying unaudited consolidated financial statements of Basic Energy Services, Inc. and subsidiaries (“Basic” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments which are of a normal recurring nature considered necessary for a fair presentation have been made in the accompanying unaudited financial statements. *Nature of Operations* Basic provides a wide range of well site services to oil and natural gas drilling and producing companies, including completion and remedial services, fluid services and well site construction services, well servicing and contract drilling. These services are primarily provided using Basic’s fleet of equipment. Basic’s operations are concentrated in the major United States onshore oil and gas producing regions in Texas, New Mexico, Oklahoma, Arkansas, Kansas, Louisiana, Wyoming, North Dakota, Colorado, Utah, Montana, West Virginia, and Pennsylvania.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

+ References

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-Name Accounting Standards Codification
-Topic 720
-SubTopic 15
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XML 34 R9.htm IDEA: XBRL DOCUMENT

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2011

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Principles of Consolidation

Estimates and Uncertainties

•

Depreciation and amortization of property and equipment and intangible assets

•

Impairment of property and equipment, goodwill and intangible assets

•

Allowance for doubtful accounts

•

Litigation and self-insured risk reserves

•

Fair value of assets acquired and liabilities assumed

•

Future cash flows

•

Stock-based compensation

•

Income taxes

•

Asset retirement obligations

Revenue Recognition

Taxes assessed on sales transactions are presented on a net basis and are not included in revenue.

Inventories

Property and Equipment

Impairments

Deferred Debt Costs

Goodwill and Other Intangible Assets

Basic had trade names of $1.8 million as of June 30, 2011 and December 31, 2010. Trade names have an indefinite life and are tested for impairment annually.

The changes in the carrying amount of goodwill for the six months ended June 30, 2011 are as follows (in thousands):


	Completion and
	Remedial			Fluid		Well		Contract
	Services			Services		Servicing		Drilling		Total
Balance as of December 31, 2010	$	10,771		$	488	$	4,891	$	—	$	16,150
Goodwill adjustments		(74	)		148		63		—		137

Balance as of June 30, 2011	$	10,697		$	636	$	4,954	$	—	$	16,287

Customer relationships are amortized over a 15-year life, non-compete agreements are amortized over a five-year life, and rig engineering plans are amortized over a 15-year life.

Stock-Based Compensation

Income Taxes

Interest charges are recorded in interest expense and penalties are recorded in income tax expense.

Concentrations of Credit Risk

Basic did not have any one customer that represented 10% or more of consolidated revenue during the three months or six months ended June 30, 2011 or 2010.

Asset Retirement Obligations

Environmental

Litigation and Self-Insured Risk Reserves

Recent Accounting Pronouncements

- Definition

The entire disclosure for all significant accounting policies of the reporting entity.

+ References+ Details

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